The Directors have pleasure in presenting their Annual Report and
Audited Financial Statements for the year ended March 31, 2015.
Rs. crore Rs. crore
Profit before depreciation, exceptional
and extraordinary items and tax 7352.21 747183
Less: Depreciation, amortisation,
impairment and obsolescence 1009.74 793.36
Add: Transfer from Revaluation Reserve 1.59 0.94
Profit before exceptional and
extraordinary items and tax 6344.06 6679.41
Add: Exceptional items 357.16 588.50
Profit before tax 6701.22 7267.91
Less: Provision for tax 1645.04 1774.78
Profit for the period carried to Balance
Sheet 5056.18 5493.13
Add: Balance brought forward from
previous year 333.45 285.75
Less: Dividend paid for the previous year
(including dividend distribution tax) 2.20 2.78
Less: Depreciation charged against
retained earnings 86.28 -
Add: Reversal of deferred tax on depreciation
charged against retained earnings 29.33 -
Balance available for disposal 5330.48 5776.10
(which the directors appropriate as follows):
Debenture Redemption Reserve 256.50 44.00
Proposed Dividend 1510.54 1320.85
Dividend Tax 134.33 77.80
General Reserve - 4000.00
Balance to be carried forward 3429.11 333.45
Dividend 1510.54 1320.85
The Directors recommend payment of final
dividend of Rs. 16.25 per equity
share of Rs. 2/- each on 92,95,62,061 shares.
CAPITAL & FINANCE
During the year under review, the Company allotted 26,49,403 equity
shares upon exercise of stock options by the eligible employees under
the Employee Stock Option Scheme.
The Company tied up long term foreign currency loans of approximately Rs.
1,093.75 crore and issued Non-Convertible Debentures (NCDs) worth Rs.
1,150 crore. In addition, the Company also refinanced USD 200 million
foreign currency loan through a Foreign Currency Convertible Bond
(FCCB) issuance to reduce its interest cost. Apart from this, the
Company also repaid a part of its long term foreign currency debt of
USD 5.83 million.
As at March 31,2015, the gross fixed and intangible assets, including
leased assets, stood at Rs. 12,784 crore and the net fixed and intangible
assets, including leased assets, at Rs. 7,981 crore. Capital expenditure
during the year amounted to Rs. 953 crore.
There were no deposits which were due for repayment on or before March
31, 2015. All unclaimed deposits were transferred to Investor Education
& Protection Fund during the year.
As the members are aware, the Company''s shares are compulsorily
tradable in electronic form. As on March 31, 201 5, 97.77% of the
Company''s total paid-up capital representing 90,87,91,21 1 shares are
in dematerialized form. In view of the numerous advantages offered by
the Depository system, members holding shares in physical mode are
advised to avail of the facility of dematerialization from either of
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company sends letters to all shareholders, whose dividends are
unclaimed so as to ensure that they receive their rightful dues.
Efforts are also made in co-ordination with the Registrar to locate the
shareholders who have not claimed their dues.
During the year the Company has transferred a sum of Rs. 1,47,21,816 to
Investor Education & Protection Fund, the amount which was due &
payable and remained unclaimed and unpaid for a period of seven years
as provided in Section 205C(2) of the Companies Act, 1956. Despite the
reminder letters sent to each shareholder, this amount remained
unclaimed and hence was transferred. Cumulatively, the amount
transferred to the said fund was Rs. 13,05,29,159 as on March 31, 2015.
SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES
During the year under review, the Company subscribed / acquired equity
/ preference shares in various subsidiary / associate / joint venture
companies. These subsidiaries include companies in general insurance,
real estate, infrastructure, engineering services and manufacturing
sectors. The details of investments in subsidiary companies during the
year are as under:
1. During the year, the Company acquired 50% stake in L&T
Infrastructure Engineering Limited (formerly known as L&T-Ramboll
Consulting Engineers Limited) from the Joint Venture partner, with this
acquisition, L&T Infrastructure Engineering Limited is now a wholly
owned subsidiary of the Company.
2. To comply with, inter-alia the minimum public shareholding
requirement in L&T Finance Holdings Limited by August 2014, the Company
has sold shares of L&T Finance Holdings Limited.
The Company has formulated a policy on the identification of material
subsidiaries and the same is placed on the website at
C) Performance and Financial Position of each
subsidiary/associate/joint venture companies:
A statement containing the salient features of the financial statement
of subsidiary/associate/joint venture companies is provided on pages
342 to 350 of this Annual Report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR
SECURITY PROVIDED BY THE COMPANY
The Company has disclosed the full particulars of the loans given,
investments made or guarantees given or security provided on pages 222
to 224 of this Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Audit Committee and the Board of Directors have approved the
Related Party Transactions Policy and the same has been uploaded on the
The Company has a process in place to periodically review and monitor
Related Party Transactions.
All the related party transactions were in the ordinary course of
business and at arm''s length. The Audit Committee has approved all
related party transactions for FY 2014-15 and estimated transactions
for FY 2015-16.
There were no material transactions with the related parties during the
YEAR IN RETROSPECT
The gross sales and other income for the financial year under review
were Rs. 59,841 crore as against Rs. 59,045 crore for the previous
financial year registering an increase of 1.35%. The profit before tax
from continuing operations including extraordinary and exceptional
items was Rs. 6,701 crore for the financial year under review as against
Rs. 7,268 crore for the previous financial year, registering a decrease
of 7.8%. The profit after tax from continuing operations including
extraordinary and exceptional items of Rs. 5,056 crore for the financial
year under review as against Rs. 5,493 crore for the previous financial
year, registering a decrease of 7.96%.
AMOUNT CARRIED TO RESERVE
The Company has not transferred any amount to the reserves during the
current financial year.
The Directors recommend payment of dividend of Rs. 16.25 per equity share
of Rs. 2/- each on the share capital.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE
There are no material changes and commitments affecting the financial
position of the Company between the end of the financial year and the
date of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as required to be given under Section 134(3)(m) read with
Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in
Annexure ''A'' forming part of this Report.
RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee comprising of
Mr. A. M. Naik, Mr. K. Venkataramanan and Mr. R. Shankar Raman and
concerned heads of Independent Companies as members. Mr. A. M. Naik is
the Chairman of the Committee.
The Company has formulated a risk management policy and has in place a
mechanism to inform the Board Members about risk assessment and
minimization procedures and periodical review to ensure that executive
management controls risk by means of a properly designed framework.
A detailed note on risk management is given under financial review
section of the Management Discussion and Analysis on pages 182 to 183
of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted a Corporate Social Responsibility Committee
comprising of Mr. Vikram Singh Mehta, Mr. M. V. Kotwal and Mr. R.
Shankar Raman as the Members. Mr. Vikram Singh Mehta is the Chairman of
The details of the various projects and programs to be undertaken by
the Company as a part of its CSR policy framework is available on its
The disclosures required to be given under Section 135 of the Companies
Act, 2013 read with Rule 8(1) of the Companies (Corporate Social
Responsibility Policy) Rules, 2014 are given in Annexure ''D'' forming
part of this Report.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
APPOINTED/RESIGNED/RETIRED DURING THE YEAR
Mr. S. Rajgopal and Mr. S. N. Talwar, Independent Directors, retired at
the conclusion of the Annual General Meeting (AGM) held on August 22,
Mr. A. K. Jain, Nominee Director representing Administrator of the
''Specified Undertaking of Unit Trust of India'' (SUUTI) resigned with
effect from February 10, 2015, consequent to the withdrawal of his
The Board places on record its appreciation of the immense contribution
made by Mr. S. Rajgopal, Mr. S. N. Talwar and Mr. A. K. Jain to the
The Board has appointed Mr. Akhilesh Krishna Gupta as an Independent
Director of the Company from September 9, 2014 to September 8, 2019,
subject to the approval of the shareholders. Mr. Akhilesh Gupta,
appointed as an Additional Director, will hold office till the ensuing
AGM and is eligible for appointment.
The Board has appointed Mr. Bahram Navroz Vakil as an Independent
Director of the Company from March 16, 2015 to March 1 5, 2020, subject
to the approval of the shareholders. Mr. Vakil, appointed as an
Additional Director, will hold office till the ensuing AGM and is
eligible for appointment.
The Board has appointed Mr. Swapan Dasgupta as a Director in the casual
vacancy caused by the resignation of Mr. A. K. Jain as a Director
representing SUUTI, with effect from April 1, 2015.
The Board has appointed Mrs. Sunita Sharma as a Director in the casual
vacancy caused by the resignation of Mr. N. Mohan Raj as a Director
representing ''Life Insurance Corporation of India'', with effect from
April 1, 2015.
The Board has appointed Mr. Thomas Mathew T. as an Independent Director
of the Company from April 3, 2015 to April 2, 2020, subject to the
approval of the shareholders. Mr. Mathew, appointed as an Additional
Director, will hold office till the ensuing AGM and is eligible for
The Board has appointed Mr. Ajay Shankar as an Independent Director of
the Company from May 30, 2015 to May 29, 2020, subject to the approval
of the shareholders. Mr. Ajay Shankar, appointed as an Additional
Director, will hold office till the ensuing AGM and is eligible for
Mr. Sushobhan Sarker, Mr. Shailendra Roy and Mr. R. Shankar Raman
retire from the Board by rotation and are eligible for re-appointment
at the forthcoming AGM.
The notice convening the AGM includes the proposal for appointment /
re-appointment of Directors.
The terms and conditions of appointment of the Independent Directors
are placed on the website of the Company
The Company has also disclosed the Directors'' familiarization programme
on its website
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
This information is given in Annexure ''C'' - Report on Corporate
Governance forming part of this Report. Members are requested to refer
to page 57 of this Annual Report.
The Company has in place an Audit Committee in terms of the
requirements of the Companies Act, 2013 read with the rules made
thereunder and Clause 49 of the Listing Agreement. The details relating
to the same are given in Annexure ''C'' - Report on Corporate Governance
forming part of this Report. Members are requested to refer to pages 59
to 61 of this Annual Report.
COMPANY POLICY ON DIRECTOR APPOINTMENT AND REMUNERATION
The Company has in place a Nomination & Remuneration Committee in
accordance with the requirements of the Companies Act, 2013 read with
the rules made thereunder and Clause 49 of the Listing Agreement. The
details relating to the same are given in Annexure ''C'' - Report on
Corporate Governance forming part of this Report. Members are requested
to refer to pages 61 to 63 of this Annual Report.
The Committee has formulated a policy on Director''s appointment and
remuneration including recommendation of remuneration of the key
managerial personnel and other employees, board diversity, composition
and the criteria for determining qualifications, positive attributes
and independence of a Director.
DECLARATION OF INDEPENDENCE
The Company has received Declarations of Independence as stipulated
under Section 149(7) of the Companies Act, 2013 and Clause 49 of the
Listing Agreement from Independent Directors confirming that he is not
disqualified from appointing/continuing as an Independent Director. The
same are also displayed on its website
EXTRACT OF ANNUAL RETURN
As per the provisions of Section 92(3) of the Companies Act, 2013, an
extract of the Annual Return in Form MGT-9 is attached as Annexure ''G''
to this Report.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms that:
a) In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
b) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that period;
c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
d) The Directors have prepared the Annual Accounts on a going concern
e) The Directors have laid down an adequate system of internal
financial control to be followed by the Company and that such internal
financial controls are adequate and were operating efficiently; and
f) The Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company has designed and implemented a process driven framework for
Internal Financial Controls (IFC) within the meaning of the
explanation to Section 134(5)(e) of the Companies Act, 2013. For the
year ended March 31, 2015, the Board is of the opinion that the Company
has sound IFC commensurate with the nature and size of its business
operations and operating effectively and no material weakness exist.
The Company has a process in place to continuously monitor the same and
identify gaps, if any, and implement new and/or improved controls
wherever the effect of such gaps would have a material effect on the
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS
The Nomination & Remuneration Committee and the Board have laid down
the manner in which formal annual evaluation of the performance of the
Board, Committees and individual Directors has to be made.
It includes circulation of questionnaires to all Directors for
evaluation of the Board and its Committees, Board composition and its
structure, its culture, its effectiveness, its functioning, information
availability, etc. These questionnaires also cover specific criteria
and the grounds on which all Directors in their individual capacity
will be evaluated.
The Individual Directors responses on the questionnaire on the
performance of the Board, Committee(s), Directors and Chairman were
analyzed to arrive at unbiased conclusions.
The inputs given by all the directors were discussed in the meeting of
the Independent Directors held on March 23, 2015, as per Schedule IV of
the Companies Act, 2013.
The performance evaluation of the Board, Committees and Directors was
also reviewed by the Nomination & Remuneration Committee.
DISCLOSURE OF REMUNERATION
The details of remuneration as required to be disclosed under the
Companies Act, 2013 and the rules made thereunder is given in Annexure
''H'' forming part of this Report.
The Board of Directors wishes to express their appreciation to all the
employees for their outstanding contribution to the operations of the
Company during the year. The details of employees receiving
remuneration exceeding Rs. 5 lakh per month or Rs. 60 lakh per annum is
provided in Annexure ''E'' forming part of this Report. In terms of
Section 136(1) of the Act and the rules made thereunder, the Report and
Accounts are being sent to the shareholders excluding the aforesaid
Annexure. Any Shareholder interested in obtaining a copy of the same
may write to the Company Secretary. None of the employees listed in the
said Annexure is related to any Director of the Company.
RECEIPT OF REMUNERATION BY MANAGING DIRECTOR FROM SUBSIDIARY COMPANY
Mr. K. Venkataramanan, Chief Executive Officer and Managing Director of
the Company, is also the Managing Director of a wholly owned
subsidiary, L&T Hydrocarbon Engineering Limited. During the year
2014-15, part of the remuneration received by Mr. Venkataramanan was
debited to L&T Hydrocarbon Engineering Limited. Kindly refer to page
242 of this Annual Report for details.
The disclosures relating to Employee Stock Options required to be made
under the provisions of the Companies Act, 2013 and the rules made
thereunder and the SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 together with a certificate
obtained from the Statutory Auditors, confirming compliance, is
provided in Annexure ''B'' forming part of this Report.
Pursuant to Clause 49 of the Listing Agreement entered into with the
Stock Exchanges, a Report on Corporate Governance and a certificate
obtained from the Statutory Auditors confirming compliance, is provided
in Annexure ''C'' forming part of this Report.
As per the provisions of Section 177(9) of the Companies Act, 2013, the
Company is required to establish an effective Vigil Mechanism for
Directors and employees to report genuine concerns.
The Company has a Whistle-blower Policy in place since 2004 to report
concerns about unethical behaviour, actual/ suspected frauds and
violation of Company''s Code of Conduct or Ethics Policy. The Policy has
been suitably modified to meet the requirements of Vigil Mechanism
under the Companies Act, 2013. The policy provides for adequate
safeguards against victimisation of persons who avail the same and
provides for direct access to the Chairperson of the Audit Committee.
The Audit Committee of the Company oversees the implementation of the
The Company has disclosed information about the establishment of the
Whistle Blower Policy on its website
BUSINESS RESPONSIBILITY REPORTING
The Company has been one of the first engineering and construction
companies in India to publish its report on Corporate Sustainability.
As per Clause 55 of the Listing Agreement with the Stock Exchanges, a
separate section on Business Responsibility Reporting forms a part of
this Annual Report (refer pages 18 to 35).
The detailed Corporate Sustainability Report is also available on the
Company''s website http://www.larsentoubro.com/corporate/sustainability.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS
During the year under review, there were no material and significant
orders passed by the regulators or courts or tribunals impacting the
going concern status and the Company''s operations in future.
CONSOLIDATED FINANCIAL STATEMENTS:
Your Directors have pleasure in attaching the Consolidated Financial
Statements pursuant to Section 129(3) of the Companies Act, 2013 and
Clause 32 of the Listing Agreement entered into with the Stock
Exchanges and prepared in accordance with the Accounting Standards
prescribed by the Institute of Chartered Accountants of India, in this
The Auditors report to the shareholders does not contain any
qualification, observation or adverse comment.
SECRETARIAL AUDIT REPORT
The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian &
Co., Practicing Company Secretaries is attached as Annexure ''F'' to this
The Secretarial Auditor''s report to the shareholders does not contain
REPORTING OF FRAUD
The Auditors of the Company have not reported any fraud as specified
under the second proviso of Section 143(12) of the Companies Act, 2013.
The Company''s auditors M/s. Sharp & Tannan, (firm registration number
109982W) have already completed more than ten years as Statutory
Auditors of the Company.
In accordance with provisions of Section 139 of the Companies Act, 2013
and the Companies (Audit and Auditors) Rules, 2014, they can continue
as Auditors for a further period of two years i.e up to March 31, 2017.
It is proposed to appoint them from conclusion of 70th Annual General
Meeting till the conclusion of 72nd Annual General Meeting.
In view of the mandatory rotation of auditor requirement and to ensure
smooth transition during this period, it is also proposed to appoint
M/s. Deloitte Haskins & Sells LLP as Statutory Auditors for a period of
5 continuous years i.e., from the conclusion of 70th Annual General
Meeting till the conclusion of 75th Annual General Meeting of the
Both the Auditors will be jointly and severally responsible during the
first two financial years 2015-16 and 2016-17.
Sharp & Tannan and Deloitte Haskins & Sells LLP, have informed the
Company vide letters dated May 30, 201 5 & May 26, 2015 respectively,
that their appointment if made would be within the limits prescribed
under section 141 of the Companies Act, 2013.
Sharp & Tannan and Deloitte Haskins & Sells LLP, have confirmed that
they have subjected themselves to the peer review process of Institute
of Chartered Accountants of India (ICAI) and hold valid certificate
issued by the Peer Review Board of the ICAI.
Sharp & Tannan and Deloitte Haskins & Sells LLP, have also furnished a
declaration confirming their independence as well as their arm''s length
relationship with the Company and declared that they have not taken up
any prohibited non-audit assignments for the Company.
Pursuant to the provisions of Section 148(3) of the Companies Act, 2013
the Board of Directors had appointed M/s R. Nanabhoy & Co., Cost
Accountants, as Cost Auditors of the Company, for conducting the audit
of cost records for the financial year ended March 31, 2015. The audit
is in progress and report will be filed with Ministry of Corporate
Affairs within the prescribed period.
The Board, on the recommendation of the Audit Committee, at its meeting
held on May 30, 201 5, has approved the appointment of M/s R. Nanabhoy
& Co., Cost Accountants as the Cost Auditors of the Company, for
conducting audit of cost records for the financial year ending March
31,2016. There is an additional coverage of products under audit
during the year.
A proposal for ratification of remuneration of the Cost Auditors for FY
2014-15 as well as FY 2015-16 is placed before the shareholders.
Your Directors take this opportunity to thank the customers, supply
chain partners, employees, Financial Institutions, Banks, Central and
State Government authorities, Regulatory authorities, Stock Exchanges
and all the various stakeholders for their continued co-operation and
support to the Company. Your Directors also wish to record their
appreciation for the continued co-operation and support received from
the Joint Venture partners / Associates.
For and on behalf of the Board
A. M. Naik
Group Executive Chairman
Mumbai, May 30, 2015