To the Members,
The Directors have pleasure in presenting their Annual Report and
Accounts for the year ended March 31, 2013.
Rs. crore Rs. crore
Profit before depreciation, exceptional 7,275.56 6,954.79
and extraordinary items and tax
Less: Depreciation, amortization and 819.42 700.45
Add: Transfer from Revaluation Reserve 0.95 0.99
Profit before exceptional and 6,457.09 6,255.33
extraordinary items and tax
Add: Exceptional items 175.95 55.00
Profit before extraordinary items and tax 6,633.04 6,310.33
Add: Extraordinary items 78.11 -
Profit before tax 6,711.15 6,310.33
Less: Provision for Tax 1800.50 1,853.83
Profit after Tax 4,910.65 4,456.50
Add: Balance brought forward from 152.39 105.68
Less: Dividend paid for the previous 2.71 3.89
year (including dividend distribution tax)
Balance available for disposal which the 5,060.33 4,558.29
directors appropriate as follows :
Debenture Redemption Reserve 50.25 44.00
Proposed Dividend 1,138.47 1,010.46
Dividend Tax 85.86 101.44
General Reserve 3,500.00 3,250.00
Balance to be carried forward 285.75 152.39
Dividend 1,138.47 1,010.46
The Directors recommend payment of final dividend of Rs. 18.50 per
equity share of Rs. 21- each on pre-bonus capital of 61,53,85,981
YEAR IN RETROSPECT
The gross sales and other income for the financial year under review
were Rs. 63,322 crore as against X 55,076 crore for the previous
financial year registering an increase of 15%. The Profit before tax
excluding extraordinary and exceptional items was Rs. 6,457 crore and
the Profit after tax excluding extraordinary and exceptional items of f
4,695 crore for the financial year under review as against Rs. 6,255
crore and Rs. 4,413 crore respectively for the previous financial year,
registering an increase of 3% and 6% respectively.
TRANSFER OF HYDROCARBON BUSINESS
The Board of Directors of the Company at its Meeting held on May 22,
2013 has approved a Scheme of Arrangement between Larsen & Toubro
Limited and L&T Hydrocarbon Engineering Limited, a wholly owned
subsidiary of the Company (LTHE) and their respective Shareholders
and Creditors which inter alia envisages transfer of the Hydrocarbon
Business undertaking along with related assets and liabilities into
LTHE and other consequential matters under the provisions of Sections
391 to 394 of the Companies Act, 1956. The Appointed Date of the Scheme
would be April 01, 2013. There would be no issue of Shares by LTHE to
the Shareholders of the Company pursuant to transfer of Hydrocarbon
ISSUE OF BONUS SHARES
To commemorate the occasion of the Platinum Jubilee of the Company, the
Board of Directors of the Company in its meeting held on May 22, 2013,
has recommended for approval of the shareholders issue of bonus shares
to the holders of equity shares of the Company in the ratio of 1:2
(i.e. one bonus equity share of Rs. 21- each for every two fully paid
up equity shares of Rs. 2/- each held). The approval of the
shareholders will be sought through postal ballot.
The Directors recommend payment of dividend of Rs. 18.50 per equity
share of Rs. 2/- each on the pre-bonus share capital which works out to
Rs. 12.33 per share post issue of bonus shares.
As the members are aware, the Companys shares are compulsorily
tradable in electronic form. As on March 31, 2013, 97.39% of the
Companys total paid-up Capital representing 59,93,26,527 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 the
CAPITAL & FINANCE
During the year under review, the Company allotted 29,87,082 equity
shares upon exercise of stock options by the eligible employees under
the Employee Stock Option Schemes.
During the year under review, Rs. 250 crores were raised by the Company
via issuance of Non-Convertible Debentures. Further, the Company has
drawn down long term foreign currency loans in USD & JPY equivalent to
approximately Rs. 2,660 crores.
During the year, the Company repaid a part of its long term foreign
currency loans, equivalent to about Rs. 1,615 crore.
As at March 31, 2013, the gross fixed and intangible assets, including
leased assets, stood at Rs. 12,582 crore and the net fixed and
intangible assets, including leased assets, at Rs. 8,902 crore. Capital
expenditure during the year amounted to Rs. 1,505 crore.
There are no deposits which were due for repayment on or before March
31, 2013. All unclaimed deposits were transferred to Investor Education
& Protection Fund during the year.
TRANSFER TO INVESTOR EDUCATION & 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. 73,11,898/-
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. 10,63,57,861/- as on March 31,
During the year under review, the Company subscribed to/ acquired
equity shares in various subsidiary companies. The details of
investments in subsidiary companies during the year are as under:
A) Shares acquired during the year:-
Name of the company No. of shares
L&T Aviation Services Private Limited 2,16,00,000
L&T-MHI Boilers Private Limited 71,40,000
L&T-MHI Turbine Generators Private Limited 4,61,55,000
L&T General Insurance Company Limited 9,00,00,000
L&T Power Development Limited 43,70,00,000
L&T Shipbuilding Limited 81,86,30,000
L&T Special Steels and Heavy Forgings Limited 6,66,00,000
Larsen Toubro Arabia LLC 7,500
L&T Metro Rail (Hyderabad) Limited 9,30,000
L&T Technology Services Limited 50,000
Audco India Limited (see Note 1) 7,81,630
B) Shares sold/transferred/reduction in face value during the year:
Name of the company No. of shares
L&T- Sargent & Lundy Limited (under buy-back) 9,09,092
L&T Plastics Machinery Private Limited (See Note 2) 1,60,00,000
L&T Power Limited (See Note 3) 51,157
1. During the year, the Company acquired 50% stake in Audco India
Limited. With this acquisition, Audco India Limited is now a wholly
owned subsidiary of the Company.
2. The Company has sold its entire stake in L&T Plastics Machinery
Private Limited during the year.
3. During the year, the face value of the share was reduced from Rs.
30,000 per share to Rs. 10 per share.
The Ministry of Corporate Affairs (MCA), vide its circular No. 2/2011
dated February 8, 2011, has granted general exemption under Section
212(8) of the Companies Act, 1956, subject to certain conditions being
fulfilled by the Company. As required under the circular, the Board of
Directors has, at its meeting held on January 25, 2013, passed a
resolution giving consent for not attaching the Balance Sheet of the
subsidiary companies. We have also given the required information on
subsidiary companies in this Annual Report. Shareholders who wish to
have a copy of the full report and accounts of the subsidiaries will be
provided the same on receipt of a written request from them. These
documents will be uploaded on the Companys Website viz.
www.larsentoubro.com and will also be available for inspection by any
shareholder at the Registered Office of the Company, on any working day
during business hours.
The Auditors Report to the Shareholders does not contain any
DISCLOSURE OF PARTICULARS
Information as per the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, relating to Conservation of
Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is
provided in Annexure A forming part of this Report.
The disclosures required to be made under the Securities and Exchange
Board of India (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.
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 information required under Section 217(2A)
of the Companies Act, 1956 and the Rules made thereunder, is provided
in Annexure forming part of the Report. In terms of Section 219( 1 )(b)
(iv) of the Act, the Report and Accounts are being sent to the
shareholders excluding the aforesaid Annexure. Any Shareholder
interested in obtaining 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.
BUSINESS RESPONSIBILITY REPORTING
SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012,
mandated the top 100 listed companies, based on market capitalization
at BSE and NSE, to include Business Reponsibility Report as part of the
Accordingly 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 (pages 22-37).
CORPORATE GOVERNANCE VOLUNTARY GUIDELINES
By complying with the provisions of the Companies Act, 1956 and Clause
49 of the Listing Agreement, the Company is complying with all the
major clauses of the Corporate Governance Voluntary Guidelines, 2009.
We have reported in Annexure C to the Directors Report- Corporate
Governance, the extent of our compliance of the Corporate Governance
Voluntary Guidelines, 2009 under the following heads:
1. Nomination & Remuneration Committee
2. Other Information
3. Audit Committee
4. General Shareholders Information
CORPORATE SOCIAL RESPONSIBILITY VOLUNTARY GUIDELINES
MCA had released a set of guidelines on Corporate Social Responsibility
(CSR) in December 2009. The Company is substantially complying with the
guidelines laid down.
The Company has been one of the first engineering and construction
companies in India to publish its report on Corporate Sustainability.
The activities carried out by the Company as a part of its CSR
initiatives are covered in the Business Responsibility Reporting
forming a part of this Annual Report. The detailed- Corporate
Sustainability Report is also available on the Companys website
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable
Accounting Standards have been followed and there has been no material
ii. that the selected accounting policies were applied consistently
and the Directors 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 as at March 31, 2013 and of the profits of the Company for
the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern
v. that the Company has adequate internal systems and controls in
place to ensure compliance of laws applicable to the Company.
During the year under review, Mr. Ravi Uppal, Whole-time Director of
the Company resigned with effect from September 15, 2012.
Mr. V.K. Magapu, Whole-time Director of the Company retired on
September 30, 2012.
Mr. M. Damodaran was appointed as an Additional Director with effect
from October 22, 2012.
Mr. Vikram Singh Mehta was appointed as an Additional Director with
effect from October 22, 2012.
Mr. Thomas Mathew T., the Nominee Director of the Company representing
Life Insurance Corporation of India, resigned with effect from
November 19, 2012.
Mr. Sushobhan Sarker was appointed as the Nominee Director representing
Life Insurance Corporation of India with effect from December 15,
2012 to fill the casual vacancy caused by the resignation of Mr. Thomas
Mathew T. Mr. Subodh Bhargava, Mr. Shailendra Roy, Mr. R. Shankar
Raman and Mr. M. M. Chitale retire from the Board by rotation and are
eligible for re-appointment at the forthcoming Annual General Meeting.
Mr. M. Damodaran and Mr. Vikram Singh Mehta, Additional Directors of
the Company hold office up to the date of the forthcoming Annual
General Meeting and are eligible for appointment.
Mrs. Bhagyam Ramani, Nominee of General Insurance Corporation of India,
resigned w.e.f. May 8, 2012. Mrs. Bhagyam Ramani would have been
liable for retirement by rotation in ensuing AGM. The said vacancy is
not proposed to be filled at the ensuing AGM.
The notice convening the Annual General Meeting includes the proposal
for appointment/re-appointment of Directors.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the Consolidated Financial
Statements pursuant to 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 regard.
The Auditors Report to the Shareholders does not contain any
The Auditors, M/s. Sharp & Tannan (S&T), hold office until the
conclusion of the ensuing Annual General Meeting and are recommended
for re-appointment. Certificate from the Auditors has been received to
the effect that their re-appointment, if made, would be within the
limits prescribed under Section 224(1 B) of the Companies Act, 1956.
S&T has submitted the Peer Review Certificate dated September 21, 2010
issued to them by Institute of Chartered Accountants of India (ICAl).
Pursuant to the Cost Audit Order dated January 24, 2012 issued by the
Ministry of Corporate Affairs (MCA), the Board of Directors has
appointed M/s. R. Nanabhoy & Co., Cost Accountants, as Cost Auditors
for audit of cost accounting records of Engineering machinery
(including electrical and electronic products), for the Financial Year
ended March 31, 2013. The appointment has been approved by the Central
The Report of the Cost Auditors for the Financial Year ended March 31,
2013 is under finalization and will be filed with the MCA within the
Based on the Audit Committee recommendations, the Board of Directors at
its meeting held on May 22, 2013, has approved the re-appointment of
M/s. R. Nanabhoy & Co. as the Cost Auditors of the Company for the
Financial Year ending March 31, 2014, for applicable Product Groups
covered under MCA Cost Audit Order No. 52/56/CAB-2010 dated November 6,
2012. The appointment is subject to approval of the Central Government
Your Directors take this opportunity to thank the 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
For and on behalf of the Board
A. M. Naik
Group Executive Chairman
Mumbai, May 22, 2013