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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    « Mar 12
To the Members,
 
 The Directors have pleasure in presenting their Annual Report and
 Accounts for the year ended March 31, 2013.
 
 FINANCIAL RESULTS
 
                                                    2012-13     2011-12 
                                                    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 
 obsolescence
 
                                                   6,456.14    6,254.34
 
 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
 previous year
 
 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
 
                                                   4,774.58    4,405.90
 
 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
 shares.
 
 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
 business.
 
 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.
 
 DIVIDEND
 
 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.
 
 DEPOSITORY SYSTEM
 
 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
 Depositories.
 
 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.
 
 CAPITAL EXPENDITURE
 
 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.
 
 DEPOSITS
 
 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,
 2013.
 
 SUBSIDIARY COMPANIES
 
 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
 
 Note:
 
 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.
 
 AUDITORS REPORT
 
 The Auditors Report to the Shareholders does not contain any
 qualification.
 
 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.
 
 OTHER DISCLOSURES
 
 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.
 
 PERSONNEL
 
 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
 Annual Report.
 
 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
 www.larsentoubro.com.
 
 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
 departure;
 
 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
 basis; and
 
 v.  that the Company has adequate internal systems and controls in
 place to ensure compliance of laws applicable to the Company.
 
 DIRECTORS
 
 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
 qualification.
 
 AUDITORS
 
 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).
 
 COST AUDITORS
 
 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
 Government.
 
 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
 prescribed period.
 
 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
 
 ACKNOWLEDGEMENT
 
 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
 partners/Associates.
 
                                 For and on behalf of the Board
 
                                           A.  M. Naik
 
                                      Group Executive Chairman
 
 Mumbai, May 22, 2013
Source : Dion Global Solutions Limited
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