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Larsen and Toubro
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« Mar 12
Notes to Accounts Year End : Mar '13
A(1) Revenue from sales & service include:
 
 (a) Rs. 691.63 crore (previous year: Rs. 298.88 crore) for price
 variations net of liquidated damages in terms of contracts with the
 customers.
 
 (b) Shipbuilding subsidy Rs. 10.02 crore (previous year: Z 2.09 crore)
 and reversal of shipbuilding subsidy of Rs. 7.22 crore (previous year :
 f 18.24 crore).  .
 
 [B(l)] Miscellaneous income includes recoveries from subsidiary, joint
 venture and associate companies towards directly attributable expenses
 incurred on employees deputed to these companies. Such expenses, the
 details of which are given hereunder, have been netted off from
 miscellaneous income.
 
 C(1) The Balance Sheet as on March 31, 2013 and the Statement of Profit
 and Loss for the year ended March 31, 2013 are drawn and presented as
 per the new Schedule VI to the Companies Act, 1956.
 
 C(2) Particulars in respect of loans and advances in the nature of
 loans as required by the listing agreement:
 
 C(3) Extraordinary and Exceptional Items [Note R(4)]:
 
 (a) Exceptional items for the year ended March 31, 2013 include the
 following:
 
 (i) Expenses incurred amounting to Rs. 38.34 crore on voluntary
 retirement scheme;
 
 (ii) Gain of Rs. 214.29 crore on sale of the Companys stake in L&T
 Plastics Machinery Private Limited, a subsidiary company.  Exceptional
 items for the year ended March 31, 2012 included profit of Rs. 55.00
 crore on sale of the Companys part stake in Raykal Aluminium Company
 Private Limited, a subsidiary company.
 
 (b) Extraordinary items during the year ended March 31, 2013 represent
 the following:
 
 (i) Reversal of Rs. 52.89 crore (previous year: Rs. Nil) being
 provision made in earlier years in respect of the Companys Investment
 in shares of Satyam Computer Services Limited (SCSL);
 
 (ii) Gain of Rs. 25.22 crore (net of tax Rs. 18.72 crore) on sale of
 the Companys Medical Equipment Business unit. Tax of Rs. 6.50 crore
 included under current tax.
 
 C(4) The expenditure on research and development activities recognised
 as expense in the Statement of Profit and Loss is Rs. 98.17 crore
 (previous year: Rs. 83.33 crore). Further, the Company has incurred
 capital expenditure on research and development activities as follows:
 
 (a) on tangible assets of Rs. 12.45 crore (previous year: Rs.17.17
 crore);
 
 (b) on intangible assets being expenditure on new product development
 of Rs. 43.76 crore (previous year: Rs. 38.58 crore) [Note 5(b)]; and
 
 (c) on other intangible assets of Rs. 0.96 crore (previous year: Rs.1.11
 crore).
 
 In addition, the Company has carried out work of a developmental nature
 of Rs. 21.27 crore (previous year: Rs. 13.06 crore) which is
 partially/fully paid for by the customers.
 
 C(5) (a) Provision for current tax includes Rs. 20.25 crore in respect
 of income tax payable outside India (previous year: Rs. 8.32 crore)
 
 (b) Tax effect of t 0.17 crore (previous year: Rs. 0.03 crore) on
 account of debenture issue expenses has been credited to securities
 premium account.
 
 C(6) Disclosures pursuant to Accounting Standard (AS) 13 Accounting
 for Investments
 
 1. The Company has given, inter alia, the following undertakings in
 respect of its investments:
 
 a.  Jointly with L&T Infrastructure Development Projects Limited (a
 subsidiary of the Company), to the term lenders of its subsidiary
 company L&T.Transportation Infrastructure Limited (LTTIL):
 
 i.  not to reduce their joint shareholding in LTTIL below 51 % until
 the financial assistance received from the term lenders is repaid in
 full by LTTIL; and
 
 ii. to jointly meet the shortfall in the working capital requirements
 of LTTIL until the financial assistance received from the term lenders
 is repaid in full by LTTIL .
 
 b.  To the lenders of L&T Krishnagiri Thopur Toll Road Limited, not to
 dilute Companys shareholding in L&T Infrastructure Development
 Projects Limited below 51 %.
 
 c.  To Gujarat State Road Development Corporation Limited:
 
 i.  to hold in L&T Ahmedabad-Maliya Tollway Limited, L&T Halol-Shamlaji
 Tollway Limited and L&T Rajkot-Vadinar Tollway Limited along with L&T
 Infrastructure Development Projects Limited:
 
 - 100% stake during the construction period;
 
 - 51 % stake for 5 years from the date of commercial operation or end
 of construction of the project, whichever .  is later; and
 
 - 51% stake during operational period.
 
 ii.  not to divest the stake in L&T Infrastructure Development Projects
 Limited until the aforesaid undertakings are valid.
 
 d.  To National Highway Authority of India, to hold together with its
 associates in L&T Samakhiali Gandhidham Tollway Limited minimum 51 %
 stake for a period of 2 years after the construction period.
 
 e.  To National Highway Authority of India, to hold minimum 26% stake
 in PNG Tollway Limited till the commercial operations date.
 
 f.  To National Highway Authority of India, to hold together with its
 associates, in L&T Devihalli Hassan Tollway Limited, minimum 51 % stake
 for a period of 2 years after construction period.
 
 g.  To National Highway Authority of India, to hold together with its
 associates in L&T Krishnagiri Walajahpet Tollway Limited:
 
 i.  minimum 51 % stake during the construction period
 
 ii.  minimum 33% stake for 3 years from project completion date and
 
 iii. Minimum 26% or such lower stake as may be permitted by National
 Highway Authority of India during remaining concession period.
 
 h.  To the lenders of PNG Tollway Limited, to hold together with L&T
 Infrastructure Development Projects Limited and Ashoka Buildcon
 Limited, minimum 51% stake in PNG Tollway Limited, until final
 settlement date.
 
 i.  To the Security Trustee of the lenders of L&T Metro Rail
 (Hyderabad) Limited, to hold and maintain along with L&T Infrastructure
 Development Projects Limited (a subsidiary of the Company) at least 51
 % stake till final settlement date.
 
 j. To the Government of Andhra Pradesh (GoA) with respect to
 shareholding in L&T Metro Rail (Hyderabad) Limited, to hold and
 maintain along with L&T Infrastructure Development Projects Limited -
 
 i.  51 % stake till the second anniversary of the commercial operation
 date (COD) of the project;
 
 ii.  33% stake till the third anniversary of the commercial operation
 date of the project;
 
 iii. 26% stake (or such lower proportion as may be permitted by the
 GoA), till the remaining concession period.
 
 k. Jointly with L&T-MHI Turbine Generators Private Limited (a
 subsidiary of the Company) and Mitsubishi Heavy Industries Limited
 (joint venture partners in L&T-MHI Turbine Generators Private Limited),
 to Andhra Pradesh Power Development Company Limited (APPDCL) to render
 unconditional and irrevocable financial support for the successful
 execution of APPDCL 2x800 MW Power Project - Steam Turbine Generator
 Package Tender, near Krishnapatnam, Nellore District, Andhra Pradesh.
 
 I.  To hold certain minimum stake in its subsidiary companies namely,
 L&T-MHI Boilers Private Limited and L&T-MHI Turbine Generators Private
 Limited. These undertakings have been given to the customers/potential
 customers of the Company, as also those of L&T-MHI Boilers Private
 Limited. The undertakings will remain valid till the end of defect
 liability period or till such period as prescribed in the related bid
 documents/contracts, m. To the Security Trustee of the lenders of L&T
 Sapura Shipping Private Limited, not to sell or transfer equity stake
 without prior approval.
 
 n. To hold 15,899 shares comprising 9.85% of the issued capital of
 International Seaport Dredging Limited till January 24, 2016.
 
 o.  To the Security Trustee of L&T Aviation Services Private Limited,
 to hold at least 51% stake, directly or indirectly, in L&T Aviation
 Services Private Limited, until any amount is outstanding under the
 Credit Facility Agreement, p. To City and Industrial Development
 Corporation of Maharashtra Limited (CIDCO) that it shall continue to
 hold not less than 51 % stake in L&T Seawoods Private Limited (LTSPL)
 until CIDCO executes the lease deed for land in favour of LTSPL.
 
 q. To the lenders of L&T Seawoods Private Limited, to maintain a
 minimum 51 % stake in L&T Seawoods Private Limited, until any amount is
 outstanding under banking credit facilities.
 
 r. To the debenture trustee of L&T Shipbuilding Limited, to maintain at
 least 26% stake in L&T Shipbuilding Limited, until any amount is
 outstanding under the debentures.
 
 C(7) Disclosure pursuant to Accounting Standard (AS) -15 (Revised)
 Employee Benefits.
 
 i.  Defined contribution plans: [Note R(6)(b)(i)) Amount of Rs. 103.80
 crore [including Rs.17.17 crore in respect of earlier years] (previous
 year: Rs. 74.52 crore) is recognised as an expense and included in
 employee benefits expense (Note N) in the Statement of Profit and
 Loss.
 
 ii.  Defined benefit plans: [Note R(6)(b)(ii)]
 
 a) The amounts recognised in Balance Sheet are as follows:
 
 C(8) Disclosures pursuant to Accounting Standard (AS) 17 Segment
 Reporting
 
 a) Information about business segments (information provided in respect
 of revenue items for the year ended March 31, 2013 and  in respect of
 assets/liabilities as at March 31, 2013 denoted as CY below, previous
 year denoted as PY)
 
 C(9) Disclosure in respect of Leases pursuant to Accounting Standard
 (AS 19) Leases
 
 (i) Where the Company is a Lessor:
 
 a.  The Company has given on finance leases certain items of plant and
 equipment. The leases have a primary period that is fixed and
 non-cancellable. The leases are cancellable upon payment by the lessee
 of an additional amount such that, at inception, continuation of the
 lease is reasonably certain. There are no exceptional/restrictive
 covenants in the lease agreement.
 
 b.  The total gross investment in these leases as on March 31, 2013 and
 the present value of minimum lease payments receivable as on March 31,
 2013 is as under:
 
 (ii) Where the Company is a lessee: a) Finance leases:
 
 i.  [a] Assets acquired on finance lease mainly comprise plant and
 equipment, vehicles and personal computers. The leases have a primary
 period, which is fixed and non-canceliable. In the case of vehicles,
 the Company has an option to renew the lease for a secondary period.
 The agreements provide for revision of lease rentals in the event of
 changes in (a) taxes, if any, leviable on the lease rentals (b) rates
 of depreciation under the Income Tax Act, 1961 and (c) change in the
 lessors cost of borrowings. There are no exceptional/restrictive
 covenants in the lease agreements.
 
 C(10) In line with the Companys risk management policy, the various
 financial risks mainly relating to changes in the exchange rates,
 interest rates and commodity prices are hedged by using a combination
 of forward contracts, swaps and other derivative contracts, besides the
 natural hedges.
 
 C(11) (a) The Company has adopted a new accounting policy [Note
 R(18)(f)] for separate accounting of embedded derivatives with effect
 from April 1, 2012, for more appropriate presentation of the financial
 statements. The profit before tax is lower by Rs. 55.36 crore pursuant
 to adoption of the new accounting policy for separate accounting of
 embedded derivatives.
 
 (b) The Company has changed the accounting policy for recognition of
 revenue from real estate development transactions pursuant to the
 guidance note on accounting for Real Estate Transactions (Revised 2012)
 issued by the Institute of Chartered Accountants of India [Note
 R(3)(A)(a)(iii)]. The profit before tax of the Company is higher byRs.
 2.39 crore pursuant to change in the accounting policy of revenue
 recognition for real estate development transactions.
 
 C(12) There are no amounts due and outstanding to be credited to
 Investor Education & Protection Fund as at March 31, 2013.
 
 C(13) Figures for the previous year have been regrouped/reclassified
 wherever necessary.
Source : Dion Global Solutions Limited
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