A(III) Terms/rights attached to equity shares:
The Company has only one class of share capital, i.e., equity shares
having face value of Rs. 2 per share. Each holder of equity share is
entitled to one vote per share.
A(VI) The aggregate number of equity shares allotted as fully paid up
by way of bonus shares in immediately preceding five years ended March
31,2015 are 30,82,94,576 (previous period of five years ended March 31,
2014: 30,82,94,576 shares)
A(VII) The aggregate number of equity shares issued pursuant to
contract, without payment being received in cash in immediately
preceding last five years ended on March 31, 2015: Nil (previous period
of five years ended March 31, 2014: Nil)
A(VIII) Stock option schemes
i. The grant of options to the employees under the stock option schemes
is on the basis of their performance and other eligibility criteria.
The options are vested equally over a period of 4 years [5 years in the
case of series 2006(A)], subject to the discretion of the management
and fulfillment of certain conditions.
ii. Options can be exercised anytime within a period of 7 years from
the date of grant and would be settled by way of issue of equity
shares. Management has discretion to modify the exercise period.
d) Weighted average share price at the date of exercise for stock
options exercised during the period is Rs. 1554.71 (previous year: Rs.
112061) per share.
e) (i) In respect of stock options granted pursuant to the Company''s
stock options schemes, the intrinsic value of the options
(excess of market price of the share over the exercise price of the
option) is treated as discount and accounted as employee compensation
over the vesting period.
(ii) Expense on Employee Stock Option Schemes debited to the Statement
of Profit and Loss during 2014-15 is Rs. 49.11 crore (previous year: Rs. 55
88 crore) net of recoveries of Rs. 2.54 crore (previous year: Rs. 3.30
crore) from its group companies towards the stock options granted to
deputed employees, pursuant to the employee stock option schemes (Note
N). The entire amount pertains to equity-settled employee share-based
f) Pursuant to the Securities and Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014, the Company has adopted the
guidance note on Employee Share Based Payments issued by the Institute
of Chartered Accountants of India and revised the method of computation
of stock option compensation based on the number of grants that are
expected to vest. Consequently, the charge on account of employee
stock option compensation for the year ended March 31,2015 is lower and
the profit before tax is higher by Rs. 13.99 crore.
g) During the year, the Company has recovered Rs. 14.60 crore (previous
year: Rs. 16.01 crore) from its subsidiary companies towards the stock
options granted to their employees, pursuant to the employee stock
h) Had fair value method been adopted for expensing the compensation
arising from employee share-based payment plans:
(i) The employee compensation charge debited to the Statement of Profit
and Loss for the year 2014-15 would have been higher by Rs. 9.10 crore
(previous year: Rs. 21.30 crore) [excluding Rs. 2.05 crore (previous year:
Rs. 5.45 crore) on account of grants to employees of subsidiary
(ii) Basic EPS before extraordinary items would have decreased from Rs.
54.46 per share to Rs. 54.37 per share
(iii) Basic EPS after extraordinary items would have decreased from Rs.
54.46 per share to Rs. 54.37 per share
(iv) Diluted EPS before extraordinary items would have decreased from Rs.
54.10 per share to Rs. 54.00 per share
(v) Diluted EPS after extraordinary items would have decreased from Rs.
54.10 per share to Rs. 54.00 per share
i) Weighted average fair values of options granted during the year is Rs.
1190.22 (previous year: Rs. 556.06) per option
k) The balance in share option outstanding account as on March 31, 2015
is Rs. 252.56 crore (net) (previous year: Rs. 323.70 crore), including Rs.
135.98 crore (previous year: Rs. 148.22 crore) for which the options have
been vested to employees as on March 31, 2015.
A(IX) The Directors recommend payment of final dividend of Rs. 16.25 per
equity share of Rs. 2 each on the number of shares outstanding as on the
Provision for final dividend has been made in the books of account for
92,95,62,061 equity shares outstanding as at March 31,2015 amounting to
Rs. 1510.54 crore.
C(I)(b) Foreign Currency Convertible Bonds:
0.675% US$ denominated 5 years & 1 day Foreign Currency Convertible
Bonds (FCCB) carried at Rs. 1250 crore as on March 31, 2015 represent
1000 bonds of US$ 2,00,000 each .The bonds are convertible into the
CompanyRs.s fully paid equity shares of Rs. 2 each at a conversion price of
Rs. 1916.50 per share at the option of the bond holders at any time on
and after December 1,2014 up to October 15, 2019. The bonds are
redeemable, subject to fulfillment of certain conditions, in whole but
not in part, at the option of the Company, on or at any time after
October 22, 2017 but not less than seven business days prior to the
maturity date, at the principal amount together with accrued interest
(calculated up to but excluding the date of redemption) on the date
fixed for redemption, unless the bonds have been previously redeemed,
converted or purchased and cancelled.
D(I)(a) Loans repayable on demand from banks include fund based working
capital facilities viz. cash credits and demand loans. The secured
portion of loans repayable on demand from banks of Rs. 57.79 crore
(previousyear: Rs. 104.45 crore), short term loans and advances from the
banks of Rs. 206.25 crore (previous year: Rs. 103.92 crore), working
capital facilities and other non-fund based facilities viz. bank
guarantees and letters of credit, are secured by hypothecation of
inventories, book debts and receivables.
D(IV)(a) Other payable includes due to directors Rs. 50.61 crore
(previous year: Rs. 52.90 crore) on account of commission.
(c) in various co-operative societies Rs. 12.88 crore for which share
certificates are yet to be issued.
(d) in proposed co-operative societies Rs. 0.53 crore.
(ii) of Rs. 4.39 crore in respect of which the deed of conveyance is yet
to be executed.
(iii) of Rs. 8.45 crore representing undivided share in properties at
4. Depreciation for the year include obsolescence Rs. 30.68 crore
(previous year Rs. 17.09 crore).
5. Own assets given on operating lease have been presented separately
in the schedule as per Accounting Standard (AS) 19.
6. Cost/valuation as at April 1,2014 of individual assets has been
reclassified wherever necessary.
7. Out of its lease hold land at Hazira, the Company has given certain
portion of land for the use of its subsidiary company. The lease deed
in respect of leasehold land given to the subsidiary company is under
8. With effect from April 1,2014, depreciation has been computed and
provided on the basis of useful life of fixed assets as specified in
Schedule II to the Companies Act, 2013 except in respect of assets
specified in Note 9 below where the useful life was determined by
technical evaluation, considering business specific usage, the
consumption pattern of the assets and the past performance of similar
assets. Consequently, the depreciation for the year ended March 31,2015
is higher and the profit before tax lower to the extent of Rs. 147.41
In respect of assets where useful life specified in Schedule II has
expired as on April 1, 2014, the carrying amount of Rs. 86.28 crore
before tax (Rs. 56.95 crore net of tax of Rs. 29.33 crore) was adjusted
against retained earnings as on April 1,2014.
As at 31-3-2015 As at 31-3-2014
Particulars Rs. crore Rs. crore
(a) Claims against the Company
not acknowledged as debts 883.06 184.75
(b) Sales-tax liability that
may arise in respect of matters
in appeal 173.96 122.11
(c) Excise duty/Service Tax
liability that may arise in respect
of matters in appeal/challenged
by the Company in WRIT 55.41 41.80
(d) Income-tax liability (including
penalty) that may arise in respect
of which the Company is in appeal 826.44 463.58
(e) Corporate guarantees for debt
given on behalf of Subsidiary
companies 8723.55 3772.85
(f) Corporate and bank guarantees
for performance given on behalf of
Subsidiary companies 9201.96 5627.07
1. The Company does not expect any reimbursements in respect of the
above contingent liabilities.
2. It is not practicable to estimate the timing of cash outflows, if
any, in respect of matters at (a) to (d) above pending resolution of
the arbitration/appellate proceedings.
3. In respect of matters at (e), the cash outflows, if any, could
generally occur up to twelve years, being the period over which the
validity of the guarantees extends except in a few cases where the cash
outflows, if any, could occur any time during the subsistence of the
borrowing to which the guarantees relate.
4. In respect of matters at (f), the cash outflows, if any, could
generally occur up to four years, being the period over which the
validity of the guarantees extends.
5. Contingent liability with respect to interest in joint ventures -
Revenue from sales & service include:
(a) Rs. 1443.57 crore (previousyear: Rs. 1558.70 crore) for price
variations net of liquidated damages in terms of contracts with the
(b) Shipbuilding subsidy Rs. Nil (previous year: Rs. Nil) and reversal of
shipbuilding subsidy of Rs. Nil (previous year: Rs. 31.54 crore)
Q(1) The balance sheet as on March 31, 2015 and the Statement of Profit
and Loss for the year ended March 31,2015 are drawn and presented as
per the format prescribed under Schedule III to the Companies Act,
Q(2) Particulars in respect of loans and advances in the nature of
loans as required by the listing agreement:
Q(4) Exceptional Item [Note R4]:
Exceptional item for the year ended March 31, 2015 includes gain of Rs.
357.16 crore (previous year: Rs. 588.50 crore) on sale of the Company''s
part stake in L&T Finance Holdings Limited, a subsidiary company.
Q(5) The expenditure on research and development activities recognised
as expense in the Statement of Profit and Loss is Rs. 139.44 crore
(previous year: Rs. 114.15 crore). Further, the company has incurred
capital expenditure on research and development activities as follows:
(a) on tangible assets of Rs. 6.50 crore (previous year: Rs. 5.02 crore);
(b) on intangible assets being expenditure on new product development
of Rs. 56.93 crore (previous year: Rs. 60.73 crore) [Note R5(b)]; and
(c) on other intangible assets of Rs. 0.69 crore (previous year: Rs. 1.20
Q(6) (a) Provision for current tax includes Rs. Nil crore in respect of
income tax payable outside India (previous year: Rs. 9.74 crore)
(b) Tax effect of Rs. 9.29 crore (previous year: Rs. 2.00 crore) on account
of debenture/share/foreign currency convertible bond issue expenses and
premium on inflation linked debenture has been credited to securities
Q(8) Disclosures pursuant to Accounting Standard (AS) 13 Accounting
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
companies 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 (KTTL),
not to dilute Company''s shareholding in L&T Infrastructure Development
Projects Limited below 51% until the borrowings received from the
lenders is repaid in full by KTTL.
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 alongwith 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 along with its
associates minimum 51% stake in L&T Samakhiali Gandhidham Tollway
Limited 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% equity
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% equity 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 Security Trustee of:
(i) the lenders of PNG Tollway Limited, to hold along with L&T
Infrastructure Development Projects Limited and Ashoka Buildcon Limited
minimum 51% equity stake in PNG Tollway Limited, until the financial
assistance received from the term lenders is repaid in full by PNG
Tollway Limited. The aforesaid minimum stake can, however, be disposed
off before final settlement date with prior approval of lenders;
(ii) the lenders of L&T Krishnagiri Walajahpet Tollway Limited, to hold
along with L&T Infrastructure Development Projects Limited minimum 51%
equity stake in L&T Krishnagiri Walajahpet Tollway Limited, until the
financial assistance received from the term lenders is repaid in full.
The aforesaid minimum stake can, however, be disposed off before final
settlement date with prior approval of lenders.
(iii) the lenders of L&T Samakhiali Gandhidham Tollway Limited, to hold
along with L&T Infrastructure Development Projects Limited minimum 51%
equity stake in L&T Samakhiali Gandhidham Tollway Limited, until the
financial assistance received from the term lenders is repaid in full
by L&T Samakhiali Gandhidham Tollway Limited. The aforesaid minimum
stake can, however, be disposed off before final settlement date with
prior approval of lenders;
(iv) the lenders of L&T Metro Rail (Hyderabad) Limited, to hold along
with L&T Infrastructure Development Projects Limited minimum 51% equity
stake and retain management control in L&T Metro Rail (Hyderabad)
Limited until the financial assistance received from the term lenders
is repaid in full. The aforesaid minimum stake can, however, be
disposed off before final settlement date with prior approval of
(v) the lenders of L&T Sapura Shipping Private Limited, not to sell or
transfer equity stake without prior approval;
(vi) L&T Aviation Services Private Limited, to hold atleast 51% stake,
directly or indirectly, in L&T Aviation Services Private Limited, until
any amount is outstanding under the Credit Facility Agreement.
i. To the Government of Telangana (erstwhile Government of Andhra
Pradesh) 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 COD of the project;
(iii) 26% stake (or such lower proportion as may be permitted by the
Government of Telangana (erstwhile Government of Andhra Pradesh), till
the remaining concession period.
j. To hold certain minimum stake in its subsidiary companies namely,
L&T-MHPS Boilers Private Limited and L&T-MHPS Turbine Generators
Private Limited. These undertakings have been given to the
customers/potential customers of the Company and customers/potential
customers of L&T-MHPS 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.
k. To hold 15,899 shares comprising 9.85% of the issued capital of
International Seaport Dredging Limited till January 24, 2016.
l. 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 Limited (formerly known as L&T Seawoods Private
Limited) until CIDCO executes the lease deed for land in favour of L&T
Seawoods Limited (formerly known as L&T Seawoods Private Limited).
m. To the lenders of L&T Seawoods Limited (formerly known as L&T
Seawoods Private Limited), to maintain a minimum 51% stake in L&T
Seawoods Limited (formerly known as L&T Seawoods Private Limited) until
any amount is outstanding towards banking credit facilities.
n. To the debenture trustee of L&T Shipbuilding Limited, to maintain
atleast 26% stake in L&T Shipbuilding Limited, until any amount is
outstanding towards the debentures.
o. To the lender of L&T Shipbuilding Limited, to maintain minimum 76%
stake in L&T Shipbuilding Limited, until any amount is outstanding
towards the working capital loan.
p. To the joint venture partner in L&T Howden Private Limited, to not
sell, transfer or dispose of any stake in L&T Howden Private Limited
till December 17, 2017 (90 months from the date of incorporation).
Q(9) Disclosure pursuant to Accounting Standard (AS) 15 (Revised)
i. Defined contribution plans: [Note R(6)(b)(i)] Amount of Rs. 82.64
crore (previous year Rs. 74.85 crore) is recognised as an expense and
included in employee benefits expense (Note N) in the Statement of
Profit and Loss Account.
ii. Defined benefit plans: [Note R(6)(b)(ii)]
h) General descriptions of defined benefit plans:
1. Gratuity Plan:
The Company operates gratuity plan through a trust wherein every
employee is entitled to the benefit equivalent to fifteen days salary
last drawn for each completed year of service. The same is payable on
termination of service or retirement whichever is earlier. The benefit
vests after five years of continuous service. The company''s scheme is
more favourable as compared to the obligation under Payment of Gratuity
Act, 1972. A small part of the gratuity plan, which is not material, is
unfunded and managed within the Company.
2. Post-retirement medical care plan:
The Post-retirement medical benefit plan provides for reimbursement of
health care costs to certain categories of employees post their
retirement. The reimbursement is subject to an overall ceiling
sanctioned based on cadre of the employee at the time of retirement.
3. Company''s pension plan:
In addition to contribution to state-managed pension plan (EPS scheme),
the Company operates a post retirement pension scheme, which is
discretionary in nature for certain cadres of employees. The quantum of
pension depends on the cadre of the employee at the time of retirement.
4. Trust managed provident fund plan:
The Company manages provident fund plan through a provident fund trust
for its employees which is permitted under the Provident Fund and
Miscellaneous Provisions Act, 1952. The plan envisages contribution by
employer and employees and guarantees interest at the rate notified by
the provident fund authority. The contribution by employer and employee
together with interest are payable at the time of separation from
service or retirement, whichever is earlier. The benefit under this
plan vests immediately on rendering of service.
The interest payment obligation of trust-managed provident fund is
assumed to be adequately covered by the interest income on long term
investments of the fund. Any shortfall in the interest income over the
interest obligation is recognised immediately in the statement of
Profit and Loss as actuarial loss. Any loss/gain arising out of the
investment risk and actuarial risk associated with the plan is also
recognised as expense or income in the period in which such loss/gain
occurs. Further, the provision of Rs. 27.55 crore created in 2013-14
based on actuarial valuation towards the future obligation arising out
of interest rate guarantee associated with the plan, has been reversed
to the extent of Rs. 22.69 crore in the current year, because the balance
in surplus account of the fund is higher than the interest obligation
of Rs. 27.78 crore as on March 31, 2015.
c) Segment reporting: segment identification, reportable segments and
definition of each reportable segment:
i) Primary/secondary segment reporting format:
[a] The risk-return profile of the Company''s business is determined
predominantly by the nature of its products and services. Accordingly,
the business segments constitute the primary segments for disclosure of
[b] In respect of secondary segment information, the Company has
identified its geographical segments as (i) domestic and (ii) overseas.
The secondary segment information has been disclosed accordingly.
ii) Segment identification:
Business segments have been identified on the basis of the nature of
products/services, the risk-return profile of individual businesses,
the organisational structure and the internal reporting system of the
iii) Reportable segments:
Reportable segments have been identified as per the criteria specified
in Accounting Standard (AS) 17 Segment Reporting.
iv) Segment composition:
- Infrastructure segment comprises engineering and construction of
building and factories, transportation infrastructure, heavy civil
infrastructure, power transmission & distribution and water & renewable
- Power segment comprises turnkey solutions for Coal-based and
Gas-based thermal power plants including power generation equipment
with associated systems and/or balance-of-plant packages.
- Metallurgical & Material Handling segment comprises turnkey
solutions for ferrous (iron & steel making) and non-ferrous (aluminium,
copper, lead & zinc) metal industries, bulk material & ash handling
systems in power, port, steel and mining sector including manufacture
and sale of industrial machinery and equipment.
- Heavy Engineering segment comprises manufacture and supply of
custom designed, engineered critical equipment & systems to core sector
industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil &
Gas, Thermal & Nuclear Power, Aerospace and Defence.
- Electrical & Automation segment comprises manufacture and sale of
low and medium voltage switchgear components, custom built low and
medium voltage switchboards, electronic energy meters/protection
(relays) systems and control & automation products.
- Others segment includes realty, shipbuilding, marketing and
servicing of construction & mining machinery and parts thereof,
manufacture and sale of rubber processing machinery & castings. Others
also included integrated engineering services, manufacture and
marketing of industrial valves and cutting equipment (up to the date of
transfer) in the previous year.
v) The businesses of marketing and servicing of construction & mining
machinery and parts thereof, manufacture and sale of rubber processing
machinery & castings which was hitherto reported as the Machinery and
Industrial Products segment have been grouped under Others segment
during the year based on internal restructuring. The figures pertaining
to the previous year have been regrouped and restated for proper
The businesses of manufacture and marketing of industrial valves and
cutting equipment (up to the date of transfer) which were reported as
part of the Machinery and Industrial Products segment in the previous
year have also been grouped under Others segment in the previous
vi) Pursuant to the business transfer agreement dated March 15, 2014,
the Company has transferred at book value to its wholly owned
subsidiary L&T Technology Services Limited, the business of integrated
engineering services as a going concern effective April 1,2014. The
same was hitherto reported as part of the Others segment [Note
Q(12) Disclosure in respect of Leases pursuant to Accounting Standard
(AS 19) Leases
(i) Where the Company is a Lessor:
a. The Company had given on finance leases certain items of plant and
equipment. The leases had a primary period that is fixed and
non-cancellable. The leases were cancellable upon payment by the lessee
of an additional amount such that, at inception, continuation of the
lease was reasonably certain. There were no exceptional/restrictive
covenants in the lease agreement.
(ii) Where the Company is a lessee: a) Operating leases:
i. The Company had taken various commercial premises and plant and
equipment under cancellable operating leases. Those lease agreements
were normally renewed on expiry.
[b] The lease agreements provided for an option to the Company to renew
the lease period at the end of the non-cancellable period. There were
no exceptional/restrictive covenants in the lease agreements.
iii. Lease rental expense in respect of operating leases: Rs. 87.14 crore
(previous year: Rs. 102.18 crore).
iv. Contingent rent recognised in the Statement of Profit and Loss: Rs.
Nil (previous year: Nil).
Q(15) Pursuant to the business transfer agreement dated March 15, 2014,
the Integrated Engineering Service business of the Company has been
transferred at book value to a wholly owned subsidiary L&T Technology
Services Limited as a going concern with effect from April 1, 2014 for
a lump sum consideration of Rs. 549.49 crore.
Q(17) Disclosures pursuant to Accounting Standard (AS) 29 Provisions,
Contingent Liabilities and Contingent Assets:
b) Nature of provisions:
i. Product warranties: The Company gives warranties on certain products
and services, undertaking to repair or replace the items that fail to
perform satisfactorily during the warranty period. Provision made as at
March 31, 2015 represents the amount of the expected cost of meeting
such obligations of rectification/replacement. The timing of the
outflows is expected to be within a period of five years from the date
of Balance Sheet.
ii. Expected tax liability in respect of indirect taxes represents
mainly the differential sales tax liability on account of non-
collection of declaration forms.
iii. Provision for litigation related obligations represents
liabilities that are expected to materialise in respect of matters in
iv. Contractual rectification cost represents the estimated cost the
Company is likely to incur during defect liability period as per the
contract obligations in respect of completed construction contracts
accounted under (AS) 7 (Revised) Construction Contracts.
c) Disclosure in respect of contingent liabilities is given as part of
Note (I) to the Balance Sheet.
Q(18) In line with the Company''s 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
Q(27) Contribution to political parties include:
Contribution to political parties aggregating to Rs. 11.00 crore
(previous year: Rs. Nil) made during the year as follows: Indian National
Congress: Rs. 5.00 crore, Bharatiya Janata Party: Rs. 5.00 crore and Shiv
Sena Rs. 1.00 crore.
Q(28) a) Amount required to be spent by the Company on Corporate Social
Responsibility (CSR) related activities during the year Rs. 106.21 crore.
Q(29) Figures for the previous year have been regrouped/reclassified