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EQUITY - MARKET SCREENER

Larsen & Toubro Ltd
Industry :  Engineering - Turnkey Services
BSE Code
ISIN Demat
Book Value()
500510
INE018A01030
477.6308387
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
LT
28.84
221401.71
EPS(TTM)
Face Value()
Div & Yield %
54.63
2
1.4
 

As on: May 26, 2022 12:33 PM

Dear Members,

The Directors have pleasure in presenting their 76th Annual Report and Audited Financial Statements for the year ended 31st March 2021.

FINANCIAL RESULTS:

Particulars 2020-21

2019-20

Rs crore

Rs crore

Profit before depreciation, exceptional items and tax 8282.04 7379.43
Less: Depreciation, amortization, impairment and obsolescence 1025.62 1020.51
Profit before exceptional items and tax 7256.42 6358.92
Add: Exceptional items (2818.65) 626.99
Profit before tax 4437.77 6985.91
Less: Provision for tax 1751.28 961.15
Profit for the year from continuing operations 2686.49 6024.76
Profit before tax from discontinued operations 11199.23 865.38
Less: Tax expense of discontinued operations 2548.75 210.93
Net profit after tax from discontinued operations 8650.48 654.45
Net profit after tax from continuing operations and discontinued operations 11336.97 6679.21
Add: Balance brought forward from the previous year 16957.17 15046.99
Less: Ind AS 116 transition adjustment 3.97
Less: Dividend paid for the previous year (*Including dividend distribution tax) 1123.23 *2754.94
Less: Interim dividend paid during the year 2527.66 1403.89
Less: (Profit)/loss on remeasurement of the net defined
benefits plans/Equity instruments through other comprehensive income (32.04) 512.96
Balance available for disposal (which the Directors appropriate as follows) 24675.29 17050.44
Less: Debenture Redemption
Reserve 93.27
Balance to be carried forward 24675.29 16957.17

STATE OF COMPANY AFFAIRS:

The total income for the financial year under review was R 76,751 crore as against R 85,192 crore for the previous financial year, registering a decrease of 9.91%, primarily due to the disruption caused by the COVID 19 pandemic. The profit before tax from continuing operations, including exceptional items, was lower at R 4,438 crore for the financial year under review as against R 6,986 crore for the previous financial year. The profit after tax from continuing operations, excluding exceptional items, was R 2,686 crore for the financial year under review as against R 6,025 crore for the previous financial year, registering a decrease of 55%.

AMOUNT TO BE CARRIED TO RESERVES:

The Company has not transferred any amount to the reserves during the current financial year.

DIVIDEND:

During the Financial Year ended 31st March 2021, the Company paid a special dividend of R 18/- (900%) per equity share as interim dividend amounting to R 2,527.66 crore on successful divestment of Electrical and Automation business to Schneider Electric India Private Limited.

The Directors recommend payment of a final dividend of R 18/- (900%) per equity share of R 2/- each on the share capital amounting to R 2528.20 crore. The total dividend for FY 2021, including the special dividend, if approved by shareholders, would amount to R 36/- (1800%) per equity share.

The Dividend payment is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line with regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is attached as Annexure ‘F' forming a part of this Board Report and also uploaded on the Company's website at https://investors.larsentoubro.com/Listing-Compliance.aspx.

CAPITAL AND FINANCE:

During the year under review, the Company allotted 663,275 equity shares of R 2/- each upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes. The Company's Authorized Capital increased to R 5,025 crore, pursuant to the approval of the Scheme of Amalgamation of L&T Shipbuilding Limited with the Company. The authorised share capital of L&T Shipbuilding Limited has been added to the authorised share capital of the Company, with effect from the appointed date i.e. 1st April 2019.

The Company repaid long-term borrowings (including External Commercial Borrowings [ECB] and Non-Convertible Debentures [NCDs]), as per schedule, of R 5,084 crore during the year. The Company has further raised a short-term ECB of USD 100 million for partly refinancing a maturing ECB. The Company has issued and allotted on private placement basis, Unsecured, Rated, Listed, Redeemable NCDs aggregating to R 9,000 crore during the FY 2021. The funds raised were utilized mainly for creation of liquidity reserve to tide over pandemic related uncertainty. These NCDs are listed on the Wholesale Debt Market Segment of National Stock Exchange of India Limited. The Company has issued Commercial Papers amounting to R 20,895 crore during FY 2021. As on 31st March 2021 the outstanding Commercial Paper is R 2,775 crore. The Company has listed its Commercial Papers on BSE Limited. The Company has not defaulted on any of its dues to the financial lenders.

The Company's borrowing programmes have received the highest credit ratings from CRISIL, ICRA and India Rating. The details of the same are given on page 119 in Annexure ‘B' – Report on Corporate Governance forming part of this Board Report and is also available on the website of the Company.

DIVESTMENT OF ELECTRICAL AND AUTOMATION BUSINESS:

The divestment of the Electrical and Automation (E&A) business undertaking was completed on 31st August 2020 after fulfillment of necessary conditions.

CAPITAL EXPENDITURE:

As at 31st March 2021, the gross property, plant and equipment, investment property and other intangible assets including leased assets, were at R 14,222.27 crore and the net property, plant and equipment, investment property and other intangible assets, including leased assets, at R 8,640.71 crore. Capital Expenditure during the year amounted to R 720.26 crore.

DEPOSITS:

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the rules framed thereunder during the year under review. The Company does not have any unclaimed deposits as of date.

Pursuant to the Ministry of Corporate Affairs (MCA) notification amending the Companies (Acceptance of

Deposits) Rules, 2014, the Company has filed with the Registrar of Companies (ROC) the requisite returns for outstanding receipt of money/loan by the Company, which are not considered as deposits as per the Companies Act, 2013 and the rules framed thereunder.

DEPOSITORY SYSTEM:

As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on 31st March 2021, 98.78% of the Company's total paid up capital representing 138,73,80,965 shares are in dematerialized form. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates that transfers, except transmission and transposition, of securities are to be carried out in dematerialized form only. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. Accordingly, any investor desirous of transferring shares (which are held in physical form) can transfer only after their shares are dematerialized. Further in adherence to SEBI's circular to enhance the due-diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company has been regularly sending communications to members whose dividends are unclaimed requesting them to provide/update bank details with RTA/Company, so that dividends paid by the Company are credited to the investor's account on time. Efforts are also made by the Company in co-ordination with the RTA to locate the shareholders who have not claimed their dues. Despite these efforts, an amount of R 7,81,84,801 which was due and payable and remained unclaimed and unpaid for a period of seven years, was transferred to Investor Education and Protection Fund (IEPF) as provided in section 125 of the Companies Act, 2013 and the rules made thereunder. In addition to the above, the Company has also transferred an amount of R 23,59,657 pertaining to sale proceeds of fractional entitlement of Bonus shares issued in 2013.

Cumulatively, since the inception till 31st March 2021, the amount transferred to the said fund was R 37,66,72,744. In accordance with the provisions of the Section 124(6) of the Companies Act, 2013 and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules'), the Company has transferred 10,54,705 equity shares of R 2 each (0.08% of total number of shares) held by 12,982 shareholders (0.95% of total shareholders) to IEPF. The said shares correspond to the dividend which had remained unclaimed for a period of seven consecutive years from the FY 2013. Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules. On receipt of the application, the Company sends an online verification report to the IEPF Authority after verifying all the necessary details which is duly certified by the Nodal Officer.

The Company sends specific advance communication to the concerned shareholders at their address registered with the Company and also publishes notice in newspapers providing the details of the shares due for transfer to enable them to take appropriate action. All corporate benefits accruing on such shares viz. bonus shares, etc. including dividend except rights shares shall be credited to IEPF.

SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES:

During the year under review, the Company subscribed to / acquired equity / preference shares in various subsidiary / associate / joint venture companies. The details of investments / divestments in subsidiary companies during the year are as under:

A) Shares acquired during the year:

Name of the Company Type of Shares No. of shares
L&T Uttaranchal Hydropower Limited Preference 6,44,00,000
L&T Geostructure Private Limited (Note 1) Equity 2,47,50,000
L&T Finance Holdings Limited Equity (in Rights Issue) 29,34,84,370

Note:

1. L&T Geostructure LLP was converted into L&T Geostructure Private Limited on 25th November 2020. Pursuant to the same, 2,47,50,000 equity shares of

R 10 each have been allotted to the Company in lieu of the capital contribution in the LLP.

B) Preference shares redeemed during the year:

Name of the Company Type of shares Number of shares
L&T Hydrocarbon Engineering Limited Preference 26,00,00,000

C) Companies Struck off:

L&T Cassidian Limited was struck off by the Registrar of Companies, vide its approval dated 28th January 2021. Larsen & Toubro Hydrocarbon International Limited LLC was liquidated on 16th May 2020.

Kesun Iron and Steel Company Private Limited has applied to the Ministry of Corporate Affairs for strike off from Register of Companies under the provisions of Companies Act, 2013 on 11th February 2021. The approval is awaited.

D) Performance and Financial Position of subsidiary / associate and joint venture companies:

A statement containing the salient features of the financial statement of subsidiary / associate / joint venture companies and their contribution to the overall performance of the Company is provided on pages 561 to 573 of this Annual Report.

The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is placed on the website at https://investors.larsentoubro.com/Listing-Compliance.aspx. The Company does not have any material subsidiaries.

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 as required under Section 186 of the Companies Act, 2013, Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in Note 58 forming part of the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy, specifying the individual threshold limits for each transaction and the same has been uploaded on the Company's website https://investors.larsentoubro.com/Listing-Compliance.aspx. 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 the related party transactions for the FY 2021 and estimated related party transactions for FY 2022.

There were no material Related Party Transactions during the year.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

Other than stated elsewhere in this report, 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.

COMPANY'S RESPONSE TO COVID-19:

The COVID-19 crisis disrupted the operations of the Company across the country, majorly during Q1 of FY 2021. The Company resumed operations from 14th April 2020, after implementation of standard protocols in line with the guidelines prescribed. All the plants and office establishments started functioning after implementing necessary safety and hygiene protocols like wearing of face masks, social distancing norms, workplace sanitation and employee awareness programmes etc in compliance with the regulations of the local authorities. All international sites also resumed work with employees and workmen working in a staggered manner, mandatory rotation on a periodic basis and in adherence to all the safety protocols as prescribed locally.

A Decision Response Team was formed by the Company which assessed the situation and took appropriate decisions with respect to issuing directives for protecting its employees including contract workers, supporting communities and also protecting the financial health of the business.

The later quarters of FY 2021 saw the economy opening up gradually resulting in the revival of demand. Our employees and associated volunteers on the ground, spread awareness about the need for social distancing, personal hygiene and need to wear mask to prevent infection and avoid the spread of the virus. The Company has taken steps to create awareness amongst the nearby communities on health and hygiene through periodical campaigns.

The Company, through various internal communication, has encouraged its employees to get themselves vaccinated and the Company has also taken several steps to facilitate the same. The Company has also setup a number of dedicated quarantine centres for all employees and their immediate family members, who are prescribed quarantine and not able to isolate at home.

The Company has rolled out various schemes for retention of workers and keeping them safe at workplace including creation of dedicated quarantine rooms in all its major labour camps.

Considering the shortage of oxygen faced by the various hospitals in India, in wake of the second wave of COVID 19, the Company has started working towards a long-term solution to meet medical grade oxygen demand in the country. It has planned to provide medium/large oxygen generators to various hospitals where the scarcity is most acute. These permanent units will serve the hospitals for the next 10-15 years. The Company is working closely with the Government and Municipal Authorities towards providing ventilators, small oxygen generators, N95 masks, sanitizers, PPE kits and other medical equipment as required and available.

As the COVID-19 scenario is still evolving, the Company is mapping the developments on a real-time basis to ensure the health and safety of all its stakeholders. The impact of the lockdown disruption is being constantly assessed.

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 Board Report.

RISK MANAGEMENT:

The Risk Management Committee comprises Mr. Adil Zainulbhai, Mr. Sanjeev Aga and Mr. Subramanian Sarma, Directors of the Company. Mr. Adil Zainulbhai is the Chairman of the Committee.

The charter of the Committee is to assist the Board in fulfilling its oversight responsibilities for review of the existing Risk Management Policy, Framework, Risk Management Structure and Risk Management Systems. The risk assessment includes review of strategic risks at domestic and international level including sectoral developments, risks related to market competition, financial, geographical, political and reputational issues, environment, social and governance risks and cyber security risks. The Committee periodically reviews the risk status to ensure that executive management mitigates the risks by appropriate actions.

For further details on risk management please refer to pages 111 and 112 of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility Committee comprises Mr. M. M. Chitale, Mr. R. Shankar Raman and Mr. D. K. Sen as the Members. Mr. Chitale is the Chairman of the Committee.

The CSR policy framework is available on the website https://investors.larsentoubro.com/Listing-Compliance.aspx. A brief note regarding the Company's initiatives with respect to CSR is given in Annexure ‘B' - Report on Corporate Governance forming part of this Board Report. Please refer to pages 110 and 111 of this Annual Report.

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 ‘C' forming part of this Board Report.

The Chief Financial Officer of the Company has certified that CSR funds so disbursed for the projects have been utilized for the purposes and in the manner as approved by the Board.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/ RESIGNED:

Mr. Shailendra Roy ceased to be the Whole-time Director of the Company with effect from 7th July 2020 on account of superannuation from the services of the Company.

Ms. Naina Lal Kidwai ceased to be an Independent Director of the Company with effect from 28th February 2021 on completion of her term as Independent Director.

Ms. Sunita Sharma resigned as a Director of the Company with effect from 3rd May 2021 pursuant to withdrawal of her nomination by LIC. The Board places on record its appreciation towards valuable contribution made by them during their tenure as Directors of the Company.

The Board has appointed Mr. S. V. Desai and Mr. T. Madhava Das as the Whole-time Directors of the Company for a period of five years with effect from 11th July 2020 upto and including 10th July 2025. Mr. Subramanian Sarma has been appointed as the Whole-time Director for a period of five years with effect from 19th August 2020 upto and including 18th August 2025. These appointments were approved by shareholders in the preceeding AGM.

The Board has re-appointed Mr. M. V. Satish as a Whole-time Director for a period from 29th January 2021 upto and including 7th April 2024 and Mr. R Shankar Raman as Whole-time Director for a period from 1st October 2021 upto and including 30th September 2026. Their appointments shall be subject to the approval of the shareholders at this AGM.

Mr. Sanjeev Aga was appointed as Independent Director of the Company with effect from 25th May 2016 upto and including 24th May 2021. Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 14th May 2021 has approved the re-appointment of Mr. Sanjeev Aga for a second and final term of five years from 25th May 2021 upto and including 24th May 2026, subject to the approval of shareholders through special resolution at this AGM.

Mr. Narayanan Kumar was appointed as Independent Director of the Company with effect from 27th May 2016 upto and including 26th May 2021. Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 14th May 2021 has approved the re-appointment of Mr. Narayanan Kumar for a second and final term of five years from 27th May 2021 to 26th May 2026, subject to the approval of shareholders through special resolution at this AGM. Based on their skills, experience, knowledge and report of their performance evaluation, the Board was of the opinion that their association would be of immense benefit to the Company and it would be desirable to continue to avail their services as Independent Directors.

The Board has appointed Mrs. Preetha Reddy as an Independent Director for a period of five years with effect from 1st March 2021 upto and including 28th February 2026, subject to approval of shareholders.

Mr. Hemant Bhargava, Mr. D. K. Sen, Mr. M. V. Satish and Mr. R. Shankar Raman, retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment.

The notice convening the AGM includes the proposals for appointment/re-appointment of Directors. The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company https://investors.larsentoubro.com/Listing-Compliance.aspx. The Company has also disclosed on its website https://investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

This information is given in Annexure ‘B' - Report on Corporate Governance forming part of this Report. Members are requested to refer to pages 97 and 98 of this Annual Report.

AUDIT COMMITTEE:

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 Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure ‘B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 103 to 105 of this Annual Report.

COMPANY POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Company has in place a Nomination and Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure ‘B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 105 to 109 of this Annual Report. The Committee has formulated a policy on Directors' appointment and remuneration including recommendation of remuneration of the key managerial personnel and senior management personnel, composition and the criteria for determining qualifications, positive attributes and independence of a Director. Nomination and Remuneration Policy is provided as Annexure ‘G' forming part of this Board Report and also disclosed on the Company's website at https://investors.larsentoubro.com/Listing-Compliance.aspx. The Committee has also formulated a separate policy on Board Diversity.

DECLARATION OF INDEPENDENCE:

The Company has received Declarations of Independence as stipulated under Section 149(7) of the Companies Act, 2013 from Independent Directors confirming that he/she is not disqualified from appointing/ continuing as Independent Director as laid down in section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI Regulations, 2015. The same are also displayed on the website of the Company https://investors.larsentoubro.com/Listing-Compliance.aspx. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013.

The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs (IICA). In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors are exempted from undertaking the online proficiency self-assessment test conducted by the IICA.

ANNUAL RETURN:

As per the provisions of section 92(3) of the Companies Act, 2013, the Annual Return of the Company for the FY 2021 is available on our website https://investors.larsentoubro.com/.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

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 31st March 2021, 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 exists. 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 could have a material effect on the Company's operations.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms:

a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistently and made judgements 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 irregularities;

d) The Directors have prepared the Annual Accounts on a going concern basis;

e) The Directors have laid down an adequate system of internal financial controls to be followed by the Company and such internal financial controls are adequate and operating efficiently;

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES, DIRECTORS AND CHAIRMAN:

The Nomination and Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Individual Directors and the Chairman has to be made. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, Individual Directors and the Chairman.

For the year under review, the questionnaire was updated suitably based on the comments and suggestions received from Independent Directors. As in the previous years, an external consultant was engaged to receive the responses of the Directors and consolidate/ analyze the responses. The consultant's IT platform was used from initiation till conclusion of the entire board evaluation process. This ensured that the process was transparent and independent of involvement of the Management or the Company's IT system. This has enabled unbiased feedback. The Board Performance Evaluation inputs, including areas of improvement, for the Directors, Board processes and related issues for enhanced Board effectiveness were discussed in the meetings of the Nomination and Remuneration Committee and the Board of Directors held on 14th May 2021.

DISCLOSURE OF REMUNERATION:

The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder, are given in Annexure ‘D' forming part of this Board report.

The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure ‘H' 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 at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

PROTECTION OF WOMEN AT WORKPLACE:

The Company believes that every employee should have the opportunity to work in an environment free from any conduct which can be considered as sexual harassment. The Company is committed to treating every employee with dignity and respect. The Company has formulated a policy on ‘Protection of Women's Rights at Workplace' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules, 2013. The policy is applicable to all L&T establishments located in India. The policy has been widely disseminated. The Company has constituted Internal Complaints Committees to ensure implementation and compliance with the provisions of the aforesaid Act and the Rules. This Policy addresses the following objectives:

To define Sexual Harassment;

To lay down the guidelines for reporting acts of

Sexual Harassment at the workplace; and

To provide the procedure for the resolution and redressal of complaints of Sexual Harassment. A detailed procedure for making a Complaint and initiating an Enquiry to the redressal process, and finally the process of preparation of a report within a stipulated timeline is well laid out in the Policy document. The Policy also covers Disciplinary Action for sexual harassment and is a part of the Company's Code of Conduct. Training programs and workshops for employees are organised throughout the year. The orientation programs for new recruits include awareness sessions on prevention of sexual harassment and upholding the dignity of employees. Specific programs have been created on the digital platform to sensitize employees to uphold the dignity of their colleagues and prevention of sexual harassment. During FY 2021, about 13,400 employees have undergone training through the programs / workshops including the awareness sessions held on digital platform.

There were 3 complaints received during the FY 2021. All the complaints were redressed as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules, 2013.

OTHER DISCLOSURES:

ESOP Disclosures:

There has been no material change in the Employee Stock Option Schemes (ESOP schemes) during the current financial year. The ESOP Schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefit) Regulations, 2014 ("SBEB Regulations"). The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company https://investors.larsentoubro.com/Listing-Compliance.aspx.

The certificate obtained from the Statutory Auditors, confirming compliance with the Companies Act, 2013 and the SBEB Regulations is also provided in Annexure ‘B' forming part of this Report.

Corporate Governance: Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, are provided in Annexure ‘B' forming part of this Report.

Business Responsibility Reporting: As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility Reporting forms a part of this Annual Report (refer to pages 28 to 53).

Integrated Reporting: The Company has adopted the Integrated Reporting Framework as laid down by International Integrated Reporting Council. The Integrated Report tracks the sustainability performance of the organization and its interconnectedness with the financial performance, showcasing how the Company is adding value to its stakeholders. The Integrated Report encompasses areas such as Corporate Governance, the Integrated Reporting and Sustainability Structure, Sustainability Roadmap 2021, Risks and Opportunities, enhancement of Financial Capital, Manufactured Capital, Intellectual Capital, Human Capital, Natural Capital and Social & Relationship Capital and alignment to sustainable development goals. It also covers strategy, business model and resource allocation.

The Integrated Report for the FY 2020 is available on the Company's website https://www.lntsustainability.com/integrated-report/ and the report for the FY 2021 shall be published shortly.

Statutory Compliance: The Company complies with all applicable laws and regulations, pays applicable 89 taxes on time, takes care of all its stakeholders, ensures statutory CSR spend and initiates sustainable activities.

MSME: The Ministry of Micro, Small and Medium Enterprises vide their Notification dated 2nd November 2018 has instructed all the Companies registered under the Companies Act, 2013, with a turnover of more than Rupees Five Hundred crore to get themselves onboarded on the Trade Receivables Discounting system platform (TReDS), set up by the Reserve Bank of India. In compliance with this requirement, the Company has registered itself on TReDS.

The Company complies with the requirement of submitting a half yearly return to the Ministry of Corporate Affairs within the prescribed timelines.

IBC: There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

Remuneration received by Whole time Director from subsidiary company: Mr. Subramanian Sarma, Whole-time Director of the Company is also the Managing Director of a Wholly Owned Subsidiary, L&T Hydrocarbon Engineering Limited. During the FY 2021, part of the remuneration received by Mr. Sarma was charged to L&T Hydrocarbon Engineering Limited (LTHE). Accordingly, the Company has recovered an amount of R 3.17 crore from LTHE for remuneration paid to Mr. Sarma.

VIGIL MECHANISM:

As per the provisions of Section 177(9) of the Companies Act, 2013 (‘Act'), 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 encourage and facilitate employees 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 policy also establishes adequate mechanism to enable employees report instances of leak of unpublished price sensitive information. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy.

The Company has disclosed information about the establishment of the Whistle Blower Policy on its website https://investors.larsentoubro.com/CorporateGovernance.aspx. During the year, no person has been declined access to the Audit Committee, wherever desired.

Also see pages 112 and 113 forming part of Annexure ‘B' of this Board Report.

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 Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereof issued by the Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies Act, 2013.

AUDIT REPORT:

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., Company Secretaries, is attached as Annexure ‘E' forming part of this Board Report.

AUDITORS:

In view of the mandatory rotation of auditors' requirement and in accordance with the provisions of Companies Act, 2013, M/s. Deloitte Haskins & Sells LLP were re-appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 75th Annual General Meeting till the conclusion of 80th Annual General Meeting of the Company.

The Auditors 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. The Auditors have also furnished a declaration confirming their independence, their arm's length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company.

The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process.

The Auditors attend the Annual General Meeting of the Company.

Also see page no. 113 forming part of Annexure ‘B' of this Board Report.

REPORTING OF FRAUD:

The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013.

COST AUDITORS:

The provisions of Section 148(1) of the Companies Act, 2013 are applicable to the Company and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended 31st March 2021.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, at its meeting held on 14th May 2021, has approved the appointment of M/s R. Nanabhoy & Co., Cost Accountants as the Cost Auditors for the Company for the financial year ending 31st March 2022 at a remuneration of R 13 lakhs.

A proposal for ratification of remuneration of the Cost Auditor for the FY 2022 is placed before the shareholders. The Report of the Cost Auditors for the financial year ended 31st March 2021 is under finalization and shall be filed with the Ministry of Corporate Affairs within the prescribed period.

ACKNOWLEDGEMENT:

The 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 other 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 Chairman
(DIN: 00001514)
Date : 14th May 2021
Place : Mumbai