To the Members of
LARSEN & TOUBRO INFOTECH LIMITED
Your Directors have pleasure in presenting the Integrated Annual Report along with theAudited Financial Statements of Larsen & Toubro Infotech Limited (LTI' orCompany') for the year ended March 31 2021 (FY21').
1. Financial Results
(Rs. in million)
|Particulars ||Standalone ||Consolidated |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from operations ||115626 ||101842 ||123698 ||108786 |
|Other Income ||2247 ||4217 ||2744 ||3292 |
|Total Income ||117873 ||106059 ||126442 ||112078 |
|Less: Operating Expenditure ||90578 ||83185 ||96447 ||88493 |
|Less: Finance Cost ||716 ||720 ||788 ||826 |
|Less: Depreciation and amortization ||2669 ||2084 ||3325 ||2730 |
|Profit Before Tax (PBT) ||23910 ||20070 ||25882 ||20029 |
|Less: Provision for Tax ||6036 ||4546 ||6500 ||4824 |
|Profit forthe year (PAT) ||17874 ||15524 ||19382 ||15205 |
|Less: Non-Controlling Interests ||0 ||- ||21 ||4 |
|Add: Balance brought forward from previous year ||47564 ||38359 ||47530 ||38659 |
|Less: Transition impact of IND AS 116 ||0 ||629 ||0 ||640 |
|Balance available for disposal which Directors appropriate as follows: ||65438 ||53254 ||66891 ||53220 |
|Less: Dividend (excluding tax) ||5324 ||4875 ||5324 ||4875 |
|Less: Tax on Dividends ||0 ||815 ||0 ||815 |
|Balance to be carried forward ||60114 ||47564 ||61567 ||47530 |
2. Performance of the Company
On standalone basis revenue from operations and other income for the financial yearunder review were Rs. 117873 Million as against Rs. 106059 Million for the previousfinancial year registering an increase of 11.14%. The profit before tax was Rs. 23910Million and the profit after tax was Rs. 17874 Million for the financial year underreview as against Rs. 20070 Million and Rs. 15524 Million respectively for the previousfinancial year.
On consolidated basis revenue from operations and other income for the financial yearunder review were Rs. 126442 Million as against Rs. 112078 Million for the previousfinancial year registering an increase of 12.82%. The profit before tax was Rs. 25882Million and the profit after tax was Rs. 19382 Million for the financial year underreview as against Rs. 20029 Million and Rs. 15205 Million respectively for the previousfinancial year.
3. Capital Expenditure
On standalone basis as at March 31 2021 the gross fixed and intangible assets stoodat Rs. 11099 Million (previous year Rs. 9728 Million) out of which assets amounting toRs. 1726 Million (previous year Rs. 2092 Million) were added during the year and the netfixed and intangible assets stood at Rs. 4795 Million (previous year Rs. 4563 Million).
On consolidated basis as at March 31 2021 the gross fixed and intangible assetsstood at Rs. 25521 Million (previous year Rs. 22190 Million) out of which assetsamounting to Rs. 3231 Million (previous year Rs. 3558 Million) were added during theyear and the net fixed and intangible assets stood at Rs. 13501 Million (previous yearRs. 12097 Million).
4. Integrated Report
As a good corporate governance practice the Company is continuously enhancing thequality of disclosures being made available to the stakeholders and accordingly a similarstep on this front has been taken by voluntarily providing an Integrated Report for thereporting financial year which encompasses both financial and non-financial informationto enable the stakeholders to take well informed decisions and have a better understandingof the Company's long term perspective vision and value creation model.
The Integrated Report is in terms of the Guiding Principles prescribed by theInternational Integrated Reporting Council (IIRC') and has details aboutorganisation's strategy governance framework performance and prospects of value creationbased on the six forms of capital viz. financial capital manufactured capitalintellectual capital human capital social and relationship capital and natural capital.
5. Material changes and commitments affecting the financial position of the Companybetween the end of the financial year and the date of this Report
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and the date of this report.
6. Changes in Share Capital
During FY21 the Company allotted 623839 equity shares of Rs. 1 each on exercise ofthe vested options by the eligible employees under Employee Stock Option Scheme 2015 ofthe Company. Accordingly the paid-up equity share capital of the Company increased fromRs. 174.13 Million to Rs. 174.75 Million. After March 31 2021 the Company has furtherallotted 11720 equity shares of Rs. 1 each on May 4 2021 on exercise of vested optionsby the eligible employees under the Employee Stock Option Scheme 2015 of the Company. Theequity shares allotted under the Employee Stock Option Scheme 2015 rank pari-passu withthe existing equity shares of the Company. Consequently as on the date of this reportthe paid-up equity share capital of the Company is Rs. 174.76 Million.
7. Dividend and Dividend Distribution Policy
The Directors are pleased to recommend final dividend of Rs. 25/- per equity share offace value of Rs. 1/- each. During the financial year ended March 31 2021 the Companypaid an interim dividend of Rs. 15/- per equity share. The total dividend for FY21including the final dividend if approved by shareholders would amount to Rs. 40/- perequity share. The final dividend if approved by the shareholders would be paid/ payable tothose shareholders whose name appear in the Register of Members as on the record datementioned in the Notice convening the 25th Annual General Meeting (AGM')of the Company.
The Dividend is based upon the parameters mentioned in the Dividend Distribution Policywhich is available on the Company's website at www.Lntinfotech.com/Investors
8. Human Resource
Our employees are the foundation of our success at LTI. Our employees have shownextraordinary grit and resilience in the challenging year gone by and have been theprimary reason for LTI setting the growth benchmark in the industry. LTI has strengthenedseveral development programs and built new ones during the FY21 with the vision of furtherfortifying and deepening the skills of our workforce of over 35000 LTItes across the globein keeping with the evolving needs of our business.
To learn more about our efforts in the human resource development space please referto the Human Capital' section of the Integrated Report Section in this AnnualReport.
Brand LTI is now four years old. Through its contemporary style and messaging LTI hasgained recognition as one of the leading global technology brands. The Company stepped upits efforts toward gaining mindshare of clients prospects and other stakeholders bydelivering crisp and consistent messaging across relevant channels. It leveraged robustmarketing technology stack to remodel its outreach initiatives given the change incustomer behavior due to challenges posed by the pandemic the Company continued to garneraccolades for its efforts and initiatives.
10. Awards & Recognition
Corporate/ Marketing awards:
1. LTI is the fastest growing brand in Brand Finance IT Services 25 2021 ranking.
2. LTI ranked 75th in Business India Super 100 Annual Rankings.
3. LTI ranked 35th (Rating A') among the top 50 companies in the BWBusinessWorld India rankings for Most Sustainable Companies 2020.
4. LTI recognized as a Top Employer 2021 in the UK by the Top Employers Institute.
5. LTI won the Platinum award at the 7th CSR India Awards 2020 in thecategory Employment Enhancing Vocational Skills'.
6. LTI Wins 2020 SAP Pinnacle Award as the Industry Innovation Partner of the Year.
7. LTI recognized as the Great Place to Work' in the USA.
8. LTI's Powai HQ building bagged the IGBC Performance
Challenge 2020 for Green Built Environment Excellence Award' under ITESBuilding' category scoring excellent' in Energy Performance and Water Conservation.
Analyst and Advisory recognitions:
1. LTI topped the list of IT Services Challenger 2021' in Everest Group's PEAKMatrix Service Provider of the Year Awards.
2. LTI Leni and LTI Mosaic recognized in The Forrester Tech Tide : Enterprise BusinessInsights & Analytics Q1 2021.
3. LTI has received an Honorable Mention in the Gartner Magic Quadrant for Data andAnalytics Service Providers 2021.
4. LTI is a Leader in Digital Business Consulting and Digital Product LifecycleServices in 2020 ISG Provider Lens Digital Business Solutions and ServicePartners report for the US.
5. LTI recognized in Forrester's Now Tech: Oracle Apps Implementation ServicesProviders Q2 2020.
6. LTI recognized as a Rising Star for Managed Application Services in the ISG ProviderLens Salesforce Ecosystem Partners 2020 US Report.
7. LTI recognized as a Leader in ISG Provider Lens: SIAM/ ITSM 2020 Study for USMarket.
8. LTI recognized in Forrester's Now Tech: IoT Consultancies in Asia Pacific Q1 2020.
9. LTI recognized as Leader and Star Performer in Everest Group's Application andDigital Services in Capital Markets PEAK Matrix Assessment 2021.
10. LTI positioned in Leaders' Quadrant within NelsonHall's Software Testing:Quality Engineering NEAT 2020.
11. LTI recognized as a Leader in Everest Group Insurance Business Model InnovationEnablement Services PEAK Matrix Assessment 2021.
12. LTI recognized as a Leader and Rising Star in the ISG Provider Lens Next-GenPrivate/Hybrid Cloud Data Center Services & Solutions Report Nordics 2020.
13. LTI recognized as a Leader in Payment Ecosystem Services in their 2020 ISGProvider Lens Banking Industry Ecosystem 2020 Nordics report.
14. LTI named as an Innovator in the Internet of Things (IoT) Services RadarView2021 Report by Avasant.
15. LTI recognized as a Leader in Artificial Intelligence for IT Operations (AIOps) Mid Market in the ISG Provider Lens Intelligent Automation Solutionsand Services Report US 2020.
16. LTI ranked #1 for Next-Generation Data Services in the recent Everest Group TalentReadiness PEAK Matrix.
The Company has always focused on maintaining State-of-the-art infrastructure andprovided best-in-class facilities and services. Our footprint majorly within SpecialEconomic Zones is spread across 5 cities in India. Prevailing pandemic situation hascompelled the Company to revisit existing infrastructure and add new footprints in Tier 2cities like Noida Nagpur and Mysore.
As a result of the pandemic and health emergencies in the Country LTI has adopted andimplemented measures to ensure COVID appropriate behaviour for the safety and well-beingof everyone within premises. The way we interact collaborate learn and deliver haschanged forever. This brought about rapid and innovative changes in working culture due towhich we have optimised office spaces in Mumbai Pune and Hyderabad. During this year ourprimary focus on Employee Safety has helped pioneer innovative solutions like Safe-Radius(an App that enables us to track health of employees and follow Social Distancing norms)which exhibits our commitment towards Digital infrastructure.
LTI Headquarters at Powai is now upgraded to a Platinum rated Green Building by U. S.Green Building Council (USGBC') and was awarded the "Green Building Award forContinuous Performance" by Indian Green Building Council (IGBC').
As on March 31 2021 the total seating capacity for Indian Centres stands at 28542.
12. Quality Initiatives
Client Centricity is the core of the Company Quality Policy. LTI strives to be the mostclient centric partner by delivering rich and meaningful experiences not only to itsclients but also to its client's customers. It endeavours to continuously improve itsservices and solutions with focus on agility and creativity by nurturing an environmentthat promotes learning and growth.
Company's endeavour to be unmatched in client centricity including its real timetransparent yet forward-thinking response amid the unprecedented challenges posed by thepandemic were acknowledged and appreciated in the recently concluded CSAT survey. ClientCentricity was called out as a differentiator and Company's Net Promoter Score(NPS') showed a significant increase. All time high scores were registered acrossall key outcome measures-advocacy satisfaction loyalty and business value. Remotedelivery during pandemic was also widely appreciated.
During the year the Company instituted an independent Client Centricity Office withthe objective of ensuring a positive experience for every client through close monitoringand actioning on project and account level feedback.
Company's proprietary Capability Maturity (LTI-CMF) framework was deployed in FY21 forthe third consecutive year. It continued to instill a culture of self-discipline combinedwith strong collaboration within and across units. Prime benefits included increase inearnings via 14 new innovations platforms frameworks governance and analytics tools andindustrialization of existing Intellectual Property and best practices. Project managementusing High Maturity (HM) practices also brought in significant savings.
Other benefits included generation of improvement ideas for client environment (morethan 15% of the ideas were approved by client and implemented) and enrichment of theCentral Knowledge Repository (myKM) with good practices case studies and reusablecomponents from all units.
Company's Service Management System was upgraded to the latest version of ISO20000:2018 and strengthened with a Third-Party Risk Management Framework to ensure deeperunderstanding of customers' needs better collaboration and control of third parties.
Service Management COE has been established to further enhance service quality throughfocussed consultancy. It is enabled by proprietary tools - ITIL Assessment framework (toassess effectiveness of ITIL process implementation) iautodoc (AI based tool for trackingcontractual commitments) and Ticket Data Audit (inhouse tool to automate the ticketaudits).
Company's Quality Management Systems (QMS) was enriched with Agile DevelopmentFramework (ADF) & LENI product development framework. An approach for EnterpriseArchitecture in the context of transforming Breakaway Enterprises technology stackrecommendations and new processes for the Life Sciences and Security domain (CDRC) werealso added. Digitized role-based trainings were enhanced and extended to additional keydelivery roles. The High Maturity (HM) practice got a boost with the release of newtechnology baselines new HM models and BGenie- LTIs proprietary Liferay based tool whichhas automated the benchmarking process reducing project manager efforts by 75%.
The Company's Escalation Risk Review (ERR) framework with escalation path right up tothe Chief Operating Officer was very effective in getting timely attention at theappropriate level thus arresting possible client escalations and ensuring a positiveclient experience at every stage during the engagement.
Remote Auditing and Delivery Health Assessment via a mobile app to capture and reportdetails of service performance and disruption events detail enabled senior leadership totake timely decisions during the pandemic.
"Design Driven Delivery" suitably supported by Agile and DevOpsmethodologies has helped the Company to design and deliver client focused services andsolutions. Agile Assessment Framework was deployed to improve the adoption of the agilebest practices. Continued focus on "Extreme Automation" helped to furtheroptimize delivery execution improve productivity and reduce costs for us and our clients.Lean Six Sigma Value Stream mapping and Agile based initiatives helped to bring inaround 15% improvement in productivity for many teams. Unified dashboard which providedinsights into performance of all the delivery execution parameters simplified governanceand resulted in elimination of manual efforts by 75%.
LTI's entry in BGenie statistical analysis automation' based on our proprietarytool was among top 12 finalists at the Watts Humphrey Conference organized by SPINChennai.
The Company continues to demonstrate its ability to drive its Quality ServiceManagement Information Security Environmental & Health commitments effectively andefficiently through its ISO 9001 ISO 27001 ISO 14001 ISO 20000 and ISO 45001certification accreditations by Bureau Veritas. Compliance to ISAE 3402 for projects inthe Insurance domain and for client specific engagements in the other domains across allDelivery Units was sustained. The Company continues to retain its Level 5 status on theCMMI DEV & CMMI SVC constellations. CMMI 2.0 Level 5 will be completed by 2022.
Our commitment to client centricity and culture of continuous improvement thuscontinues enabled by a firm commitment to our belief's to Go the Extra Mile'"Keep Learning" & Push Frontiers of Innovation'.
13. Transfer to Reserves
The Directors do not propose to transfer any amount to reserves.
During the year ended March 31 2021 the Company has not accepted any public depositsand as such no amount on account of principal or interest on public deposits wasoutstanding as on the date of the Balance Sheet.
15. Directors' Responsibility Statement
The Board of Directors hereby confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there has been no material departure;
(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as on March 31 2021 and of the profit ofthe Company for the year ended March 31 2021;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis;
(v) the Directors have laid down adequate system of internal financial controls to befollowed by the Company and such internal financial controls are adequate and operatingefficiently; and
(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
16. Directors & Key Managerial Personnel
During FY21 following were the changes in the Board and Key Managerial Personnel:
a. Mrs. Aruna Sundararajan was appointed as an Independent Director of the Company fora period of 5 years with effect from May 19 2020.
b. Mr. Arjun Gupta ceased to be an Independent Director of the Company with effect fromclose of business hours of October 27 2020 on account of completion of his term ofoffice and opting not to seek re-appointment for the 2nd term as an IndependentDirector due to his personal commitments.
c. Mr. Ashok Kumar Sonthalia ceased to be the Chief Financial Officer of the Companydue to his resignation with effect from close of business hours of January 25 2021.
d. Mr. Samir T. Desai ceased to be an Independent Director of the Company with effectfrom close of business hours of March 31 2021 on account of completion of his 2ndand last term of office as an Independent Director of the Company.
The Board places on record its appreciation for the services rendered by Mr. ArjunGupta and Mr. Samir T. Desai during their tenure as an Independent Director of the Companyand Mr. Ashok Kumar Sonthalia during his tenure as a Chief Financial Officer of theCompany.
After FY21 the Board of Directors of the Company have approved following appointmentand re-appointments: a. Mr. Anil Rander has been appointed as the Chief Financial Officerof the Company with effect from April 14 2021.
b. Mr. Sudhir Chaturvedi President - Sales and Whole-time Director of the Companywhose term of office as Whole-time Director is coming to an end on November 8 2021 hasbeen re-appointed as the Whole-time Director by the Board in its meeting held on May 42021 for another term of five years w.e.f. November 9 2021.
c. Mr. Sanjeev Aga Independent Director of the Company whose 1st term ofoffice is getting completed on November 8 2021 has been re-appointed by the Board in itsmeeting held on May 4 2021 for 2nd term of five years w.e.f. November 9 2021.
The Notice convening the 25th AGM includes re-appointment of above-mentionedDirectors and also the re-appointment of Mr. S. N. Subrahmanyan & Mr. SudhirChaturvedi Directors of the Company who retire by rotation and being eligible haveoffered themselves for re-appointment.
Shareholders are requested to refer the 25th AGM Notice for the necessarydisclosures required under the Companies Act 2013 and the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 and Secretarial Standards-2 on General Meetingsissued by the Institute of Company Secretaries of India.
17. Corporate Governance Report
A report on Corporate Governance is annexed as Annexure A to this Report.
18. Number of Meetings of the Board of Directors
The Board of Directors met 5 (five) times during FY21. The details of the Boardmeetings and their attendance is provided in the Corporate Governance Report annexed as AnnexureA to this Report.
Pursuant to Rule 3 & Rule 4 of the Companies (Meetings of Board and its Powers)Rules 2014 majority of the Board meetings and Committee meetings were held through VideoConference or Other Audio-Visual Means in compliance with the said rules.
Board meeting dates are finalized in consultation with all Directors and agenda isbacked up with comprehensive notes and detailed background information which arecirculated well in advance before the date of Board meeting thereby enabling the Board tohave effective discussion and take informed decisions. Detailed business and regulatorypresentations are also made to apprise the Board on the important developments.
19. Declaration by Independent Directors
The Company has received declaration of independence from the Independent Directors asstipulated under Section 149(7) of the Companies Act 2013 and Regulation 16(1)(b) of theSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 confirmingthat they meet the criteria of independence which has been duly assessed by the Board aspart of performance evaluation of Independent Directors. Further all the IndependentDirectors have confirmed that they have registered their name in the Independent Directorsdata bank maintained by the Indian Institute of Corporate Affairs. The IndependentDirectors have also confirmed that if applicable they shall undergo the proficiency testin accordance with Rule 6(4) of the Companies (Appointment and Qualification of Directors)Rules 2014.
The Independent Directors have complied with the Code for Independent Directorsprescribed in Schedule IV of the Companies Act 2013.
20. Independent Directors Meeting
As per Schedule IV of the Companies Act 2013 Secretarial Standards-1 on BoardMeetings (SS-1') and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 during FY21 a meeting of the Independent Directors was held on October16 2020 to discuss inter-alia the performance evaluation of the Board its CommitteesChairman and the individual Directors assessment of information flow from Management tothe Board and evaluation and self-assessment of the training requirements of IndependentDirectors.
21. Board of Directors Performance Evaluation
Similar to the previous financial year to maintain independence and confidentialitythe performance evaluation process for FY21 was carried out with the help of an externalagency in compliance with the provisions of the Companies Act 2013 and Regulation 17(10)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. An onlineannual evaluation of Board Board Committees Chairman and individual Directors wascarried out on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc. It also coveredspecific criteria and the grounds on which all Directors in their individual capacity wereevaluated including fulfillment of the independence criteria for Independent Directors aslaid under the Companies Act 2013 and the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. The online evaluation also included self-assessment ofthe training requirements by the Directors.
The above criteria are based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India.
The performance evaluation of the Board its Committees Chairman and Directors wasalso reviewed by the Independent Directors at their meeting held on May 3 2021 andNomination and Remuneration Committee and the Board of Directors at their respectivemeetings held on May 4 2021 which showcased the strengths of the Board and areas ofimprovement from current evaluation in comparison to the evaluation findings of FY20. Theobservations made during FY20 were acted upon appropriately.
Overall the Board expressed its satisfaction on the performance evaluation process aswell as performance of all Directors Committees and Board as a whole.
Further the performance evaluation included evaluation of each individual members ofthe Board against the list of core skills/ expertise/ competences identified and approvedby the Board of Directors as are required in the context of Company's business whichinter-alia included competence/ expertise in areas viz.
a) strategy and planning
b) governance legal risk and compliance
c) finance accounts and audit
d) information technology
e) stakeholders engagement and industry advocacy
f) client engagement
g) contributor and collaborator and
h) global experience/international exposure.
The evaluation report revealed that the Board of Directors of the Company have optimalmix of skills/ expertise to function effectively. The mapping of board skills/ expertisevis--vis individual Directors is provided in the Corporate Governance Report AnnexureA to this Report.
22. Board Committees
In terms of the requirements of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has constituted Audit CommitteeStakeholders' Relationship Committee Nomination & Remuneration Committee CorporateSocial Responsibility (CSR') Committee and Risk Management Committee. Additionallythe Board has also constituted a Strategic Investment Committee and also there isCommittee of Independent Directors. The details of each of the Committees comprising theircomposition charter and details of meetings held during the year are provided in theCorporate Governance Report Annexure A to this Report.
23. Corporate Social Responsibility (CSR')
The disclosures required to be given under Section 135 of the Companies Act 2013 readwith Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules 2014 andCompanies (Corporate Social Responsibility Policy) Amendment Rules 2021 is provided inthe Annual Report on CSR Activities for FY21 in Annexure D to this Report.
The CSR Policy of the Company is available on the Company's websitewww.Lntinfotech.com/social-responsibility
24. Business Responsibility Report (BRR')
Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Business Responsibility Report' forms part as Annexure Hto this Report which describes the initiatives taken by the Company from anenvironmental social and governance perspective.
25. Corporate Sustainability
As a fast-growing group company LTI has inherited tenets of excellence insustainability practices from Larsen & Toubro Limited its Parent Company. We believein conducting business sustainably through sound practices which are socially responsibleand environment friendly. Through its community development programs LTI works towardsbuilding resilience in underprivileged members of society. LTI's Sustainability frameworkleverages its core competencies to deliver greater and more sustainable impacts across itsfocus areas of Education Empowerment and Environment. These are further set forth throughspecific objectives identified and commitments made through the sustainability roadmap.LTI has a holistic approach which can be seen through the commitments which are not onlybusiness focused but also has equal emphasis on its employees community and theenvironment at large. The objectives to achieve the desired results will in turn enhanceour contribution to the overarching objectives of the United Nations SustainableDevelopment Goals.
The Sustainability reports are available on the Company's websitewww.Lntinfotech.com/social-responsibility
A. Statutory Auditor
M/s. B. K. Khare & Co. [ICAI Registration No. 105102W] were appointed as StatutoryAuditors of the Company by the shareholders at the AGM held in 2017 for a period of 5years from the conclusion of 21st AGM till the conclusion of 26thAGM of the Company subject to ratification by the shareholders at every AGM. Therequirement of ratification by the shareholders at every AGM has been dispensed with bythe Companies (Amendment) Act 2017 hence no resolution is being proposed forratification of appointment of Statutory Auditors.
The Auditors' Report to the shareholders' on the audited standalone and consolidatedfinancial statements of the Company for the year ended March 31 2021 does not contain anyqualification observation or comment or remark(s) which has/have an adverse effect on thefunctioning of the Company and therefore does not call for any comments from Directors.Further the Statutory Auditors of the Company have not reported any fraud as specifiedunder Section 143(12) of the Companies Act 2013.
The Auditors have confirmed that they have subjected themselves to the peer reviewprocess of Institute of Chartered Accountants of India (ICAI') and hold validcertificate issued by the Peer Review Board of the ICAI.
The Auditors have also furnished a declaration confirming their independence as well astheir arm's length relationship with the Company and declared that they have not taken upany prohibited non-audit assignments for the Company.
Please refer to the Notes to accounts for the total fees paid by the Company toStatutory Auditors for FY21 on a consolidated basis. Further the Statutory Auditor isnot providing any other service to any other group entity of the Company.
B. Secretarial Auditor
The Secretarial Audit Report issued by Ms. Naina R Desai Practicing Company Secretaryis annexed asAnnexure C to this Report. The Secretarial Auditors' Report to theshareholders does not contain any qualification or reservation which has any materialadverse effect on the functioning of the Company except the observation/qualificationw.r.t. non-fulfillment by March 31 2021 of the vacancy created on cessation of term ofoffice of an Independent Director on the Board of Directors of the Company with effectfrom the close of business hours of October 27 2021.
The Nomination & Remuneration Committee had been successful in finalizing oneperson for the position of Independent Director who possessed the core skills/ expertise/competencies as required in the context of Company's business however the appointmentcould not be considered as certain clearances required prior to the appointment werepending.
Further the Nomination & Remuneration Committee is still evaluating potentialcandidates for the position of an Independent Director however due to surge in thesecond wave of Covid-19 pandemic it has been very difficult to have physical one-to-onemeetings with the identified candidates for closing the open position.
The Board and Nomination & Remuneration Committee are conscious of its complianceand governance obligations under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and are making all possible efforts to finalize and fill the vacancy atthe earliest.
27. Consolidated Financial Statements
The Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act2013 prepared in accordance with the Accounting Standards prescribed by the Institute ofChartered Accountants of India forms part of this Integrated Annual Report.
28. Adequacy of Internal Financial Controls
The Company has designed and implemented a process driven framework for InternalFinancial Controls (IFC') within the meaning of the explanation to Section 134(5)(e)of the Companies Act 2013. For the year ended March 31 2021 the Board is of the opinionthat the Company has sound IFC commensurate with the nature and size of its businessoperations and are operating effectively and no material weaknesses exist. Further theCompany has a process in place to continuously monitor the same and identify gaps if anyand implement new and/or improved controls wherever the effect of such gaps would have amaterial effect on the Company's operations.
29. Risk Management
The Company has formulated a risk management policy and has in place a mechanism toinform the Board Members about risk assessment and minimization procedures and periodicalreview to ensure that executive management controls risk by means of a properly designedframework. A detailed note on risk management along with the measures taken by the Companyunder the current COVID-19 global pandemic is given in Management Discussion &Analysis/ Integrated Report section forming part of this Annual Report.
30. Whistle Blower Mechanism
The Whistle Blower Policy of the Company meets the requirement of the Vigil Mechanismframework prescribed under the Companies Act 2013 (Act'). Whistle-Blower Policy andGuidelines on Vigil Mechanism are available on the Company's website www.Lntinfotech.com/Investors
The Whistle Blower Policy encourages and facilitates the employees to report concernsabout unethical behavior actual/ suspected frauds and any wrongdoings or unethical orimproper practice. Further to strengthen the Vigil Mechanism framework of the Company andto ensure timely and efficient redressal of complaints Guidelines on VigilMechanism' are put in place laying out procedures and process flow for investigations tobe conducted. The Policy also provides for adequate safeguards against victimisation of aWhistle Blower. The Audit Committee of the Company quarterly reviews complaints receivedunder the Vigil Mechanism and during the year no employee was denied access to the AuditCommittee or its Chairman.
31. Related Party Transactions
The Audit Committee and the Board of Directors have approved the Related PartyTransactions Policy including clear threshold limits and the same is available on theCompany's website www.Lntinfotech.com/Investors
During FY21 the Company has further strengthened the controls and approvals forrelated party transactions through automating the tracking and monitoring of related partytransactions. All the related party transactions during FY21 were in the ordinary courseof business and at arm's length and were prior approved and duly reviewed by the AuditCommittee as required under the provisions of Section 177 of the Companies Act 2013 andRegulation 23 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015.
Related party transactions during FY21 were in compliance with the Companies Act2013 SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 andAccounting Standard and are disclosed in the notes forming part of the financialstatements. Further there were no material related party transactions during FY21requiring shareholders' approval.
32. Subsidiary/ Associate/ Joint Venture Companies
As on March 31 2021 the Company has 27 subsidiaries. During the year under reviewthere were following material changes:
The Company incorporated following wholly-owned subsidiaries:
(i) Larsen & Toubro Infotech UK Limited incorporated in UK on August 17 2020with an investment amount of GBP 1000 towards equity share capital.
(ii) LTI Middle East FZ-LLC incorporated in Dubai on November 25 2020 with aninitial investment amount of AED 10000 towards equity share capital. Additionally theCompany has made an investment of AED 1850000 in February 2021 towards equity sharecapital.
The Board of Directors of Syncordis Software Services India Private Limited(Syncordis') and Ruletronics Systems Private Limited (Ruletronics') whollyowned subsidiaries of the Company at their respective meetings held on September 28 2020and the Board of Director of the Company at its meeting held on October 20 2020 approvedthe Scheme of Amalgamation (Scheme') between Syncordis and Ruletronics with theCompany under Sections 230-232 of the Companies Act 2013 (hereinafter referred asPetitioners'). The Company Scheme Petition filed by the Petitioners with Hon'ble NationalCompany Law Tribunal (NCLT') Mumbai Bench on January 22 2021 was admitted by NCLTon April
8 2021. The appointed date for the proposed Scheme is April 1 2021.
C. Merger of Nielsen+Partner S.A (N+P Luxembourg) with Syncordis S.A. (SyncordisLuxembourg)
During the year N+P Luxembourg was merged with Syncordis Luxembourg with effect fromDecember 21 2020 and pursuant to the common terms of merger and purchase considerationSyncordis Luxembourg issued shares to Nielsen+Partner GmbH sole shareholder of N+PLuxembourg resulting in increase in the share capital of Syncordis Luxembourg from EUR34800 to EUR 55392.
D. Buy Back by Larsen And Toubro Infotech South Africa Pty Limited
During FY21 Larsen And Toubro Infotech South Africa Pty Limited (South Africasubsidiary') made an offer of buyback of which 77600 shares were accepted by theCompany resulting in disinvestment of Company's shareholding from 74.9% to 69.58% in itsSouth Africa subsidiary.
In line with Regulation 16(c) of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Company has a policy on the identification ofmaterial subsidiaries which is available on the Company's website www.Lntinfotech.com/Investors.Based on same there are no material subsidiaries of the Company as on March 31 2021.
A statement containing the salient features of the financial statement of subsidiaries/associate/ joint venture companies as per form AOC-1 is annexed as Annexure F tothis Report. Further pursuant to the provisions of Section 136 of the Act the standalonefinancial statements and consolidated financial statements of the Company along withrelevant documents and separate audited financial statements in respect of subsidiariesare available on the Company's website www.Lntinfotech.com/Investors
33. Particulars of Loans given Investments made Guarantees given or Security provided
Details of loans given investments made or guarantees given or security provided ifany covered under the provisions of Section 186 of the Companies Act 2013 and Regulation34(3) read with Schedule V of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 are given in the notes forming part of the financial statements providedin this Integrated Annual Report.
34. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Information as per Section 134 of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 relating to conservation of energy technologyabsorption foreign exchange earnings and outgo is given in Annexure G to thisReport.
35. Compliance with Secretarial Standards on Board Meetings and General Meetings
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and General Meetings.
36. Compliance Monitoring System
At LTI ensuring regulatory compliance and adherence to standards is of utmostimportance. The Company ensures that appropriate business processes and adequate tools arein place for adherence with all the statutory obligations. Regulatory Compliances whichare applicable to LTI globally are monitored/ tracked through an in-house web-based tool.Audit Committee on quarterly basis reviews status of compliances and quarterly acertificate is presented to the Board of Directors at its meetings confirming status ofcompliances along with remediation plan for non-conformities if any. Any amendments inthe laws applicable to the Company are also reviewed updated in the system and monitoredby the Company. The Company also engages external consultants to review and update thecompliance requirements for new geographies and also update the existing list ofcompliances applicable globally to LTI. Audit assurance on the Compliance Management issought on regular basis through Company's Internal Audit team.
Further the Company has put in place a framework on "Global CorporateCompliances" which outlines the Company's philosophy towards compliance cultureunderstanding compliances coverage approach responsibilities reporting matrix andtrainings. The framework focuses on taking up compliance as an integral element forconducting business and create corporate culture characterized with integrity andlaw-abiding behavior. Under this framework identified key stakeholders across businessunits corporate functions and geography heads ensure and confirm compliance with theprovisions of all applicable laws on a continuous basis.
During FY21 Company has further enhanced its mechanism to monitor Sanctions Complianceby developing an in-house tool to monitor the same. Further various organization levelpolicy document and training modules for Anti Money Laundering Export control regulationswere reviewed and upgraded to ensure full compliances on the same.
37. Prevention of Sexual Harassment at Workplace
LTI is committed to provide a safe secure and congenial work environment for all itsemployees that is free from sexual harassment. The Company has formulated a robust POSH(Prevention of Sexual Harassment at Workplace) policy with clearguidelinesforreportingactsofSexualHarassmentattheworkplace and procedures for resolutionand redressal of complaints of Sexual Harassment. This Policy is in line with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and infact goes beyond to make it gender-neutral and applicable to every employee in theorganization.
The Policy is available on the website of the Company at www.Lntinfotech.com/investors
Awareness sessions as well as communication campaigns are conducted at regularintervals to promote a safe space for all genders and to sensitize employees in thisspace. Besides that the training program on POSH has been made mandatory for allemployees annually across the globe.
During FY21 the Company received two complaints on sexual harassment. All suchcomplaints have been resolved with appropriate action taken by the Internal ComplaintsCommittee with no complaints pending at the end of FY21.
38. Company Policy on Director Appointment and Remuneration
Nomination and Remuneration Policy lays out role of NRC on Director's appointment andremuneration including recommendation of remuneration of the key managerial personnel andother employees and the criteria for determining qualifications positive attributes andindependence of a Director. The NRC policy is available on the Company's website www.Lntinfotech.com/Investors
Some of the salient features of NRC Policy are as follows:
1. To regulate the appointment and remuneration of directors key managerial personneland the senior management personnel;
2. To identify persons who are qualified to become directors as per the criteria/ Boardskill matrix identified by the Board;
3. To ensure proper composition of Board of Directors and Board diversity;
4. To ensure that level and composition of remuneration is reasonable and sufficient toattract retain and motivate directors key managerial personnel and senior management andtheir remuneration involves a balance between fixed and incentive pay reflecting short andlong-term performance objectives appropriate to Company's working and its goals.
39. Statement under Section 197 of the Companies Act 2013
The information as required under Section 197(12) of the Companies Act 2013(Act') and Rule 5(1) of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time is provided in Annexure E tothis Report.
The details of employees receiving remuneration as mentioned in Rule 5(2) & 5(3) ofthe Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 asamended from time to time is provided in Annexure I to this Report. In terms ofSection
136(1) of the Act and the rules made thereunder the Report and Accounts are being sentto the shareholders excluding the aforesaid Annexure. Any shareholder interested inobtaining copy of the same may send an email to the Company Secretary and ComplianceOfficer at investor@Lntinfotech.com None of the employees listed in the said Annexure arerelated to any Director of the Company.
40. Annual Return
The copy of annual return is available on the Company's websitewww.Lntinfotech.com/Investors
41. Employee Stock Option Schemes
The Company has in place an Employee Stock Option Scheme 2015 (ESOP Scheme 2015')to attract and retain talent. There has been no material change in the ESOP Scheme 2015during FY21. The ESOP Scheme 2015 is in compliance with the Companies Act 2013 and SEBI(Share Based Employee Benefits) Regulations 2014 and the disclosure relating to the ESOPScheme 2015 as required under SEBI (Share Based Employee Benefits) Regulations 2014 isavailable on the Company's website www.Lntinfotech.com/Investors
A Certificate obtained from the Statutory Auditors confirming compliance with theCompanies Act 2013 and SEBI (Share Based Employee Benefits) Regulations 2014 is providedas Annexure B to this Report.
42. Details of significant and material orders passed by the Regulators or Courts orTribunals
During FY21 there were no material and significant orders passed by the regulators orcourts or tribunals impacting the going concern status and the Company's operations infuture.
43. Green Initiative
Electronic copy of the Integrated Annual Report for FY21 and the Notice of the ensuingAGM is being sent to all shareholders whose email addresses are available in demat accountand registered with Company's Registrar and Share Transfer Agent. Shareholders holdingshares in demat form are requested to update their email addresses with their DepositoryParticipant(s) and for shareholders holding shares in physical form should get theiremail registered/ updated with Link Intime India Private Limited Company's Registrar andShare Transfer Agent.
The Directors thank the Company's customers vendors banks financial and academicinstitutions employees regulatory authorities stock exchanges and all otherstakeholders for their continued co-operation and support. The Directors also acknowledgethe support and co-operation from the Government of India and overseas its agencies andother regulatory authorities. The Directors also wish to place on record theirappreciation towards employees of the Company and its Group for their commendable effortsteamwork and professionalism.
|For and on behalf of the Board || |
|Sanjay Jalona ||Nachiket Deshpande |
|Chief Executive Officer & ||Chief Operating Officer & |
|Managing Director ||Whole-time Director |
|(DIN: 07256786) ||(DIN: 08385028) |
|Place: USA ||Place: Pune |
|Date: May 04 2021 || |