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L&T Technology Services Ltd.

BSE: 540115 Sector: IT
NSE: LTTS ISIN Code: INE010V01017
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P/E 23.23
Mkt Cap.(Rs cr) 16,394
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OPEN 1580.00
CLOSE 1592.90
VOLUME 33090
52-Week high 1780.00
52-Week low 995.00
P/E 23.23
Mkt Cap.(Rs cr) 16,394
Buy Price 1565.00
Buy Qty 10.00
Sell Price 1568.10
Sell Qty 1.00

L&T Technology Services Ltd. (LTTS) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 8th Annual Report along with the AuditedFinancial Statements of L&T Technology Services Limited for the year ended March 312020.

FINANCIAL RESULTS

Standalone
Particulars
2019-20 2018-19
Profit Before Depreciation exceptional and extra ordinary items & tax 12084 10145
Less: Depreciation amortization and obsolescence 1534 731
Profit / (Loss) before exceptional items and tax 10550 9414
Add: Exceptional Items - -
Profit / (Loss) before tax 10550 9414
Less: Provision for tax 2650 2413
Profit for the period carried to the Balance Sheet 7900 7001
Add: Balance brought forward from previous year 11770 7240
Less: Dividend for the year (Including dividend distribution tax and deemed dividend) 2641 2449
Add: ESOP cancellation impact 10
Less: Impact of IND AS 116 in opening reserve 335
Less: Impact of Ind AS 115 and ECL on contract asset in opening reserve 22
Balance available for disposal 16704 11770
Balance to be carried forward 16704 11770

Performance of the Company State of Company Affairs

The gross sales and other income for the financial year under review wereRs. 53936million as against Rs. 48632 million for the previous financial year registering anincrease of 10.91%. The profit before tax from continuing operations includingextraordinary and exceptional items was Rs. 10550 million and the profit after tax fromcontinuing operations including extraordinary and exceptional items of Rs. 7900 millionfor the financial year under review as againstRs. 9414 million and Rs. 7001 millionrespectively for the previous financial year registering an increase of 12.07% and 12.84%respectively.

Segmental Performance

The Company has five Business Segments namely Transportation Plant EngineeringIndustrial Products Medical Devices and Telecom & Hi-Tech. During the year thecontribution to the revenue from various business segments were as follows: -

Segmental FY20 % of overall FY19 % of overall
Transportation 17014 32.8% 14067 29.9%
Plant Engineering 9101 17.6% 7220 15.3%
Industrial Products 10717 20.7% 10182 21.6%
Medical Devices 5109 9.9% 3378 7.2%
Telecom & Hi Tech 9872 19.0% 12273 26.0%
Total 51813 100.0% 47120 100.0%

The detailed segmental performance is referred in Note No. 40 of the Notes forming partof the standalone financial statements.

Geographical Performance

The Revenue contribution of the Company from various

Geographies is mentioned herein below:

GEO FY20 % of overall FY19 % of overall
North America 30258 58.4% 25729 54.6%
Europe 8256 15.9% 8334 17.7%
India 7457 14.4% 7012 14.9%
Rest of the World 5842 11.3% 6045 12.8%
Total 51813 100.0% 47120 100.0%

Capital & Finance

During the year under review the Company had allotted 498233 Equity Shares of Rs. 2each upon exercise of stock options by the eligible employees under the Employee StockOption Scheme - 2016.

As on March 31 2020 the total paid up equity share capital of the Company was Rs.209023116/- consisting of 104511558 equity shares of Rs. 2 each fully paid up.During the year under review our Promoter and Holding Company - Larsen & ToubroLimited (L&T) - sold 4063632 equity shares reducing its stake by 4.26% in order toachieve the minimum public shareholding requirement of 25% in compliance with Rule 19(2)and Rule 19A of the Securities Contracts (Regulation) Rules 1957 and Regulation 38 ofSEBI LODR. The Company thus achieved the minimum public shareholding requirement on

June 26 2019 wherein L&T's holding was reduced to 74.99%.

As on March 31 2020 L&T holds 77986899 shares constituting

74.62% of the paid-up share capital of the Company.

Capital Expenditure

As at March 31 2020 the gross fixed and intangible assets including leased assetsstood at Rs. 13527 million (previous year Rs. 8087 million) and the net fixed includingleased assets at Rs. 9595 million (previous year Rs. 5654 million). Capitalexpenditure during the year is Rs. 1347 million (previous year Rs. 872 million).

Deposits

During the year ended March 31 2020 the Company has not accepted any deposits fromthe public falling within the ambit of Section 73 of the Act and the Rules framedthereunder.

Hence the Company does not have any unclaimed deposits as on date.

Pursuant to the Ministry of Corporate Affairs (MCA) notification amending the Companies(Acceptance of Deposits) Rules 2014 the Company is required to file with MCA annualreturn of deposits in Form DPT-3 on or before June 30 2020 for outstanding receipts ofamounts which are not considered as deposits as on 31.03.2020.

The Company would be complying with this requirement within the prescribed timelines.

Depository System

As the members are aware the Company's shares are compulsorily tradable in electronicform only. As on March

31 2020 99.99% of the Company's total paid up capital representing 104499712shares are in dematerialized form. LODR w.e.f. April 1 2019 mandated that all transfer ofshares except transmission and transposition to be carried out only in dematerializedform. In view of the numerous advantages offered by the Depository system as well as toavoid frauds members holding shares in physical mode are advised to avail the facility ofdematerialization from either of the depositories. The

Company has not accepted any physical transfer of shares during the year under review.Further in adherence to SEBI's circular to enhance the due-diligence for dematerializationof the physical shares the

Company has provided the static database of the shareholders holding shares in physicalform to the depositories which would augment the integrity of its existing systems andenable the depositories to validate any dematerialization request.

Transfer to Investor Education and Protection Fund

There are no amounts that are due to be transferred to Investor

Education and Protection Fund by the Company.

The Company has sent adequate communication to the members whose dividends areunclaimed requesting them to provide/update bank details with the RTA/Company so thatand intangible assets dividends paid by the Company are credited to the investors'account on timely basis.

The Company has sent communication to shareholder(s) holding shares in physical formfor collecting details of their bank account such as Bank name Bank Branch MICR number

IFSC Code for payment of dividend to such shareholders whose dividend remainedunclaimed/unpaid. The Company hereafter will be crediting the dividend through electronicmode instead of revalidating and issuing fresh warrants or

Demand Drafts to the shareholders.

Pursuant to the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 the Company has appointed the Company Secretary as theNodal Officer for carrying out the necessary functions under the said Rules.

Subsidiary/Associate/Joint Venture Companies

During the year under review the Company has incorporated a wholly owned subsidiary inChina named L&T Technology Services (Shanghai) Co. Limited. The Company also formed anoverseas company named L&T Technology Services (Canada) Limited through its whollyowned subsidiary L&T Technology Services LLC which holds 100% shares in the said

Canadian entity.

During the year the Company has also acquired the shares of

Esencia Technologies India Private Limited (India) from Esencia Technologies Inc. andthe business of Graphene Solutions PTE. Ltd (Singapore) Graphene Solution SDN. BHD(Malaysia) Graphene Solutions Taiwan limited (Taiwan) and Seastar Labs Private Limited(India) from Graphene Semiconductor Services

Private Limited.

The details of investments in such companies during the year are as under:

A) Shares acquired during the year:

Name of the Company Type of Shares No. of shares
Graphene Solutions PTE. Ltd
Equity 60501
(Singapore)
Graphene Solution SDN. BHD (Malaysia) Equity 100000
Graphene Solutions Taiwan Limited (Taiwan) Equity NA*
Seastar Labs Private Limited Equity 50000
Esencia Technologies India Private Limited Equity 10000

 

*As per the local laws in Taiwan share capital is not divided in number of shares

Post the said acquisition the following is the Group structure of the Company:-

B) Performance and Financial Position of each subsidiary/associate and joint venturecompanies:

A statement containing the salient features of the financial statement ofsubsidiaries/associate/joint venture companies and their contribution to the overallperformance of the Company is annexed to this Annual

Report at page no.255.

The Company has formulated a policy on identification of material subsidiaries in linewith Regulation 16(c) of LODR and the same is placed on the website at http://www.ltts.com/investors/.The Company does not have any material subsidiaries.

Particulars of Loans given Investments made Guarantees given or Security provided bythe Company

The Company has disclosed the full particulars of the loans given investments made orguarantees given or security provided as required under Section 186 of Act and Regulation34(3) read with Schedule V of the LODR in Note 37 forming part of the financialstatements.

Particulars of Contracts or Arrangements with Related Parties

The Audit Committee and Board of Directors have approved the Related Party TransactionPolicy along with threshold limits and the same has been uploaded on the Company's websitehttp://www.ltts.com/investors

The Company has a process in place of periodically reviewing and monitoring RelatedParty Transactions.

All the Related Party Transactions were in the ordinary course of business and at arm'slength. The Audit Committee has approved all the Related Party Transactions for FY 2019-20and estimated transactions for FY 2020-21 as required under the provisions of Section 177of the Act.

There are no materially significant related party transactions that may have conflictwith the interest of the Company.

Amount to be Carried to Reserves

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

Dividend

The Board at its meeting held on October 18 2019 declared an interim dividend of Rs.7.50 (375%) per equity share amounting to Rs. 782 million (the total payout includingDividend

Distribution Tax amounted to Rs. 943 million). The dividend was paid on November 52019.

Further the Board of Directors in its meeting held on May

15 2020 have recommended the payment of final dividend of

Rs. 13.50 (675%) per equity share of Rs. 2 each for the financial year ended March 312020. The proposal is subject to the approval of shareholders at the ensuing AnnualGeneral

Meeting (AGM) to be held on July 17 2020.

The final dividend on equity shares if approved by the members would involve a cashoutflow ofRs. 1411 million.

The dividend is based upon the parameters mentioned in the Dividend Distribution Policyapproved by the Board of

Directors of the Company which is in line with Regulation 43A of the LODR. The Policyis provided as Annexure ‘A' forming a part of this Board Report and also uploaded onthe Company's website at http://www.ltts.com/investors/

Material changes and commitments affecting Financial position of the Company betweenthe end of the Current Financial Year and the date of the Report

Other than stated elsewhere in this Report there are no material changes andcommitments affecting the financial position of the Company between the end of the current

financial year and the date of this Report.

Conservation of Energy Technology absorption Foreign Exchange earnings and outgo

Information as required to be given under Section 134(3)(m) of the Act read with Rule8(3) of the Companies (Accounts) Rules 2014 is provided in Annexure ‘B' forming partof this

Board Report.

Risk Management Policy

The Risk Management Committee comprises of Mr. S. N. Subrahmanyan Dr. Keshab Panda andMr. P. Ramakrishnan. Mr. S. N. Subrahmanyan is the Chairman of the Committee.

The Committee is responsible for monitoring and reviewing the risk management plan andensuring its effectiveness. The Company has formulated a risk management policy and has inplace a mechanism to inform the Board Members about risk assessment including cybersecurity and minimization procedures and periodical review to ensure that executivemanagement controls risk by means of a properly designed framework. The details of thesame are given in Annexure ‘D' Report on

Corporate Governance forming part of this Board Report.

A detailed note on risk management and the internal controls with reference to thefinancial statement is given under the financial review section of the ManagementDiscussion and

Analysis on page no. 115 and 120 of the Annual Report.

Corporate Social Responsibility

The Corporate Social Responsibility (CSR) Committee comprises of Mr. Arjun Gupta Mr.Sudip Banerjee and Dr. Keshab Panda as its Members. Mr. Arjun Gupta is the Chairman of theCommittee.

The disclosures required to be given under Section 135 of the Act read with Rule 8(1)of the Companies (Corporate Social Responsibility Policy) Rules 2014 are provided inAnnexure ‘C' to this Board report.

The CSR Policy framework is available on the Company's website https://www.ltts.com/investors/corporate-governance

The details of the Committee are given in Annexure ‘D' Report on CorporateGovernance forming part of this Board Report.

During the year under review the Company has amended the CSR Policy to include Sportsand Environment as its CSR theme.

Contribution to the PM Cares Fund to ght the Covid-19 Pandemic

During the year ended March 31 2020 as part of the L&T

Group's resolve to contribute Rs. 1500 million to the Prime Minister's CitizenAssistance and Relief in Emergency Situations Fund i.e. PM (CARES) FUND your Company aspart of its CSR initiative has made a contribution of Rs. 183.09 million and the employeeshave contributed Rs. 16.91 million to the

PM(CARES) FUND.

Policy of ‘Work From Home' implemented for ghting the threat of Covid-19 Pandemic

In line with the Govt of India's directive State wise guidelines and directives issuedby respective countries and as a protective step for all its employees welfare andsafety the Company had put in place a Policy of "Work From Home" for all itsemployees from March 23 2020 at all its Centers and Offices in India and overseas. Withthe objective of well-being and safety of all its employees the Senior

Management and Business Continuity Team took lot of initiatives and implemented variouspolicies for the benefit of employees. The Human Resource Development Team was constantlyin touch with all the employees and regularly gave instructions to the employees to facethis Pandemic through advisory emails.

Directors and Key Managerial Personnel Appointed/ Resigned during the year

The terms and conditions of appointment of the Independent

Directors are in compliance with the provisions of the Act and LODR and are placed onthe website of the Company https://www.ltts.com/investors/corporate-governance.

The notice convening the AGM includes the proposal for appointment / reappointment ofDirectors.

A. Appointment/Re-appointment of Directors & Key Managerial Personnel:

During the year under review the following appointments/ re-appointments were made onBoard:-

a. Mr. Abhishek Chief Operating Officer was appointed as a Whole Time Director for aperiod of three years with effect from October 18 2019 upto and including October 172022 subject to the approval of shareholders in the general meeting.

b. Ms. Apurva Purohit was appointed as an Independent Director of the Company witheffect from December 11 2019 for a term of five years up to and including December 102024 subject to the approval of the shareholders in general meeting.

c. Mr. Amit Chadha President Sales & Business Development and Whole-Time Directorof the Company was appointed as the Deputy Chief Executive Officer & Whole-TimeDirector of the Company with effect from April 1 2020.

d. Mr. S. N. Subrahmanyan and Dr. Keshab Panda

Directors retire by rotation at the ensuing AGM and being eligible offer themselvesfor re-appointment.

B. Resignation of Directors & Key Managerial Personnel: a. Ms. Renuka Ramnathresigned as an Independent

Director of the Company on October 18 2019 due to her other professional commitments.She has confirmed to the Company that there are no other material reasons for herresignation.

b. Mr. Bhupendra Bhate resigned as Chief Operating

Officer and Whole Time Director of the Company on May 3 2019. He was appointed as theChief

Innovation Officer of the Company.

The Board places on record its appreciation towards valuable contribution made by themduring their tenure as Directors of the Company.

The Company has also disclosed on its website http://www.ltts.com/investors/details of the familiarization programs formulated to educate the Directors regardingtheir roles rights and responsibilities in the Company and the nature of the industry inwhich the Company operates the business model of the Company etc.

Pursuant to the amendments in the Companies

(Appointment and Qualification of Directors)

Rules 2014 all the Independent Directors of the

Company have registered themselves with the

Databank of Independent Directors and are in the process of appearing for the onlineproficiency test wherever required.

The Board is of the view that all the Independent

Directors on the Board possess integrity necessary expertise and experience forperforming their functions diligently.

Number of Meetings of the Board of Directors

This information is given in Annexure ‘D' Report on Corporate

Governance forming part of this Board Report. Members are requested to refer to pageno. 61 of this Annual Report.

Audit Committee

The Company has in place an Audit Committee in terms of the requirements of Section 177of the Act read with rules made thereunder and Regulation 18 of LODR.

Currently the Committee comprises of 3 Independent

Directors namely Mr. N. Kumar-Chairman Mr. Samir Desai and Ms. Apurva Purohit.

During the year under review 4 meetings were held on May 3 2019 July 19 2019October 18 2019 and January 17 2020. The details relating to the same are given inAnnexure ‘D'

Report on Corporate Governance forming part of this Board Report. Members are requestedto refer to page no. 65 of this Annual Report.

Company Policy on Directors' Appointment and Remuneration

The Company has in place a Nomination and Remuneration

Committee (NRC) in accordance with the requirements of Section 178 of the Act read withrules made thereunder and

Regulation 19 of LODR.

The details of the same are given in Annexure ‘D' Report on

Corporate Governance forming part of this Board Report. Members are requested to referto page no. 67 of this Annual Report. NRC has formulated a policy on directors appointmentand remuneration including recommendation of remuneration of the key managerial personneland senior management personnel and the criteria for determining qualifications positiveattributes and independence of a Director and also disclosed the policy on the Company'swebsite http://www.ltts.com/ and is also enclosed to the Board Report asAnnexure ‘I'

The Committee has formulated a policy on Board diversity.

Stakeholders' Relationship Committee

The Company has in place a Stakeholders' Relationship Committee in terms of therequirements of the Act read with the rules made thereunder and Regulation 20 of the LODR.

The details of the same are given in Annexure ‘D' Report on

Corporate Governance forming part of this Board Report. Members are requested to referto page no. 70 of this Annual Report.

Declaration of Independence

The Company has received Declarations of Independence from Independent Directors asstipulated under Section 149(7) of the Act confirming that he/she is not disqualified frombeing appointed or continuing as Independent Director. The same are also displayed on thewebsite of the Company http:// www.ltts.com/investors/investor-download/. TheIndependent

Directors have complied with the Code for Independent Directors prescribed in ScheduleIV to the Act.

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 Act. For the year ended March 31 2020 the Board is of the opinion that theCompany has sound IFC commensurate with the nature and size of its business operations andoperating effectively and no material weaknesses exist. The Company has a process in placeto continuously monitor the same and identify gaps if any and implement new and/orimproved controls wherever such gaps would have a material effect on the Company'soperations.

Directors' Responsibility Statement

The Board of Directors of the Company confirms that: a. In the preparation of AnnualAccounts the applicable accounting standards have been followed along with properexplanation relating to material departures; b. The Directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit of the Company for thatperiod; c. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act

2013 for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities; d. The Directors have prepared the Annual Accounts on a goingconcern basis; e. The Directors have laid down an adequate system of internal financialcontrol to be followed by the Company and such internal financial controls are adequateand operating efficiently; f. The Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand were operating effectively.

Performance Evaluation of Board its Committees Directors and Chairman

The Nomination and Remuneration Committee and the Board have laid down the manner inwhich formal annual evaluation of the performance of the Board Committees Chairman andindividual Directors has to be made. All Directors responded through a structuredquestionnaire giving feedback about the performance of the Board its Committeesindividual Directors and the Chairman.

The Company had engaged an external agency to facilitate the process of annualevaluation of the performance of the Board Committees Chairman and the individualDirectors. The said external agency was responsible to receive the responses from theDirectors to consolidate and analyze their responses and present the same to the Chairmanof the Nomination and

Remuneration Committee. The external agency used its IT platform for the entire boardevaluation process right from initiation till conclusion in order to ensure that theentire process is done in a confidential transparent and independent manner without theinvolvement of the Management or the Company's IT system to ensure an unbiased feedback.

The questionnaires cover the Board composition its structure its culture itseffectiveness its functioning information availability adequate discussions etc. Thesequestionnaires also cover specific criteria and the grounds on which all directors intheir individual capacity will be evaluated. Evaluation of Independent Directors was doneby board including assessment of their performance and their independence of management.

The Board Performance Evaluation inputs were highlighted by the Chairman of Nominationand Remuneration Committee in the Nomination and Remuneration Committee as well as in theBoard Meeting held on May 15 2020. Further the Chairman of the Nomination andRemuneration Committee apprised the Chairman on the outcome of Board Evaluation andsuggested that the individual discussion with the Independent Director can be held oncethe lockdown is lifted. Most of the suggestions from the Board Evaluation exercise of FY2018-19 had been suitably implemented including Directors' Familiarization Programmefixation of Board calendar in advance and adequate time allocation for meetings etc.

Disclosure of Remuneration

The details of remuneration as required to be disclosed under the Act and the rulesmade thereunder are given in the

Annexure ‘E' 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 ‘F' forming part of this Board Report.

In terms of Section 136(1) of the Act and the rules made thereunder the Report andAccounts are being sent to the shareholders excluding the aforesaid Annexure. AnyShareholder interested in obtaining copy of the same may write to the Company Secretary atthe registered office of the Company. None of the employees listed in the said Annexure isrelated to any Director of the Company.

Compliance with Secretarial Standards on the Board and General Meetings

The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board

Meetings and General Meetings.

Protection of Women at Workplace

The Company has constituted an Internal Complaints

Committee (‘ICC') - in line with the requirements of the Sexual

Harassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013.The ICC has been constituted as per the Act to redress the complaints received regardingsexual harassment. All employees (permanent contractual temporary trainees) are coveredunder this policy. During the year under review 3 cases of sexual harassment werereceived on Ethics Line. The same were resolved and wherever necessary appropriate actionwas taken by the

Company.

Awareness workshops/training programmes are conducted across the Company to sensitizeemployees to uphold the dignity of their colleagues at work place especially with respectto prevention of sexual harassment.

Consolidated Financial Statements

Your Directors have pleasure in attaching the Consolidated

Financial Statements pursuant to Section 129(3) of the Act and Regulation 34 of theLODR and prepared in accordance with the applicable Accounting Standards prescribed by theInstitute of Chartered Accountants of India (ICAI) in this regard.

Auditors' Report

The Auditors' Report to the shareholders does not contain any qualificationobservation or comment or adverse remark(s).

Statutory Auditors

In view of the mandatory requirement of the rotation of Auditors and in accordance withthe provisions of the Act Sharp & Tannan (firm registration number 109982W)Chartered Accountants were appointed as Statutory Auditors for a period of 4 continuousyears from the conclusion of 6th

Annual General Meeting (AGM) till the conclusion of 10th AGM of the Companyin the AGM held on August 22 2018.

Certificate from the Auditors has been received to the effect that they are eligible toact as auditors of the Company and their appointment would be within the limits asprescribed obtained under Section 141 of the Act. The Auditors have confirmed that theyhave subjected themselves to the peer review process of the Institute of CharteredAccountants of India (ICAI) and hold a valid certificate issued by the Peer Review

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.

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

For the financial year 2019-20 the total fees paid by the

Company and its subsidiaries on a consolidated basis to the

Auditors and all entitiesinthenetworkfirm/entityof which the Auditors are a partthereof for all the services provided by them is Rs. 4.72 million.

The Auditors attend the AGM of the Company. Also see page no. 73 forming part ofAnnexure ‘D' of this Board Report.

Secretarial Audit Report

The Board had appointed Mrs. Naina Desai (M. No. F1351) Practicing Company Secretaryto carry out Secretarial Audit under the provisions of Section 204 of the Act for thefinancial year 2019-20.

The Secretarial Audit Report issued by Mrs. Naina Desai Practicing Company Secretaryis attached as Annexure ‘G' to this Board Report.

The Secretarial Auditor's Report to the shareholders does not contain any qualificationor reservation or adverse remark.

Details of Significant and Material Orders Passed by the Regulators or Courts orTribunals

During the year under review there were no significant material orders passed by theRegulators or Courts or Tribunals impacting the going concern status and the Company'soperations in future.

Extract of Annual Return

As per the provisions of Section 92(3) of the Act an extract of the Annual Return inForm MGT-9 is provided in Annexure ‘H' to this Board Report and is also available onthe website of the

Company http://www.ltts.com/investors/.

Other Disclosures

1. Corporate Governance Report

Pursuant to Regulation 34 read with Schedule V of the LODR a Report on CorporateGovernance and from athecertificate Statutory Auditors confirming compliance is providedin Annexure ‘D' forming part of this Board Report.

2. Employee Stock Option Scheme

There has been no material change in the Employee Stock of the ICAI.

Option Scheme 2016 (ESOP Scheme 2016) during the current financial year. The ESOPScheme -2016 is in compliance with the SBEB Regulations. The disclosure relating to theESOP Scheme-2016 required to be made under the Act and rules made thereunder and the SBEBRegulations togetherwith certificateobtained from the Statutory Auditorsconfirming compliance is provided on the website of the Company http://www.ltts.com/investors/.

The Statutory Auditors' Certificateconfirmingcompliance with the Act and the SBEBRegulations is provided in Annexure ‘D' forming part of this Board Report.

3. No disclosure is required under Section 67(3)(c) of the Act in respect of votingrights not exercised directly by the employees of the Company as the provisions of thesaid section are not applicable.

4. Credit Rating

The Company enjoys a good reputation for its sound

financial management and the ability to meet its financial obligations. The Company hasreceived CRISIL AAA/stable and CRISIL A1+ rating for it's the long term and short termfinancial instruments of the Company respectively.

5. Vigil Mechanism

As per the provisions of Section 177(9) of the Act the Company is required toestablish an effective Vigil

Mechanism for directors and employees to report genuine concerns.

The Company has a Whistle-Blower Policy in place since 2014 to encourage and facilitateemployees to report concerns about unethical behaviour actual/ suspected frauds andviolation of Company's Code of

Conduct. The Policy provides for adequate safeguards against victimisation of personswho avail the same and provides for direct access to the Chairperson of the AuditCommittee. The Audit Committee of the Company oversees the implementation of theWhistle-Blower

Policy. The Policy also establishes adequate safeguards to enable employees reportinstances of leak of unpublished price sensitive information.

The Company has disclosed information about the establishment of the Whistle-BlowerPolicy on its website http://www.ltts.com/investors/. During the year no personnelhas been declined access to the Audit

Committee wherever desired.

6. Reporting of Frauds

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

7. Business Responsibility Reporting

As per Regulation 34 of LODR a separate section on Business Responsibility Reportingforms a part of the

Annual Report (refer pages 124 to 133) describing initiatives taken by the Company froman environmental social and governance perspective. The activities carried out by theCompany as a part of its CSR initiatives during

2019-20 are covered in the same.

8. Statutory Compliance

The Company complies with all applicable laws rules and regulations pays applicabletaxes on time ensures taking care of all its stakeholders initiates sustainableactivities and ensures statutory CSR Spend.

9. MSME

The Ministry of Micro Small and Medium Enterprises vide their Notification datedNovember 2 2018 has instructed all the companies registered under the Act with aturnover 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 throughKredX Early.

The Company complies with the requirement of submitting the half yearly return to theMinistry of

Corporate Affairs within the specified timelines.

Acknowledgement

Your Directors take this opportunity to thank the customers vendors academicinstitutions Financial Institutions Regulatory authorities and Stock Exchanges and allthe various stakeholders for their continued co-operation and support to the Company. YourDirectors also acknowledge the support and co-operation from the Government of India andthe Governments of various countries the concerned

State Governments and other Government Departments and Governmental Agencies. TheDirectors appreciate the significant contributions made by the employees of the

Company and its subsidiaries during the year under review and value the contributionsmade by every member of the

LTTS family globally.

For and on behalf of the Board
Dr. Keshab Panda S. N. Subrahmanyan
CEO & Managing Director Vice Chairman
(DIN: 05296942) (DIN: 02255382)
Place: New Jersey USA Place: Chennai India
Date : May 15 2020 Date : May 15 2020