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Larsen & Toubro Ltd.

BSE: 500510 Sector: Engineering
NSE: LT ISIN Code: INE018A01030
BSE 09:10 | 27 Jan 1918.50 -6.20
(-0.32%)
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1918.50

HIGH

1918.50

LOW

1918.50

NSE 00:00 | 25 Jan 1925.30 25.40
(1.34%)
OPEN

1895.00

HIGH

1931.30

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1850.10

OPEN 1918.50
PREVIOUS CLOSE 1924.70
VOLUME 283
52-Week high 2078.20
52-Week low 1306.40
P/E 39.28
Mkt Cap.(Rs cr) 269,520
Buy Price 1915.00
Buy Qty 16.00
Sell Price 1918.50
Sell Qty 184.00
OPEN 1918.50
CLOSE 1924.70
VOLUME 283
52-Week high 2078.20
52-Week low 1306.40
P/E 39.28
Mkt Cap.(Rs cr) 269,520
Buy Price 1915.00
Buy Qty 16.00
Sell Price 1918.50
Sell Qty 184.00

Larsen & Toubro Ltd. (LT) - Director Report

Company director report

Dear Members

The Directors have pleasure in presenting their 76th Annual Report and AuditedFinancial 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 76751 crore asagainst R 85192 crore for the previous financial year registering a decrease of9.91% primarily due to the disruption caused by the COVID 19 pandemic. The profit beforetax from continuing operations including exceptional items was lower at R 4438crore for the financial year under review as against R 6986 crore for the previousfinancial year. The profit after tax from continuing operations excluding exceptionalitems was R 2686 crore for the financial year under review as against R 6025crore 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 financialyear.

DIVIDEND:

During the Financial Year ended 31st March 2021 the Company paid a special dividend ofR 18/- (900%) per equity share as interim dividend amounting to R 2527.66crore on successful divestment of Electrical and Automation business to Schneider ElectricIndia Private Limited.

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

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

CAPITAL AND FINANCE:

During the year under review the Company allotted 663275 equity shares of R 2/-each upon exercise of stock options by the eligible employees under the Employee StockOption Schemes. The Company's Authorized Capital increased to R 5025 crorepursuant to the approval of the Scheme of Amalgamation of L&T Shipbuilding Limitedwith the Company. The authorised share capital of L&T Shipbuilding Limited has beenadded to the authorised share capital of the Company with effect from the appointed datei.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 5084 crore duringthe year. The Company has further raised a short-term ECB of USD 100 million for partlyrefinancing a maturing ECB. The Company has issued and allotted on private placementbasis Unsecured Rated Listed Redeemable NCDs aggregating to R 9000 croreduring the FY 2021. The funds raised were utilized mainly for creation of liquidityreserve to tide over pandemic related uncertainty. These NCDs are listed on the WholesaleDebt Market Segment of National Stock Exchange of India Limited. The Company has issuedCommercial Papers amounting to R 20895 crore during FY 2021. As on 31st March 2021the outstanding Commercial Paper is R 2775 crore. The Company has listed itsCommercial Papers on BSE Limited. The Company has not defaulted on any of its dues to thefinancial lenders.

The Company's borrowing programmes have received the highest credit ratings fromCRISIL 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 isalso available on the website of the Company.

DIVESTMENT OF ELECTRICAL AND AUTOMATION BUSINESS:

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

CAPITAL EXPENDITURE:

As at 31st March 2021 the gross property plant and equipment investment property andother intangible assets including leased assets were at R 14222.27 crore and thenet property plant and equipment investment property and other intangible assetsincluding leased assets at R 8640.71 crore. Capital Expenditure during the yearamounted to R 720.26 crore.

DEPOSITS:

The Company has not accepted deposits from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the rules framed thereunder during the yearunder 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) therequisite returns for outstanding receipt of money/loan by the Company which are notconsidered 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 electronicform. As on 31st March 2021 98.78% of the Company's total paid up capital representing1387380965 shares are in dematerialized form. SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 mandates that transfers except transmission andtransposition of securities are to be carried out in dematerialized form only. In view ofthe numerous advantages offered by the Depository system as well as to avoid fraudsmembers holding shares in physical mode are advised to avail of the facility ofdematerialization from either of the depositories. Accordingly any investor desirous oftransferring shares (which are held in physical form) can transfer only after their sharesare dematerialized. Further in adherence to SEBI's circular to enhance the due-diligencefor dematerialization of the physical shares the Company has provided the static databaseof the shareholders holding shares in physical form to the depositories which wouldaugment the integrity of its existing systems and enable the depositories to validate anydematerialization request.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company has been regularly sending communications to members whose dividends areunclaimed requesting them to provide/update bank details with RTA/Company so thatdividends paid by the Company are credited to the investor's account on time. Efforts arealso made by the Company in co-ordination with the RTA to locate the shareholders who havenot claimed their dues. Despite these efforts an amount of R 78184801 which wasdue and payable and remained unclaimed and unpaid for a period of seven years wastransferred to Investor Education and Protection Fund (IEPF) as provided in section 125 ofthe Companies Act 2013 and the rules made thereunder. In addition to the above theCompany has also transferred an amount of R 2359657 pertaining to sale proceedsof fractional entitlement of Bonus shares issued in 2013.

Cumulatively since the inception till 31st March 2021 the amount transferred to thesaid fund was R 376672744. In accordance with the provisions of the Section124(6) of the Companies Act 2013 and Rule 6(3)(a) of the Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (‘IEPFRules') the Company has transferred 1054705 equity shares of R 2 each (0.08% oftotal number of shares) held by 12982 shareholders (0.95% of total shareholders) to IEPF.The said shares correspond to the dividend which had remained unclaimed for a period ofseven consecutive years from the FY 2013. Subsequent to the transfer the concernedshareholders can claim the said shares along with the dividend(s) by making an applicationto IEPF Authority in accordance with the procedure available on www.iepf.gov.in and onsubmission of such documents as prescribed under the IEPF Rules. On receipt of theapplication the Company sends an online verification report to the IEPF Authority afterverifying all the necessary details which is duly certified by the Nodal Officer.

The Company sends specific advance communication to the concerned shareholders at theiraddress registered with the Company and also publishes notice in newspapers providing thedetails of the shares due for transfer to enable them to take appropriate action. Allcorporate benefits accruing on such shares viz. bonus shares etc. including dividendexcept rights shares shall be credited to IEPF.

SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES:

During the year under review the Company subscribed to / acquired equity / preferenceshares in various subsidiary / associate / joint venture companies. The details ofinvestments / 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 64400000
L&T Geostructure Private Limited (Note 1) Equity 24750000
L&T Finance Holdings Limited Equity (in Rights Issue) 293484370

Note:

1. L&T Geostructure LLP was converted into L&T Geostructure Private Limited on25th November 2020. Pursuant to the same 24750000 equity shares of

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

B) Preference shares redeemed during the year:

Name of the Company Type of shares Number of shares
L&T Hydrocarbon Engineering Limited Preference 260000000

C) Companies Struck off:

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

Kesun Iron and Steel Company Private Limited has applied to the Ministry of CorporateAffairs for strike off from Register of Companies under the provisions of Companies Act2013 on 11th February 2021. The approval is awaited.

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

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

The Company has formulated a policy on identification of material subsidiaries in linewith Regulation 16(c) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and the same is placed on the website athttps://investors.larsentoubro.com/Listing-Compliance.aspx. The Company does not have anymaterial 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 the Companies Act2013 Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) 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 PartyTransactions Policy specifying the individual threshold limits for each transaction andthe same has been uploaded on the Company's websitehttps://investors.larsentoubro.com/Listing-Compliance.aspx. The Company has a process inplace to periodically review and monitor Related Party Transactions.

All the Related Party Transactions were in the ordinary course of business and at arm'slength. The Audit Committee has approved the related party transactions for the FY 2021and 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 COMPANYBETWEEN THE END OF THE 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 thefinancial 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 majorlyduring Q1 of FY 2021. The Company resumed operations from 14th April 2020 afterimplementation of standard protocols in line with the guidelines prescribed. All theplants and office establishments started functioning after implementing necessary safetyand hygiene protocols like wearing of face masks social distancing norms workplacesanitation and employee awareness programmes etc in compliance with the regulations of thelocal authorities. All international sites also resumed work with employees and workmenworking in a staggered manner mandatory rotation on a periodic basis and in adherence toall the safety protocols as prescribed locally.

A Decision Response Team was formed by the Company which assessed the situation andtook appropriate decisions with respect to issuing directives for protecting its employeesincluding contract workers supporting communities and also protecting the financialhealth of the business.

The later quarters of FY 2021 saw the economy opening up gradually resulting in therevival of demand. Our employees and associated volunteers on the ground spread awarenessabout the need for social distancing personal hygiene and need to wear mask to preventinfection and avoid the spread of the virus. The Company has taken steps to createawareness amongst the nearby communities on health and hygiene through periodicalcampaigns.

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

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

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

As the COVID-19 scenario is still evolving the Company is mapping the developments ona real-time basis to ensure the health and safety of all its stakeholders. The impact ofthe 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 theCompanies (Accounts) Rules 2014 is provided in Annexure ‘A' forming part of thisBoard 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 theCommittee.

The charter of the Committee is to assist the Board in fulfilling its oversightresponsibilities for review of the existing Risk Management Policy Framework RiskManagement Structure and Risk Management Systems. The risk assessment includes review ofstrategic risks at domestic and international level including sectoral developments risksrelated to market competition financial geographical political and reputational issuesenvironment social and governance risks and cyber security risks. The Committeeperiodically reviews the risk status to ensure that executive management mitigates therisks by appropriate actions.

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

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 theCommittee.

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

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 aregiven in Annexure ‘C' forming part of this Board Report.

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

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/ RESIGNED:

Mr. Shailendra Roy ceased to be the Whole-time Director of the Company with effect from7th 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 effectfrom 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 2021pursuant to withdrawal of her nomination by LIC. The Board places on record itsappreciation towards valuable contribution made by them during their tenure as Directorsof the Company.

The Board has appointed Mr. S. V. Desai and Mr. T. Madhava Das as the Whole-timeDirectors of the Company for a period of five years with effect from 11th July 2020 uptoand including 10th July 2025. Mr. Subramanian Sarma has been appointed as the Whole-timeDirector for a period of five years with effect from 19th August 2020 upto and including18th 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 from29th January 2021 upto and including 7th April 2024 and Mr. R Shankar Raman as Whole-timeDirector for a period from 1st October 2021 upto and including 30th September 2026. Theirappointments 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 from25th May 2016 upto and including 24th May 2021. Pursuant to the recommendation of theNomination and Remuneration Committee the Board at its Meeting held on 14th May 2021 hasapproved the re-appointment of Mr. Sanjeev Aga for a second and final term of five yearsfrom 25th May 2021 upto and including 24th May 2026 subject to the approval ofshareholders through special resolution at this AGM.

Mr. Narayanan Kumar was appointed as Independent Director of the Company with effectfrom 27th May 2016 upto and including 26th May 2021. Pursuant to the recommendation of theNomination and Remuneration Committee the Board at its Meeting held on 14th May 2021 hasapproved the re-appointment of Mr. Narayanan Kumar for a second and final term of fiveyears from 27th May 2021 to 26th May 2026 subject to the approval of shareholders throughspecial resolution at this AGM. Based on their skills experience knowledge and report oftheir performance evaluation the Board was of the opinion that their association would beof immense benefit to the Company and it would be desirable to continue to avail theirservices as Independent Directors.

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

Mr. Hemant Bhargava Mr. D. K. Sen Mr. M. V. Satish and Mr. R. Shankar Raman retireby 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 ofDirectors. The terms and conditions of appointment of the Independent Directors are incompliance with the provisions of the Companies Act 2013 and are placed on the website ofthe Company https://investors.larsentoubro.com/Listing-Compliance.aspx. The Company hasalso disclosed on its website https://investors.larsentoubro.com/Listing-Compliance.aspxdetails of the familiarization programs to educate the Directors regarding their rolesrights and responsibilities in the Company and the nature of the industry in which theCompany 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 formingpart of this Report. Members are requested to refer to pages 97 and 98 of this AnnualReport.

AUDIT COMMITTEE:

The Company has in place an Audit Committee in terms of the requirements of theCompanies Act 2013 read with the rules made thereunder and Regulation 18 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The details relatingto the same are given in Annexure ‘B' - Report on Corporate Governance forming partof this Board Report. Members are requested to refer to pages 103 to 105 of this AnnualReport.

COMPANY POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Company has in place a Nomination and Remuneration Committee in accordance with therequirements of the Companies Act 2013 read with the rules made thereunder and Regulation19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Thedetails relating to the same are given in Annexure ‘B' - Report on CorporateGovernance forming part of this Board Report. Members are requested to refer to pages 105to 109 of this Annual Report. The Committee has formulated a policy on Directors'appointment and remuneration including recommendation of remuneration of the keymanagerial personnel and senior management personnel composition and the criteria fordetermining qualifications positive attributes and independence of a Director. Nominationand Remuneration Policy is provided as Annexure ‘G' forming part of this Board Reportand also disclosed on the Company's website athttps://investors.larsentoubro.com/Listing-Compliance.aspx. The Committee has alsoformulated a separate policy on Board Diversity.

DECLARATION OF INDEPENDENCE:

The Company has received Declarations of Independence as stipulated under Section149(7) of the Companies Act 2013 from Independent Directors confirming that he/she is notdisqualified from appointing/ continuing as Independent Director as laid down in section149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI Regulations 2015. Thesame are also displayed on the website of the Companyhttps://investors.larsentoubro.com/Listing-Compliance.aspx. The Independent Directors havecomplied with the Code for Independent Directors prescribed in Schedule IV to theCompanies Act 2013.

The Independent Directors of the Company have registered themselves with the data bankmaintained by Indian Institute of Corporate Affairs (IICA). In terms of Section 150 of theAct read with Rule 6(4) of the Companies (Appointment and Qualification of Directors)Rules 2014 the Independent Directors are exempted from undertaking the onlineproficiency 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 ofthe Company for the FY 2021 is available on our websitehttps://investors.larsentoubro.com/.

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 Section134(5) (e) of the Companies Act 2013. For the year ended 31st March 2021 the Board is ofthe opinion that the Company has sound IFC commensurate with the nature and size of itsbusiness operations and operating effectively and no material weakness exists. The Companyhas a process in place to continuously monitor the same and identify gaps if any andimplement new and/or improved controls wherever the effect of such gaps could have amaterial 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 beenfollowed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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 befollowed by the Company and such internal financial controls are adequate and operatingefficiently;

f) The Directors have devised proper systems to ensure compliance with the provisionsof 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 inwhich formal annual evaluation of the performance of the Board Committees IndividualDirectors and the Chairman has to be made. All Directors responded through a structuredquestionnaire giving feedback about the performance of the Board its CommitteesIndividual Directors and the Chairman.

For the year under review the questionnaire was updated suitably based on the commentsand suggestions received from Independent Directors. As in the previous years an externalconsultant was engaged to receive the responses of the Directors and consolidate/ analyzethe responses. The consultant's IT platform was used from initiation till conclusion ofthe entire board evaluation process. This ensured that the process was transparent andindependent of involvement of the Management or the Company's IT system. This has enabledunbiased feedback. The Board Performance Evaluation inputs including areas ofimprovement for the Directors Board processes and related issues for enhanced Boardeffectiveness were discussed in the meetings of the Nomination and Remuneration Committeeand 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 2013and the rules made thereunder are given in Annexure ‘D' forming part of this Boardreport.

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) Rules2014 as amended from time to time is provided in Annexure ‘H' forming part of thisreport. In terms of Section 136(1) of the Act and the rules made thereunder the Reportand Accounts are being sent to the shareholders excluding the aforesaid Annexure. AnyShareholder interested in obtaining a copy of the same may write to the Company Secretaryat the Registered Office of the Company. None of the employees listed in the said Annexureis 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 CompanySecretaries 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 anenvironment free from any conduct which can be considered as sexual harassment. TheCompany is committed to treating every employee with dignity and respect. The Company hasformulated a policy on ‘Protection of Women's Rights at Workplace' as per theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act 2013 and Rules 2013. The policy is applicable to all L&Testablishments located in India. The policy has been widely disseminated. The Company hasconstituted Internal Complaints Committees to ensure implementation and compliance withthe provisions of the aforesaid Act and the Rules. This Policy addresses the followingobjectives:

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 SexualHarassment. A detailed procedure for making a Complaint and initiating an Enquiry to theredressal process and finally the process of preparation of a report within a stipulatedtimeline is well laid out in the Policy document. The Policy also covers DisciplinaryAction for sexual harassment and is a part of the Company's Code of Conduct. Trainingprograms and workshops for employees are organised throughout the year. The orientationprograms for new recruits include awareness sessions on prevention of sexual harassmentand upholding the dignity of employees. Specific programs have been created on the digitalplatform to sensitize employees to uphold the dignity of their colleagues and preventionof sexual harassment. During FY 2021 about 13400 employees have undergone trainingthrough the programs / workshops including the awareness sessions held on digitalplatform.

There were 3 complaints received during the FY 2021. All the complaints were redressedas per the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition 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 andExchange Board of India (Share Based Employee Benefit) Regulations 2014 ("SBEBRegulations"). The disclosures relating to ESOPs required to be made under theprovisions of the Companies Act 2013 and the rules made thereunder and the SBEBRegulations together with a certificate obtained from the Statutory Auditors confirmingcompliance is provided on the website of the Companyhttps://investors.larsentoubro.com/Listing-Compliance.aspx.

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

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

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

Integrated Reporting: The Company has adopted the Integrated Reporting Frameworkas laid down by International Integrated Reporting Council. The Integrated Report tracksthe sustainability performance of the organization and its interconnectedness with thefinancial performance showcasing how the Company is adding value to its stakeholders. TheIntegrated Report encompasses areas such as Corporate Governance the Integrated Reportingand Sustainability Structure Sustainability Roadmap 2021 Risks and Opportunitiesenhancement of Financial Capital Manufactured Capital Intellectual Capital HumanCapital Natural Capital and Social & Relationship Capital and alignment tosustainable development goals. It also covers strategy business model and resourceallocation.

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

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

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

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

IBC: There is no Corporate Insolvency Resolution Process initiated under theInsolvency 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 aWholly Owned Subsidiary L&T Hydrocarbon Engineering Limited. During the FY 2021 partof the remuneration received by Mr. Sarma was charged to L&T Hydrocarbon EngineeringLimited (LTHE). Accordingly the Company has recovered an amount of R 3.17 crorefrom LTHE for remuneration paid to Mr. Sarma.

VIGIL MECHANISM:

As per the provisions of Section 177(9) of the Companies Act 2013 (‘Act') theCompany is required to establish an effective Vigil Mechanism for directors and employeesto report genuine concerns. The Company has a Whistle-blower Policy in place since 2004 toencourage and facilitate employees to report concerns about unethical behaviour actual/suspected frauds and violation of Company's Code of Conduct or Ethics Policy. The Policyhas been suitably modified to meet the requirements of Vigil Mechanism under the CompaniesAct 2013. 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 policy also establishes adequate mechanism to enable employees reportinstances of leak of unpublished price sensitive information. The Audit Committee of theCompany oversees the implementation of the Whistle-Blower Policy.

The Company has disclosed information about the establishment of the Whistle BlowerPolicy on its website https://investors.larsentoubro.com/CorporateGovernance.aspx. Duringthe 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 ORTRIBUNALS:

During the year under review there were no material and significant orders passed bythe regulators or courts or tribunals impacting the going concern status and the Company'soperations in future.

CONSOLIDATED FINANCIAL STATEMENTS:

Your Directors have pleasure in attaching the Consolidated Financial Statementspursuant to Section 129(3) of the Companies Act 2013 and Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and prepared inaccordance with the provisions of the Companies Act 2013 and the Indian AccountingStandards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015and amendments thereof issued by the Ministry of Corporate Affairs in exercise of thepowers conferred by section 133 of the Companies Act 2013.

AUDIT REPORT:

The Auditors' report to the shareholders does not contain any qualificationobservation or adverse comment.

SECRETARIAL AUDIT REPORT:

The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian & Co. CompanySecretaries 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 theprovisions of Companies Act 2013 M/s. Deloitte Haskins & Sells LLP were re-appointedas Statutory Auditors for a period of 5 continuous years from the conclusion of 75thAnnual 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 reviewprocess of Institute of Chartered Accountants of India (ICAI) and hold valid certificateissued by the Peer Review Board of the ICAI. The Auditors have also furnished adeclaration confirming their independence their arm's length relationship with theCompany as well as declaring that they have not taken up any prohibited non-auditassignments for the Company.

The Audit Committee reviews the independence and objectivity of the Auditors and theeffectiveness 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 againstthe Company by its officers or employees as specified under Section 143(12) of theCompanies Act 2013.

COST AUDITORS:

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

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

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

ACKNOWLEDGEMENT:

The Directors take this opportunity to thank the customers supply chain partnersemployees Financial Institutions Banks Central and State Government authoritiesRegulatory Authorities Stock Exchanges and all the various other stakeholders for theircontinued co-operation and support to the Company. Your Directors also wish to recordtheir appreciation for the continued co-operation and support received from the JointVenture Partners / Associates.

 

For and on behalf of the Board

A.M. NAIK
Group Chairman
(DIN: 00001514)
Date : 14th May 2021
Place : Mumbai

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