CHAIRMAN’S STATEMENT    ANNUAL REPORT 2020-21

A. M. Naik “It is vital to remain psychologically strong and

Group Chairman stay united in our shared sense of purpose.”

Dear Shareholders

I am addressing you all at a time when the nation has Your Company reiterates its strong commitment to serve
been impacted by the second wave of the Corona virus, the people of this country, and expresses solidarity with
leading to widespread distress and tragic loss of life. the nation and its leadership.
The unexpected scale and intensity of this year’s surge
threatened to overwhelm India’s healthcare systems and Response to the Pandemic
undermine the prevailing macro-economic narrative.
L&T’s first priority has revolved around taking every
Undoubtedly, this is the most severe test ever faced by
possible care of its employees, contract workers and
all of us – households, corporates, civil society and the
society at large. For our employees, we have initiated a
Government.
broad spectrum of measures that encompass financial,
At this critical juncture, as important as observing health medical and insurance assistance as well as educational
and safety measures is to remain psychologically strong, support.
guard against cynical despair and stay united in our
These measures were communicated across the
shared sense of purpose. As they say, the darkest hour is
organisation and have contributed to bolstering the
before dawn, and we are already beginning to glimpse
morale of our workforce. All these are over and above
early signs that give rise to cautious optimism. The
the regular benefits and insurance payments already in
declining trend in cases across the states as well as the
place for employees. In addition, quarantine centres,
prospects of the vaccine rollout gaining pace should help
fully equipped with oxygen generators and other vital
us look forward to happier times.

1
CHAIRMAN’S STATEMENT    ANNUAL REPORT 2020-21

equipment, have been set up to meet the emergency Secondly, the enhancement as well as the front-loading of
needs of our employees and their families as well our borrowing programmes by the Centre and States ensured
contract workmen. Employees can also avail of in-house that money continued to flow through various economic
vaccination drives and secure help through medical constituents even when tax collections were low. Against
services and professional online counselling. all odds, our country has demonstrated commendable
economic resilience despite stringent lockdowns, reverse
We consider our contract workers as part of our extended
migration of labour and supply chain disruptions.
workforce and have continued to pay their wages
and provide food, shelter and medical assistance. This Post the phased lifting of the lockdowns last year, the
was done while maintaining the prescribed COVID-19 Indian economy recorded growth across most sectors,
preventive and containment protocols at all our factories evidenced by way of significant increases in high
and project sites. frequency indicators such as energy demand, E-way bills,
GST collections, cement and steel consumption, etc.
As a conscientious corporate citizen, we have contributed
These not only touched pre-pandemic levels but, in some
in monetary and material terms to meet the challenges
cases, surpassed them. Despite the progressive pickup in
posed by this humanitarian crisis. In addition to a
various economic parameters, India’s GDP has contracted
donation to the PM Cares Fund at the onset of the crisis,
by 7.3% in FY2020-21 mainly due to the lockdown in the
the L&T Group has also supplied test, medical and PPE kits
first half of the year.
to locations around the country. When the second wave
threw up the unexpected challenge of an acute shortage The global economy, already buffeted by various factors
of oxygen, we responded by activating our global like trade tensions, political instability, Brexit and low
procurement arms, and commenced delivery of oxygen crude prices, etc., was further stressed as the virus
generators to various hospitals in India. We also supplied raged across large swathes of the world. In addition to
oxygen concentrators, ventilators and ambulances. introducing healthcare measures, most countries have
opted for benevolent fiscal and monetary policies to
As India’s leading Group involved in EPC projects,
support growth. Under-utilisation of manufacturing
high-tech manufacturing and services, we drew on our
capacities across the world due to lower demand
reservoir of expertise to provide assistance in a number
and decelerated global trade has become a recurring
of ways. Our construction business has converted many
phenomenon. Increasingly, countries are resorting to a
hospitals to Covid Care Centres. We have installed
protectionist stance in an attempt to safeguard their own
smart technologies in over 20 major cities to help state
economies. Meanwhile, volatile oil prices due to demand-
governments and local authorities in their endeavour
supply imbalances have affected the fiscal arithmetic of
to contain the spread of the virus. These public-
GCC countries and consequently, their ability to spend
spirited initiatives by your Company have been widely
on Capex.
acknowledged by multiple state governments.
It appears that augmenting India’s stock of vaccines, and
Economic Scenario accelerating its rollout across the country is the safest
and surest route to full economic recovery.
The year FY21 was an economic roller coaster. It can
be best described as a ‘tale of two halves’ where we
Capex Spends
witnessed a precipitous slowdown in economic activity
in the first half, followed by an impressive sequential India’s capex cycle over the last five years has revolved
rebound in the second half. The combination of fiscal around public investments, while private investments
and monetary measures by the Government and RBI remained largely lacklustre. Given the scale of India’s
announced in the early part of the year accounted for infrastructure deficit, we remain optimistic about the
10% of India’s nominal GDP. Not only did it cushion Government’s intent to complete around 7400 projects
the economic fallout, it also bolstered consumer and as envisaged in the National Infrastructure Pipeline,
business confidence when activities resumed post the first aggregating to R 111 trillion by FY25. The project pipeline
lockdown. is expected to be collectively funded by the Central

2
Government, State Governments and PSUs to the extent The L&T Group recorded revenues of R 135,979 crore
of 79% with the remaining 21% being envisaged to during FY2020-21, registering a decline of 6.5%. The
come from the private sector. decline was mainly due to the slowdown of project
execution and manufacturing activity, affected due to
We believe a phased recovery in economic activity over
lockdown-related disruptions in first half of the year. This
the next couple of years will result in tax buoyancy, and
was partially compensated for by a more normalised level
consequently enable the Government to forge ahead
of operations during the second half of FY2020-21.
with various infrastructure projects. While the Union
Budget 2021 highlighted large outlays on infrastructure, As on March 31, 2021, the order book at R 327,354 crore
the Government also postponed the fiscal consolidation provides multi-year revenue visibility. The infrastructure
exercise to FY25, essentially creating more room for segment has a 75% share of the consolidated order book.
future Capex spends. Currently, many projects in India The order book registered a growth of 7.7%, on the back
are also being funded by various bi-lateral/multi-lateral of some mega orders secured during the year.
agencies which can potentially plug funding gaps, if
Shareholder value was delivered through healthy profit
any, in the National Infrastructure Pipeline. Private sector
after tax which stood at R 11,583 crore, representing a
balance sheets have been looking healthier, thanks to
growth of 21.3% over the previous year. During the year,
the combination of incentives around PLIs, low tax rates
the Company concluded the divestment of its Electrical
and liquidity, as well as visibility of pick up in industrial
& Automation (E&A) business including the sale of
demand and select segments of real estate. We are bullish
the integrated marine automation solutions company,
about an uptick in private investments in the medium
Servowatch Systems Limited.
term. India’s investment/GDP ratio which has been
languishing, should see significant improvement in the The Company continues to focus on shareholder value
coming years. Once private investments revive, we could creation by divesting non-core assets, capturing cost
hopefully see shades of a repeat of the 2003-08 capex efficiencies and leveraging technology for productivity
cycle in India when both public and private investments gains. The Company’s strategically diversified business
gained momentum in tandem. portfolio, geographical dispersion, robust balance
sheet and strong order book are reliable signposts to a
Since infrastructure investments serve the twin benefits of
brighter future. Further, its proven execution strengths
improving productivity and generating employment, we
and committed workforce are helping it to successfully
believe that the underlying macro drivers for investments
transition into a more digitally evolved work environment.
in India remain intact. Your Company is poised to
This should enable the business to thrive and grow, once
capitalise on these opportunities as they emerge.
the immediate challenges posed by the pandemic are
overcome.
Group Performance Overview
It gives me great pleasure to inform you that the Board of
In a year marked by anxiety and uncertainty, your
Directors has recommended a final dividend of R 18 per
Company turned in a creditable performance and
share for FY2020-21. This is in addition to the R 18 per
registered appreciable recovery across key performance
share of special dividend declared earlier during the year.
parameters. Our order inflow for the year at R 175,497
crore was achieved on the back of strong domestic wins
International Business
in the Infrastructure and Hydrocarbon segments. Despite
the COVID-19 led disruption, order inflow was boosted The Company has gradually expanded its international
by the thrust given by the Indian Government to the footprint through geographic dispersion as a conscious
Infrastructure sector to help put the economy back on de-risking strategy. While the Middle East region has
track. We secured multiple large and prestigious orders obviously remained an area of focus, the Company has
during the year, viz., the Mumbai-Ahmedabad High Speed turned its attention to many countries in Africa as well
Rail (popularly called the ‘Bullet Train’), a bridge across as South East Asia. Currently, the Middle East region
the Brahmaputra in Assam as well as EPCC packages for constitutes 61% of the international order book of
the Barmer Refinery in Rajasthan. R 68,773 crore.

3
CHAIRMAN’S STATEMENT    ANNUAL REPORT 2020-21

Training, Talent Management and communities around us with better access to potable
Next Line Planning water, an improved level of sanitation, and facilities
for health, education and skill building. We are also
At the L&T Group, we have crafted a culture of
committed to expanding and enhancing the scope of
continuous training and empowerment, with an emphasis
our activities far into the future – for happy communities
on transparency, efficiency and empathy. Our people
contribute to the society’s general sense of well-being.
occupy prime position in the organisation’s hierarchy
of stakeholders, and therefore continuous attention is Turning to governance, at L&T, our core values pivot
given to retention and development of talent at all levels. around the principles and ideals based on independence,
Talent management has been broadly classified into three transparency, accountability, responsibility, compliance,
domains: Business Leadership, Technical Leadership and ethics and trust. In recognition of our efforts, we received
Project Leadership. For Business Leadership, a robust ‘7 the ‘Grant Thornton Bharat SABERA’ award for Best
Step Leadership Development Model’ has been in place Integrated Reporting.
for more than a decade. The Company’s top management
As stated in our Integrated Report, I also wish to
ensures that employees are accorded opportunities
underscore that we have clarified our position vis-à-vis
for professional development and are able to grow
controversial weapon segments in Defence Engineering:
along with the business they work for. Our initiatives in
we are not involved in any such weaponry.
digitalisation have enabled us to provide the relevant
learning experience to our employees, even as they
Outlook
worked remotely during the lockdown.
The outlook for FY2021-22 is one of cautious optimism,
Sustainable Development with the country’s GDP regaining positive territory thanks
to the base effect in the first half, followed by robust
Our Group is over eight decades old, and we have been
growth in the second. While the current resurgence of
at the forefront of many sustainability initiatives, long
COVID-19 may dent prospects in the initial part of the
before they were mandated by law. In other words,
year, vigorous vaccination efforts and improved adherence
we internalised the spirit behind ESG and were among
to safety protocols should spark a revival in the latter half.
the early companies who turned precepts into practice.
We therefore believe the recovery is ‘delayed’ and not
An annual reporting cycle has been maintained for all
‘derailed’.
our Sustainability Reports since 2008. These reports are
accessible on the Company’s website. The reports, which One unintended but welcome consequence of the
serve as ESG progress scorecards, are aligned to the pandemic has been the rapid adoption of digital
Global Reporting Initiative (GRI) standards and Sustainable technologies. This was a lifeline which ensured that
Development Goals (SDGs), and have been independently economies do not get paralysed due to lockdowns and
verified by a third-party assurance agency. other constraints. Another positive fall-out has been an
increased awareness of sustainability and a more stringent
Our approach covers a wide spectrum of materially
emphasis on Environment Protection, Social Responsibility
relevant parameters. This involves placing under the lens
and Governance frameworks. With countries signing
factors such as energy conservation, use of renewable
up for time-bound zero carbon emission targets, newer
energy, reduction of GHG emissions, water efficiency and
business opportunities should emerge for your Company
materials management. We also calibrate our growing
in green hydrogen, renewables, water and waste
green portfolio, clock improvements in sustainability
management and allied fields.
implemented by our vendors as well as measure
enhancements in employee engagement, safety and Elsewhere, the recovery of the global economy has
well-being. been uneven, with the performance of several countries
still below pre-COVID-19 levels. With oil firmly back
As the community sees it, sustainable development must
above USD 60 per barrel, we should see an upswing
necessarily translate into the tangible things that make
in GCC Capex spends as well as improved prospects in
life safer, less burdensome and more promising for their
Africa and South East Asia.
children. On our part, we are helping to provide the

4
Against the backdrop of the pandemic and its aftermath, vendors, the Government and other stakeholders for the
your Company will continue to uphold the primary confidence and trust they have reposed in us. I also thank
dictum of maintaining the health and safety of its people. my fellow Board members for their invaluable support
Simultaneously, it will aggressively pursue opportunities in guiding the Company and enabling another year of
for growth, both in domestic and international markets. growth.
The focus would be on mega project wins, efficient
Thank You
execution of its large order book and productive
utilisation of its monetary resources. All of this is targeted
at ensuring a sustainable business model and thereby
enhancing shareholder returns.

As we pass through a crisis of unprecedented magnitude,

A. M. Naik
I would like to thank Team L&T as well as our customers,

5
CONTENTS    ANNUAL REPORT 2020-21

Company Information 7 Statement of Changes

in Equity 328-329
Organisation Structure 8-9
Cash Flow Statement 330-331
Leadership Team 10
Notes Forming Part of the
Executive Committee 11
Financial Statements 332-430
L&T Nationwide Network
Auditors’ Report on
& Global Presence 12-13
Consolidated Financial
Corporate Social Statements 431-439
Responsibility 14-27
Consolidated Balance
Annual Business Sheet 440-441
Responsibility Report
Consolidated Statement
(ABRR) 2020-21 28-53
of Profit and Loss 442-443
Standalone Financials -
Consolidated Statement
CONTENTS 10 Year Highlights 54
of Changes in Equity 444-445
Consolidated Financials
Consolidated Cash Flow
- 10 Year Highlights 55
Statement 446-447
Graphs 56-57
Notes Forming Part of
AGM Notice 58-80 the Consolidated Financial
Statements 448-560
Board Report 82-155
Information Regarding
Management Discussion Subsidiary Companies 561-573
& Analysis 156-311
Shareholder’s
Auditors’ Report on Satisfaction Survey Form
Standalone Financial – 2020-21 575-576
Statements 313-323

Balance Sheet 324-325

Statement of
Profit and Loss 326-327

6
COMPANY INFORMATION    ANNUAL REPORT 2020-21

MR. A. M. NAIK MR. SUBODH BHARGAVA

Group Chairman Independent Director

MR. S. N. SUBRAHMANYAN MR. M. DAMODARAN

Chief Executive Officer and Managing Director Independent Director

MR. R. SHANKAR RAMAN MR. VIKRAM SINGH MEHTA

Whole-time Director & Chief Financial Officer Independent Director

MR. D. K. SEN MR. ADIL SIRAJ ZAINULBHAI

Whole-time Director & Sr. Executive Vice President Independent Director
(Development Projects)
MR. SANJEEV AGA
MR. M. V. SATISH Independent Director
Whole‐time Director & Sr. Executive
Vice President (Buildings) MR. NARAYANAN KUMAR
Independent Director
COMPANY MR. JAYANT DAMODAR PATIL
Whole-Time Director & Sr. Executive Vice President
INFORMATION (Defence & Smart Technologies)
MR. HEMANT BHARGAVA
Nominee of Life Insurance Corporation of India

BOARD OF MR. SUBRAMANIAN SARMA MRS. PREETHA REDDY

Whole-time Director & Sr. Executive
DIRECTORS Vice President (Energy)
Independent Director

(as on 14th May 2021) MR. S. V. DESAI

Whole-time Director & Sr. Executive Vice President
(Civil Infrastructure)

MR. T. MADHAVA DAS

Whole-time Director & Sr. Executive Vice President
(Utilities)

MR. M. M. CHITALE
Independent Director

Company Secretary
Mr. Sivaram Nair A

Registered Office
L&T House, Ballard Estate, Mumbai - 400 001

Auditors
M/s.Deloitte Haskins & Sells LLP

Registrar & Share Transfer Agents

KFin Technologies Private Limited

76th Annual General Meeting through Video Conferencing or Other Audio Visual Means
on Thursday, 5th August 2021 at 3.30 p.m. IST

7
ORGANISATION STRUCTURE    ANNUAL REPORT 2020-21

8
9
LEADERSHIP TEAM    ANNUAL REPORT 2020-21

LEADERSHIP
TEAM

A. M. Naik
Group Chairman

S. N. Subrahmanyan
CEO & Managing Director

R. Shankar Raman Subramanian Sarma

Whole-time Director & Whole-Time Director &
Chief Financial Officer Sr. Executive Vice President
(Energy)

D. K. Sen M. V. Satish J. D. Patil

Whole-time Director & Whole-time Director & Whole-time Director &
Sr. Executive Vice President Sr. Executive Vice President Sr. Executive Vice President
(Development Projects) (Buildings) (Defence & Smart Technologies)

T. Madhava Das S. V. Desai

Whole-Time Director & Whole-Time Director &
10
Sr. Executive Vice President Sr. Executive Vice President
(Utilities) (Civil Infrastructure)
EXECUTIVE COMMITTEE (eCom)     ANNUAL REPORT 2020-21

Executive
Committee (ECOM)

S. N. Subrahmanyan
CEO & Managing Director

R. Shankar Raman Subramanian Sarma

Whole-time Director & Whole-Time Director &
Chief Financial Officer Sr. Executive Vice President
(Energy)

D. K. Sen M. V. Satish J. D. Patil

Whole-time Director & Whole-time Director & Whole-time Director &
Sr. Executive Vice President Sr. Executive Vice President Sr. Executive Vice President
(Development Projects) (Buildings) (Defence & Smart Technologies)

T. Madhava Das S. V. Desai

Whole-Time Director & Whole-Time Director &
Sr. Executive Vice President Sr. Executive Vice President
(Utilities) (Civil Infrastructure)

Hasit Joshipura Shrikant Joshi

Sr. Vice President & Head CEO & Managing Director
Corporate Centre L&T Reality Limited 11
NATIONWIDE NETWORK & Global Presence    ANNUAL REPORT 2020-21

NATIONWIDE NETWORK

Chandigarh
Rajpura
New Delhi
Faridabad

Jaipur
Lucknow
Guwahati
Udaipur
Varanasi

Durgapur
Ahmedabad Bhopal Ranchi
Serampore
Jamnagar Pithampur Jamshedpur Kolkata
Vadodara

Hazira Rourkela
Cuttack
Nagpur Raipur
Madh Bhubaneswar
Mumbai
Panvel
Lonavala Talegaon
Pune Visakhapatnam
Hyderabad

Vijayawada

This pictorial representation does not purport to be the political map of India.
Registered Office
Bengaluru Campus
Pulicat
Kattupalli Power Plant
Mysuru
Chennai
Kancheepuram Shipyards
Puducherry
Coimbatore
Offices
Knowledge City
Kochi Leadership Development Academy
Corporate Technology and Engineering Academy
Construction Skills Training Institutes*
+Campus denotes facilities for design and manufacture
* Part of L&T?s Corporate Social Initiatives

12
GLOBAL PRESENCE

Offices
Engineering & Construction Projects
Product & Equipment Supply
Manufacturing / Fabrication Facilities
Agents

Note: Map is broadly representative of L&T’s presence in markets worldwide.

For details of establishments within India, please refer to ‘Nationwide Network’.

13
CORPORATE SOCIAL RESPONSIBILITY    ANNUAL REPORT 2020-21

CORPORATE
SOCIAL
RESPONSIBILITY

Drip irrigation for farmers under L&T’s CSR flagship Integrated Community
Development Programme at Devgaon, Maharashtra

Building India’s Social Infrastructure

L&T’ s deep concern for the underprivileged stems from a philosophy of inclusive, sustainable growth and development.
Long before CSR was mandated by the Companies Act 2013, L&T was providing health and educational services to the
underprivileged around its campuses. Today, L&T’s CSR programmes are well-established, focusing on areas that align with the
global and national matrices of development: water & sanitation, health, education and skill-building
This year, the COVID-19 pandemic and national lockdown severely impacted the social sector as much as the economy. Health,
Education, Skilling were among the most seriously impacted sectors.
L&T, through its CSR efforts, responded swiftly to address the immediate needs of augmenting the health infrastructure,
addressing lost livelihoods and supporting those suffering from Covid-19. Strong support was provided to the Government
pan-India. L&T has been at the forefront in supporting Covid-19 related work, in areas such as direct supply of food and
groceries to migrant and vulnerable communities, strengthening the public health infrastructure to be able to provide
treatment and services for Covid-19-affected persons and providing safety and protective gear to Covid warriors – the health-
care professionals and para-medical workers.

L&T’s Covid Care Covid has been particularly harsh on the underprivileged,
This year, as if life for the underprivileged was not pushing them deeper into poverty. The sudden loss of
challenging enough, dealing with Covid-19 increased the employment has led to the lack of essentials: millions have
pressure on survival. In this difficult time, L&T has been on now been struggling to make it from one day to the next.
the front lines in several ways – through setting up ICUs for Under its CSR initiatives, for over 10 years now, L&T has
treating Covid-19 patients, equipping Government hospitals been reaching out to children in the slums around its Powai,
with ventilators, providing Personal Protective Equipment Mumbai and Mahape (New Mumbai) campuses through
(PPE) kits, gloves and masks to health workers, as well as balwadis and after-school study centres.
making available basic provisions like food to those in need.
Most of the staff working on our programmes assumed These children belong to families that have just one
responsibility to educate communities about prevention and daily-wage earning member – a rickshaw driver, vegetable
safety measures in the project areas and were available for vendor, painter, etc. – all of whom lost their livelihoods due
counselling as well as referrals. to the lockdown.

• Helping the hapless Thus, L&T’s primary concern during the lockdown was
During the lockdown, an L&T initiative ensured food security to ensure that these children should at least have food
to underprivileged children in Mumbai as a first response to security. In collaboration with NGO partner Save The
the pandemic. Children India (STCI), it undertook relief work to aid these

14
Dry ration kits distributed to the students of a Community Learning L&T-backed NGO volunteers distributing packaged meals at Burmah
Centre at Bandstand, Bandra, Mumbai Shell Pipeline, Kurla East

children and their families, as well as other vulnerable On March 30, entrepreneurs, corporate leaders and
families, all residing across Powai and Turbhe. others together launched an initiative named the Mumbai
Food Project. L&T was one of the first supporters of this
Ration kits containing dal, rice, wheat, salt, sugar, oil, tea, humanitarian drive.
turmeric powder, red chili powder, onions and potatoes
were provided to as many as 1,400 beneficiaries. Sanitation Temporary food camps and distribution zones were set
kits containing bathing and washing soap, toothpaste, hair up across Mumbai, serving nearly 8,000 packaged meals
oil and sanitary pads were also distributed among these and kits of essential items a day. The drive was carried
families. out through NGO Pratham’s well-established network and
community programmes, with the much-needed support
The drive was carried out with utmost care and by adhering from MCGM.
to all physical distancing norms to deter the spread of
coronavirus. • Caring for Caregivers
• Plugging Hunger In Chennai (Tamil Nadu) too, L&T swung into action to
meet the urgent needs of the community. Frontline workers
Mumbai Food Project comes to the rescue of and staff at hospitals put in every effort to ensure the
distressed masses during the lockdown required care for patients in these tough times. There were
Soon after the first phase of the lockdown from March 24, many patients, caretakers, health workers and hospital
reports started pouring in about daily-wage earners and staff in hospitals with no access to essentials, especially
migrant workers in Mumbai having no access to food food. To mitigate their food problem, L&T, in association
supplies and even shelter. They included construction with the NGO YRG Foundation served 43,150 hygienically
workers, taxi drivers, rag-pickers, beggars, street vendors, prepared meals (2500 meals per day for 17 days) across 7
transgenders and many more. government hospitals in Chennai.

The local administration responded by setting up relief Another 20,000 meals were distributed in association with
camps and food canteens, but the number of the distressed the ‘Feed My Chennai’ programme to people in distress
were overwhelming and the risk of many slipping through (especially migrant workers and homeless people) who got
the cracks was imminent. The Municipal Corporation of stranded due to the lockdown and did not have access to
Greater Mumbai (MCGM) approached corporates and food.
NGOs for support. L&T and an NGO partner, Pratham • Strengthening the health system
Mumbai Education Initiative, responded quickly to the
pressing needs. The Government’s efforts to prevent the Covid infection
and treat the infected were falling short, with limited,

15
CORPORATE SOCIAL RESPONSIBILITY    ANNUAL REPORT 2020-21

A CT-scan machine donated towards Covid relief, Mumbai, Maharashtra Bitter-gourd farm flourishes as a result of increased water availability
to farmers at Chettipalayam, Coimbatore, Tamil Nadu

overburdened resources. L&T responded to this challenge

L&T reached out to 12 states in India with a spend of
by supporting health infrastructure, providing protective
gear and supplies for frontline workers as well as donating over R 36 crores for Covid Relief in 2020-21.
treatment, testing and diagnostic equipment.
Ongoing Projects
In March 2020, most of the CSR projects were in readiness
Safety Equipment Hospital Equipment Medical Supplies
to be rolled out for the FY 2020-21. However, the pandemic
Testing Kits: 155 Semi-Fowler Beds: 100 Nitrile Gloves, 3-ply struck, and the lockdown was announced. The enormity
(Maharashtra, Tamil Ventilators: 10 masks, hand sanitiser of the pandemic and its impact on the most vulnerable
Nadu, Gujarat and bottles, infrared communities we worked with through our CSR projects,
Bipap Ventilators: 7
Centre) thermometers, sprayers posed a challenge. This was addressed by revisiting the
Multiparameter with disinfectants
N-95 Masks: 2,16,162 Monitors: 20
projects, re-strategising them in line with the changed
(West Bengal, Andhra reality and reallocating resources. Sustaining services in
(Maharashtra, Tamil Pulse Oximeters: 20 Pradesh) the ongoing projects was our priority. NGO partners were
Nadu, Gujarat,
(Tamil Nadu) supported, so as to be at the forefront in order to reach out
Uttarakhand, New Food Supplies
Delhi, Telangana, Bihar, Ventilators: 26 to communities by adapting to the new normal.
West Bengal) In Mumbai
(Maharashtra, Madhya
Pradesh, Bihar, West Grocery Kits: 3,432 We continued to mitigate the impact of the pandemic
PPE Kits: 1,22,247
Bengal) Cooked Meals: 8,000 in all possible ways, while continuing our mission and
(Maharashtra, Tamil touched the lives of 12,139,76 individuals this year.
Patient Monitors: 2 In Gujarat
Nadu, Telangana,
Andhra Pradesh, Grocery Kits: 1550
(Maharashtra)
Cooked Meals: 12,500
Water & Sanitation
Gujarat, Madhya
Dialysis Machines: 13 Through our Integrated Community Development
Pradesh, Uttar In Chennai
Pradesh, New Delhi, (Seven Hills Hospital,
Cooked Meals: 43,150 Programme (ICDP), which commenced in 2014-15, water
Uttarakhand, Bihar, Mumbai) for drinking, sanitation and agriculture is available to five
(Doctors, stranded
West Bengal, Assam) patients, sanitation formerly water-stressed locations in Rajasthan, Maharashtra
workers in 7 Hospitals and Tamil Nadu, covering a population of 25875 across
Covid Facility Medical Vehicles Cooked Meals: 20,000 11596 hectares.
(Tamil Nadu)
Covid Testing Bio-medical Waste Infrastructure
Van: 1 Rice: 11,000 kg
Laboratory: 1 The affected communities were involved in the
(Migrant workers,
(Uttar Pradesh) Life-Care Ambulance: 1 implementation of the solutions to their problems. Their
daily-wage earners –
(Gujarat) Tamil Nadu) contributions, such as labour, were used to construct
water-harvesting and soil conservation structures such as

16
Toilet before (left) and after (right) the sanitation intervention at Okkilipalayam village, Chettipalayam, Coimbatore, Tamil Nadu

field bunds, check dams, farm ponds and contour trenches. the Google Earth images at Latitude : 19° 41’ 10.80” N,
Now, water for household use is available for 2-3 extra Longitude : 75° 35’ 51.86” E, clicked before and after the
months in a year for 100% of the households, as compared interventions.
to 56% families in 2014. The ground water level has
increased in project locations by 2.9 metres on an average In all the ICDP locations, the community was actively
in the ICDP locations initiated in 2014-15. Resilience has involved in soil and water conservation practices to increase
been built against fluctuating rainfall cycles. the availability of water, reduce groundwater exploitation
and prevent land degradation. With assured irrigation
In addition to the availability of water for drinking, options, farm-based livelihood enhancement was initiated.
agriculture and sanitation, other visible outcomes of water Vegetable farming was one such initiative, which was
and soil conservation work in the project area are increase not possible in the pre-project period. Vegetable farming
in land bought under irrigation, fallow land converted to and horticulture increased the average income of farmers
arable land and increase in the area protected from surface from R 6000 to 8000 per month in Papampatti and
run-off, leading to more land being made available for Chettipalayam, Coimbatore in Tamil Nadu.
agriculture. This, combined with efficient techniques of
agriculture, led to an increase in the viability of agricultural Sanitation drives
income, leading to reverse migration of many farmers. L&T initiated sanitation drives to provide easy access
to toilets and sanitation facilities in rural households,
Based on the success achieved in the projects initiated in covering six ICDP locations in Tamil Nadu, Rajasthan and
2014-15, the ICDP approach was extended to another 4 Maharashtra. This initiative was also aligned with the
water-stressed districts covering a population of 55,584 Government’s Swachha Bharat Programme announced
people. in October 2014, which provided an impetus to L&T’s
This year, in Devgaon in Aurangabad district in Maharashtra, existing rural sanitation drive. L&T constructed over 4000
7.21 crore litres of water storage potential was created well-designed toilet-cum-bathrooms using local skills and
through the construction of farm bunds for capturing excess material, of which over 800 were constructed in 2020-21.
run-off water. This water conservation measure resulted The local masons were trained in constructing the L&T-
in an increase in the level of water in the wells within the designed toilets. The community was educated about the
project area. use of toilets and its impact on health through community
meetings and awareness programmes using local media.
The greening impact and growth in the vegetative cover Community-based monitoring committees ensured that
due to soil & water conservation interventions – such as these villages became free of open-defecation. Today, 98%
continuous contour trenches and water absorption trenches households have toilets in 5 ICDP locations, compared to
in the project area at Dabhrul Village in Devgaon, Paithan 33% in 2014-15.
Block, Aurangabad district, Maharashtra – is visible in

17
CORPORATE SOCIAL RESPONSIBILITY    ANNUAL REPORT 2020-21

Workshop on ‘Ground Water Balance Estimation and Crop Water’ at

Village Development Committee meeting at Bhim, Rajasthan
Parvakkal watershed area, Gudiyatham, Tamil Nadu

WASH initiative in schools women and girls from the drudgery of fetching water. This
As many schools in the project area lacked proper sanitation gave them more time for education and leisure activities.
facilities, L&T provided adequate Water, Sanitation and Capacity Building
Hygiene (WASH) infrastructure for over 5000 children and
trained them in using toilets and keeping their schools clean The communities concerned were trained to facilitate
and hygienic. This year, since the schools were closed, the optimum, equitable and efficient water use and implement
awareness programmes were held on the school grounds, other agricultural methods and technology to increase
with adequate Covid-safety measures. their yield. Farmers were trained in preparing low-cost
organic manures. A large number of farmers, realising its
58 school toilets were constructed in the ICDP areas in Tamil cost-effectiveness, started using this manure preparation
Nadu and Rajasthan, of which 11 were constructed this regularly.
year.
Indigenous knowledge on managing livestock was revived,
Sensitivity to water usage and youth and women trained in ethno-veterinary care.
Sensitisation programmes on the importance of saving Women’s groups were given training in the retention of the
water were held for the community using local cultural nutritional value of food through traditional millet recipes
media. Regular workshops on ground-water balance and by growing vegetables through kitchen gardening.
estimation and crop water budgeting were conducted in The knowledge shared in these workshops will help farmers
the project areas in Gudiyatham, Tamil Nadu, to sensitise sustain the project activities in the future.
farmers towards water usage. Data collected from borewells
and open wells of farmers was used for preparing the Institution Building and Sustainability
crop water budget. To deal with water scarcity for the Community groups of farmers were set up to maintain and
second crop, crop water budgeting was done before the regulate the use of the structures and resources created
second crop to get better yields. The entire village was through the project and democratically manage the
informed about the availability and level of groundwater community fund. Capacity-building of these groups was
in a particular area. Groundwater balance and crop water undertaken regularly. In the area where L&T has exited from
budgeting data is displayed on the common wall in the the project, these groups have assumed the responsibility of
village for ready referral and awareness of all. monitoring the activities initiated by the project.
After ensuring the availability of water, water distribution Women played an equal role in the decision-making, being
schemes were introduced in six villages in Bhim block in members of the village development committee, and also
Rajasthan. This ensured that all 3315 rural households from formed SHGs for livelihood-generation. This led to the
these villages were provided with adequate piped water development of leadership skills among women.
supply within or nearby the household premises to relieve

18
Capacity-building training for Village Development Committee, at Village Village-based group teaching during the pandemic at Gundi ka Bhilwara
Brahmangaon, Aurangabad, Maharashtra village, Kumbhalgarh, Rajasthan

A sustainability index indicating the maturity and readiness Board examination conducted in March 2020 and wish
of the local committees to sustain project efforts was to pursue higher education. Confidence-building and
computed, and the groups were further given inputs to personality development sessions are an integral part of
strengthen their solidarity and encourage democratic the intervention for the holistic development of children.
functioning. This year, 365 children from vulnerable families in Pathardi
have access to quality education through blended learning
Today, all the project areas have access to drinking water strategies.
and sanitation, as well as water to cultivate fodder for
livestock and extra crops. Another educational initiative in the Kumbhalgarh Block
in Rajasthan was the organisation of Residential Learning
The impact of the ICDP projects which were completed last Camps for out-of-school underprivileged children, enabling
year has been sustained and is visible this year by the same them to read and write with a view to reintegrating them
/ increased level of water in the wells and area of arable into the formal education system. These camps ensure
land and irrigated land; as well as the same / decreased holistic development and were conducted despite the
percentage of fallow land. pandemic situation.
Improving quality education and health in ICDP Similarly, a health project for mitigating malnutrition among
areas women and children was introduced in Kumbhalgarh in
Water sufficiency in the ICDP project area and the resultant Rajasthan where community volunteers are trained to visit
increase in agricultural income led to increased aspirations households and identify malnourished women and children,
among the local population. They seek a better future for counsel them, refer them to the treatment camps and
their children. L&T thus extended their support to work on follow up their treatment. Nineteen treatment camps were
the other need-based social issues like health, education conducted this year and 275 children and women were
and livelihoods in the ICDP locations initiated in 2014-15. screened and treated.
During the Covid-induced lockdown, the project staff
One such education project in the Pathardi cluster,
in the ICDP areas conducted awareness sessions for the
(Ahmednagar in Maharashtra) works specifically with
community about Covid prevention and protection. The
children from very poor and vulnerable families at risk of
local village committees and farmer groups supported the
dropping out of school by mentoring the child, counselling
distribution of nutrition kits among the balwadi children and
both children and parents and conducting remedial
provided dry ration to the needy families. The community
teaching classes after school hours and over weekends.
health volunteers also adopted technology to counsel
Special classes are conducted for children appearing for
women over the phone and conducted follow-ups through
the Board exams. A significant achievement this year
a mobile app. Moreover, SHGs stitched and distributed
is that all girl students in the project passed the SSC
masks to the community.

19
CORPORATE SOCIAL RESPONSIBILITY    ANNUAL REPORT 2020-21

Self Help Groups stitched and distributed masks at Bhim, Rajasthan,

Onion crop demonstration at Devgaon, Maharashtra
during the pandemic.

L&T enhances the quality of education in resource-stressed

We have touched the lives of 1,10,525 beneficiaries
slums, as well as in rural and tribal schools, by strengthening
through our water and sanitation interventions this the concrete infrastructure as well as improving the quality
year. of education in many ways.
Case story: Wonders water can do We have a four-pronged approach to Improving education
In 2018, the Nagzari cluster in Ambad block of Jalna 1) Improving access 2) Improving the quality of education
district in Maharashtra received only 250 to 300 mm of 3) Encouraging curiosity and interest in STEM (Science,
rainfall. So, the farmers were forced to grow only low-yield Technology, Engineering Math) subjects 4) Capacity-building
kharif crops. They had to rely on tankers for six months for and advocacy with stakeholders.
drinking water as the wells had dried up.
Improving access to education
Since 2019, L&T has supported the Integrated Community • Pre-primary centres in the community: L&T runs pre-
Development Programme in the Nagzari cluster, and a primary centres like balwadis and anganwadis in urban
large number of water and soil conservation works (nala slums and rural areas for improved school readiness
deepening, farm bunding and farm ponds) were carried and smooth transition of children from anganwadis to
out in this area. Due to good rainfall in 2020 and water primary schools. Local women who have a rapport with
and soil conservation measures, the water level in the the parents and an understanding of the community
wells increased drastically – from 4.37 to 7.9 meters. are selected and trained to be balwadi teachers. These
Hence, a sufficient amount of water became available for teachers ensure that parents send their children to
drinking as well as agriculture. Farmers are now growing balwadis and then to the schools.
kharif, rabi, as well as, summer crops. The area is now
tanker-free. • After-school community study centres: These centres
offer supplementary education to underprivileged
Education children, while monitoring their learning levels. Here,
The backbone of social development is education. It has they learn at their own pace and move to their potential
been accorded priority as part of L&T’s efforts towards level of learning. The fear-free and positive learning
inclusive development. The aim of our education initiatives environment at these centres helps children build their
is to increase the access of underprivileged children to foundation of learning. They are even better able to
education by providing basic infrastructure, ensuring cope in their classrooms, and are thus prevented from
enrolment, mainstreaming dropouts and making learning a dropping out of school.
fun experience.

20
Infrastructure upgradation of a Government school at Getticheviyur, Community Learning Centre Teacher conducting classes during pan-
Erode, Tamil Nadu demic with adherence to Covid Norms

• Providing basic infrastructure: L&T constructed and Life-skills workshops and awareness sessions on social issues
repaired classrooms, donated chairs and desks, and were conducted in all the educational projects. For example,
constructed toilet blocks and water stations for basic in one of the projects, older students took responsibility
hygiene facilities as well as kitchens and sports grounds. in advocacy activities pertaining to the community, such
L&T developed school infrastructure that is child-friendly as mapping their community, identifying dropouts, filing
and fun-based learning. This creates a conducive requests and petitions for fixing streetlights, and motivating
learning environment and prevents children from other children to join the community learning centres.
dropping out, especially girls, who often dropped out if
sanitation facilities were not available in school. Supplies Encouraging curiosity and interest in STEM subjects
– including stationery, uniforms, shoes etc. – are also Most future jobs will involve digital technology skills in
provided to needy students in resource-poor schools. Science, Technology, Engineering and Mathematics (STEM),
which intimidated students from resource-poor schools
Improving the quality of education in four locations, namely Vadodara, Hazira, Chennai and
• Emphasis was laid on teachers adopting interactive, Faridabad. Therefore, L&T introduced the STEM ‘Engineering
hands-on, practical ways of teaching rather than Futures’ Project in 103 upper primary Government schools.
rote learning. Interactive teaching learning aids were The aim of the programme is to strengthen STEM learning
provided to the teachers for effective content delivery. activities in schools and empower the students to enhance
learning through critical thinking. To replace rote learning
• E-learning was provided through digitisation of with experiential learning, teachers in these schools were
content, smart classrooms and computer labs which trained in collaborative and interactive teaching methods.
helped teachers to deliver selective content online. Students were exposed to diverse learning platforms by
Providing innovative e-teaching aids helped the encouraging them to participate in national science events,
teacher to integrate information and communication exhibitions and competitions. Parents were encouraged to
technologies into their teaching and make the learning persuade their children, especially daughters, to participate
interesting for the students. in these events. This will help bridge the gender gap in
• Interventions for holistic development: To make STEM-related careers.
learning fun, extracurricular activities focusing on talent Education during the pandemic
development, summer camps, sports activities, cultural
shows and educational outings were organised in the The sudden lockdown in the first wave in March 2020 led
schools as well as in the community learning centres. to the shutting down of schools. This led to loss of learning
These activities aid the holistic development of the for many children, and worse – it was feared that this would
children and expand their horizons. push children towards labour to supplement the family
income and would lead to long-lasting adverse effects on
the health, nutrition and mental health of the children.

21
CORPORATE SOCIAL RESPONSIBILITY    ANNUAL REPORT 2020-21

A student of the Government school in Hazira, Gujarat, uses a mobile Project staff go to Kansad village in Hazira, Gujarat, to visit the homes of
phone for remote learning children who do not have access to digital media during the pandemic

Gearing up to the challenge, and after deliberation with the Regular virtual teacher training programmes, online
implementing partners, we re-strategised education projects classes by teachers, e-learning, regular Head of the School
to suit the prevailing situation and adopted digital and meetings, virtual STEM workshops, and community
remote teaching and learning methodology. L&T ensured engagement with students were some of the strategies
learning continuity in all its projects during the closure of under this project. Content sharing on WhatsApp
schools and mobilised teachers, parents and children to groups, along with Google assessment forms and regular
participate in the process of remote learning. communication with all the stakeholders, helped to align
to the different needs of each learner.
We have impacted the lives of 2,44,962 beneficiaries
However, the sudden transition to online schooling came
through our education projects this year. with its challenges--unavailability of the required materials
for STEM experiments at home, absence and the limited
Case story: When home became the classroom –
access to smartphones, lack of mobile network/data plans
driving education during Covid times
and network issues. Keeping this in mind, the project team
}When Covid-19 struck, due to the long break from conducted home visits and distributed worksheets to those
school, we were scared that we might forget what who couldn’t connect virtually.
we studied. But then, online classes began where we
learnt math, science and even used WhatsApp for }Since the pandemic, I have been a part of remote
grammar lessons! Besides appearing for e-exams, we learning activities. The STEM exhibition gave me a chance
also participated in various competitions by submitting to build a model I wanted to – a plug tray kitchen garden.
our drawings through WhatsApp. Now my home is my I am grateful that I got such an opportunity to experiment
classroom and I keep learning.~ — Saishree, Student, L&T with different theories of Science~ -- 14-year-old Reshma
Bhumi Evening Learning Centre, Chennai, Tamil Nadu Bariya, Vadodara, Gujarat

Case story: Covid pandemic – Challenges and }I am thankful for the training sessions conducted on
opportunities in the STEM project Google forms, PowerPoint presentations and video-
making. I faced difficulty in the beginning, but now, after
Initially, schools were apprehensive about remote learning.
the training sessions, it has become a lot easier for me to
So, it was challenging to bring all the primary stakeholders
such as the principals, teachers and students on this new take lessons online.~ – Khyatiben Patel, Teacher, Sharada
learning platform. Vidyalaya, Icchapore, Vadodara, Gujarat

22
Teacher trained remotely to conduct online classes with children,
Karambakkam, Chennai Paediatric camp in a mobile van at Coimbatore, Tamil Nadu

Impact of strategies adopted and the project progress was shared with the district
• 3
50 Engineering Futures Program Teachers (100%), education officers to promote successful strategies
equipped to use remote learning methodologies, within the district. Headmasters were encouraged
conducted online classes for students to provide leadership and ensure monitoring of
interventions through monthly meetings with teachers.
• 1
00% of Science and Math curriculum covered via
remote learning content and classes. • Advocacy for child rights: L&T, through its work in
the education sector, ensures the preservation of child
• 1
0628 (64.19%) students participated in the remote rights, such as the right to education, the right to be
learning programme. protected from violence and abuse and prevention of
child labour. For instance, a virtual Child Rights desk
• 6
035 (56.78%) students were able to perform STEM was operated, helping children and parents to enrol
activities. in school, obtain entitlement documents and address
• 4
884 (29.50%) students who don’t have access to issues like child labour, abuse and neglect.
smartphones were reached out to through community
visits and worksheets. Health
To make health care accessible and affordable to the
• 1
0628 (100%) parents gave feedback on the remote underprivileged, L&T undertakes several initiatives.
learning experience and encouraged children to
participate in the project. Health Centres: L&T’s 12 multi-speciality Health Centres
are professionally staffed and provide outpatient and tertiary
Advocacy and Collaboration health services. Focus was laid on preventing infant, child
• Creating a home learning environment: School and maternal mortality.
management committees and parents were encouraged
Psychological health: Psychiatric OPDs and counselling
to dialogue and take the responsibility of maintaining
clinics provided services for mental health and stress-
the infrastructure in the schools and creating a learning
related issues. A child guidance clinic supported parents
environment at home. During online learning, many
and children who have behavioural problems and are
parents assumed the responsibility for monitoring their
scholastically backward.
child’s attendance and progress in online classes.
Infrastructure: L&T provided medical equipment and
• Collaboration with government agencies: All the
construction / refurbishment services to health centres and
education interventions in the government schools had
hospitals run by the Government or charitable trusts.
the concurrence of the state department of education,

23
CORPORATE SOCIAL RESPONSIBILITY    ANNUAL REPORT 2020-21

Outpatient Department at L&T Health Centre at Coimbatore, Tamil Nadu A mobile van visits a tribal community in Coimbatore, Tamil Nadu, and
conducts a health awareness session

Health Camps: Mobile vans took L&T’s health services to common ailments and referral to Government healthcare
the underprivileged. Specialised health camps covered eye services within the Madukkarai block of Coimbatore
care, dental, paediatric and gynaecological care. Camps on district.
reproductive health were conducted for deprived children
Health awareness sessions were conducted in areas
and adolescents.
such as anaemia, nutrition, health & hygiene, diabetes
HIV/AIDS programmes: L&T has a comprehensive management, breast cancer, de-addiction, reproductive
programme for HIV/AIDS management and state-of-the- health, child abuse and parenting. These sessions are
art diagnostic and counselling facilities. It provided the conducted by medical officers and professional social
Government’s free Anti-Retroviral Therapy (ART) at its ART workers during the health camps.
health centre in Mumbai in association with the National The project worked in close coordination with the Health
AIDS Control Organisation (NACO). This Centre is an Department by referring patients to various Government
example of successful public-private collaboration. health facilities. The mobile health clinic intends to bridge
Tuberculosis (TB) services: L&T takes preventive and the gap between people and the health care facilities,
curative steps towards the control and management of TB. which hinges on core approaches, availability, accessibility,
and affordability.
Dialysis Centres: L&T runs artificial kidney dialysis centres
for the underprivileged at highly subsidised rates at its The project covered 7300 beneficiaries in 2020-21.
Health Centres at Mumbai, Thane, Vadodara, Surat and Case story: Dialysis gives the hope to live
Chennai.
Ms. Kanniammal, aged 75, is a widow from Annanoor,
Cancer camps: Camps on preventive education and early Chennai who lives all by herself after her only daughter
diagnosis were held – especially for women, with a focus on got married. Her only source of income is her husband’s
breast and cervical cancers. Mammography and pap smear pension of R 5000/- per month. She was diagnosed with
services were also provided. Chronic Kidney Disease in 2017. Initially Kanniammal
underwent dialysis at a centre at the cost of R 1800/- per
Case story: Aarogya at the doorstep session. She came to know about the quality treatment
The mobile health clinic Aarogya at Coimbatore in given at an affordable price at Prayas Medical Centre at
Tamil Nadu is an initiative covering 17 villages, including Chennai by a consulting nephrologist. She visited the
resident tribals with socio-economic barriers to accessing Centre and started her dialysis session from January 2018
healthcare. and is continuing till date. In 2019, when her haemoglobin
level dropped alarmingly, the Centre made an expensive
The project aims to enhance health awareness, provide drug available to her free of cost, and now her
door-to-door medical services, basic treatment for haemoglobin level is maintained at 10.9. Since she lives

24
Industrial Electrician Course at Construction Skills Training Iinstiture, CCTV installation and Maintenance Training session at the L&T Smart
Serampore, West Bengal City Skill Development Centre Lab at Hyderabad

alone, counselling was provided to instil in her a positive The hands-on training and the L&T certificate prepared the
attitude towards life and to increase her confidence level. trainees to earn and support their families. Many found jobs
abroad. L&T thus helped to bridge the schism between the
}It’s true that Prayas Medical Centre not only treats my
skill demands of industry and the aspirations of the youth.
ailment, but also gives me strength to face society with
hope~ – Ms. Kanniammal, Chennai, Tamil Nadu L&T has 9 CSTIs in 8 states – Tamil Nadu, Maharashtra,
Uttar Pradesh, Telangana, Orissa, Karnataka, Gujarat and
This year we have provided 822,967 individuals with West Bengal.
better access to information and healthcare facilities. This year, 17635 youth completed various courses at these
CSTIs, of which 35 % obtained employment.
Skill Development
A key strategy to realise the potential of India’s demographic 35,522 rural and urban youth, along with women and
advantage is skill development. L&T helps to create the physically challenged persons from underprivileged
human resources to improve India’s competitiveness and communities, were imparted skills that improved their
growth – especially in construction skills – by training employability.
underprivileged youth.
L&T’s Construction Skills Training Institutes (CSTIs) provide Case Story: Fulfilling a family’s dreams
free standardised industrial training to prepare the large Umesh Kumar from Madhya Pradesh belongs to
unorganised workforce to meet the demand for skilled Tenganikala village, Balghat district and was born in a poor
workers in India and abroad. The skills imparted include family. He lives with his parents and a younger brother. His
bar-bending, formwork, electrical work, tiling, masonry, father, being non-literate, works as a daily labourer and
welding, carpentry and solar electrical work. his mother is a homemaker. Because of lack of nutritional
With an emphasis on technology and innovation, new food, his mother does not keep good health. She tends to
technology-based skill-training courses have been neglect her health worrying about her children and their
introduced – in Solar PV Technician skills, OFC and CCTV future. She encouraged Umesh to study and not have
installation and maintenance. the same fate as their father, whose meagre income was
unable to fulfil even the basic needs of the family. Umesh
The integral elements of all the skill-training deliverables completed the ITI course in the trade of Fitter.
are digital training, digital study material, micro-learning
modules on mobile apps, Augmented Reality / Virtual He worked for 3-4 years in different companies in
Reality Training, safety, quality standards and soft skills Balaghat (Madhya Pradesh) and Pune (Maharashtra) but
training. Periodic online assessment is an essential part of all did not find a steady job or consistent work. Additionally,
the courses. the income was not enough to support his family. He was

25
CORPORATE SOCIAL RESPONSIBILITY    ANNUAL REPORT 2020-21

Digital training modules incorporated for all courses at the Construction Trainees learning Bar bending skill at CSTI, Serampore
Skills Training Institute at Panvel, Maharashtra

disappointed as he could not fulfil his mother’s dream to strengthened mobilization, placement process followed by
have enough to meet the basic needs and foster good student tracking post placements.
health. This year, the Centre trained 89 candidates, of which 29
During a break, when he visited his hometown, a friend are women.
told him about the CSTI at Jadcherla and informed Umesh Case story: Ensuring livelihoods for rural women
that he was earning a monthly salary R 16, 500/- working amid the Covid-19 crisis
on an L&T project. Umesh discussed joining the CSTI As the pandemic spread rapidly, global health- monitoring
with his parents, but since it was 1000-1200 km from his organisations called for everyone stepping outdoors to
hometown, his father was reluctant to send him there. wear a protective mask.
However, his mother convinced his father that it would
benefit the family, so Umesh joined the CSTI at Jadcherla. Amidst the distressing shortage of masks faced by L&T
in Hazira and to create livelihoods for women living in
After successfully completing his training in bar bending remote villages trained in tailoring by L&T under its skill
& steel fixing, he soon got a job at a construction project building initiative, they were engaged in mask production.
through the placement agency and currently earns The tailoring faculty and the Hazira CSR team arranged
R 18,500/- pm. for raw material and reached out to these women, who
}My son has fulfilled my dreams. Umesh’s father and I are responded positively and began producing face masks at
the Skills Training Centre in Lavachha, Valsad, Gujarat.
very happy~ – Umesh’s mother
Step-by-step tutorials on sewing the masks were given
Case story: Multi Skill Training Centre (MSTC) to 39 women, both in person and on a digital platform.
Vizag, Andhra Pradesh Each woman made around 60-70 masks per day and, in
The MSTC at Autonagar in Gajuwaka was established a few weeks, they stitched more than 14631 face masks.
by L&T to create livelihood options in the submarine Throughout this initiative, women earned a minimum of
and shipbuilding sector. This Centre is a very helpful R 75/- and a maximum of R 18046/-. Similarly, tailoring
resource for the nearby shipbuilding industry (located near course trainees at Prayas Trust, Bengaluru in Karnataka,
Vishakhapatnam Port), helping it obtain skilled manpower earned R 5000/- per month by stitching and selling
for shipbuilding. designer masks.
This move has not only helped in protecting others but
Local ITI-pass youth qualified in electrical and fitter trades
also gave livelihood opportunities to several women,
benefit from the basic and advanced courses at the MSTC.
especially during the lockdown when most of them were
The Centre has installed Engineering Software (CATIA) and
left jobless.
AutoCAD to aid teaching and training. From FY 21, L&T

26
Women trained in sewing skills produce face masks at the Skills Training
Multi-Skill Training Centre, Vizag, Andhra Pradesh
Centre in Lavachha, Valsad, Gujarat.

Employee Volunteering Total Spending on Corporate Social Responsibility

In the pandemic year of 2020-21, even while grappling (CSR) in FY 2020-21 was R 15006.959 lakhs which is
with many more uncertainties and anxieties than usual, 2.062% of profit after tax, above the mandated 2%
L&T employees came forward to volunteer and do their as per the Companies Corporate Social Responsibility
bit for the underprivileged. With children being adversely Policy, Rule 2014.
affected owing to school closure, volunteers taught various
subjects to children online, read out stories and enhanced Over 1.21 million beneficiaries
language skills of children in remote areas through voice
calls. Volunteers recorded stories for children, making
(including beneficiaries of the L&T Public
them available for teachers in L&T-supported government Charitable Trust)
schools. L&T engineers helped keep up the spirit of
STEM learning among children, motivating them and Water & Sanitation
painstakingly judging unique science models created by
children from L&T-supported schools. Volunteers mentored
1,10,525 Beneficiaries
and built confidence of college students through online
career guidance and spoken English sessions and made Education
video-based learning materials for them. Employees used
their professional skills to build capacities of individuals from
2,44,962 Beneficiaries
marginalised sections by conducting mock interviews over
video calls. This year too, volunteers recorded books for Health
the visually impaired. Blood donation drives, health camps,
environment cleanliness and tree plantation drives were 8,22,967 Beneficiaries
conducted across project sites in remote locations.
Skill Development
4,360 L&T-ites volunteered in 2020-21, contributing 35,522 Beneficiaries
27,763 hours of their time and directly reached more
than 11,700 people. 1,21,39,76 Total Beneficiaries

27
Annual Business Responsibility Report 2020-21

L&T is committed to fulfilling its economic, environmental Social, Environmental and Economic Responsibilities
and social responsibilities while conducting its business. of the Business (NVG – SEE) released by the Ministry
It is conscious of its impact on the society within which it of Corporate Affairs, Government of India. The BRR
operates, and has systems to either eliminate or control complies with the regulations 34 (2) (f) of the Securities
the adverse impact of its operations. L&T works towards Exchange Board of India (SEBI) (Listing Obligation and
resource conservation, improving social relations with the Disclosure Requirements) Regulations 2015. In 2020,
community in which it operates, supporting community- L&T published its 3rd Integrated Report (IR) 2019-20, as
led groups to assuage social problems, alleviate the per the International Integrated Reporting Council (IIRC)
distressing impact of crisis or disasters like the Covid-19 reporting framework. The externally assured IR was also
virus outbreak, and generating economic value. L&T’ s in accordance with the Global Reporting Initiative (GRI)
Sustainability Roadmap 2021 aligned with its Business Standards ‘Comprehensive’ option. FY 2018 onwards,
plan, LAKSHYA 2021, has produced pleasing results the IR has replaced the sustainability report being
through various digitalisation initiatives. released by the organisation. The Integrated Report
The Business Responsibility Report (BRR) is prepared in and previous sustainability reports can be accessed at
accordance with the National Voluntary Guidelines on www.Lntsustainability.com

SECTION A: GENERAL INFORMATION ABOUT THE COMPANY

1. Corporate Identity Number (CIN) of the Company: L99999MH1946PLC004768

2. Name of the Company: Larsen & Toubro Limited
3. Registered address: L&T House, Ballard Estate, Mumbai, 400 001, India
4. Website: www.Larsentoubro.com
5. E-mail id: [email protected]
6. Financial Year reported: 1st April 2020 - 31st March 2021
7. Sector(s) that the Company is engaged in (industrial activity code-wise):

Group Class Sub Class Description

282 2824 28246 Manufacture of parts and accessories for machinery / equipment used by construction and
mining industries.
301 3011 30111 Building of commercial vessels, passenger vessels, ferry boats, cargo ships, tankers, tugs, hovercraft
(except recreation-type hovercraft), etc.
30112 Building of warships and scientific investigation ships, etc.
30114 Construction of floating or submersible drilling platforms.
410 4100 41000 Construction of water treatment plants, water pipelines and irrigation facilities
421 4210 42101 Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways,
highways, bridges, tunnels and subways.
42102 Construction and maintenance of railways and rail-bridges.
422 4220 42201 Construction and maintenance of power plants
42202 Construction / erection and maintenance of power, telecommunication and transmission lines.
42901 Construction and maintenance of industrial facilities such as refineries, chemical plants, etc.

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Group Class Sub Class Description
465 4659 46594 Wholesale of construction and civil engineering machinery and equipment.
681 6810 68100 Real estate activities with own or leased property.
711 7110 71100 Architectural and engineering activities and related technical consultancy.

8. List three key products/services that the Company manufactures/provides (as in balance sheet)
1. Construction and project related activity
2. Manufacturing and trading activity
3. Engineering services
9. Total number of locations where business activity is undertaken by the Company
i. Number of International Locations : 31 (excluding listed subsidiaries and limited life project sites.)
Listed IT & Technology services subsidiaries operate from another
additional 81 international locations
ii. Number of National Locations : 50
10. Markets served by the Company – Local/State/National/International/: All

SECTION B: FINANCIAL DETAILS OF THE COMPANY

1. Paid up Capital (INR) : R 280.91 crore

2. Total Turnover (INR) : R 73315.59 crore [Revenue from operations]
3. Total profit after taxes (INR) : R 11336.97 crore [Net profit after tax from continuing operations & discontinued operations]
4. Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%): 2.06%
5. List of activities in which expenditure in 4 above has been incurred: L&T’s focus areas in Corporate Social Responsibility are
as follows:
i. Health
ii. Education
iii. Water & Sanitation
iv. Skill Building

Section C: Other Details

1. Does the Company have any Subsidiary Company/ Companies?

Yes
2. D
o the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then
indicate the number of such subsidiary company(s):
Yes. The Business Responsibility (BR) initiatives of L&T are extended to the Subsidiary/Associate Companies and they are
also encouraged to participate in Business Responsibility Initiatives of the parent organisation. In addition, listed subsidiaries
like L&T Finance Holdings, L&T Infotech, L&T Technology Services and Mindtree Ltd. (Listed entities) have their separate
Business Responsibility Report (BRR) as a part of their Annual Reports. L&T Hydrocarbon Engineering and other unlisted
subsidiary companies participate in our Business Responsibility initiatives.

29
3. D
o any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with participate
in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than
30%, 30-60%, More than 60%]:
Yes. The suppliers are critical to the company’s operation and supply chain sustainability issues can impact its operations.
L&T promotes BR initiatives in its value chain. At present, less than 30% of its suppliers/distributors participate in BR
initiatives.

SECTION D: BR INFORMATION

1. Details of Director/Directors responsible for BR

a) Details of the Director/Directors responsible for implementation of the BR policy/policies
• DIN Number : 00019798
• Name : Mr. R. Shankar Raman
• Designation : Chief Financial Officer & Whole-time Director
b) Details of the BR head

S. No Particulars Details
1. DIN Number (If applicable) Not Applicable
2. Name Dr. Pradeep Panigrahi
3. Designation Head-Corporate Sustainability
4. Telephone Number +91-22-61238521
5. Email ID [email protected]

2. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N)

Name of principles:
P1 – Businesses should conduct and govern themselves with Ethics, Transparency and Accountability
P2 – Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle
P3 – Businesses should promote the well-being of all employees
P4 – Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalised
P5 – Businesses should respect and promote human rights
P6 – Businesses should respect, protect, and make efforts to restore the environment
P7 – Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner
P8 – Businesses should support inclusive growth and equitable development
P9 – Businesses should engage with and provide value to their customers and consumers in a responsible manner

S. No Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1. Do you have a policy / policies for the following Y Y Y Y Y Y Y Y Y
principles?
2. Has the policy been formulated in consultation with the relevant Y Y Y Y Y Y Y Y Y
stakeholders?
3. Does the policy conform to any national /international Yes. The policies are aligned with the principles of NVG
standards? If yes, specify? (50 words) guidelines and conform to international standards of ISO
9001, ISO 14001, OHSAS 18001 and ILO principles.

30
S. No Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
4. Has the policy been approved by the Board? Y Y Y Y Y Y Y Y Y
Yes.
If yes, has it been signed by MD/owner/CEO/appropriate Board
Director?
Signed by the Group Chairman
5. Does the Company have a specified committee of the Board/ Y Y Y Y Y Y Y Y Y
Director/Official to oversee the implementation of the policy?
Yes.
6. Indicate the link for the policy to be viewed online? www.Lntsustainability.com
7. Has the policy been formally communicated to all relevant Y Y Y Y Y Y Y Y Y
internal and external stakeholders?
8. Does the Company have an in-house structure to implement the Y Y Y Y Y Y Y Y Y
policy/policies?
9. Does the Company have a grievance redressal mechanism Y Y Y Y Y Y Y Y Y
related to the policy/policies to address stakeholders’ grievances
related to the policy/policies?
10. Has the Company carried out independent audit/evaluation of Y Y Y Y Y Y Y Y Y
the working of this policy by an internal or external agency?

2a. If answer to S. No. 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options) Not Applicable

S. No Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1. The Company has not understood the Principles -----
2. The Company is not at a stage where it finds itself in a position -----
to formulate and implement the policies on specified principles
3. The Company does not have financial or manpower resources -----
available for the task
4. It is planned to be done within next 6 months -----
5. It is planned to be done within the next 1 year -----
6. Any other reason (please specify) -----

3. Governance related to BR
• Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of
the Company. Within 3 months, 3-6 months, Annually, More than 1 year
Annually
• D
oes the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it
is published?
Yes, L&T has been publishing its Sustainability report annually as per the Global Reporting Initiative (GRI) framework
since 2008. From 2017-18, the Sustainability Reports have been replaced by an Integrated Report (IR) which follows GRI
Standards as well as International Integrated Reporting Council (IIRC) framework. The Integrated Report is externally
assured. L&T is following the GRI Standard ‘In Accordance – Comprehensive’ report. The reports can be accessed at
www.Lntsustainability.com.

31
based ‘Any Time Learning’ (ATL) portal. The Graduate
SECTION E: Engineering Trainees (GETs) and Post Graduate Engineering
Trainees (PGETs) also learn about the CoC in their ‘PRAYAG’
& ‘SWAGAT’ (special orientation) training modules.
Principle 1: Businesses should conduct
and govern themselves with Ethics, The senior management and the audit committee of the
Transparency and Accountability Board are apprised of the internal processes on a periodical
basis, which covers internal controls, statutory compliance
At Larsen & Toubro, Corporate Governance is fundamental and assurance.
to the business and core to its existence. The philosophy
is based on the transparent governance and disclosure L&T has established a separate CoC for suppliers and
practices, respect for human rights, individual dignity and vendors which covers various aspects such as compliance
adherence to the norms of moral and professional conduct. with environmental regulations, health & safety, labour
L&T is a professionally managed Indian multi-national practices, human rights aspects, minimum wages
company and committed to total customer satisfaction rule, freedom of association and collective bargaining,
and enhanced value creation. The vision of L&T is inclusive, prohibition on child labour, forced & compulsory labour,
with a culture of caring and trust enabled by the corporate ethical behaviour, reducing the negative impact on society
policies. These are also applicable to all its subsidiary and due to their operations, transparency in business processes
associate companies. and environment conservation.

L&T has laid down its Code of Conduct (CoC), which is Every new supplier needs to sign this CoC to do business
applicable to Board members, senior management and with L&T. In FY21, 29,407 suppliers have signed this
employees. The objective is to remain committed and CoC. Training workshops, including capability-building
vigilant towards the ethical conduct of business processes programmes are periodically conducted for vendors and
and instil a sense ownership of the Company. All designated sub-contractors, and cover topics such as Environment,
employees, including Board Members, adhere to the CoC Health & Safety (EHS), Human Rights, business process
and provide an annual declaration of their compliance. improvements and sustainability. L&T ensures compliance
by its vendors and suppliers to the CoC through periodic
A separate detailed CoC is in force for all other employees quality appraisals, EHS audits and assessments.
covering supervisory, executive and management staff.
Apart from a preamble explaining the principles of Whistle Blower Policy
honesty, ethics and integrity, the Code covers all aspects The Policy was formulated in 2004 and has been reviewed
of functioning, including anti-trust behaviour, information and updated periodically. The policy aims to offer an
security, insider trading rules, professional engagements, impartial vigilance mechanism in place for directors, senior
use of Company assets and brand logo, intellectual management and employees to report their concerns about
property, respect for human rights, overarching corporate potential, suspected and actual frauds, unethical behaviour,
HR philosophy including equal opportunity employment, and violations of the CoC. The Whistle Blower policy is an
prohibited items, social media code of conduct, use of effective method available to employees to report without
information technology assets, anti-bribery policies and fear any wrong practices, unethical behaviour or non-
other aspects of individual governance codes. The Code compliance which may have a detrimental effect on the
incorporates reporting structures and a graded escalation organisation, including financial damage and impact on
matrix to be followed in case any breaches are noticed or brand image.
pointed out, including reference to the Whistle Blower
Investigation Committee in appropriate cases. The Code is During 2020-21, a total of 48 complaints were received
also applicable to unlisted subsidiaries. through the whistle-blower mechanism, all of which were
scrutinised and addressed in accordance with L&T’s protocol.
The CoC is available at https://investors.larsentoubro.com/ 46 complaints were resolved and 2 complaint is in the
CodeOfConduct.aspx. Periodic training is conducted for process of being resolved. The Whistle Blower investigation
relevant stakeholders to make them aware of the CoC and committee and management maintain the anonymity of
amendments thereof. All new employees undergo training the whistle-blower at all times. The stakeholder complaints
on the CoC in induction / orientation programmes. The are included in the Director’s Report section of the Annual
training module on the CoC is also hosted on L&T’s intranet- Report.

32
The Whistle-blower policy has also been extended to own campuses, we have 13 certified green buildings and a
suppliers and contractors which enables them to report their certified Green Campus (viz., the Leadership Development
concerns about unethical behaviour, misconduct, violation Academy at Lonavala). Our campuses have adopted the
of legal and other requirements, improper practices, actual zero-wastewater discharge approach and continue to
or suspected fraud by Company officials without the fear of ensure water positive status. Energy efficiency programmes
unfair treatment or punishment (including loss of business). and climate change mitigation measures are extensively
implemented across L&T, contributing to greener campuses
Other Policies and project sites. Renewable energy is harnessed at
The various other policies that govern the general functions campuses and project sites as well.
of L&T include:
L&T’s green product and services portfolio consists of metro
• Sustainability Policy
rail projects, efficient power transmission and distribution
• Environment Health and Safety Policy systems, small hydro-electric power stations, solar PV-
• Green Supply Chain Policy based power plants, green buildings, water treatment &
distribution infrastructure, emission control equipment. Our
• Human Resources Policy green portfolio is focused on minimising environmental
• Corporate Social Responsibility Policy impact, e.g. reduced water consumption, carbon emissions,
material consumption and reduced waste generation. These
• Policy for Protection of Women’s Rights at Workplace
help our clients to move onto the low-carbon economy
• Risk Management Policy path.
• Related Party Transactions Policy
L&T participates in the ‘Make in India’ programme and
• Quality Policy promotes local sourcing of products and services. The
• P olicy on Determination of Materiality of Event or transportation of material at the project sites is optimised
Information based on the project execution stage. Many of our
infrastructure projects are at remote locations, and therefore
The detailed policies can be found on the weblink https:// goods and services are procured from local producers and
www.lntsustainability.com/corporate-policies/. the surrounding areas as far as possible. L&T has adopted
the 3R (Reduce, Recycle & Recover) principle for material
Principle 2: Businesses should provide conservation. Material recycling and the use of alternative
goods and services that are safe and material (in place of natural material) are extensively
practiced by our infrastructure business. The Sustainability
contribute to sustainability throughout
Roadmap 2021 targets increasing recycling / use of recycled
their life cycle
material by 5%.
L&T ensures that environment, health, and safety aspects
Fly ash is used as a substitute for cement in construction,
are taken into consideration at the design stage itself while
crushed sand is used in place of natural sand, and blast
manufacturing products or providing services to customers.
furnace slag is used. These are some of the conservation
It is our endeavour to provide safe and sustainable goods
methods practiced at project sites. However, since most
and services to our clients. Our business portfolio consists
of L&T’s products are ‘engineered to order’ and based on
of infrastructure, energy (oil & gas/power), defence, heavy
customer-specific requirements, the potential for use of
engineering, hydrocarbon projects. Sustainability aspects,
recycled material for products is limited.
including lower emissions and resource conservation,
are integrated into our engineering and design. L&T also
provides training to customers and customers’ personnel in
Principle 3: Business should promote the
the safe use and handling of products. well-being of employees

L&T offers conservation-based products and projects, L&T’s growth depends upon the growth of the employees
such as green buildings, wastewater treatment, recycling within the organisation. The commitment, enthusiasm and
plants and solar PV-based power plants. These help our dedication of employees has helped L&T become a large
clients contain pollution and conserve resources. At our organisation of repute within India and in other geographies

33
L&T’s 24-acre Leadership Development Academy at Lonavala, near L&T showcased stories of a few of its women staffers whose inner
Mumbai strengths enabled them to surmount challenges

where we operate. L&T nurtures and motivates its talent and the supply chain has employed 19 PWDs. During FY21,
pool through its leadership programmes and other forms L&T did not receive any complaint in respect of child labour,
of monetary and non-monetary incentives. L&T recognises forced / involuntary labour.
that employees spend a better part of their working lives at
their workplace. The organisation hence provides workplace Total workforce
infrastructure that is conducive to the well-being of staff
L&T employees 40,527
– this includes good IT infrastructure, ergonomic seating,
recreation areas, high standards of hygiene and other Number of permanent 3,149
services such as basic medical care facilities. The policies of women employees
the Corporate Human Resources Department form a strong Number of contract 3,20,299
framework for workforce management. Fostering a culture workmen
of caring and trust are embedded in various corporate
Training and skill-building are the pillars which support
policies like the Environment, Health & Safety (EHS) Policy,
L&T’s skill development agenda. Regular training and
Whistle-Blower policy, Protection of Women’s Rights at
exposure to the challenges of the future are vital parts of an
Workplace Policy and the CoC.
employee’s career progression. L&T trains employees in new
L&T does not discriminate against employees based on skills and emerging fields in addition to continual training
caste, religion, region, gender or physical disability, and in functional and behavioural areas. Employees are given
the merit of candidates is always accorded top priority for opportunities for higher education through sponsorship
selection and promotion. L&T adheres to the UNGC (United in reputed colleges and by way of corporate tie-ups with
Nation Global Compact) principles which include Human renowned management institutes.
Rights clauses. These clauses are part of our contracts with
L&T’s e-learning portal – Any Time Learning (ATL) – is
suppliers, partners and NGOs, and are extended across our
available for employees anytime and at any place. The
supply chain.
training modules are diverse. They are prepared by subject
L&T recognises the employees’ right to form unions and matter experts and complied from various knowledge
associations affiliated with trade unions at its manufacturing sources. ATL courses are interactive, engaging and user-
campuses. 5.26% of permanent employees are covered friendly. ATL-Next, a learning process automation and
under the unionised employee category. L&T has provided analytical platform has been hosted on L&T’s intranet
direct employment to 80 Persons With Disabilities (PWDs) portal since the last two years. This intelligent and adaptive

34
Virtual Reality Safety Training workshop Workmen training helps enhance safety and productivity

learning platform makes learning personal and compelling. implementation. This is further extended to our supply chain
The Leadership Development Academy (LDA) at Lonavala partners as well.
has been identified as a unique corporate university in India.
It is a symbol of value for L&T as it helps people develop L&T’s Corporate Environment, Health & Safety (EHS) policy
and grow by providing the right infrastructure and services articulates our unwavering commitment in ensuring a safe
to aid and enhance learning. The LDA has been recognised workplace. It defines the protocols to be followed by each
as a ‘Research Centre’ by Symbiosis International University business across India and abroad. The safety performance
and it also enables employees to pursue their Ph.D. of the Company is reviewed on a quarterly basis by the
programmes. In addition, various functional, technical and Company’s Board, to guarantee the Corporate EHS policy
managerial training programmes are provided to employees is effectively implemented and adhered to across the
through technical training centres from Mumbai (located company.
at Madh and Mahape), Mysuru and Project Management
Our commitment to safety requires that all our employees
Institutes at Vadodara and Chennai.
and supply chain partners undertake regular safety
L&T Zero Harm Vision ensures the safety of the workforce is training, which includes Tool Box Talks, emergency mock
given high priority in all activities across facilities and project drills and task specific safety briefings. All new employees
sites. Every task, job or assignment is mandated to be are introduced to the aspects of safety and all contract
performed in a safe manner and this forms the foundation workmen receive mandatory safety training before the
of our work execution philosophy. commencement of work.

The Management’s commitment to safety is demonstrated L&T is the first corporate organisation in India to be
through our structured approach, which is inclusive when accredited as ‘Course Provider’ by the National Examination
undertaking business decisions and is further supported by Board in Occupational Safety & Health (NEBOSH), UK,
assigning individual safety objectives. for delivering the International General Certificate by the
Institution of Occupational Safety & Health (IOSH), UK for
We focus on effective implementation of health and delivering their course.
safety practices in line with our ‘Zero-Harm Vision’. This
focus is to establish a safer work environment for our L&T continued commitment to safety has provided more
employees, contractors, and customers through a rigorous than 3.2 million man-hours of safety training were provided
safety management system, of procedures, and firm in FY 2020-21 to our workforce. Our wellness programme

35
Employee volunteers help underprivileged children to excel in STEM
CSR programmes increase the yield of community agriculture
(Science, Technology, Engineering & Maths)

‘Working on Wellness’ is a unique initiative undertaken Active engagement with a large and varied ecosystem of
by the Corporate Health and Welfare Department, stakeholders (shareholders, employees, customers, bankers,
which conducts counselling, awareness sessions, health vendors, government, communities and society at large. is
programmes, diagnostics camps and health workshop done through multiple touch-points.
activities aimed at enhancing employees’ wellness and
well-being at office. These health interventions are grouped L&T is a pioneer in providing a counselling helpline for its
into six critical areas like cancer, diabetes, cardiac disease, employees and their families in India, in collaboration with
obesity, ergonomic issues, and stress. In addition, our the Tata Institute of Social Science (TISS).
health programme extended to cover health check-ups, and
Our Corporate Social Responsibility (CSR) department
medical support on Covid 19 virus pandemic. A programme
runs specific programmes in the areas of Education,
of vaccination and awareness to our employees and workers
Health, Water and Sanitation and providing livelihood
was initiated to minimise the spread and containment of the
opportunities to vulnerable and marginalised stakeholders.
Covid 19 virus.
These initiatives are excuted both near and away from our
campuses and project sites to ensure that the benefits reach
Principle 4: Business should respect the the last mile and to the maximum number of beneficiaries.
interests of and be responsive towards
all stakeholders, especially those who Our Education initiatives are focused on ensuring
are disadvantaged, vulnerable and sustainable development of communities and contribute
to strengthening education and social infrastructure. These
marginalized
initiatives, which mostly cater to children below 18 years
L&T’s responsibility to stakeholders is reflected in the way belonging to marginalised sections of society, provide
we do our business. The contribution of shareholders support for better learning abilities of young minds and
and investors to the growth of the Company is deeply supplement learning in schools. The projects not only cover
valued, and we strive to ensure that we deliver value to all academics but also touch various other facets of education
stakeholders. including nutrition at the pre-primary level, setting up of
L&T maps both internal and external stakeholders basic infrastructures such as smart classrooms and soft
along with vulnerable, marginalised and disadvantaged skills to supplement textbook education. They also help
stakeholders. This large and mixed community has train teachers in STEM (Science Technology Engineering
varied and extended expectations, and L&T strives to Maths) education and hence make a difference in the entire
match or exceed expectations from all stakeholders. education cycle of the child.

36
Rainwater harvesting fosters bountiful harvests Safety Training at L&T’s Construction Skills Training Institute, Panvel

In 2020-21, L&T supported more than 500 schools and construction skills for the large unorganised workforce
reached out to over 1.9 lakh children with its education in the sector. The skills imparted include bar-bending,
initiatives pan-India. formwork carpentry, masonry, scaffolding and welding, and
more recently, courses were introduced in the installation of
L&T’s interventions in the health field range from running its solar panels, CCTV and other digital equipment required for
own health centres providing quality services ,to supporting planning a smart city.
health institutions partnering with the Government to
provide necessary quality infrastructure, training the health This year has seen one of the most challenging global health
care workers in delivering services and imparting preventive crises by way of the Covid--19 pandemic. The pandemic had
health education in the communities. a devastating effect on lives of migrants, daily wage earners
and the poor and challenged us to respond quickly and
One of our flagship CSR programmes is the Integrated devise new strategies in all our existing projects, to absorb
Community Development (ICD) programme, which focuses the impact. In addition to re-strategising, L&T offered
on improving the quality of life of communities living in the support in directly mitigating the impact of the pandemic
‘water-stressed’ regions of India. The ICD programme works and contributed significantly to support the government
towards providing access to clean drinking water, sanitation efforts by way of donating physical infrastructure as well
facilities and water for agriculture and livestock in these as medicine, supplies, personal safety kits, investigation
regions. The projects are made sustainable by building and equipments and so on.
strengthening people’s institutions to manage the resources
created by the project. Water and Sanitation efforts in We use the following communication channels to engage
these regions are followed by CSR interventions in health, with various stakeholders:
education and skill-building based on the needs, aiming to External Stakeholders
improve the quality of life of these communities. Stakeholders Engagement Modes
Shareholders Press Releases, Infodesk with a contact
L&T’s Skilling programme specialises in training youth.
and investors number and email ID, dedicated email id for
It focuses particularly on rural youth, who are either investor grievances, Quarterly Results, Annual
uneducated or partially educated. The programmes enhance Reports, Sustainability / Integrated Reports,
the skills of youth who are mostly school dropouts and AGM (Shareholders interaction), Investor
meets, corporate website
make them employable. This is done through Construction
Suppliers / Regular supplier, dealer and stockist meets
Skills Training Institutes (CSTIs) across the country. These
Contractors
institutes provide free formal and vocational training in

37
Supplier Meets help stakeholders understand new concepts and products better Technical skills training for women

External Stakeholders Principle 5: Business should respect and

Media Press Releases, Quarterly Results, Annual promote Human Rights
Reports, Sustainability / Integrated Reports,
AGM (shareholders interaction), Access
information and media interactions L&T is an Indian Multi-National Company (MNC) with a
Community Periodic feedback mechanism presence in 31 countries and is exposed to human rights
issues. L&T publishes an annual Communication On
Customers Regular business interactions, client
satisfaction surveys Progress (COP) as part of its compliance to UN Global
Government Press Releases, Quarterly Results, Annual Compact (UNGC) and is a member of Global Compact
Reports, Sustainability / Integrated Reports, Network India (GCNI). The policies and practices related
Stock Exchange filings, issue specific meetings, to human rights are extended to subsidiary and associate
representations
companies as well. L&T’s Human Resource Policy covers
human rights aspects and ILO conventions. Prohibition
For Internal Stakeholders of child labour, the prohibition of forced and compulsory
labour, non-discrimination, freedom of collective bargaining,
Employees Employee engagement surveys for
etc. are covered in our CoC for employees and Human
improvement in employees’ engagement
process Resource Policy. The Grantees of the CSR grant also sign the
same CoC, hence ensuring endorsement of human rights at
Circulars, Messages from Corporate and Line the L&T supported CSR projects.
Management

Corporate Social initiatives

L&T believes that every employee should have the
opportunity to work in an environment free from any
Welfare initiatives for employees and their families conduct which can be considered as Sexual Harassment.
Online news bulletins to convey topical
developments L&T is committed to treating every employee with dignity
and respect. The Company has formulated a policy on
A large bouquet of print and on-line in-house ‘Protection of Women’s Rights at Workplace’ as per
magazines (some location-specific, some business-
specific), a CSR programme newsletter
the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal) Act,
L&T Helpdesk, toll-free number 2013 and Rules, 2013. The policy is applicable to all L&T
establishments located in India. The policy has been widely

38
Solar power generation at the campus of a Construction Skills Training Miyawaki forest in Erode - faster, denser growth of indigenous trees
Institute

disseminated. L&T has constituted Internal Complaints There were 3 complaints received during the F.Y. 2020-21.
Committees to ensure implementation and compliance with All the complaints were redressed as per the provisions of
the provisions of the aforesaid Act and the Rules. the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and Rules, 2013.
This Policy encompasses the following objectives:

• To define Sexual Harassment at workplace; Principle 6: Business should respect,

• T o lay down the guidelines for reporting acts of Sexual
protect and make efforts to restore the
Harassment at the workplace; and environment
Environment protection and the conservation of natural
• T o provide the procedure for the resolution and redressal
resources are part of L&T’s business philosophy. L&T’s
of complaints of Sexual Harassment at workplace.
Corporate Environment, Health & Safety (EHS) Policy lays
A detailed procedure for making a Complaint and initiating emphasis on incorporating environmental consideration
an Enquiry to the redressal process, and finally the process into all business processes. As a part of our Sustainability
of preparation of a report within a stipulated timeline is programme, we set quantifiable targets with a timeline and
well laid out in the Policy document. The Policy also covers action plan to achieve sustainability goals. Our Sustainability
Disciplinary Action for Sexual Harassment at workplace. Roadmap 2021 is aligned with our business plan, LAKSHYA
2021, which incorporates measurable targets and key
The policy is a part of L&T’s Code of Conduct.
initiatives. The Sustainability Roadmap is extended to
Training programmes and workshops for employees are Subsidiary & Associate Companies and they are encouraged
organised throughout the year. The orientation programmes to set similar targets and roadmaps. Environmental risks and
for new joinees include awareness sessions on prevention of opportunities are periodically identified from operations and
sexual harassment at workplace and upholding the dignity addressed at the business level.
of employees. Specific programmes have been created on
A separate Code of Conduct has been extended to vendors
the digital platform to sensitise employees to uphold the
and service providers which covers the need for compliance
dignity of their colleagues and prevent sexual harassment
with environmental regulations, health and safety, labour
at workplace. During FY 2020-21, about 13400 employees
practices, human rights aspects, minimum wages, freedom
have undergone training through the programmes /
of association, collective bargaining, prohibition of child
workshops, including the awareness sessions held on the
labour and forced and compulsory labour, ethical behaviour,
digital platform.

39
L&T offers a range of eco-friendly services, including wastewater L&T regularly organises tree-plantation drives at its premises, project
treatment and solar PV installation sites and allotted public areas

transparency in business processes and environment also invest in lower emission and cleaner programmes, thus
conservation. All new vendors/ service providers need to promoting sustainable growth.
sign this combined CoC as part of the initial empanelment
process. Our green product and services portfolio helps our
clients to reduce their carbon footprint. We comply with
We continue to conduct water assessment surveys at our applicable environmental regulatory requirements from
campuses. Water conservation and rainwater harvesting are the State Pollution Control Board (SPCB) and Central
practiced within our premises. Additionally, our community Pollution Control Board (CPCB). Compliance with these
interventions consist of rainwater harvesting, check-dam pollution control norms is also covered by the statutory
construction and restoration, creation of farm ponds, soil compliance certificates submitted by Business Heads on a
moisture conservation programmes, roof water harvesting quarterly basis. Sustainability assurance by an independent
in schools and households, etc. Our campuses have been assurance agency on an annual basis covers compliance
maintaining zero-wastewater-discharge status since 2014. with environmental regulations, including submission of
Our community intervention programmes have helped us to compliance reports to regulatory agencies. During 2020-
conserve more than 10142 million litres of water annually. 21, there were no pending or unresolved show cause /
legal notices from CPCB / SPCB. Renewable energy at
Our climate-change interventions programme focuses on manufacturing campuses is utilised, wherever feasible.
climate-change mitigation and abatement. We focus on Currently, 7 campuses are sourcing renewable energy (wind
controlling / reducing the energy consumption intensity and solar) from external sources, and 12 campuses are
(GJ/billion turnover), implementing energy conservation generating renewable energy onsite.
projects and increasing the use of renewable energy in our
operations. We also maintained Carbon Neutrality in two of Fully-grown trees are natural carbon sinks, and biodiversity
our campuses, i.e. Powai (Mumbai) and Chennai in 2020-21 plays an important role in the sustenance of human lives
as well. We have aligned our practices with the Government on this planet. L&T undertakes tree plantation both within
of India’s National Action Plan on Climate Change (NAPCC) and outside its premises (as part of our CSR programme)
and its eight Missions, and continue to report progress on and we engage with agencies / NGOs to conduct plantation
this front in our Sustainability / Integrated Reports. Increased at public places, national parks and on Government
energy efficiency, developing low-emission technologies, land. During the year 2020-21 more than 8 lakh trees
building sustainable infrastructure, increasing the green were planted by our people in project locations across
cover, and dissemination of sustainability knowledge are India. We continue to nurture self-sustaining forests at six
some of the measures adopted by the organisation. We

40
L&T’s services include advanced technology, such as drone-based CCTV L&T’s green portfolio includes green buildings and several eco-friendly
surveillance for smart city projects products, systems and solutions

locations including two in L&T campus in India through the • National Safety Council
Miyakwaki technique and green areas like public gardens • National Fire Protection Institution
are developed and maintained.
• Indian Electrical and Electronics Manufacturers’
Association (IEEMA)
Principle 7: Responsible Public Advocacy
• India Smart Grid Forum (ISGF)
We engage with multiple business and trade organisations • Central Board of Irrigation and Power (CBIP)
and professional bodies. Our senior executives participate
• India Lead Zinc Development Association (ILZDA)
through active dialogue with the Government, be it on
new policy consultations or by presenting views of different • Society of Indian Defence Manufacturers (SIDM)
stakeholders. They provide their expertise and business
L&T interacts regularly with the Confederation of Indian
acumen during public policy consultations and present the
Industry – Centre of Excellence for Sustainable Development
views of industry at large.
(CII - CESD) on Sustainability and Integrated Reporting
Industrial forums and institutes where L&T actively <IR> policies, regulations, and L&T is a member of <IR> lab
participates include: India. The Federation of Indian Chambers of Commerce
and Industry (FICCI) engages with L&T for CSR and India
• Association of Business Communicators of India
Sanitation Coalition. L&T regularly interacts with the Indian
• A
ssociated Chambers of Commerce and Industry of Institute of Corporate Affairs (IICA) on CSR- related aspects
India (ASSOCHAM) as well. L&T is also an active member of committees such
• Bombay Chamber of Commerce & Industry (BCCI) as the Environment & Recycling Council by CII – Green
• Bureau of Indian Standards Business Centre (GBC), CII EHS Council (Western Region),
• Construction Industry Development Council (CIDC) Corporate Social Responsibility (CSR), etc.

• C
onfederation of Indian Industry – Centre of Excellence
for Sustainable Development (CII-CESD) Principle 8: Support inclusive growth
• CII – Green Business Centre (GBC) The following corporate policies of L&T put emphasis
• F ederation of Indian Chambers of Commerce and on inclusive growth by empowering communities and
Industry (FICCI) accelerating sustainable development.
• Indian Institute of Chemical Engineers (IIChE) • Corporate Social Responsibility Policy

41
Ration kits are distributed for Covid relief Food distribution to health workers and patients during the pandemic

• Corporate Human Resource Policies marginalised. From ensuring water reaches far-flung fields
• Corporate Environment, Health & Safety (EHS) Policy to creating access to sanitation facilities. From capability
building among local communities to creating a talent
• Sustainability Policy
bank of employable young men and women. Through each
Nation-building and community development are integral to initiative, we strive to make services and resources available
L&T’s Strategic vision. The Company’s CSR programmes are till the last mile.
based on the theme ‘Building India’s Social Infrastructure’.
This year, we are experiencing an unprecedented situation
The objective is to contribute positively to society, improve
due to the Novel Coronavirus (Covid-19) outbreak in our
the quality of life of those who are at the bottom of
country. Thus L&T contributed R 31.32 crore to back the
the pyramid, provide sustainable solutions and make a
Government’s efforts by supporting infrastructure as well as
meaningful impact on people’s lives.
providing supplies, food and spreading awareness.
The CSR interventions of L&T are based on the CSR Policy
Below are the highlights of L&T’s CSR interventions focused
and are in line with the Companies Act 2013 and CSR
across four key thrust areas and how we leveraged our
Rules 2014. The CSR Committee of the Board oversees the
capacity during the pandemic.
implementation of CSR programmes at the corporate level.
They are ably supported by the core CSR team at corporate WATER & SANITATION
level and Sustainability and CSR SPOCs from all businesses.
Water
We strive to provide access to essential services in health • Implementation of Integrated Community Development
and education for the underprivileged and provide for (ICD) Programme aimed at making water available for
equality of opportunity by empowering people through drinking, sanitation and agriculture to communities
capacity-building and skill development. staying in water-stressed regions of Maharashtra, Tamil
Nadu and Rajasthan.
L&T impacts communities across India through initiatives in
the areas of education, health, water & sanitation and skill- • Mobilising people to be equal partners in changing
building. From empowering students in rural areas through behaviours to address problems like wastage of water
digital literacy to building toilet blocks in schools and and overexploitation of ground water.
improving quality of primary education. From strengthening • Conducting educational activity on the theme of
health infrastructure to making services accessible to the ground-water management to motivate the project

42
Rally for promotion of good sanitation practices Village development commitee meeting

community to adopt conservation measures, shift to practices, water management and use of natural
cultivating water efficient crops and improved irrigation fertilisers which helped in improving soil structure and
technologies reduced cost of cultivation
• Building water-harvesting and soil conservation • Diversification of annual crops to suitable dryland
structures like check dams, farm ponds, percolation horticulture perennial crops to reduce cost of production
tanks, field bunds, contour trenches and implementing and to improve the quality of produce
other sustainable agricultural techniques like crop
• Demonstrating and promoting location-specific
rotation leading to increased crop yield and hence
sustainable agricultural practices such as Participatory
improved agricultural viability
Variety Selection, Guli method of ragi cultivation, and
• Capacity building of the community members in Systematic Rice Intensification for substantial increase in
Participatory Ground Water Management, ground productivity
water balance estimation and crop water budgeting for
• Capacity building of dairy farmers by adopting
making them self-sufficient to monitor and analyse the
traditional methods of heath care for livestock,
data and manage use of the water efficiently
construction of cattle floors and promoting azolla fodder
• Promoting household and school level rainwater for stabilisation and improving viability of the existing
harvesting for a sustainable solution to the drinking dairy farms
water problems of the project area
• Training para-vets and watershed assistants from among
• Strengthening basic infrastructure and services in the community youth for sustaining and supporting
rural India and creating livelihood options once water- the watershed management project and health care of
sufficiency is achieved livestock after the project comes to an end

Agriculture and Allied livelihoods Sanitation

• Treating and bringing undulated and fallow land under • Community-led total sanitation approach for ensuring
cultivation and adoption of multi cropping pattern behavioural change on a large scale, following up and
due to availability of water and quality soil leading to supplementing the change by supporting construction
improved productivity and additional income of household toilets for making communities open-
• Organising Farmers’ Field Schools for efficient irrigation defecation-free

43
Toilet facilities were constructed to enable villages become open-
L&T supports the education of the underprivileged
defecation-free

• Increased ownership of the project through active EDUCATION

participation of village development committee and • Increasing access to quality education for
contribution from the local community underprivileged children, for example bicycles were
provided to the students attending the education
• School sanitation programme and collaboration with
programme in a rural project to make the long-distance
government schemes to complement and sustain the
commute manageable and ensure that the students
sanitation programme in the community
attend school
Community Cohesion and Participation • Improving the quality of education by introducing
• Capacity-building of the people’s institutions like village student-centred interactive pedagogy and introduction
development committees, farmers’ groups and self-help of innovative teaching and learning techniques and aids
groups to ensure their participation in decision-making • Enhancing pre-primary and primary education to ensure
and increased ownership school readiness, smooth transition from Anganwadi
• Strengthening farmers and community groups through centres to primary schools and prevent children from
village meetings, exposure visits and training on dropping out
leadership, planning, management and governance skills • Infrastructure development in schools for creating a
conducive learning environment, including provision of
• Ensuring participation of women by having 50%
basic facilities like water, toilets, etc.
women members in the Village Development committee
and forming Self Help Groups (SHGs). Capacity-building • E-learning through digitisation of content, smart
of SHG members in managing finance and accounts as classrooms and computer labs
well as group dynamics, leading to collective decision • STEM Education Programme for encouraging scientific
making and empowerment of women to be equal rigour among students with emphasis on joyful learning
partners in the development process in the community and introducing 21st century skills like critical thinking,
• Sustained community action for the operation and communication, collaboration and creativity, to prepare
maintenance of assets created and for further protection students for careers focussed on technology and
and development of natural resources, once the project innovation
is over • Encouraging children to participate in national science
events for application of learning and exposure to larger
Number of beneficiaries: 110,525
learning platforms

44
Self Help Group Meeting – Empowerment through livelihood generation Online training for capacity-building of teachers

• Establishing urban and rural community learning • Strengthening community-based monitoring

centres to provide after-school and remedial academic mechanisms to ensure quality education and working
support to children, especially first-generation learners, with School Management Committees and parents’
and help them to cope with their curriculum, move to groups to provide a conducive learning environment at
their potential level of learning and prevent them from home
dropping out • L&T employee volunteering programme (L&T-eering)
• Organising career counselling, personality development, to augment the running of urban community learning
life-skills programmes, medical camps for overall centres, design low-cost teaching aids to explain
development of the child concepts in science and math, organising various
education sessions in resource- poor schools, such as
• Conducting extra-curricular activities where children
on safety, caring for environment, celebrating days
engage in fun-filled interactive activities for emotional,
of national importance with them, organising extra-
cognitive, and holistic well-being
curricular programmes and events for development
• Training students from 9th grade in core employability of various art forms, mentoring children from low-
skills such as Spoken English, Digital Literacy, Emotional income communities to develop various aspects of their
Quotient under Youth Engagement Programme personality and mentoring young adults for confidence-
building and making them job-ready.
• Developing leadership by making older students take
responsibility in advocacy activities pertaining to the Number of beneficiaries: 244,962
community like mapping their community, identifying
HEALTH
dropouts, filing requests and petitions to fix street
lights, and motivating other children to join community Urban Health Projects
learning centres • Providing health and welfare activities for the
underprivileged across its locations in India
• Preparing children for board examinations and
supporting in college enrolment • Conducting malnutrition and anaemia mitigation camps

• Running a child rights desk programme where children • Conducting eye check-ups, blood donation camps and
and parents are helped for school enrolment, getting health awareness programmes
entitlement documents and addressing issues like child • Providing health services in remote locations through
labour, abuse and neglect mobile health vans

45
Infrastructure support enables Government health centres to continue
L&T’s Health and Dialysis Centre, Vadodara
services during the pandemic

• Dedicated health centres at 9 locations across India their nutrition and health, and leveraging services from
provide family welfare services maternal & child health Government and strengthen linkages with ICDS and
care and reproductive health, speciality and super- health department
speciality consultations, low-risk day care surgeries
• Promoting nutrition gardens and conducting recipe
(capacity of 8 beds), services in diagnostic and clinical
demonstrations and contests in the community for
camps, immunisation and health education
nutrition awareness
• Services for psychological health including counselling
• Providing rural primary care health centres and
child guidance clinic, physiotherapy and occupational
Anganwadis with need-based supplies and infrastructure
therapy
support to ensure quality health services
• Outreach treatment services through satellite clinics
• Ensuring immunisation of mother and child and other
• TB Clinic services to treat Multi Drug Resistant services for children under- 5 under the Government’s
Tuberculosis and counselling patients and their families ICDS programme by offering information and
• Treating and supporting HIV / AIDS patients through counselling services during home visits by a trained
Anti-Retroviral Therapy (ART) centre at Mumbai community volunteer. This programme is run in
coordination with Government front-line workers like
• Artificial kidney dialysis centres at 5 locations pan-India ASHAs and ANMs.
Rural Health Projects • Training of traditional birth attendants to guide and
support women for safe institutional deliveries
• Capacity-building of para-workers to identify children
with acute malnutrition before they become seriously ill • Training men, women and youth in the communities on
and sending them to referral camps for timely detection maternal and reproductive health to ensure informed
of Severely Acute Malnutrition and provisioning decisions and responsible behaviour
treatment of children (without medical complications)
with ready-to-use therapeutic foods or other nutrient- Apart from regular health projects described above, Covid
rich foods at home relief was an important initiative this year

• Training of para-workers to conduct regular home visits,

counselling with mothers and monitor children on

46
Underprivileged youth at one of L&T’s Construction Skills Training Multi-Skill Training Institute
Institutes

Covid Relief • Direct support to strengthen the health system to

L&T has assisted in the setting up of ICUs for treating fight Covid included providing testing kits, N95 masks,
Covid-19 patients, equipped existing government hospitals PPE kits, ventilators, dialysis machine, beds and other
with ventilators, provided of Personal Protective Equipment hospital equipment.
(PPE) kits, gloves, masks to health workers, as well as made • A Covid testing laboratory was constructed in U.P.
available basic provisions food to those in need.
Number of beneficiaries: 822,967
• Immediate relief was provided to the communities
where CSR projects are implemented. Relief work was SKILL DEVELOPMENT
undertaken to aid the needy and vulnerable families • Providing free training in various construction skills like
of the children attending community learning centres bar-bending, formwork carpentry, masonry, scaffolding,
by way of providing food and ration as most of them welding, electric wiring etc., through Construction Skills
come from single-breadwinner families. Additionally, Training Institutes (CSTIs) to rural and urban youth to
other vulnerable families in these communities were enhance their employability
also supported by way of providing them with essentials
required to survive from one day to the next. 1400 • Introducing innovative and technology-based skill-
families were reached out to with dry ration kits and training in Solar PV Technician skills, OFC & CCTV
sanitation kits, and cooked meals were given to 8000 Installation and Maintenance
families. • Digitalising CSTIs with e-learning modules
• L&T was one of the first supporters of the Mumbai Food • Training CSTI trainees in safety and soft skills
Project initiated by few entrepreneurs, corporate leaders
• Vocational training programmes for women: Tailoring,
and others. The grant funding made available from L&T
beautician, home nursing and food processing courses
enabled the project to serve over 16,000 meals every
day, benefitting construction workers, taxi drivers, rag- • Imparting skills and development of self-help groups at
pickers, beggars, street vendors, transgenders and many ICD locations
more. • Collaboration with state-run technical institutes (ITIs)
• Additionally, 2000 meals were provided to hospital staff
Number of beneficiaries: 35,522 (17635 - CSR+ 17,887 -
on Covid duty, 20000 meals were distributed to migrant
LTPCT)
workers and 11000 kg rice was distributed in Tamil
Nadu

47
Masks being prepared by trainees during skill
ITI students who completed AutoCAD Training at Serampore, West Bengal
building

Impact of Covid on CSR Projects • In the rural as well as urban health projects the project
Covid-19 affected a large number of daily wage earners, teams joined government efforts in spreading awareness
migrant labourers and poor across states, class, caste, about Covid infection and safety precautions through
gender and region. The sudden lockdown in the first posters, pamphlets and tele calls.
wave in March 2020 led to the shutting down of schools,
• Community health volunteers started to visit a few
colleges, shops and establishments, small businesses,
children each day to engage them in pre-school activity,
community outreach health services and training institutes.
made home visits for provision of nutrition supplements
This led to loss of learning opportunities for many children,
and counselled mothers on childcare services.
loss of income for families, absence of outreach health
services affecting mother and child health care services and • The CSR team monitoring system also went digital and
no skill training opportunities. field services for all the CSR projects were monitored
through video calls, Microsoft team meetings and
L&T geared up to the challenge and, after deliberation with
diligent documentation.
implementing partners, re-strategised many CSR projects as
follows: Despite the Covid-19 crisis, we reached most of the services
to the worst-affected communities aided by technology and
• Ensured learning continuity in all the projects during
innovative methods. The pandemic brought to the front
closure of schools and mobilised teachers, parents and
crisis management skills and achieving targets in the adverse
children to participate in the process of remote learning
situation, turning adversity in an opportunity to reach out to
and adopted digital and remote teaching and learning
people.
methodology.
L&T spent R 150.01 Crore 2020-21 towards CSR activities as
• Children lacking access to digital media were provided
per the Companies Act 2013.
with worksheets and their progress monitored through
home visits, involving parents in the process, while
maintaining Covid safety norms. Principle 9: Engage with and provide
value to customers
• Community learning centres kept children engaged
through meaningful activities related to academics as The range of projects, products and services offered by L&T
well as healthy recreation through online platforms. has a far-reaching impact on customers and considerable

48
attention is consequently devoted to the design, customer satisfaction surveys and market-based research,
development and execution of these offerings. including training and capability building programmes for
customers. Senior management actively reviews customer
Inputs on changing customer preferences and market trends feedback and suggests corrective and/or preventive action
gathered from interactive customer engagement and study as required.
of markets are incorporated into products and services
through training, R&D, design, testing, manufacturing and A survey of 66 customers across L&T, most of whom had
best-in-class construction methodologies. The business been associated with L&T for more than 5 years, showed
has also leveraged new-age technology for productivity our customer engagement has been excellent.
improvements that benefit both Company and customer.
These include Artificial Intelligence, Machine Learning, use Level of satisfaction with L&T’s response to address
of Geospatial technologies (Lidar, Radar, Sonar, Thermal, customer queries and grievances
Optical), Virtual Reality (including extensive usage in worker 11% 0%
safety applications and training), Augmented Reality,
Analytics tools, Bots, Laser, Radiography, extensive use of
IOT platforms and adoption of different components of the
Industry 4.0 value chain. Health and safety aspects are also
47%
carefully incorporated into product lifecycles.
42%
Products carry requisite labelling, and maintenance manuals
Excellent   Good   Satisfactory   Unsatisfactory
include related specifications and codes that render
transparency and provide maintenance utility to customers.
Products undergo testing in conformity with national Customers’ experience with L&T
personnel Interaction
and international standards such as Indian Standards,
0%
International Organization of Standardization (ISO), RoHS 8%
(for relevant products). Training of customer personnel on
product characteristics, usage and maintenance forms an
24%
integral part of services offered by L&T.
68%
L&T’s green product and services portfolio helps its clients to
reduce their energy, water and material footprint and helps
them to follow a low-carbon economy path. The Company Excellent   Good   Satisfactory   Unsatisfactory
regularly engages with customers through customer meets,

49
ANNEXURE: MAPPING TO THE SEBI FRAMEWORK

Question Reference Description

Section Page Number
Section A: General Information about the Company
1. Corporate Identity Number (CIN) of the Company AR 28
2. Name of the Company 28
3. Registered Address 28
4. Website AR 28
5. Email id AR 28
6. Financial Year Reported AR 28
7. Sector(s) that the Company is engaged in (industrial activitycode- AR 28 and 29
wise)
8. List three key products/services that the Company manufactures/ AR 29
provides (as in balance sheet)
9. Total number of locations where business activity is undertaken by AR 29
the Company
i. Number of International Locations (Provide details of major 5) AR 29
ii. Number of National Locations AR 29
10. Markets served by the Company – Local/State/National/International AR 29
Section B: Financial Details of the Company
1. Paid up Capital (INR) AR 29
2. Total Turnover (INR) 29
3. Total profit after taxes (INR) AR 29
4. Total spending on Corporate Social Responsibility (CSR) as AR 29
percentage of profit after tax (%)
5. List of activities in which expenditure in 4 above has been incurred: AR 29
Section C: Other Details
1. Does the Company have any Subsidiary Company/ Companies? AR 29
2. Do the Subsidiary Company/Companies participate in the BR AR 29
Initiatives of the parent company? If yes, then indicate the number
of such subsidiary company(s)
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that AR 30
the Company does business with, participate in the BR initiatives of
the Company? If yes, then indicate the percentage of such entity/
entities? [Less than 30%, 30-60%, More than 60%]
Section D: BR Information
1. Details of Director/Directors responsible for BR AR 30
a) Details of the Director/Director the BR policy/policies
• DIN Number • Name • Designation
b) Details of the BR head
• DIN Number (if applicable) • Name • Designation
• Telephone number • e-mail ID
Principle-wise (as per NVGs) BR Policy / policies AR 30-31

50
Question Reference Description
Section Page Number
3. Governance Related to BR Indicate the frequency with which the AR 31
Board of Directors, Committee of the Board or CEO to assess the BR
performance of the Company. Within 3 months, 3-6 months, Annually,
More than 1 year.
Does the Company publish a BR or a Sustainability Report? What is the AR 31
Hyperlink for viewing this report? How frequently it is published?
Section E: Principle-wise Performance
Principle 1: Ethics, Transparency and Accountability
Does the policy relating to ethics, bribery and corruption cover only the AR 32-33
company?
Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs
/Others?
How many stakeholder complaints have been received in the past The details related to 32-33, 109 and 110
financial year and what percentage was satisfactorily resolved by the stakeholder complaints
management? are included in the
Director’s Report
Section of this Annual
Report.
Principle 2: Sustainable Products and Services
List up to 3 of your products or services whose design has incorporated AR 33
social or environmental concerns, risks and/or opportunities.
For each such product, provide the following details in respect of AR 33
resource use (energy, water, raw material, etc.) per unit of product
(optional):
Does the company have procedures in place for sustainable sourcing AR 33
(including transportation)?
Has the company taken any steps to procure goods and services AR 33
from local & small producers, including communities surrounding their
place of work?
If yes, what steps have been taken to improve their capacity and AR 33
capability of local and small vendors?
Does the company have a mechanism to recycle products and waste? The Company is a
If yes what is the percentage of recycling of products and waste leading EPC solution
(separately as <5%, 5-10%, >10%). Also, provide details thereof, in provider for Solar Photo
about 50 words or so. Voltaic (PV) based
power plants helping
customers save on
the energy bills and
contribute to reduction
of GHG emissions from
consumption of indirect
energy.

51
Question Reference Description
Section Page Number
Principle 3: Employee Well Being
Total number of employees. AR 33-36
Total number of employees hired on temporary/contractual casual basis.
Number of permanent women employees.
Number of permanent employees with disabilities
Do you have an employee association that is recognized by
management?
What percentage of your permanent employees and members of this
recognized employee association?
Please indicate the Number of complaints relating to child labour, AR 33-36
forced labour, involuntary labour, sexual harassment in the last financial
year and pending, as on the end of the finacial year.
What percentage of your under-mentioned employees were given AR 33-36
safety and skill upgradation training in the last year?
Principle 4: Valuing Marginalized Stakeholders
Has the company mapped its internal and external stakeholders? AR 36-38
Out of the above, has the company identified the disadvantaged, AR 36-38
vulnerable & marginalized stakeholders? Are there any special initiatives
taken by the company to engage with the disadvantaged, vulnerable
and marginalized stakeholders.
Principle 5: Human Rights
Does the policy of the company on human rights cover only the AR 38-39
company or extend to the Group/Joint Ventures/Suppliers
Contractors/NGOs/Others?
How many stakeholder complaints have been received in the past AR 38-39
financial year and what percent was satisfactorily resolved by the
management?
Principle 6: Environment
Does the policy relate to Principle 6 cover only the company or extends AR 39-41
to the Group/Joint Ventures/Suppliers/Contractors NGOs/others?
Does the company have strategies/ initiatives to address global AR 39-41
environmental issues such as climate change, global warming, etc?
Does the company identify and assess potential environmental risks? AR 39-41
Does the company have any project related to Clean Development AR 39-41
Mechanism?
Has the company undertaken any other initiatives on – clean AR 39-41
technology, energy efficiency, renewable energy, etc.? Y/N.
Are the Emissions/Waste generated by the company within the AR 39-41
permissible limits given by CPCB/SPCB for the financial year being
reported?
Number of show cause/ legal notices received from CPCB/SPCB which AR 39-41
are pending (i.e. not resolved to satisfaction) as on end of Financial Year.

52
Question Reference Description
Section Page Number
Principle 7: Responsible Public Advocasy
Is your company a member of any trade and chamber or association? AR 41
If Yes, Name only those major ones that your business deals with:
Have you advocated/lobbied through above associations for the
advancement or improvement of public good?
Principle 8: Inclusive Growth
Does the company have specified programmes/initiatives projects in AR 41-48
pursuit of the policy related to Principle 8?
Are the programmes/projects undertaken through in-house team own AR 41-48
foundation/external NGO/government structures/any other organisation?
Have you done any impact assessment of your initiative? AR 41-48
What is your company’s direct contribution to community development AR 41-48
projects? Amount in INR and the details of the projects undertaken.
Have you taken steps to ensure that this community development AR 41-48
initiative is successfully adopted by the community?
Principle 9: Customer Welfare
What percentage of customer complaints/consumer cases are pending as AR 48-49
on the end of financial year?
Does the company display product information on the product label, over AR 48-49
and above what is mandated as per local laws?
Is there any case filed by any stakeholder against the company regarding AR 48-49
unfair trade practices, irresponsible advertising and or anti-competitive
behavior during the last five years and pending as of end of financial year

53
10 YEAR HIGHLIGHTS    ANNUAL REPORT 2020-21

STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS

v crore
Ind AS [11] IGAAP [11]
Description 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
[10] [8]

Statement of Profit and Loss

Gross revenue from operations [1] 73316 82384 82287 74612 66301 63813 57558 57164 52196 53738

PBDIT [1] [2] 7266 6838 7653 7701 6481 5829 6488 6667 5473 6283

Profit after tax (excluding extraordinary/

exceptional items) [12] 5505 5414 5466 4861 4560 4454 4699 4905 4169 4413

Profit after tax (including extraordinary/

exceptional items) 11337 6679 7491 5387 5454 5000 5056 5493 4384 4457

Balance Sheet
Net worth 60414 52175 50048 49174 46013 42135 37085 33662 29291 25223

Loan funds 23809 25785 11990 10561 10558 13924 12936 11459 8478 9896

Capital employed 84223 77960 62038 59735 56571 56059 50021 45121 37769 35119

Ratios and statistics

PBDIT as % of net revenue from
operations [1][3] 9.91 8.30 9.30 10.34 9.86 9.23 11.38 11.78 10.60 11.82

PAT as % of net revenue from

operations [1][4] 15.46 8.11 9.10 7.23 8.30 7.91 8.87 9.71 8.50 8.38

RONW % [5] 20.14 13.07 15.74 11.32 12.37 12.39 14.30 17.46 16.06 18.95

Gross Debt: Equity ratio 0.39:1 0.49:1 0.24:1 0.21:1 0.23:1 0.33:1 0.35:1 0.34:1 0.29:1 0.39:1

Basic earnings per equity share (R) [6] 80.74 47.59 53.43 38.46 39.00 35.81 36.31 39.57 35.55 32.41

Book value per equity share (R) [7] 430.13 371.65 356.79 350.90 328.79 301.57 265.85 241.97 211.39 182.90

Dividend per equity share (R) [7][9] 36.00 18.00 18.00 16.00 14.00 12.17 10.83 9.50 8.22 7.33

No. of equity shareholders 1371535 1,251,569 10,21,275 8,99,902 9,23,628 10,28,541 8,53,824 832,831 854,151 926,719

No. of employees 40527 45467 45,205 42,924 41,466 43,354 44,081 54,579 50,592 48,754
[1] For Continuing Operations from 2018-19
[2] Profit before depreciation, interest and tax (PBDIT) is excluding extraordinary & exceptional items wherever applicable and other income.
[3] PBDIT as % of net revenue from operations =[(PBDIT)/(gross revenue from operations less excise duty up to June 30, 2017)].
[4] Profit After Tax (PAT) as % of net revenue from operations =[(PAT including extraordinary & exceptional items)/(gross revenue from operations less
excise duty up to June 30, 2017)].
[5] RONW [(PAT including extraordinary & exceptional items)/(average net worth excluding revaluation reserve)].
[6] Basic earnings per equity share has been calculated including extraordinary & exceptional items and adjusted for all the years for issue of bonus shares.
[7] After considering adjustments for issue of bonus shares during the respective years.
[8] Figures for the year 2011-12 include Hydrocarbon business which has been transferred w.e.f April 1, 2013 to a wholly owned subsidiary.
[9] Dividend for the year 2020-21 includes special dividend of R 18.00 per share and final dividend of R 18 per share.
[10] Figures from 2018-19 include the impact of the merger of L&T Shipbuilding Limited with the Company.
[11] Figures from 2015-16 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable.
[12] Profit from discontinued operations from the year 2018-19 has been considered as exceptional item.

54
CONSOLIDATED FINANCIALS-10 YEAR HIGHLIGHTS
v crore
Ind AS IGAAP
Description 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
Statement of Profit and Loss
Gross revenue from operations [1] 135979 145452 135220 119862 110011 101975 92762 85889 75195 64960

PBDIT [1] [2] 15624 16329 15330 13641 11130 10463 11258 10730 9929 8884

Profit attributable to Group

shareholders (excluding
extraordinary/exceptional items) [3] 6965 8894 8144 7151 5920 4154 4470 4547 4911 4649

Profit attributable to Group

shareholders (including
extraordinary/exceptional items) 11583 9549 8905 7370 6041 4233 4765 4902 5206 4694

Balance Sheet
Net worth 75869 66723 62375 54904 50217 44180 40909 37712 33860 29387

Non-controlling interest 12052 9521 6826 5201 3564 2893 4999 3179 2653 1753

Loan funds 132605 141007 125555 107524 93954 88135 90571 80330 62672 47150

Capital employed 220525 217251 194756 167629 147735 135208 136479 121221 99185 78290

Ratios and statistics

PBDIT as % of net revenue from
operations [4] [1] 11.49 11.23 11.34 11.40 10.18 10.35 12.24 12.60 13.33 13.81

PAT as % of net revenue from

operations [5] [1] 8.52 6.57 6.59 6.16 5.53 4.19 5.18 5.76 6.99 7.30

RONW % [6] 16.25 14.80 15.35 14.12 12.80 9.91 12.13 13.71 16.47 17.26

Gross Debt: Equity ratio 1.51:1 1.85:1 1.81:1 1.79:1 1.75:1 1.87:1 2.21:1 2.13:1 1.85:1 1.61:1

Basic earnings per equity share (R) [7] 82.49 68.04 63.51 52.62 43.20 30.32 34.22 35.31 37.69 34.14

Book value per equity share (R) [8] 540.16 475.27 444.67 391.78 358.83 316.20 293.29 271.10 244.40 213.09

Dividend per equity share (R) [8] [9] 36.00 18.00 18.00 16.00 14.00 12.17 10.83 9.50 8.22 7.33

Figures for 2015-16 to 2020-21 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable.
[1] From Continuing Operations in 2020-21, 2019-20 and 2018-19
[2[ Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary/exceptional items wherever applicable and other income.
[3] Profit from discontinued operations in the year 2020-21, 2019-20 and 2018-19 has been considered as exceptional item.
[4] PBDIT as % of net revenue from operations =[PBDIT/(gross revenue from operations less excise duty upto June 30, 2017)].
[5] Profit after tax (PAT) as % of net revenue from operations = [PAT including extraordinary/exceptional items/gross revenue from operations less excise duty
upto June 30, 2017].
[6] RONW = [(PAT including extraordinary/exceptional items)/(average net worth excluding revaluation reserve)].
[7] Basic earnings per equity share has been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares.
[8] After considering adjustment for issue of bonus shares during respective years.
[9] Dividend for the year 2020-21 includes special dividend of R 18.00 per share and final dividend of R 18.00 per share

55
GRAPHS    ANNUAL REPORT 2020-21

L&T CONSOLIDATED - ORDER INFLOW L&T CONSOLIDATED - SEGMENT-WISE ORDER INFLOW

2020-21
210000 –
186356 v crore
190000 – 9% (6%) 3621 5554
175497 3%
170817 2%
170000 – Infrastructure
13404 102702
8% Power
150000 – 60094 59%
45116 47951 Heavy Engineering
25463
130000 – Defence
v crore

14%
Engineering
110000 – Hydrocarbon
90000 – 17729 IT & Technology
126262
125701 10% Services
70000 – 127546
Financial Services
50000 – 2468 Developmental
1% 3574 Projects
30000 – 2% 982 Others
–

–
2018-19 2019-20 2020-21 1%
Domestic International

L&T CONSOLIDATED - GROSS REVENUE FROM OPERATIONS L&T CONSOLIDATED - SEGMENT-WISE EXTERNAL REVENUE
2020-21
170000 –
5853 v crore
145452
150000 – 8% (7%) 4%
135979 3621 Infrastructure
135220 3% 61431
130000 – 13404 45% Power
10% Heavy Engineering
48467
110000 – 43577 50463 Defence
v crore

Engineering
90000 – 25463 Hydrocarbon
19% IT & Technology
70000 – Services
91643 96985 Financial Services
85516
50000 – 16925 Developmental
12% Projects
30000 – 3396
3% 2712 3174 Others
–

2018-19 2019-20 2020-21 2% 2%

Domestic International

L&T CONSOLIDATED - ORDER BOOK L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK

2020-21
360000 –
327354
8%
290780 4% 303857 v crore
310000 – 13505
68773 4% Infrastructure
44179
260000 – 61670 75038 14% 244565 Power
75%
7889 Heavy Engineering
v crore

2% Defence
210000 –
4372 Engineering
1%
Hydrocarbon
160000 – 258581 12844
229110 Others
228819 4%
110000 –

60000 –
–

As at 31-3-2019 As at 31-3-2020 As at 31-3-2021

Domestic International

56
L&T CONSOLIDATED - PBDIT AS % OF NET REVENUE L&T CONSOLIDATED - PAT AND RONW %
FROM OPERATIONS

17000 – 16329 – 14.0 12000 – 11583 – 24.0

15624
15330 – 13.5 11000 –
15000 – – 22.0
– 13.0
10000 – 9549
– 12.5 – 20.0
13000 – 8905
9000 –

Percentage

Percentage
– 12.0
– 18.0
v crore

v crore
11000 – – 11.5 8000 –
11.5 – 16.0
11.3 – 11.0
11.2 7000 – 16.2
9000 –
– 10.5 15.3 14.8 – 14.0
6000 –
– 10.0
7000 – – 12.0
– 9.5 5000 –

5000 – – 9.0 4000 – – 10.0

–

–
2018-19 2019-20 2020-21 2018-19 2019-20 2020-21
PBDIT PBDIT as % of net revenue from operations PAT RONW %

L&T CONSOLIDATED - SEGMENT-WISE EBIT L&T CONSOLIDATED - SEGMENT-WISE NET ASSETS

6000 – 2019-20 2020-21 30000 – 31.03.2020 31.03.2021

27192
5170

25170
4823
4522

5000 –

24398
23442
25000 –

21403
19638
4000 –
3693

20000 –

17374
v crore

2679

3000 –
v crore

13461
15000 –
1746

2000 –
1568

1286

1123
1039

8254
10000 –

7653
617

1000 –
566

544
488

387
236

(197)
111

3029
2982
0 – 5000 –
2906

2880
2022

2090
1745
–

1740

-1000 – 0 –
–

–
Infrastructure

Heavy Engineering

Financial Services
Power

Defence
Engineering

Hydrocarbon

IT & Technology
Services

Developmental
Projects

Others

Infrastructure

Heavy Engineering

Defence
Engineering

Hydrocarbon

IT & Technology

Financial Services
Power

Services

Developmental
Projects

Others
Total Segment wise EBIT 2019-20 : R 16060 crore and 2020-21 : R 14341 crore Total Segment wise Net Assets as at 31.03.2020 R 103456 crore and as at 31.03.2021 R 103923 crore

L&T CONSOLIDATED - EPS & Dividend Payout % L&T STANDALONE - EPS & DPS

90.00 – – 60 90.00 – 80.74

82.49
80.00 – 80.00 –
– 50
70.00 – 68.04 70.00 –
63.51
60.00 – 44 – 40 60.00 –
53.43
Percentage

50.00 – 50.00 – 47.59

in v

– 30
in v

40.00 – 31 40.00 – 36
26
30.00 – – 20 30.00 –
20.00 – 20.00 – 18 18
– 10
10.00 – 10.00 –
0.00 – –0 0.00 –
–

2018-19 2019-20 2020-21 2018-19 2019-20 2020-21

Earning per share Dividend payout % Earning per share Dividend per share

57
NOTICE    ANNUAL REPORT 2020-21

LARSEN & TOUBRO LIMITED

Regd. Office : L&T House, Ballard Estate, Mumbai 400 001.
CIN : L99999MH1946PLC004768
Email: [email protected] • Website: www.larsentoubro.com
Tel No: 022-67525656 • Fax No: 022-67525893

Notice
NOTICE IS HEREBY GIVEN THAT the Seventy Sixth “RESOLVED THAT pursuant to the provisions of
Annual General Meeting of LARSEN & TOUBRO LIMITED Sections 149, 152 and any other applicable provisions
will be held through VIDEO CONFERENCING OR OTHER of the Companies Act, 2013 and the rules made
AUDIO VISUAL MEANS on Thursday, August 05, 2021 thereunder, read with Schedule IV to the Companies
at 03.30 P.M. IST to transact the following business :- Act, 2013 (including any statutory modifications
or re-enactment(s) thereof for the time being in
1) To consider and adopt the audited financial
force) and applicable provisions of the Securities
statements of the Company for the year ended March
and Exchange Board of India (Listing Obligations
31, 2021 and the Reports of the Board of Directors
and Disclosure Requirements) Regulations, 2015 and
and Auditors thereon and the audited consolidated
based on the recommendation of the Nomination and
financial statements of the Company and the report
Remuneration Committee and approval of the Board
of the auditors thereon for the year ended March 31,
of Directors, Mrs. Preetha Reddy (DIN: 00001871) be
2021;
and is hereby appointed as an Independent Director
2) To declare final dividend on equity shares; of the Company for a term of five years with effect
from March 01, 2021 to February 28, 2026.“
3) To appoint a Director in place of Mr. D. K. Sen (DIN:
03554707), who retires by rotation and is eligible for 9) To consider and, if thought fit, to pass as a SPECIAL
re-appointment; RESOLUTION the following:
4) To appoint a Director in place of Mr. Hemant “RESOLVED THAT pursuant to the provisions of
Bhargava (DIN: 01922717), who retires by rotation Sections 149, 152 and any other applicable provisions
and is eligible for re-appointment; of the Companies Act, 2013 and the rules made
thereunder, read with Schedule IV to the Companies
5) To appoint a Director in place of Mr. M. V. Satish (DIN:
Act, 2013 (including any statutory modifications or
06393156), who retires by rotation and is eligible for
re-enactment(s) thereof for the time being in force)
re-appointment;
and other applicable provisions of the Securities and
6) To appoint a Director in place of Mr. R. Shankar Exchange Board of India (Listing Obligations and
Raman (DIN: 00019798), who retires by rotation and Disclosure Requirements) Regulations, 2015 and
is eligible for re-appointment; based on the recommendation of the Nomination
and Remuneration Committee and approval of the
7) To consider and, if thought fit, to pass as an
Board of Directors, Mr. Sanjeev Aga (DIN: 00022065)
ORDINARY RESOLUTION the following:
who was appointed as an Independent Director of
“RESOLVED THAT Mrs. Preetha Reddy (DIN: the Company for a term upto May 24, 2021 by the
00001871) who was appointed as an Additional Shareholders and in respect of whom the Company
Director and holds office upto the date of this Annual has received a notice in writing from a Member under
General Meeting of the Company, and is eligible for Section 160 of the Companies Act, 2013 proposing
appointment and in respect of whom the Company his candidature for the office of a Director be and is
has received a Notice in writing from a member under hereby re-appointed as an Independent Director of
the provisions of Section 160 of the Companies Act, the Company for a term of five years with effect from
2013 proposing her candidature for the office of May 25, 2021 to May 24, 2026.“
Director, be and is hereby appointed as a Director.”
10) To consider and, if thought fit, to pass, as a SPECIAL
8) To consider and, if thought fit, to pass as an RESOLUTION the following:
ORDINARY RESOLUTION the following:
“RESOLVED THAT pursuant to the provisions of
Sections 149, 152 and any other applicable provisions

58
of the Companies Act, 2013 and the rules made RESOLVED FURTHER THAT Mr. R. Shankar Raman
thereunder, read with Schedule IV to the Companies in his capacity as Whole-time Director, be paid
Act, 2013 (including any statutory modifications or remuneration as may be fixed by the Board, from time
re-enactment(s) thereof for the time being in force) to time, as prescribed under the Companies Act, 2013
and Regulation 17(1A) and applicable provisions of and within the limits approved by the members as per
the Securities and Exchange Board of India (Listing the details given in the explanatory statement.”
Obligations and Disclosure Requirements) Regulations,
13) To consider and, if thought fit, to pass as a SPECIAL
2015 and based on the recommendation of the
RESOLUTION the following:
Nomination and Remuneration Committee and
approval of the Board of Directors, Mr. Narayanan “RESOLVED THAT in supersession of the resolution
Kumar (DIN: 00007848) who was appointed as an no. 13 passed by the Members at the 75th Annual
Independent Director of the Company for a term upto General Meeting of the Company held on August
May 26, 2021 by the Shareholders and in respect of 13, 2020 in this regard and in accordance with
whom the Company has received a notice in writing the provisions of Sections 41, 42, 62 and other
from a Member under Section 160 of the Companies applicable provisions, if any of the Companies Act,
Act, 2013 proposing his candidature for the office 2013 (including any statutory modifications or
of a Director be and is hereby re-appointed as an re-enactments thereof for the time being in force)
Independent Director of the Company for a term of as amended from time to time, Foreign Exchange
five years with effect from May 27, 2021 to May 26, Management Act, 1999, Securities and Exchange
2026 and also continue as an Independent Director of Board of India (Issue of Capital and Disclosure
the Company after he attains the age of 75 years.“ Requirements) Regulations, 2018 (‘SEBI Regulations’),
Securities and Exchange Board of India (Listing
11) To consider and, if thought fit, to pass as an
Obligations and Disclosure Requirements) Regulations,
ORDINARY RESOLUTION the following:
2015, enabling provisions in the Memorandum
“RESOLVED THAT pursuant to the provisions and Articles of Association of the Company as also
of Sections 196, 197, 203 and other applicable provisions of any other applicable laws, rules and
provisions of the Companies Act, 2013 read with regulations (including any amendments thereto or
Schedule V of the said Act and the rules made re-enactments thereof for the time being in force)
thereunder, approval be and is hereby granted to the and subject to such approvals, consents, permissions
re-appointment of Mr. M. V. Satish (DIN: 06393156) and sanctions of the Securities and Exchange Board
as the Whole-time Director of the Company with of India (SEBI), Government of India (GOI), Reserve
effect from January 29, 2021 upto and including Bank of India (RBI) and all other appropriate and/
April 07, 2024. or concerned authorities, or bodies and subject
to such conditions and modifications, as may be
RESOLVED FURTHER THAT Mr. M. V. Satish
prescribed by any of them in granting such approvals,
in his capacity as Whole-time Director, be paid
consents, permissions and sanctions which may
remuneration as may be fixed by the Board, from time
be agreed to by the Board of Directors of the
to time, as prescribed under the Companies Act, 2013
Company (‘Board’) (which term shall be deemed to
and within the limits approved by the members as per
include any Committee which the Board may have
the details given in the explanatory statement.”
constituted or hereafter constitute for the time being
12) To consider and, if thought fit, to pass as an exercising the powers conferred on the Board by this
ORDINARY RESOLUTION the following: resolution), the Board be and is hereby authorized
to offer , issue and allot in one or more tranches,
“RESOLVED THAT pursuant to the provisions
to Investors whether Indian or Foreign, including
of Sections 196, 197, 203 and other applicable
Foreign Institutions, Foreign Institutional Investors,
provisions of the Companies Act, 2013, read with
Foreign Portfolio Investors, Foreign Venture Capital
Schedule V of the said Act and the rules made
Fund Investors, Venture Capital Funds, Non-resident
thereunder, approval be and is hereby granted
Indians, Corporate Bodies, Mutual Funds, Banks,
to the re-appointment of Mr. R. Shankar Raman
Insurance Companies, Pension Funds, Individuals or
(DIN: 00019798) as the Whole-time Director of the
otherwise, whether Shareholders of the Company
Company with effect from October 1, 2021 upto and
or not, through an issue of convertible bonds and/or
including September 30, 2026.
equity shares through depository receipts, including

59
NOTICE    ANNUAL REPORT 2020-21

by way of Qualified Institutions Placement (‘QIP’), RESOLVED FURTHER THAT the Equity Shares so
to Qualified Institutional Buyers (‘QIB’) in terms of issued shall rank pari passu with the existing Equity
Chapter VI of the SEBI Regulations, through one Shares of the Company in all respects.
or more placements of Equity Shares (hereinafter
RESOLVED FURTHER THAT the Equity Shares to be
collectively referred to as “Securities”), whether by
offered and allotted shall be in dematerialized form.
way of private placement or otherwise as the Board
may determine, where necessary in consultation with RESOLVED FURTHER THAT for the purpose of
the Lead Managers, Underwriters, Merchant Bankers, giving effect to any offer, issue or allotment of
Guarantors, Financial and/or Legal Advisors, Rating Securities, the Board, be and is hereby authorised on
Agencies/ Advisors, Depositories, Custodians, Principal behalf of the Company to do all such acts, deeds,
Paying/Transfer/Conversion agents, Listing agents, matters and things as it may, in absolute discretion,
Registrars, Trustees, Auditors, Stabilizing agents and deem necessary or desirable for such purpose,
all other Agencies/Advisors so that the total amount including without limitation, the determination of
raised through issue of the Securities shall not exceed the terms thereof, for entering into arrangements
INR 4500 Crore (Rupees Four Thousand Five Hundred for managing, underwriting, marketing, listing and
Crore) or US $600 Mn (US Dollars Six Hundred trading, to issue placement documents and to sign all
Million), if the value is higher. deeds, documents and writings and to pay any fees,
commissions, remuneration, expenses relating thereto
RESOLVED FURTHER THAT for the purpose of giving
and with power on behalf of the Company to settle
effect to the above, the Board be and is hereby also
all questions, difficulties or doubts that may arise in
authorised to determine the form, terms and timing
regard to such offer(s) or issue(s) or allotment(s) as it
of the issue(s), including the class of investors to
may, in its absolute discretion, deems fit.
whom the Securities are to be allotted, number of
Securities to be allotted in each tranche, issue price, RESOLVED FURTHER THAT the Board be and is
face value, premium amount in issue/ conversion/ hereby authorised to appoint Lead Manager(s) in
exercise/ redemption, rate of interest, redemption offerings of Securities and to remunerate them by
period, listings on one or more stock exchanges way of commission, brokerage, fees or the like and
in India or abroad as the Board may in its absolute also to enter into and execute all such arrangements,
discretion deems fit and to make and accept any agreements, memoranda, documents, etc. with Lead
modifications in the proposals as may be required by Manager(s) and to seek listing of such securities.
the authorities involved in such issue(s) in India and/or
RESOLVED FURTHER THAT the Company do apply
abroad, to do all acts, deeds, matters and things and
for listing of the new Equity Shares as may be issued
to settle any questions or difficulties that may arise in
with the BSE Limited and National Stock Exchange of
regard to the issue(s).
India Limited or any other Stock Exchange(s).
RESOLVED FURTHER THAT in case of QIP issue it
RESOLVED FURTHER THAT the Company do apply
shall be completed within 12 months from the date of
to the National Securities Depository Limited and/
passing of this resolution.
or Central Depository Services (India) Limited for
RESOLVED FURTHER THAT in case of QIP issue the admission of the Securities.
relevant date for determination of the floor price of
RESOLVED FURTHER THAT the Board be and is
the Equity Shares to be issued shall be -
hereby authorised to create necessary charge on
i) in case of allotment of equity shares, the date of such of the assets and properties (whether present or
meeting in which the Board decides to open the future) of the Company in respect of Securities and
proposed issue to approve, accept, finalize and execute facilities,
sanctions, undertakings, agreements, promissory
ii) in case of allotment of eligible convertible
notes, credit limits and any of the documents and
securities, either the date of the meeting in
papers in connection with the issue of Securities.
which the Board decides to open the issue of
such convertible securities or the date on which RESOLVED FURTHER THAT the Board be and is
the holders of such convertible securities become hereby authorised to delegate all or any of the powers
entitled to apply for the equity shares, as may be in such manner as they may deem fit.”
determined by the Board.

60
14) To consider and ratify the remuneration payable to [b] Since this General Meeting is held through VC/OAVM
Cost Auditors and for that purpose to pass, as an the physical attendance of members is dispensed with
ORDINARY RESOLUTION the following: and no proxies would be accepted by the Company
pursuant to the relevant MCA Circulars.
“RESOLVED THAT pursuant to Section 148 and
other applicable provisions, if any, of the Companies [c] No attendance slip/route map has been sent along
Act, 2013 and the Companies (Audit and Auditors) with this Notice of the Meeting as the meeting is held
Rules, 2014, the Company hereby ratifies the through VC/OAVM.
remuneration of R 13 lakhs plus applicable taxes
[d] Members who are Shareholders as on Thursday, July
and out of pocket expenses at actuals for travelling
29, 2021 can join the AGM 30 minutes before the
and boarding/lodging for the financial year ending
commencement of the AGM i.e at 03.00 P.M and
March 31, 2022 to M/s R. Nanabhoy & Co. Cost
till the time of the conclusion of the Meeting by
Accountants (Regn. No. 00010), who are appointed
following the procedure mentioned in this Notice.
as Cost Auditors to conduct the audit of cost records
maintained by the Company for the Financial Year [e] The attendance through VC/OAVM is restricted
2021-22.” and hence members will be allowed on first come
first serve basis. However, attendance of Members
By Order of the Board of Directors
holding more than 2% of the shares of the Company,
For LARSEN & TOUBRO LIMITED, Institutional Investors as on Thursday, July 29, 2021
and Directors and Key Managerial Personnel, the
SIVARAM NAIR A
Chairpersons of the Audit Committee, Nomination
COMPANY SECRETARY
and Remuneration Committee, the Stakeholders
M.NO – F3939
Relationship Committee and Auditors will not be
Mumbai, June 18, 2021 restricted on first come first serve basis.

Notes: [f] Members attending the Meeting through VC/OAVM

[a] In view of the COVID-19 pandemic and the need will be counted for the purposes of reckoning of
for ensuring social distancing, the Government of Quorum under Section 103 of the Companies Act,
India, Ministry of Corporate Affairs (“MCA”) allowed 2013.
conducting Annual General Meeting through video [g] In line with the MCA Circulars and the SEBI
conferencing (VC) or other audio-visual means Circulars, the Notice calling the AGM has been
(OAVM) without the physical presence of Members uploaded on the website of the Company
at a common venue. Accordingly, MCA issued at www.larsentoubro.com. The Notice
Circular No. 14/2020 dated April 08, 2020, Circular can also be accessed from the websites of
No. 17/2020 dated April 13, 2020, Circular No. the Stock Exchanges i.e. BSE Limited and
20/2020 dated May 05, 2020 (“MCA Circulars”), National Stock Exchange of India Limited at
prescribing the procedures and manner of conducting www.bseindia.com and www.nseindia.com
the Annual General Meeting through VC/OAVM. respectively and is also available on the website of
MCA vide its Circular No. 02/2021 dated January 13, NSDL at https://evoting.nsdl.com
2021 extended the time line for holding of Annual
General Meetings through VC/OAVM till December [h] The information required to be provided under the
31, 2021. Securities and Exchange Board of India SEBI (Listing Obligations and Disclosure Requirement
(“SEBI”) also vide its Circular dated May 12, 2020, Regulations), 2015 and the Secretarial Standards
permitted holding of Annual General Meetings on General Meetings, regarding the Directors who
through VC/OAVM which was further extended by are proposed to be appointed/re-appointed and the
its circular dated January 15, 2021 (“SEBI Circulars”) relative Explanatory Statement pursuant to Section
till December 31, 2021. In compliance with the 102 of the Companies Act, 2013, in respect of the
applicable provisions of the Companies Act, 2013, business under items 7 to 14 set out above are
MCA Circulars and applicable provisions of the SEBI annexed hereto.
Circulars, the 76th Annual General Meeting (AGM) of [i] The Register of Members of the Company will be
the Members will be held through VC/ OAVM. Hence, closed from Friday, July 30, 2021 to Thursday,
Members can attend and participate in the AGM August 05, 2021 (both days inclusive).
through VC/OAVM only.

61
NOTICE    ANNUAL REPORT 2020-21

[j] Members holding shares in physical form are to follow the process as guided to capture
requested to furnish bank details, email address, the email address and mobile number for
change of address etc. to KFin Technologies Private sending the soft copy of the notice. In case
Limited (“KFintech”), Selenium Tower B, Plot 31-32, of any queries, Shareholders may write to
Gachibowli, Financial District, Nanakramguda, [email protected]
Hyderabad 500 032, who are the Company’s Registrar
and Share Transfer Agents so as to reach them latest 4. Members may also visit the website of the
by Thursday, July 29, 2021, in order to take note Company www.larsentoubro.com or the
of the same. In respect of members holding shares in website of NSDL at https://evoting.nsdl.com
electronic mode, the details as would be furnished by for downloading the Annual Report and Notice
the Depositories as at the close of the aforesaid date of the AGM.
will be considered by the Company. Hence, members 5. Members may send an e-mail request to the
holding shares in demat mode should update their email id [email protected] along
records at the earliest. with scanned copy of the signed request letter
[k] Considering the difficulties caused due to the Covid- providing the email address, mobile number, self-
19 pandemic, MCA and SEBI have dispensed with the attested PAN copy and Client Master copy in case
requirement of printing and sending physical copies of electronic folio and copy of share certificate in
of the Annual Report and the Notice of this Meeting case of physical folio.
and the Annual Reports have been sent via email to
[m] In terms of the MCA Circulars and in the view of
all those members who have registered their email ids
the Board of Directors, all matters included in this
with the Company or the Registrar and Transfer Agent
Notice are unavoidable and hence are proposed
or the Depositories or the Depository Participants as
for seeking approval at this AGM. All documents
on Friday, July 02, 2021.
referred to in the accompanying Notice and the
[l] Those Members who have not yet registered their Explanatory Statement will be available for inspection
email address are requested to get their email electronically without any fee from the date of
addresses registered by following the procedure given circulation of this Notice up to the date of AGM.
below: Members seeking to inspect such documents can
send an email to [email protected].
1. Those Members who have not registered their
email address and mobile nos. including address The Register of Directors and Key Managerial
and bank details may please contact and Personnel and their shareholding maintained under
validate/update their details with the Depository Section 170 of the Companies Act, 2013, the Register
Participant in case of shares held in electronic of Contracts or Arrangements in which the directors
form and with Registrar and Transfer Agents, are interested, maintained under Section 189 of the
KFintech in case the shares are held in physical Act, and the relevant documents referred to in the
form. Notice will be available electronically for inspection by
2. Members who have already registered their the members during the AGM.
email addresses are requested to get their Pursuant to Section 124 of the Companies Act, 2013
email addresses validated with their Depository the unpaid dividends that are due for transfer to the
Participants / the Company’s Registrar and Share Investor Education and Protection Fund are as follows:
Transfer Agent, KFintech, to enable servicing
of notices / documents / Annual Reports Dividend Date of For the Due for
electronically to their email address. No. Declaration year ended Transfer on
3. Members who have not registered their 85 22.08.2014 31.03.2014 27.09.2021
email address and in consequence the 86 09.09.2015 31.03.2015 15.10.2022
Annual Report, Notice of AGM and e-voting
87 26.08.2016 31.03.2016 02.10.2023
notice could not be served may temporarily
get their email address and mobile number 88 22.08.2017 31.03.2017 27.09.2024
registered with KFintech, by clicking the link: 89 23.08.2018 31.03.2018 28.09.2025
https://ris.kfintech.com/clientservices/mobilereg/mobileemailreg.aspx
for sending the same. Members are requested 90 01.08.2019 31.03.2019 06.09.2026

62
Dividend Date of For the Due for tax at source from dividend paid to Shareholders
No. Declaration year ended Transfer on at the prescribed rates. For the prescribed rates for
91 18.03.2020 31.03.2020 24.04.2027 various categories, the Shareholders are requested to
refer to the Income Tax Act, 1961. The Shareholders
92 13.08.2020 31.03.2020 18.09.2027
are requested to update their PAN with the Company/
93 28.10.2020 31.03.2021 02.12.2027
KFintech (in case of shares held in physical mode) and
Members who have not encashed their dividend with the Depositories/ Depository Participants (in case
warrants pertaining to the aforesaid years of shares held in demat mode).
may approach the Company/its Registrar, for
Resident Shareholders:
obtaining payments thereof atleast 20 days
before they are due for transfer to the said fund. For Resident Shareholders, who have provided PAN,
tax shall be deducted at source under Section 194 of
Final Dividend if approved by the Members at this the Income Tax Act, 1961 at 10% on the amount of
Meeting will be directly credited to the bank accounts dividend.
of the Shareholders as on the Book Closure Date
i.e Thursday, July 29, 2021 for shares held in demat Tax shall be deducted at source at 20% wherein–
form and Thursday, August 05, 2021 for shares held (a) Shareholders do not have PAN / have not
in physical form, as per the details available with the registered their valid PAN details in their account/
Company within the prescribed timelines. In case with the Company/KFintech),
of Shareholders who have not registered their bank
details with the Company, dividend warrants/demand (b) Shareholders are classified as specified persons
drafts will be sent to them. under section 206AB

[n] Investor Grievance Redressal: No tax shall be deducted on the dividend payable to a
resident individual if the total dividend to be received
The Company has designated an exclusive e-mail id by the resident Shareholders during Financial Year
viz. [email protected] to enable Investors to 2021-22 does not exceed R 5,000. In cases where
register their complaints, if any. the Shareholder provides Form 15G / Form 15H and
[o] Adhering to the various requirements set out in the meets all the required eligibility conditions, no tax will
Investor Education and Protection Fund Authority be deducted at source.
(Accounting, Audit, Transfer and Refund) Rules, Apart from above cases, following categories of
2016, as amended, the Company has during the Shareholders are exempt from tax deduction at
financial year 2020-21 transferred to the IEPF source:
Authority all shares in respect of which dividend
has remained unpaid or unclaimed for seven (a) Life Insurance Corporation of India [clause (a) to
consecutive years or more as on the due date of 2nd proviso to section 194]
transfer. Details of shares transferred to IEPF Authority
(b) General Insurance Corporation of India/ The
are available on the website of the Company
New India Assurance Company Ltd / United India
and the same can be accessed through the link:
Insurance Company Ltd / The Oriental Insurance
http://investors.larsentoubro.com/resources.aspx.
Company Ltd / National Insurance Company Ltd
The said details have also been uploaded on the
[clause (b) to 2nd proviso to section 194]
website of the IEPF Authority and the same can be
accessed through the link: www.iepf.gov.in. (c) Any other Insurer in respect of any shares owned
by it or in which it has full beneficial interest
[p] SEBI has decided that securities of listed companies
[clause (c) to 2nd proviso to section 194]
can be transferred only in dematerialized form with
effect from April 1, 2019. In view of the above and to (d) Dividend income credited/paid to a “business
avail various benefits of dematerialisation, members trust”, as defined in clause (13A) of section
are advised to dematerialize shares held by them in 2, by a special purpose vehicle referred to in
physical form. the Explanation to clause (23FC) of section 10;
[clause (d) to 2nd proviso to section 194]
[q] Dividend income is taxable in the hands of
Shareholders and the Company is required to deduct

63
NOTICE    ANNUAL REPORT 2020-21

The following payees are also not subject to TDS in 4. Self-declaration by the non-resident Shareholder
view of the provisions of sections 196, 197A of the as to:
Income Tax Act, 1961 and CBDT notification:
• Eligibility to claim tax treaty benefits
(a) Government [section 196(i)] based on the tax residential status of the
Shareholder, including having regard to the
(b) Reserve Bank of India [section 196(ii)]
Principal Purpose Test (if any), introduced in
(c) a corporation established by or under a Central the applicable tax treaty with India;
Act which is, under any law for the time being
• No Permanent Establishment / fixed base in
in force, exempt from income-tax on its income
India in accordance with the applicable tax
[section 196(iii)]
treaty;
(d) Mutual Fund [section 196(iv)]
• Shareholder being the beneficial owner of
(e) any person for, or on behalf of, the New Pension the dividend income to be received on the
System Trust referred to in section 10(44) equity shares.
[subsection 1E to section 197A]
In case of non-resident Shareholder, having
(f) Category I or a Category II Alternative Investment permanent establishment in India, if they are classified
Fund (registered with SEBI as per section 115UB) as “specified person” as per the provision of section
as per Notification 51/2015 206AB, tax will be deducted at rate higher of

Non-resident Shareholders: (a) twice the rate as per the provisions of Income Tax
For Foreign Portfolio Investor (FPI) category Act, 1961; or
Shareholders, taxes shall be deducted at source under (b) twice the rate in force; or
Section 196D of the Act at 20% (plus applicable
surcharge and cess). (c) 5%.

For other Non-resident Shareholders, taxes are General:

required to be deducted in accordance with the In order to enable us to determine the appropriate
provisions of Section 195 of the Income Tax Act, tax rate at which tax has to be deducted at source
1961, at the rates in force. As per the relevant under the respective provisions of the Income-tax
provisions of the Income tax Act, 1961, the tax shall Act, 1961, we request Resident Shareholders and
be deducted at the rate of 20% (plus applicable Non-Resident Shareholders to upload the details
surcharge and cess) on the amount of dividend and documents referred to in this Notice in the
payable to them. format provided by us and as applicable to you
on the link https://ris.KFintech.com/form15/.
FPI and the non-resident Shareholder have the option
No communication on the tax determination /
to be governed by the provisions of the Double Tax
deduction shall be entertained beyond 5.00 p.m on
Avoidance Agreement (DTAA) between India and the
Wednesday, July 28, 2021.
country of tax residence of the Shareholder, if they
are more beneficial to them. Deduction of tax at a rate lower than statutory
rate or no deduction of tax shall depend upon the
To avail benefit of rate of deduction of tax at source
completeness of the documents and the satisfactory
under DTAA, such non-resident Shareholders/FPI will
review of the forms and the documents, submitted by
have to provide the following:
Resident Shareholders, to the Company/KFintech.
1. Self-attested copy of the PAN allotted by the
Please note that the Company is not obligated
Indian Income Tax authorities;
to apply the beneficial DTAA rates at the time of
2. Tax residency certificate from the jurisdictional tax tax deduction/withholding on dividend amounts.
authorities confirming residential status for FY Application of beneficial DTAA Rate shall depend
2021-22 upon the completeness and satisfactory review of the
documents submitted, by Non- Resident Shareholder/
3. Declaration by the non- resident in prescribed
FPI, to the Company/KFintech.
form 10F

64
Tax deducted by the Company is final and the be replied by the Company suitably. Please note that
Company shall not refund /adjust the tax so deducted members queries/ questions will be responded to only
subsequently. if the Shareholder continues to hold the shares as on
the cut-off date i.e Thursday, July 29, 2021.
[r] Instruction for attending the meeting through
VC: Members who would like to express their views or ask
questions during the AGM may register themselves
Convenience of different persons positioned in
as a speaker by sending their request from their
different time zones has been kept in mind before
registered email address mentioning their name, DP
scheduling the time for this Meeting.
ID and Client ID/folio number, PAN, mobile number
The Company has appointed National Securities to [email protected] on or before
Depository Limited (NSDL), to provide VC/OAVM Monday, August 2, 2021. Those Members who have
facility for the AGM and the attendant enablers for registered themselves as a speaker and have received
conducting of the e-AGM a confirmation from the Company will be allowed to
express their views/ask questions during the AGM.
Members will be provided with a facility to attend The Company reserves the right to restrict the number
the AGM through VC/OAVM through the NSDL of speakers depending on the availability of time for
e-voting system. Members may access the meeting the AGM.
by following the steps mentioned in this Notice for
“Access to NSDL e-voting system”. After successful Members who are not able to join this Meeting over
login, you can see the link of VC/OAVM placed under VC/OAVM will be able to view the live webcast of
Join General Meeting menu against the Company proceedings of AGM by logging on the e-voting
name. You are requested to click on the VC/OAVM website of NSDL by following remote e-voting
link placed under Join General Meeting menu. instructions mentioned in the notice.

Please note that the members who do not have the [s] E-voting
User ID and Password for e-voting or have forgotten The businesses as set out in the Notice may be
their User ID and Password may retrieve the same by transacted through electronic voting system and the
following the instructions mentioned in this notice. Company will provide a facility for voting by electronic
Members can participate in AGM through smart means. In compliance with the provisions of Section
phone/laptop. However, for better experience and 108 of the Act, read with Rule 20 of the Companies
smooth participation it is advisable to join the (Management and Administration) Rules, 2014,
Meeting using Google Chrome, by Laptops connected Standard 2 of the Secretarial Standards on General
through broadband. Meetings and Reg. 44 of the SEBI (Listing Obligations
and Disclosure Requirement) Regulations, 2015, the
Further Members will be required to use Internet with Company is pleased to offer the facility of voting
a good speed to avoid any disturbance during the through electronic means. The said facility of casting
meeting. the votes by the members using electronic means will
be provided by NSDL.
Please note that Participants connecting from Mobile
Devices or Tablets or through Laptop via Mobile A person whose name is recorded in the register
Hotspot may experience Audio/Video loss due to of members or in the register of beneficial owners
fluctuation in their respective network. It is therefore maintained by the depositories as on the cut-off date
recommended to use Stable Wi-Fi or LAN Connection of Thursday, July 29, 2021 shall be entitled to avail
to mitigate any kind of aforesaid glitches. the facility of remote e-voting or e-voting on the
day of the Meeting. Persons who are not members
Members seeking any information with regard to as on the cut-off date should treat this notice for
the accounts or any matter to be placed at the information purposes only.
AGM, are requested to write to the Company on
or before Thursday, July 29, 2021 through email on The Notice will be displayed on the website of the
[email protected]. The same will Company and on the website of NSDL.

65
NOTICE    ANNUAL REPORT 2020-21

The members who have cast their vote through the AGM and to access the VC/OAVM facility at the
remote e-voting prior to the AGM may also attend AGM are as follows:
the AGM through VC/OAVM but shall not be entitled
Step 1: Access to NSDL e-voting system
to cast their vote again.
Step 2: Cast your vote electronically and join virtual
The remote e-voting period commences on Monday,
meeting on NSDL e-voting system.
August 02, 2021 at 9.00 A.M. and ends on
Wednesday, August 04, 2021 at 05.00 P.M. During Details on Step 1 are mentioned below:
this period, members of the Company holding shares I. Login method for remote e-voting and
either in physical or dematerialised form, as on the joining virtual meeting for Individual
cut-off date of Thursday, July 29, 2021, may cast their Shareholders holding securities in demat
vote by remote e-voting. The remote e-voting module mode.
shall be disabled by NSDL for voting thereafter.
Pursuant to SEBI circular no. SEBI/HO/CFD/CMD/
Instructions for e-voting during the AGM: CIR/P/2020/242 dated December 9, 2020 on
“e-voting facility provided by Listed Companies”,
The e-voting window shall be activated upon
e-voting process has been enabled to all the
instructions of the Chairman during the AGM
individual demat account holders, by way of
proceedings.
single login credential, through their demat
Only those Shareholders, who are present in the AGM accounts / websites of Depositories / DPs in order
and have not casted their vote on the Resolutions to increase the efficiency of the voting process.
through remote e-voting and are otherwise not Individual demat account holders would be able
barred from doing so, shall be eligible to vote through to cast their vote without having to register again
e-voting system available during the AGM. with the e-voting service provider (ESP) thereby
not only facilitating seamless authentication but
The Members, whose names appear in the Register also ease and convenience of participating in
of Members / list of Beneficial Owners as on e-voting process.
Thursday, July 29, 2021, i.e. the commencement
of the book closure date, are entitled to vote on Shareholders are advised to update their mobile
the Resolutions set forth in this Notice. Eligible number and e-mail ID with their DPs in order to
members who have acquired shares after the access e-voting facility.
despatch of the Annual Report and holding Type of Login Method
shares as of the cut-off date i.e. Thursday, July Shareholders
29, 2021, may obtain the login ID and password Individual A. NSDL IDeAS facility
by sending a request at [email protected] or Shareholders If you are already registered, follow the
to the Company at [email protected]. holding below steps:
However, if you are already registered with NSDL securities in
1. Visit the e-Services website of NSDL. Open
for remote e-voting, then you can use your existing demat mode
web browser by typing the following URL:
user ID and password for casting your vote. If you with NSDL
https://eservices.nsdl.com/ either on a
don’t remember your password, you can reset your Personal Computer or on a mobile.
password by using “Forgot User Details/Password” 2. Once the home page of e-Services is
or “Physical User Reset Password” option available launched, click on the “Beneficial
on https://evoting.nsdl.com or call on toll free no. Owner” icon under “Login” which is
1800 1020 990 and 1800 22 44 30. available under “IDeAS” section.
Members are requested to follow the instructions 3. A new screen will open. You will have to
enter your User ID and Password. After
given in this notice to cast their votes through
successful authentication, you will be able
e-voting. to see e-voting services.
The detailed steps on the process and manner on the
process and manner for remote e-voting/e-voting at

66
Type of Login Method Type of Login Method
Shareholders Shareholders
4. Click on “Access to e-voting” appearing 2. After successful login of Easi/Easiest the
on the left hand side under e-voting user will be also able to see the e-voting
services and you will be able to see Menu. The Menu will have links of ESP
e-voting page. i.e. NSDL portal. Click on NSDL to cast
5. Click on options available against your vote.
company name or e-voting service 3. If the user is not registered for Easi/
provider - NSDL and you will be Easiest, option to register is available at
re-directed to NSDL e-voting website https://web.cdslindia.com/myeasi/Registration/EasiRegistration.
for casting your vote during the remote Alternatively, the user can directly access
e-voting period or joining virtual meeting e-voting page by providing Demat
and e-voting during the meeting. Account Number and PAN from a link
If you are not registered, follow the in www.cdslindia.com home page.
below steps: The system will authenticate the user by
sending OTP on registered Mobile and
1. Option to register is available at
e-mail as recorded in the demat Account.
https://eservices.nsdl.com.
After successful authentication, user
2. Select “Register Online for IDeAS” Portal will be provided links for the respective
or click at ESP i.e. NSDL where the e-voting is in
https://eservices.nsdl.com/SecureWeb/IdeasDirectReg.jsp progress.
3. Please follow steps given in points 1-5. Individual 1. You can also login using the login
B. e-voting website of NSDL Shareholders credentials of your demat account
1. Open web browser by typing the (holding through your DP registered with NSDL /
following URL: https://evoting.nsdl.com securities in CDSL for e-voting facility.
either on a personal computer or on a demat mode) 2. Once logged-in, you will be able to
mobile phone. logging see e-voting option. Once you click on
through their e-voting option, you will be redirected
2. Once the home page of e-voting system is depository
launched, click on the icon “Login” which to NSDL / CDSL Depository site after
participants successful authentication, wherein you
is available under ‘Shareholder/Member’
section. can see e-voting feature.
3. A new screen will open. You will have to 3. Click on options available against
enter your User ID (i.e. your sixteen digit company name or e-voting service
demat account number held with NSDL), provider - NSDL and you will be redirected
Password / OTP and a Verification Code as to e-voting website of NSDL for casting
shown on the screen. your vote during the remote e-voting
period or joining virtual meeting and
4. After successful authentication, you will e-voting during the meeting.
be redirected to NSDL website wherein
you can see e-voting page. Click on Important note: Members who are unable to
options available against company name retrieve User ID / Password are advised to use
or e-voting service provider - NSDL Forgot User ID and Forgot Password option
and you will be redirected to e-voting available at respective websites.
website of NSDL for casting your vote
during the remote e-voting period or Helpdesk for Individual Shareholders holding
joining virtual meeting and e-voting securities in demat mode for any technical
during the meeting. issues related to login through Depository
Individual 1. Existing users who have opted for Easi i.e. NSDL and CDSL.
Shareholders / Easiest, can login through their user
holding id and password. Option will be made Login type Helpdesk details
securities in available to reach e-voting page without
Securities Please contact NSDL helpdesk by sending a
demat mode any further authentication. The URL for
with CDSL users to login to Easi/Easiest is held with request at [email protected] or call at toll
https://web.cdslindia.com/myeasi/home/login or NSDL free no.: 1800 1020 990 and 1800 22 44 30
www.cdslindia.com and click on New
System Myeasi.

67
NOTICE    ANNUAL REPORT 2020-21

Login type Helpdesk details Manner of holding Your User ID is:

Securities Please contact CDSL helpdesk by sending a shares i.e. Demat
held with request at [email protected] (NSDL or CDSL) or
CDSL or contact at 022-23058738 or Physical
022-23058542-43 For Members who hold 16 Digit Beneficiary ID
shares in demat account
II. Login method for e-voting and joining For example, if your
with CDSL
virtual meeting for Shareholders other than Beneficiary ID is
Individual Shareholders holding securities 12**************
in demat mode and Shareholders holding then your user ID is
securities in physical mode. 12**************
How to Log-in to NSDL e-voting website? For Members holding EVEN Number followed
shares in Physical Form by Folio Number
1. Visit the e-voting website of NSDL. Open registered with the
web browser by typing the following URL: company.
https://evoting.nsdl.com either on a
personal computer or on a mobile. For example, if EVEN is
123456 and folio number
2. Once the home page of e-voting system is is 001*** then user ID is
launched, click on the icon “Login” which 123456001***
is available under “Shareholders / Member”
section. 6. Your password details are given below:

3. A new screen will open. You will have to a) If you are already registered for e-voting,
enter your User ID, your Password / OTP and then you can use your existing password
a Verification Code as shown on the screen. to login and cast your vote.

4. Alternatively, if you are registered for b) If you are using NSDL e-voting system
NSDL eservices i.e. IDeAS, you can log-in for the first time, you will need to
at https://eservices.nsdl.com/ with your retrieve the ‘initial password’ which was
existing IDeAS login. Once you log-in to communicated to you by NSDL. Once
NSDL eservices after using your log-in you retrieve your ‘initial password’, you
credentials, click on e-voting and you need to enter the ‘initial password’ and
can proceed to Step 2 i.e. cast your vote the system will force you to change your
electronically. password.

5. Your User ID details are given below: c) How to retrieve your ‘initial password’?
i) If your e-mail ID is registered in
Manner of holding Your User ID is:
your demat account or with the
shares i.e. Demat
Company, your ‘initial password’
(NSDL or CDSL) or
is communicated to you on your
Physical
e-mail ID. Trace the e-mail sent to
For Members who hold 8 Character DP ID you from NSDL in your mailbox from
shares in demat account followed by 8 Digit [email protected]. Open the e-mail
with NSDL Client ID and open the attachment i.e. a .pdf
For example, if your file. Open the .pdf file. The password
DP ID is IN300*** and to open the .pdf file is your 8-digit
Client ID is 12****** client ID for NSDL account, last 8
then your user ID is digits of client ID for CDSL account
IN300***12****** or folio number for shares held in

68
physical form. The .pdf file contains during the General Meeting. For joining virtual
your ‘User ID’ and your ‘initial meeting, you need to click on “VC/OAVM” link
password’. placed under “Join General Meeting”.
ii) In case you have not registered your 3. Now you are ready for e-voting as the Voting
e-mail address with the Company/ page opens.
Depository, please follow instructions
4. Cast your vote by selecting appropriate options
mentioned below in this notice.
i.e. assent or dissent, verify / modify the number
7. If you are unable to retrieve or have not of shares for which you wish to cast your vote
received the ‘initial password’ or have and click on “Submit” and also “Confirm” when
forgotten your password: prompted.
a) Click on “Forgot User Details / 5. Upon confirmation, the message “Vote cast
Password?” (If you are holding successfully” will be displayed and you will
shares in your demat account with receive a confirmation by way of a SMS on your
NSDL or CDSL) option available on registered mobile number from depository.
https://evoting.nsdl.com.
6. You can also take the printout of the votes cast
b) Click on “Physical User Reset by you by clicking on the print option on the
Password?” (If you are holding shares confirmation page.
in physical mode) option available on
7. Once you confirm your vote on the resolution,
https://evoting.nsdl.com.
you will not be allowed to modify your vote.
c) If you are still unable to get
General Guidelines for Shareholders
the password by aforesaid two
options, you can send a request at 1. It is strongly recommended not to share your
[email protected] mentioning password with any other person and take utmost
your demat account number / folio care to keep your password confidential. Login
number, your PAN, your name and your to the e-voting website will be disabled upon
registered address. five unsuccessful attempts to key in the correct
password. In such an event, you will need to go
d) Members can also use the one-time through the “Forgot User Details/Password?” or
password (OTP) based login for casting “Physical User Reset Password?” option available
the votes on the e-voting system of on https://evoting.nsdl.com to reset the
NSDL. password.
8. After entering your password, click on Agree 2. In case of any queries relating to e-voting
to “Terms and Conditions” by selecting on you may refer to the FAQs for Shareholders
the check box. and e-voting user manual for Shareholders
9. Now, you will have to click on “Login” available at the download section of
button. https://evoting.nsdl.com or call on toll free
no.: 1800 1020 990 and 1800 22 44 30 or send
10. After you click on the “Login” button, a request at [email protected].
home page of e-voting will open.
3. Members may send a request to
Details on Step 2 are mentioned below: [email protected] for procuring user id and
How to cast your vote electronically on NSDL e-voting password for e-voting by providing demat
system? account number / Folio number, client master
or copy of Consolidated Account statement,
1. After successful login at Step 1, you will be able
PAN (self attested scanned copy of PAN card),
to see all the companies “EVEN” in which you
AADHAR (self-attested scanned copy of Aadhar
are holding shares and whose voting cycle and
Card). If you are an Individual Shareholder
General Meeting is in active status.
holding securities in demat mode, you are
2. Select “EVEN 116297” to cast your vote during requested to refer to the login method explained
the remote e-voting period and casting your vote above.

69
NOTICE    ANNUAL REPORT 2020-21

Members who need assistance before or during the its Registered Office as well as Corporate Office
AGM, can contact NSDL on [email protected] / immediately after the declaration of the result by the
1800 1020 990 and 1800 22 44 30 or contact Amit Chairman or any person authorised by him in writing
Vishal at [email protected] or Pallavi Mhatre at and will be communicated to the Stock Exchanges.
[email protected]
EXPLANATORY STATEMENT
The Company has appointed Mr. S. N. As required by Section 102 of the Companies Act, 2013,
Ananthasubramanian, Practicing Company Secretary, the following Explanatory Statement sets out material
(Membership No. 4206, COP No. 1774) or failing him facts relating to the business under items 7 to 14 of the
Mrs. Aparna Gadgil, Practicing Company Secretary, accompanying Notice dated June 18, 2021.
(Membership No. 14713, COP No. 8430), to act as
the Scrutinizer for conducting the e-voting process in Item No. 7 & 8:
a fair and transparent manner. On the recommendation of the Nomination &
Remuneration Committee, the Board of Directors
Institutional Shareholders (i.e. other than individuals,
appointed Mrs. Preetha Reddy (DIN: 00001871) as an
HUF, NRI, etc.) are required to send scanned copy
Additional Director with effect from March 01,2021.
(PDF/JPG format) of the relevant Board Resolution/
Authority letter etc., together with attested specimen In terms of Section 161(1) of the Companies Act, 2013,
signature of the duly authorized signatory(ies) who Mrs. Reddy holds office as additional director upto the
are authorized to vote, to the Scrutinizer through date of this Annual General Meeting. The Company has
e-mail to [email protected], with a copy received a notice in writing from a Shareholder under
marked to [email protected]. Section 160 of the Companies Act, 2013, proposing her
candidature for the office of Director of the Company.
In case of any queries, please visit Help and Frequently
Asked Questions (FAQs) section available at evoting On the recommendation of the Nomination &
website https://evoting.nsdl.com. Remuneration Committee, the Board of Directors
appointed Mrs. Preetha Reddy (DIN: 00001871) as an
Based on the report received from the Scrutinizer,
Independent Director of the Company with effect from
the Company will submit within 2 working days to
March 01, 2021 upto and including February 28, 2026,
the stock exchanges details of the voting results
subject to the approval of the Shareholders in the Annual
as required under Reg. 44(3) of the SEBI (Listing
General Meeting.
Obligations and Disclosure Requirements) Regulations,
2015. In the opinion of the Board, Mrs. Reddy fulfils the
conditions specified in the Companies Act, 2013 and
A Member can opt for only one mode of voting i.e.
rules made thereunder and the SEBI (Listing Obligations
either through remote e-voting or e-voting at the
and Disclosure Requirements) Regulations, 2015 for her
Meeting. If a Member has cast his vote by remote
appointment as an Independent Director of the Company
e-voting then he will not be eligible to vote at the
and is independent of the management. A copy of the
Meeting.
letter for appointment of Mrs. Reddy as an Independent
The Scrutinizer will submit his report to the Chairman Director setting out the terms and conditions would be
after completion of the scrutiny. The result of the available for inspection in the manner specified in the
voting on the Resolutions at the Meeting shall be Notice up to the date of the Annual General Meeting.
announced by the Chairman or any other person
Mrs. Preetha Reddy holds a Bachelor’s degree in Science
authorized by him immediately after the results are
and a Masters’ in Public Administration. She was conferred
declared.
the degree of Doctor of Science (Honoris Causa) by The
Facility to cast vote through e-voting will be made Tamil Nadu Dr. MGR Medical University in recognition of
available on the Video Conferencing screen and will her outstanding work in the field of healthcare.
be activated once the same is announced by the
She is the Vice Chairperson of the Apollo Hospitals Group,
Chairman during the Meeting.
Asia’s foremost integrated healthcare provider. She is
The results declared alongwith the Scrutinizer’s widely recognized for her contributions in making high
report, will be hosted on the website of the Company quality healthcare accessible to millions across the country.
www.larsentoubro.com and on the website of
In addition, Mrs. Preetha Reddy works with industry
NSDL at https://evoting.nsdl.com and will be
bodies and the Government of India to advance policy
displayed on the Notice Board of the Company at

70
decisions on healthcare. She was a Founding Member Remuneration Committee approved the re-appointment
of the Quality Council of India and under her guidance, of Mr. Aga as an Independent Director of the Company
teams from Apollo Hospitals worked with the Government for a second and final term of five years with effect from
of India in introducing the NABH. In 2013, along with Dr. May 25, 2021 upto May 24, 2026 based on his skills,
Prathap C Reddy, she had championed the establishment experience, knowledge and report of his performance
of NATHEALTH – Healthcare Federation of India. She was evaluation. His re-appointment is subject to the approval
the President of NATHEALTH for the year 2020-2021. of the Shareholders at this Annual General Meeting by
way of a Special Resolution.
In recognition of Apollo delivering outstanding medical
care during the COVID-19 outbreak, Mrs. Preetha Reddy The Company has received a notice in writing from
was awarded the Economic Times Businesswoman of the a Shareholder under Section 160 of the Companies
Year award. She was also conferred with the ‘Healthcare Act, 2013, proposing his candidature for the office of
Personality of the Year Award’ by FICCI for her farsighted Independent Director of the Company.
vision, exemplary work and notable contributions to the
In the opinion of the Board, Mr. Aga fulfils the conditions
fields of healthcare and social science.
specified in the Companies Act, 2013 and rules made
Mrs. Preetha Reddy was conferred the ‘ABLF Award for thereunder and LODR Regulations for his re-appointment
Business Courage’ by the Asian Business Leaders Forum as an Independent Director of the Company and is
(ABLF). She is also a recipient of the Lifetime Achievement independent of the management. A copy of the letter for
award for distinguished service in the field of Social re-appointment of Mr. Aga as an Independent Director
Science conferred by the Loyola Forum for Historical setting out the terms and conditions would be available
Research. She was awarded the NHRDN ‘People CEO for inspection in the manner specified in the Notice up to
Awards - Women Leadership’ by The National HRD the date of the Annual General Meeting.
Network.
The Board considers that his association would be
The Board considers that her association would be of of immense benefit to the Company as it has been
immense benefit to the Company and it is desirable to beneficial in the past and it is desirable to avail services
avail services of Mrs. Reddy as an Independent Director. of Mr. Aga as an Independent Director. Accordingly,
Accordingly, the Board recommends the resolution set out the Board recommends the resolution in relation to the
at Item No. 7 in relation to the appointment of Mrs. Reddy re-appointment of Mr. Aga as an Independent Director, for
as a Director, for the approval by the Shareholders of the the approval by the Shareholders of the Company.
Company. The Board also recommends the resolution set
Except Mr. Sanjeev Aga, being the appointee, none of the
out at Item No. 8 in relation to the appointment of Mrs.
Directors and Key Managerial Personnel of the Company
Reddy as an Independent Director, for the approval by the
and their relatives are concerned or interested in the
Shareholders of the Company.
resolution set out at Item No. 9
Except Mrs. Reddy, being the appointee, none of the
Item No. 10
Directors and Key Managerial Personnel of the Company
and their relatives are concerned or interested in the Mr. Narayanan Kumar (DIN: 00007848) was appointed
resolutions set out at Item No. 7 & 8. as an Independent Director of the Company with effect
from May 27, 2016 upto May 26, 2021. Pursuant to the
Item No. 9 provisions of the Companies Act, 2013 and SEBI (Listing
Mr. Sanjeev Aga (DIN: 00022065) was appointed as an Obligations and Disclosure Requirements) Regulations,
Independent Director of the Company with effect from 2015, (“LODR Regulations”) an Independent Director
May 25, 2016 upto May 24, 2021. Pursuant to the shall hold office for a term of five consecutive years
provisions of the Companies Act, 2013 and SEBI (Listing on the Board of the Company and shall be eligible for
Obligations and Disclosure Requirements) Regulations, re-appointment on passing of a Special Resolution by the
2015, (“LODR Regulations”) an Independent Director Company and disclosure of such appointment in the Board
shall hold office for a term of five consecutive years Report.
on the Board of the Company and shall be eligible for
The Board of Directors at its meeting held on May 14,
re-appointment on passing of a Special Resolution by the
2021 on the recommendation of the Nomination and
Company and disclosure of such appointment in the Board
Remuneration Committee approved the re-appointment
Report.
of Mr. Kumar as an Independent Director of the Company
The Board of Directors at its meeting held on May 14, for a second and final term of five years with effect from
2021 on the recommendation of the Nomination and May 27, 2021 upto May 26, 2026 based on his skills,

71
NOTICE    ANNUAL REPORT 2020-21

experience, knowledge and report of his performance Mr. M.V Satish is Whole-time Director & Senior Executive
evaluation. His re-appointment is subject to the approval Vice President and is responsible for the Buildings’
of the Shareholders at this Annual General Meeting by Business vertical within L&T Construction. Mr. M.V Satish
way of a Special Resolution. started his career in L&T as Junior Engineer.
The Company has received a notice in writing from He holds a degree in Civil engineering from Bangalore
a Shareholder under Section 160 of the Companies University and has completed a Senior Executive
Act, 2013, proposing his candidature for the office of programme from London Business School. Mr. M.V Satish
Independent Director of the Company. has played a vital role in establishing L&T’s credentials
in the GCC region, especially Oman having served as
In the opinion of the Board, Mr. Kumar fulfils the
first Chief Executive of L&T Oman LLC. He is credited for
conditions specified in the Companies Act, 2013 and
having successfully executed the Duqm Airport, Oman, the
rules made thereunder and LODR Regulations for his
Salalah greenfield airport project and the NMC Hospital in
re-appointment as an Independent Director of the
Abu Dhabi.
Company and is independent of the management. A
copy of the letter for re-appointment of Mr. Kumar as an Mr. Satish has rich and varied experience having worked
Independent Director setting out the terms and conditions across domains like hardcore Construction, Business
would be available for inspection in the manner specified Development, Contracts Management and Property
in the Notice up to the date of the Annual General Development. Under his leadership, he has led several
Meeting. landmark projects to successful completion including the
Mumbai Chhatrapati Shivaji International Airport, IGI
Additionally, Regulation 17(1A) of the LODR Regulations,
Airport New Delhi, Mumbai’s Wankhede Stadium, the
requires companies to obtain approval of Shareholders
Mahatma Mandir and the Statue of Unity among others.
by passing a Special Resolution for appointment or
Recently, under his eminent leadership, the Company has
continuation of any Non-Executive Director who has
won the mandate to build 4 international airports in India
attained the age of seventy-five years. Mr. Kumar, aged 71
which are being executed simultaneously.
years, will complete 75 years during his current proposed
term. Part III of Schedule V of the Companies Act, 2013 and the
Secretarial Standard – 2 on General Meetings provides
The Board considers that his association would be
that the appointment and remuneration of Managing
of immense benefit to the Company as it has been
Directors and Whole-time Directors, in accordance with
beneficial in the past and it is desirable to avail services
Part I and Part II of the Schedule V, shall be subject to
of Mr. Kumar as an Independent Director. Accordingly,
approval by resolution of the Shareholders in a General
the Board recommends the resolution in relation to the
Meeting.
re-appointment of Mr. Kumar as an Independent Director,
for the approval by the Shareholders of the Company. At the Annual General Meeting of the Company held on
August 26, 2016 the Shareholders had fixed the maximum
Except Mr. Narayanan Kumar, being the appointee, none
limits within which the Board was delegated authority to
of the Directors and Key Managerial Personnel of the
decide the remuneration of the Whole-time Directors of
Company and their relatives are concerned or interested in
the Company. Pursuant to this, the Board has fixed the
the resolution set out at Item No. 10
remuneration payable to Mr. M. V. Satish during his tenure
Item No. 11: as Whole-time Director.
Mr. M. V. Satish (DIN: 06393156) was appointed as the The Company has entered into an Agreement with Mr. M.
Whole-time Director of the Company for a term of five V. Satish re-appointing him as a Whole-time Director for
years from January 29, 2016 upto and including January the period from January 29, 2021 upto and including April
28, 2021. 07, 2024. During the period of this agreement and so long
The Board of Directors, on the recommendation of the as the Whole-time Director performs his services as per the
Nomination & Remuneration Committee, approved the terms and conditions provided by this agreement, he shall
re-appointment of Mr. M. V. Satish (DIN: 06393156) as be entitled to the following:
a Whole-time Director of the Company with effect from Salary : R 11,25,000 (Rupees Eleven Lakh Twenty Five
January 29, 2021 upto and including April 7, 2024, Thousand only) per month in the scale of R 10,25,000 -
subject to the approval of the members in the Annual R 1,00,000 - R 15,25,000 with annual increment due on
General Meeting. April 1 every year.

72
Commission : The commission will be paid as per the Mr. R. Shankar Raman joined L&T Group in 1994 for
parameters fixed by the Nomination and Remuneration setting up L&T Finance Limited, a subsidiary of Larsen
Committee and the Board of Directors within the overall & Toubro Limited (L&T). After six successful years with
limits approved by the Shareholders of the Company. L&T Finance Limited, he was inducted into mainstream
L&T to oversee the Finance & Accounting functions.
Perquisites : R 12 lakh per annum excluding free
Mr. R. Shankar Raman is on the Board of several
furnished accommodation
companies within the L&T Group. He had participated and
The above perquisites will exclude value of Stock Option presented papers in several conventions/ seminars both in
benefits, if any, computed as per Income Tax Act/Rules, tax India and abroad.
on which will be borne by the Company.
Mr. Shankar Raman was the past Chairman of the CII’s
Others : Company’s contribution to retirement funds, National Committee of CFOs in 2017-18. He was also
official use of car / driver and communication facilities for a member of Uday Kotak’s Committee on Corporate
Company’s business, as per rules of the Company. Governance constituted by SEBI.
Disclosures as required under Secretarial Standard 2 on Mr. Shankar Raman has received several awards such
General Meetings are provided as Annexure to this Notice. as Best CFO of Asia in the Industrial Sector in a survey
conducted by the prestigious New York based Institutional
The agreement entered into by the Company with
Investor Magazine, winner of Best CFO Awards from
Mr. M. V. Satish, in respect of his re-appointment as
CNBC TV18, Financial Express, Business Today and Yes
Whole-time Director, contains the terms and conditions of
Bank. He also received the lifetime achievement award at
his re-appointment including remuneration.
the FE CFO awards 2020.
The Agreement entered into with Mr. M. V. Satish will be
Part III of Schedule V of the Companies Act, 2013 and the
open for inspection in the manner specified in the Notice
Secretarial Standard – 2 on General Meetings provides
up to the date of the Annual General Meeting.
that the appointment and remuneration of Managing
The Board recommends approval of the re-appointment Directors and Whole-time Directors, in accordance with
and remuneration of Mr. M. V. Satish, as Whole-time Part I and Part II of the Schedule V, shall be subject to
Director of the Company. approval by resolution of the Shareholders in a General
Meeting.
Except Mr. Satish, being the appointee, none of the
Directors and Key Managerial Personnel of the Company At the Annual General Meeting of the Company held on
and their relatives are concerned or interested in the August 26, 2016 the Shareholders had fixed the maximum
resolution set out at Item No. 11. limits within which the Board was delegated authority to
decide the remuneration of the Whole-time Directors of
Item No. 12
the Company. Pursuant to this, the Board has fixed the
Mr. R. Shankar Raman (DIN: 00019798) was appointed remuneration payable to Mr. R. Shankar Raman during his
as the Whole-time Director of the Company for a term tenure as Whole-time Director.
of five years from October 01, 2016 upto and including
September 30, 2021. The Company will enter into an Agreement with
Mr. R. Shankar Raman, re-appointing him as a Whole-time
The Board of Directors, on the recommendation of the Director for the period from October 01, 2021 upto and
Nomination & Remuneration Committee, approved the including September 30, 2026. During the period of
re-appointment of Mr. R. Shankar Raman (DIN: 00019798) this agreement and so long as the Whole-time Director
as a Whole-time Director of the Company with effect from performs his services as per the terms and conditions
October 1, 2021 upto and including September 30, 2026 provided by this agreement, he shall be entitled to the
subject to the approval of the members in the Annual following:
General Meeting.
Salary : R 16,25,000 (Rupees Sixteen Lakh Twenty Five
Mr. R. Shankar Raman is a Commerce graduate from the Thousand only) per month in the scale of R 16,25,000 -
University of Madras, Chennai. He is a qualified Chartered R 1,25,000 - R 22,50,000 with annual increment due on
Accountant and a Cost Accountant. Over the past 35 April 1 every year.
years of professional work experience, Mr. R. Shankar
Raman has worked for leading listed corporations in varied Commission : The commission will be paid as per the
capacities in the field of Finance. parameters fixed by the Nomination and Remuneration

73
NOTICE    ANNUAL REPORT 2020-21

Committee and the Board of Directors within the overall receipts of the Company. SEBI (Listing Obligations and
limits approved by the Shareholders of the Company. Disclosure Requirements) Regulations, 2015 also provides
that the Company shall, in the first instance, offer all
Perquisites : R 12 lakh per annum excluding free
Securities for subscription pro-rata to the Shareholders
furnished accommodation or House Rent Allowance in lieu
unless the Shareholders in a general meeting decide
thereof.
otherwise. Members’ approval is sought for issuing any
The above perquisites will exclude value of Stock Option such instrument as the Company may deem appropriate
benefits, if any, computed as per Income Tax Act/Rules, tax to parties other than the existing Shareholders. Whilst no
on which will be borne by the Company. specific instrument has been identified at this stage, in the
event the Company issues any equity linked instrument,
Others : Company’s contribution to retirement funds,
the issue will be structured in a manner such that the
official use of car / driver and communication facilities for
additional share capital that may be issued would not be
Company’s business, as per rules of the Company.
more than 5% of the paid-up capital of the Company (as
Disclosures as required under Secretarial Standard 2 on at the date when the Board recommended passing of the
General Meetings are provided as an Annexure to this Special Resolution). The equity shares, if any, allotted on
Notice. issue, conversion of securities shall rank in all respects pari
passu with the existing Equity Shares of the Company.
The draft agreement to be entered into by the
Company with Mr. R. Shankar Raman, in respect of his The Company may also opt for issue of securities through
re-appointment as Whole-time Director, contains the Qualified Institutions Placement (QIP). A QIP of the shares
terms and conditions of his re-appointment including of the Company would be less time consuming and more
remuneration. economical than other modes of raising capital.

The draft Agreement to be entered into with Mr. R. Accordingly, the Company may issue securities by way
Shankar Raman will be open for inspection in the manner of a QIP in terms of Chapter VI of the Securities and
specified in the Notice up to the date of the Annual Exchange Board of India (Issue of Capital and Disclosure
General Meeting. Requirements) Regulations, 2018 (‘SEBI Regulations’).
These securities will be allotted only to Qualified
The Board recommends approval of the re-appointment
Institutional Buyers (QIBs) as per the SEBI Regulations and
and remuneration of Mr. R. Shankar Raman, as Whole-
there will be no issue to retail individual investors and
time Director of the Company.
existing retail Shareholders. The resolution proposed is an
Except Mr. R. Shankar Raman, being the appointee, none enabling resolution and the exact price, proportion and
of the Directors and Key Managerial Personnel of the timing of the issue of the securities will be decided by the
Company and their relatives are concerned or interested in Board based on an analysis of the specific requirements
the resolution set out at Item No. 12. after necessary consultations. Therefore, the proposal
seeks to confer upon the Board the absolute discretion to
Item No. 13 determine the terms of issue in consultation with the Lead
The Company requires adequate capital to meet the Managers to the Issue.
needs of growing business. While it is expected that the
internal generation of funds would partially finance the As per Chapter VI of the SEBI Regulations, an issue of
need for capital, debt raising would be another source of securities on QIP basis shall be made at a price not less
funds and hence it is thought prudent for the Company than the average of the weekly high and low of the
to have enabling approvals to raise a part of the funding closing prices of the related shares quoted on the stock
requirements for the said purposes as well as for such exchange during the two weeks preceding the “relevant
other corporate purposes as may be permitted under date.” The Board may, at its absolute discretion, issue
applicable laws through the issue of appropriate securities equity shares at a discount of not more than five percent
as defined in the resolution, in Indian or international or such other discount as may be permitted under
markets. applicable regulations to the ‘floor price’ as determined in
terms of the SEBI Regulations, subject to Section 53 of the
The fund raising may be through a mix of equity/ equity- Companies Act, 2013.
linked instruments, as may be appropriate. Members’
approval is sought for the issue of equity shares, securities As the pricing of the offer cannot be decided except at a
linked to or convertible into Equity Shares or depository later stage, it is not possible to state the price of shares to
be issued.

74
However, the same would be in accordance with the Item No. 14:
provisions of the SEBI Regulations, the Companies Act, In accordance with the provisions of Section 148 of the
2013, or any other guidelines / regulations / consents as Companies Act, 2013 (“the Act”) and the Companies
may be applicable or required. (Audit and Auditors) Rules, 2014 (“the Rules”) the
In case of issue of convertible bonds and/or equity shares Company is required to appoint a Cost Auditor to
through depository receipts, the price will be determined audit the cost records of the Company, for products
on the basis of the then current market price and other and services, specified under Rules issued in pursuance
relevant guidelines. to the above section. On the recommendation of the
Audit Committee, the Board of Directors had approved
The “relevant date” for the above purpose, shall be - the appointment of M/s. R. Nanabhoy & Co, Cost
i) in case of allotment of equity shares, the date of Accountants (Regn. No. 00010), as the Cost Auditors of
meeting in which the Board decides to open the the Company to conduct audit of cost records maintained
proposed issue by the Company for the Financial Year 2021-22, at a
remuneration of R 13 lakhs plus applicable taxes and out
ii) in case of allotment of eligible convertible securities, of pocket expenses at actuals for travelling and boarding/
either the date of the meeting in which the Board lodging.
decides to open the issue of such convertible
securities or the date on which the holders of such M/s. R. Nanabhoy & Co., Cost Accountants, have
convertible securities become entitled to apply for the furnished certificates regarding their eligibility for
equity shares, as may be determined by the Board. appointment as Cost Auditors of the Company. In
accordance with the provisions of Section 148 of the Act
The Stock Exchange for the same purpose is BSE Limited / read with the Rules, the remuneration payable to the
National Stock Exchange of India Limited. Cost Auditor has to be ratified by the Shareholders of the
The Shareholders through a resolution passed at their Company.
meeting held on August 13, 2020 had approved issue of Accordingly, consent of the Shareholders is sought for the
Securities for an aggregate sum up to US$ 600 Million aforesaid purpose.
(or its rupee equivalent) or INR 4500 Crore, if the value
is higher. The Company has not raised any funds under The Directors recommend this resolution for approval of
the said approval. However, Shareholders’ resolution the Shareholders.
for QIP issuance is valid for a period of 12 months from None of the Directors and Key Managerial Personnel
the date of passing of the resolution. Accordingly, the of the Company and their relatives are concerned or
Shareholders’ approval is sought for renewal of the interested, in the resolution set out at Item No. 14.
approval.
By Order of the Board of Directors
The Directors recommend this Resolution for approval of
the Shareholders. For LARSEN & TOUBRO LIMITED,

None of the Directors and Key Managerial Personnel SIVARAM NAIR A

of the Company and their relatives are concerned or COMPANY SECRETARY
interested, in the resolution set out at Item No. 13. M.No – F3939
Mumbai, June 18, 2021

75
NOTICE    ANNUAL REPORT 2020-21

(ANNEXURE TO NOTICE DATED June 18, 2021)

DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE
FORTHCOMING ANNUAL GENERAL MEETING
[Pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
and Secretarial Standard 2 on General Meetings]
Name of the Mr. D. K. Sen Mr. Hemant Bhargava Mr. M. V. Satish Mrs. Preetha Reddy
Director
Date of Birth March 19, 1956 July 20, 1959 February 12, 1957 October 28, 1957
Date of October 1, 2015 May 28, 2018 January 29, 2016 March 01, 2021
Appointment on
the Board
Qualifications B. Tech (Hons.)  in Civil M.A (Economics) BE (Civil) B. Sc, Masters in Public
Engineering from IIT, Kharagpur. Administration.
1977 and
MBA (PGDBM) from XLRI,
Jamshedpur.  1986
Expertise Vast experience in Design Vast experience in Insurance Vast experience in Construction, Vast experience in Health Care
and Engineering, Business Sector Business Development, Sector
Development, Tendering and Contracts Management and
construction Property Development in India
and GCC region
Directorships 1. L&T Infrastructure 1. ITC Limited L&T Aviation Services Private 1. Apollo Hospitals Enterprise
held in Engineering Limited 2. The Tata Power Company Limited Limited
other public 2. L&T Aviation Services Private Limited 2. Apollo Gleneagles Hospital
companies Limited 3. Voltas Limited Limited
including 3. L&T Power Development 3. Apollo CVHF Limited
private Limited 4. Imperial Hospital and
companies 4. Nabha Power Limited Research Centre Limited
which are
subsidiaries 5. Raykal Aluminum Company 5. Apollo Hospitals
of public Private Limited International Limited
companies 6. L&T Infrastructure 6. Lifetime Wellness Rx
(excluding Development Projects International Limited
foreign Limited 7. Apollo Clinical Excellence
companies) 7. Construction Skill Solutions Limited
Development Council of 8. Indian Hospitals Corporation
India Limited
9. Apollo Reach Hospitals
Enterprises Limited
Memberships/ Member: Member: None Chairperson:
Chairmanships Corporate Social Audit Committee Audit Committee
of committees Responsibility Committee
across all ITC Limited AMG Healthcare Destination
companies Larsen & Toubro Limited Corporate Social Private Limited
L&T Power Development Limited Responsibility Committee Member:
L&T Infrastructure Engineering ITC Limited Stakeholders Relationship
Limited Risk Management Committee
Nomination & Remuneration Committee Apollo Hospitals Enterprise
Committee The TATA Power Company Limited
Nabha Power Limited Limited Corporate Social
Stakeholders Committee Responsibility Committee
The TATA Power Company Apollo Hospitals Enterprise
Limited Limited
Larsen & Toubro Limited Apollo Gleneagles Hospitals
Limited

76
Name of the Mr. D. K. Sen Mr. Hemant Bhargava Mr. M. V. Satish Mrs. Preetha Reddy
Director
Risk Management
Committee
Apollo Hospitals Enterprise
Limited
Audit Committee
Apollo Gleneagles Hospitals
Limited
Number of 8 of 8 8 of 8 8 of 8 2 of 2
Meetings
attended during
the year
Shareholding of NA 190 NA 180
Non-Executive
Directors
Relationships None None None None
between
directors
inter-se
Name of the Director Mr. Sanjeev Aga Mr. Narayanan Kumar Mr. R. Shankar Raman
Date of Birth February 1, 1952 January 28, 1950 December 20, 1958
Date of Appointment May 25, 2016 May 27, 2016 October 1, 2011
on the Board
Qualifications B. Sc (Hons. In Physics), MBA B.E (Electronics) B. Com, ACA and ACMA
Expertise Vast Experience in Telecom Sector Industrialist Vast experience in Finance, Taxation,
Risk Management, Legal and
Investor Relations
Directorships held in 1. Larsen & Toubro Infotech Limited 1. Entertainment Network (India) 1. Larsen & Toubro Infotech Limited
other public companies 2. UFO Moviez India Limited Limited 2. L&T Infrastructure Development
including private 3. Pidilite Industries Limited 2. Take Solutions Limited Projects Limited
companies which are 4. Mahindra Holidays & Resorts India 3. Mphasis Limited 3. L&T Realty Developers Limited
subsidiaries of public Limited
companies (excluding 4. Aegon Life Insurance Company 4. L&T Seawoods Limited
5. Vedant Fashions Private Limited Limited
foreign companies) 5. L&T Finance Holdings Limited
6. Vishal Mega Mart Private Limited
5. N K Trading and Consultancy 6. L&T Hydrocarbon Engineering
Private Limited Limited
6. Risk Educators Private Limited 7. L&T Investment Management
7. Indus Towers Limited Limited
8. Stanley Engineered Fastening 8. L&T Metro Rail (Hyderabad)
India Private Limited Limited
9. Mindtree Limited
Memberships/ Chairman: Chairman: Member:
Chairmanships of Audit Committee Audit Committee Audit Committee
committees across all
UFO Moviez Limited Mphasis Limited L&T Finance Holdings Limited
companies
Stakeholder Relationship Entertainment Network (India) L&T Infrastructure Development
Committee Limited Projects Limited
Pidilite Industries Limited L&T Technology Services Limited L&T Metro Rail (Hyderabad) Limited
Nomination and Remuneration Stakeholders Relationship Larsen & Toubro Infotech Limited
Committee Committee Mindtree Limited
Larsen & Toubro Infotech Limited Take Solutions Limited
Risk Management Committee Larsen & Toubro Limited
Larsen & Toubro Infotech Limited

77
NOTICE    ANNUAL REPORT 2020-21

Name of the Director Mr. Sanjeev Aga Mr. Narayanan Kumar Mr. R. Shankar Raman
Member: Nomination and Remuneration Nomination and Remuneration
Audit Committee Committee Committee
Mahindra Holidays and Resorts India Entertainment Network (India) L&T Infrastructure Development
Limited Limited Projects Limited
Larsen & Toubro Limited Indus Towers Limited L&T Finance Holdings Limited
Pidilite Industries Limited Corporate Social Responsibility Stakeholder Relationship
Nomination and Remuneration Committee Committee
Committee Mphasis Limited L&T Finance Holdings Limited
UFO Moviez Limited Indus Towers Limited Corporate Social Responsibility
Pidilite Industries Limited Member: Committee
Corporate Social Responsibility Audit Committee Larsen & Toubro Limited
Committee L&T Seawoods Limited
Indus Towers Limited
Pidilite Industries Limited L&T Realty Developers Limited
Aegon Life Insurance Company
Risk Management Committee Limited L&T Finance Holdings Limited
Larsen & Toubro Limited Nomination and Remuneration L&T Infrastructure Development
Mahindra Holidays and Resorts India Committee Projects Limited
Limited
Aegon Life Insurance Company L&T Investment Management
Limited Limited
Larsen & Toubro Limited Risk Management Committee
L&T Technology Services Limited L&T Finance Holdings Limited
Risk Management Committee
Mphasis Limited
Indus Towers Limited
Entertainment Network (India)
Limited
Number of Meetings 8 of 8 8 of 8 8 of 8
attended during the
year
Shareholding of Non- 100 1500 NA
Executive Directors
Relationships between None None None
directors inter-se

78
Information at a glance:

Sr. No. Particulars Details

1 Day, Date and Time of AGM Thursday, August 05, 2021, 3.30 P.M
2 Mode Video Conference (VC) and Other Audio Visual Means(OAVM)
3 Participation through VC/OAVM Members can login from 03.00 P.M (IST) on the date of the AGM at
https://evoting.nsdl.com
4 Helpline Number for VC/OAVM 1800 1020 990/1800 22 44 30
participation
5 Submission of Questions/Queries Members seeking any information with regard to the accounts or
before AGM any matter to be placed at the AGM, are requested to write to the
Company on or before Thursday, July 29, 2021 through email on
[email protected]. The same will be replied by the
Company suitably. Please note that, members queries/ questions will
be responded to only, if the Shareholder continues to hold the shares
as on the cut-off date i.e Thursday, July 29, 2021.
6 Speaker Registration before AGM Members may register themselves as a speaker by sending
their request from their registered email address mentioning
their name, DP ID and Client ID/folio number, PAN, mobile
number to [email protected] on or before
Monday, August 2, 2021.
7 Recorded Transcript Will be made available post AGM at www.larsentoubro.com
8 Dividend for FY 2021 recommended R 18 per equity share of the face value of R 2 each
by the Board
9 Dividend Book Closure Dates Friday, July 30, 2021 to Thursday, August 05, 2021 (both days
inclusive).
10 Dividend Payment Date On or before Saturday, August 21, 2021.
11 Cut-off date for e-voting Thursday, July 29, 2021
12 Remote e-voting start time and Monday, August 02, 2021, 9.00 A.M.
date
13 Remote e-voting end time and date Wednesday, August 04, 2021, 05.00 P.M.
14 Remote e-voting website Shares held in Demat mode with NSDL:
1. Shareholders registered for NSDL IDeAS facility:
https://eservices.nsdl.com/
2. Others: https://evoting.nsdl.com
Shares held in Demat mode with CDSL:
1. Shareholders who have opted for Easi facility of CDSL:
https://web.cdslindia.com/myeasi/home/login
2. Others: www.cdslindia.com
Logging in through Depositary Participants:
Members can also login using the login credentials of their demat
account through your DP registered with NSDL /CDSL for e-voting
facility.

79
NOTICE    ANNUAL REPORT 2020-21

Sr. No. Particulars Details

15 Name, address and contact details Registrar and Transfer Agent
of e-voting service provider and KFin Technologies Private Limited (“KFintech”)
registrar and transfer agent Selenium Tower B, Plot 31-32, Gachibowli, Financial District,
Nanakramguda, Hyderabad 500 032
Tel No: 1800-425-8998/1800-345-4001
Email: [email protected]
E-voting Service Provider
National Securities Depositories Limited (“NSDL”)
Trade World, A wing, 4th Floor, Kamala Mills Compound,
Lower Parel, Mumbai - 400013
Tel No: 1800-1020-990/1800-22-44-30
16 Email Registration and Contact Demat Shareholders:
Updation Process Contact respective Depository Participant
Physical Shareholders:
KFintech Website:
https://ris.kfintech.com/clientservices/mobilereg/mobileemailreg.aspx

80
Board Report    ANNUAL REPORT 2020-21

Board Report STATE OF COMPANY AFFAIRS:

The total income for the financial year under review was
Dear Members, R 76,751 crore as against R 85,192 crore for the previous
The Directors have pleasure in presenting their 76th financial year, registering a decrease of 9.91%, primarily
Annual Report and Audited Financial Statements for the due to the disruption caused by the COVID 19 pandemic.
year ended 31st March 2021. The profit before tax from continuing operations,
including exceptional items, was lower at R 4,438 crore for
FINANCIAL RESULTS: the financial year under review as against R 6,986 crore
Particulars 2020-21 2019-20 for the previous financial year. The profit after tax from
v crore v crore continuing operations, excluding exceptional items, was
Profit before depreciation, R 2,686 crore for the financial year under review as against
exceptional items and tax 8282.04 7379.43 R 6,025 crore for the previous financial year, registering a
Less: Depreciation, amortization, decrease of 55%.
impairment and obsolescence 1025.62 1020.51
AMOUNT TO BE CARRIED TO RESERVES:
Profit before exceptional items and
tax 7256.42 6358.92 The Company has not transferred any amount to the
Add: Exceptional items (2818.65) 626.99 reserves during the current financial year.

Profit before tax 4437.77 6985.91 DIVIDEND:

Less: Provision for tax 1751.28 961.15 During the Financial Year ended 31st March 2021,
the Company paid a special dividend of R 18/- (900%)
Profit for the year from continuing per equity share as interim dividend amounting to
operations 2686.49 6024.76
R 2,527.66 crore on successful divestment of Electrical and
Profit before tax from discontinued
Automation business to Schneider Electric India Private
operations 11199.23 865.38
Limited.
Less: Tax expense of discontinued
operations 2548.75 210.93 The Directors recommend payment of a final dividend of
Net profit after tax from R 18/- (900%) per equity share of R 2/- each on the share
discontinued operations 8650.48 654.45 capital amounting to R 2528.20 crore.
Net profit after tax from continuing The total dividend for FY 2021, including the special
operations and discontinued
dividend, if approved by shareholders, would amount to
operations 11336.97 6679.21
R 36/- (1800%) per equity share.
Add: Balance brought forward
from the previous year 16957.17 15046.99 The Dividend payment is based upon the parameters
Less: Ind AS 116 transition mentioned in the Dividend Distribution Policy approved
adjustment – 3.97 by the Board of Directors of the Company which is in line
Less: Dividend paid for the with regulation 43A of the SEBI (Listing Obligations and
previous year (*Including dividend Disclosure Requirements) Regulations, 2015. The Policy
distribution tax) 1123.23 *2754.94
is attached as Annexure ‘F’ forming a part of this Board
Less: Interim dividend paid during
Report and also uploaded on the Company’s website at
the year 2527.66 1403.89
https://investors.larsentoubro.com/Listing-Compliance.aspx.
Less: (Profit)/loss on
remeasurement of the net defined CAPITAL and FINANCE:
benefits plans/Equity instruments
through other comprehensive During the year under review, the Company allotted
income (32.04) 512.96 663,275 equity shares of R 2/- each upon exercise of stock
options by the eligible employees under the Employee
Balance available for disposal Stock Option Schemes.
(which the Directors appropriate as
follows) 24675.29 17050.44 The Company’s Authorized Capital increased to
Less: Debenture Redemption R 5,025 crore, pursuant to the approval of the Scheme
Reserve – 93.27 of Amalgamation of L&T Shipbuilding Limited with
Balance to be carried forward 24675.29 16957.17 the Company. The authorised share capital of L&T
Shipbuilding Limited has been added to the authorised

82
share capital of the Company, with effect from the Deposits) Rules, 2014, the Company has filed with the
appointed date i.e. 1st April 2019. Registrar of Companies (ROC) the requisite returns for
outstanding receipt of money/loan by the Company, which
The Company repaid long-term borrowings (including
are not considered as deposits as per the Companies Act,
External Commercial Borrowings [ECB] and Non-
2013 and the rules framed thereunder.
Convertible Debentures [NCDs]), as per schedule, of
R 5,084 crore during the year. The Company has further DEPOSITORY SYSTEM:
raised a short-term ECB of USD 100 million for partly As the members are aware, the Company’s shares are
refinancing a maturing ECB. compulsorily tradable in electronic form. As on 31st March
The Company has issued and allotted on private 2021, 98.78% of the Company’s total paid up capital
placement basis, Unsecured, Rated, Listed, Redeemable representing 138,73,80,965 shares are in dematerialized
NCDs aggregating to R 9,000 crore during the FY 2021. form.
The funds raised were utilized mainly for creation of
SEBI (Listing Obligations and Disclosure Requirements)
liquidity reserve to tide over pandemic related uncertainty.
Regulations, 2015 mandates that transfers, except
These NCDs are listed on the Wholesale Debt Market
transmission and transposition, of securities are to be
Segment of National Stock Exchange of India Limited.
carried out in dematerialized form only. In view of the
The Company has issued Commercial Papers amounting numerous advantages offered by the Depository system
to R 20,895 crore during FY 2021. As on 31st March 2021 as well as to avoid frauds, members holding shares
the outstanding Commercial Paper is R 2,775 crore. The in physical mode are advised to avail of the facility
Company has listed its Commercial Papers on BSE Limited. of dematerialization from either of the depositories.
The Company has not defaulted on any of its dues to the Accordingly, any investor desirous of transferring shares
financial lenders. (which are held in physical form) can transfer only after
their shares are dematerialized.
The Company’s borrowing programmes have received
the highest credit ratings from CRISIL, ICRA and India Further in adherence to SEBI’s circular to enhance the
Rating. The details of the same are given on page 119 in due-diligence for dematerialization of the physical
Annexure ‘B’ – Report on Corporate Governance forming shares, the Company has provided the static database of
part of this Board Report and is also available on the the shareholders holding shares in physical form to the
website of the Company. depositories which would augment the integrity of its
existing systems and enable the depositories to validate
DIVESTMENT OF ELECTRICAL and AUTOMATION any dematerialization request.
BUSINESS:
TRANSFER TO INVESTOR EDUCATION AND
The divestment of the Electrical and Automation (E&A)
PROTECTION FUND:
business undertaking was completed on 31st August 2020
after fulfillment of necessary conditions. The Company has been regularly sending communications
to members whose dividends are unclaimed requesting
CAPITAL EXPENDITURE: them to provide/update bank details with RTA/Company,
As at 31st March 2021, the gross property, plant and so that dividends paid by the Company are credited to
equipment, investment property and other intangible the investor’s account on time. Efforts are also made by
assets including leased assets, were at R 14,222.27 crore the Company in co-ordination with the RTA to locate the
and the net property, plant and equipment, investment shareholders who have not claimed their dues.
property and other intangible assets, including leased
Despite these efforts, an amount of R 7,81,84,801 which
assets, at R 8,640.71 crore. Capital Expenditure during the
was due and payable and remained unclaimed and unpaid
year amounted to R 720.26 crore.
for a period of seven years, was transferred to Investor
DEPOSITS: Education and Protection Fund (IEPF) as provided in
The Company has not accepted deposits from the public section 125 of the Companies Act, 2013 and the rules
falling within the ambit of Section 73 of the Companies made thereunder.
Act, 2013 and the rules framed thereunder during the
In addition to the above, the Company has also
year under review. The Company does not have any
transferred an amount of R 23,59,657 pertaining to sale
unclaimed deposits as of date.
proceeds of fractional entitlement of Bonus shares issued
Pursuant to the Ministry of Corporate Affairs (MCA) in 2013.
notification amending the Companies (Acceptance of

83
Board Report    ANNUAL REPORT 2020-21

Cumulatively, since the inception till 31st March 2021, the R 10 each have been allotted to the Company in lieu
amount transferred to the said fund was R 37,66,72,744. of the capital contribution in the LLP.
In accordance with the provisions of the Section 124(6) of B) Preference shares redeemed during the year:
the Companies Act, 2013 and Rule 6(3)(a) of the Investor
Name of the Company Type of Number of
Education and Protection Fund Authority (Accounting,
shares shares
Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules’),
the Company has transferred 10,54,705 equity shares L&T Hydrocarbon Preference 26,00,00,000
of R 2 each (0.08% of total number of shares) held by Engineering Limited
12,982 shareholders (0.95% of total shareholders) to IEPF. C) Companies Struck off:
The said shares correspond to the dividend which had
remained unclaimed for a period of seven consecutive L&T Cassidian Limited was struck off by the Registrar of
years from the FY 2013. Subsequent to the transfer, the Companies, vide its approval dated 28th January 2021.
concerned shareholders can claim the said shares along Larsen & Toubro Hydrocarbon International Limited LLC
with the dividend(s) by making an application to IEPF was liquidated on 16th May 2020.
Authority in accordance with the procedure available on
www.iepf.gov.in and on submission of such documents Kesun Iron and Steel Company Private Limited has applied
as prescribed under the IEPF Rules. On receipt of the to the Ministry of Corporate Affairs for strike off from
application, the Company sends an online verification Register of Companies under the provisions of Companies
report to the IEPF Authority after verifying all the necessary Act, 2013 on 11th February 2021. The approval is
details which is duly certified by the Nodal Officer. awaited.

The Company sends specific advance communication to D) Performance and Financial Position of
the concerned shareholders at their address registered subsidiary / associate and joint venture
with the Company and also publishes notice in companies:
newspapers providing the details of the shares due for A statement containing the salient features of the
transfer to enable them to take appropriate action. All financial statement of subsidiary / associate / joint
corporate benefits accruing on such shares viz. bonus venture companies and their contribution to the
shares, etc. including dividend except rights shares shall be overall performance of the Company is provided on
credited to IEPF. pages 561 to 573 of this Annual Report.

SUBSIDIARY / ASSOCIATE / JOINT VENTURE The Company has formulated a policy on

COMPANIES: identification of material subsidiaries in line with
During the year under review, the Company subscribed Regulation 16(c) of the SEBI (Listing Obligations
to / acquired equity / preference shares in various and Disclosure Requirements) Regulations,
subsidiary / associate / joint venture companies. The details 2015 and the same is placed on the website at
of investments / divestments in subsidiary companies https://investors.larsentoubro.com/Listing-Compliance.aspx.
during the year are as under: The Company does not have any material subsidiaries.

A) Shares acquired during the year: PARTICULARS OF LOANS GIVEN, INVESTMENTS

MADE, GUARANTEES GIVEN OR SECURITY PROVIDED
Name of the Company Type of No. of shares BY THE COMPANY:
Shares
L&T Uttaranchal Hydropower Preference 6,44,00,000 The Company has disclosed the full particulars of the
Limited loans given, investments made or guarantees given or
L&T Geostructure Private Equity 2,47,50,000 security provided as required under Section 186 of the
Limited (Note 1) Companies Act, 2013, Regulation 34(3) and Schedule V of
L&T Finance Holdings Limited Equity (in 29,34,84,370 the SEBI (Listing Obligations and Disclosure Requirements)
Rights Issue) Regulations, 2015 in Note 58 forming part of the financial
statements.
Note:
PARTICULARS OF CONTRACTS OR ARRANGEMENTS
1. L&T Geostructure LLP was converted into L&T
WITH RELATED PARTIES:
Geostructure Private Limited on 25th November 2020.
Pursuant to the same, 2,47,50,000 equity shares of The Audit Committee and the Board of Directors have
approved the Related Party Transactions Policy, specifying

84
the individual threshold limits for each transaction and personal hygiene and need to wear mask to prevent
the same has been uploaded on the Company’s website infection and avoid the spread of the virus. The Company
https://investors.larsentoubro.com/Listing-Compliance.aspx. has taken steps to create awareness amongst the nearby
The Company has a process in place to periodically review communities on health and hygiene through periodical
and monitor Related Party Transactions. campaigns.

All the Related Party Transactions were in the ordinary The Company, through various internal communication,
course of business and at arm’s length. The Audit has encouraged its employees to get themselves
Committee has approved the related party transactions for vaccinated and the Company has also taken several steps
the FY 2021 and estimated related party transactions for to facilitate the same. The Company has also setup a
FY 2022. number of dedicated quarantine centres for all employees
and their immediate family members, who are prescribed
There were no material Related Party Transactions during quarantine and not able to isolate at home.
the year.
The Company has rolled out various schemes for retention
MATERIAL CHANGES AND COMMITMENTS AFFECTING of workers and keeping them safe at workplace including
THE FINANCIAL POSITION OF THE COMPANY, creation of dedicated quarantine rooms in all its major
BETWEEN THE END OF THE FINANCIAL YEAR AND labour camps.
THE DATE OF THE REPORT:
Considering the shortage of oxygen faced by the various
Other than stated elsewhere in this report, there are no
hospitals in India, in wake of the second wave of COVID
material changes and commitments affecting the financial
19, the Company has started working towards a long-term
position of the Company between the end of the financial
solution to meet medical grade oxygen demand in the
year and the date of this report.
country. It has planned to provide medium/large oxygen
COMPANY’s RESPONSE TO COVID-19: generators to various hospitals where the scarcity is most
The COVID-19 crisis disrupted the operations of the acute. These permanent units will serve the hospitals for
Company across the country, majorly during Q1 of the next 10-15 years. The Company is working closely
FY 2021. The Company resumed operations from with the Government and Municipal Authorities towards
14th April 2020, after implementation of standard providing ventilators, small oxygen generators, N95
protocols in line with the guidelines prescribed. All the masks, sanitizers, PPE kits and other medical equipment as
plants and office establishments started functioning after required and available.
implementing necessary safety and hygiene protocols like As the COVID-19 scenario is still evolving, the Company is
wearing of face masks, social distancing norms, workplace mapping the developments on a real-time basis to ensure
sanitation and employee awareness programmes etc in the health and safety of all its stakeholders. The impact of
compliance with the regulations of the local authorities. the lockdown disruption is being constantly assessed.
All international sites also resumed work with employees
and workmen working in a staggered manner, mandatory CONSERVATION OF ENERGY, TECHNOLOGY
rotation on a periodic basis and in adherence to all the ABSORPTION, FOREIGN EXCHANGE EARNINGS AND
safety protocols as prescribed locally. OUTGO:
Information as required to be given under Section 134(3)
A Decision Response Team was formed by the Company
(m) read with Rule 8(3) of the Companies (Accounts)
which assessed the situation and took appropriate
Rules, 2014 is provided in Annexure ‘A’ forming part of
decisions with respect to issuing directives for protecting
this Board Report.
its employees including contract workers, supporting
communities and also protecting the financial health of RISK MANAGEMENT:
the business. The Risk Management Committee comprises Mr. Adil
The later quarters of FY 2021 saw the economy opening Zainulbhai, Mr. Sanjeev Aga and Mr. Subramanian Sarma,
up gradually resulting in the revival of demand. Our Directors of the Company. Mr. Adil Zainulbhai is the
employees and associated volunteers on the ground, Chairman of the Committee.
spread awareness about the need for social distancing,

85
Board Report    ANNUAL REPORT 2020-21

The charter of the Committee is to assist the Board Ms. Sunita Sharma resigned as a Director of the Company
in fulfilling its oversight responsibilities for review of with effect from 3rd May 2021 pursuant to withdrawal of
the existing Risk Management Policy, Framework, Risk her nomination by LIC.
Management Structure and Risk Management Systems.
The Board places on record its appreciation towards
The risk assessment includes review of strategic risks valuable contribution made by them during their tenure as
at domestic and international level including sectoral Directors of the Company.
developments, risks related to market competition,
The Board has appointed Mr. S. V. Desai and Mr. T.
financial, geographical, political and reputational issues,
Madhava Das as the Whole-time Directors of the
environment, social and governance risks and cyber
Company for a period of five years with effect from
security risks. The Committee periodically reviews the risk
11th July 2020 upto and including 10th July 2025.
status to ensure that executive management mitigates the
Mr. Subramanian Sarma has been appointed as the
risks by appropriate actions.
Whole-time Director for a period of five years with effect
For further details on risk management please refer to from 19th August 2020 upto and including 18th August
pages 111 and 112 of this Annual Report. 2025. These appointments were approved by shareholders
in the preceeding AGM.
CORPORATE SOCIAL RESPONSIBILITY:
The Corporate Social Responsibility Committee comprises The Board has re-appointed Mr. M. V. Satish as a Whole-
Mr. M. M. Chitale, Mr. R. Shankar Raman and Mr. D. K. time Director for a period from 29th January 2021 upto
Sen as the Members. Mr. Chitale is the Chairman of the and including 7th April 2024 and Mr. R Shankar Raman
Committee. as Whole-time Director for a period from 1st October
2021 upto and including 30th September 2026. Their
The CSR policy framework is available on the website appointments shall be subject to the approval of the
https://investors.larsentoubro.com/Listing-Compliance.aspx. shareholders at this AGM.
A brief note regarding the Company’s initiatives Mr. Sanjeev Aga was appointed as Independent Director
with respect to CSR is given in Annexure ‘B’ - Report of the Company with effect from 25th May 2016
on Corporate Governance forming part of this Board upto and including 24th May 2021. Pursuant to the
Report. Please refer to pages 110 and 111 of this Annual recommendation of the Nomination and Remuneration
Report. Committee, the Board at its Meeting held on 14th May
The disclosures required to be given under Section 135 2021 has approved the re-appointment of Mr. Sanjeev
of the Companies Act, 2013 read with Rule 8(1) of the Aga for a second and final term of five years from 25th
Companies (Corporate Social Responsibility Policy) Rules, May 2021 upto and including 24th May 2026, subject to
2014 are given in Annexure ‘C’ forming part of this Board the approval of shareholders through special resolution at
Report. this AGM.

The Chief Financial Officer of the Company has certified Mr. Narayanan Kumar was appointed as Independent
that CSR funds so disbursed for the projects have been Director of the Company with effect from 27th May
utilized for the purposes and in the manner as approved 2016 upto and including 26th May 2021. Pursuant to the
by the Board. recommendation of the Nomination and Remuneration
Committee, the Board at its Meeting held on 14th May
DETAILS OF DIRECTORS AND KEY MANAGERIAL 2021 has approved the re-appointment of Mr. Narayanan
PERSONNEL APPOINTED/ RESIGNED: Kumar for a second and final term of five years from 27th
Mr. Shailendra Roy ceased to be the Whole-time Director May 2021 to 26th May 2026, subject to the approval of
of the Company with effect from 7th July 2020 on shareholders through special resolution at this AGM.
account of superannuation from the services of the
Based on their skills, experience, knowledge and report
Company.
of their performance evaluation, the Board was of the
Ms. Naina Lal Kidwai ceased to be an Independent opinion that their association would be of immense
Director of the Company with effect from 28th February benefit to the Company and it would be desirable to
2021 on completion of her term as Independent Director. continue to avail their services as Independent Directors.

86
The Board has appointed Mrs. Preetha Reddy as an given in Annexure ‘B’ - Report on Corporate Governance
Independent Director for a period of five years with effect forming part of this Board Report. Members are requested
from 1st March 2021 upto and including 28th February to refer to pages 105 to 109 of this Annual Report.
2026, subject to approval of shareholders.
The Committee has formulated a policy on Directors’
Mr. Hemant Bhargava, Mr. D. K. Sen, Mr. M. V. Satish appointment and remuneration including recommendation
and Mr. R. Shankar Raman, retire by rotation at the of remuneration of the key managerial personnel
ensuing AGM and being eligible, offer themselves for and senior management personnel, composition
re-appointment. and the criteria for determining qualifications,
positive attributes and independence of a Director.
The notice convening the AGM includes the proposals for
Nomination and Remuneration Policy is provided
appointment/re-appointment of Directors.
as Annexure ‘G’ forming part of this Board Report
The terms and conditions of appointment of and also disclosed on the Company’s website at
the Independent Directors are in compliance https://investors.larsentoubro.com/Listing-Compliance.aspx.
with the provisions of the Companies Act, 2013 The Committee has also formulated a separate policy on
and are placed on the website of the Company Board Diversity.
https://investors.larsentoubro.com/Listing-Compliance.aspx.
DECLARATION OF INDEPENDENCE:
The Company has also disclosed on its website The Company has received Declarations of Independence
https://investors.larsentoubro.com/Listing-Compliance.aspx as stipulated under Section 149(7) of the Companies
details of the familiarization programs to educate the Act, 2013 from Independent Directors confirming
Directors regarding their roles, rights and responsibilities in that he/she is not disqualified from appointing/
the Company and the nature of the industry in which the continuing as Independent Director as laid down
Company operates, the business model of the Company, in section 149(6) of the Companies Act, 2013 and
etc. Regulation 16(1)(b) of SEBI Regulations, 2015. The
NUMBER OF MEETINGS OF THE BOARD OF same are also displayed on the website of the Company
DIRECTORS: https://investors.larsentoubro.com/Listing-Compliance.aspx.
The Independent Directors have complied with the Code
This information is given in Annexure ‘B’ - Report on
for Independent Directors prescribed in Schedule IV to the
Corporate Governance forming part of this Report.
Companies Act, 2013.
Members are requested to refer to pages 97 and 98 of this
Annual Report. The Independent Directors of the Company have
registered themselves with the data bank maintained
AUDIT COMMITTEE:
by Indian Institute of Corporate Affairs (IICA). In terms
The Company has in place an Audit Committee in terms of Section 150 of the Act read with Rule 6(4) of the
of the requirements of the Companies Act, 2013 read Companies (Appointment and Qualification of Directors)
with the rules made thereunder and Regulation 18 of the Rules, 2014, the Independent Directors are exempted from
SEBI (Listing Obligations and Disclosure Requirements) undertaking the online proficiency self-assessment test
Regulations, 2015. The details relating to the same are conducted by the IICA.
given in Annexure ‘B’ - Report on Corporate Governance
forming part of this Board Report. Members are requested ANNUAL RETURN:
to refer to pages 103 to 105 of this Annual Report. As per the provisions of section 92(3) of the
Companies Act, 2013, the Annual Return of the
COMPANY POLICY ON DIRECTORS’ APPOINTMENT
Company for the FY 2021 is available on our website
AND REMUNERATION:
https://investors.larsentoubro.com/.
The Company has in place a Nomination and
Remuneration Committee in accordance with the ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
requirements of the Companies Act, 2013 read with The Company has designed and implemented a process
the rules made thereunder and Regulation 19 of the driven framework for Internal Financial Controls (“IFC”)
SEBI (Listing Obligations and Disclosure Requirements) within the meaning of the explanation to Section 134(5)
Regulations, 2015. The details relating to the same are (e) of the Companies Act, 2013. For the year ended

87
Board Report    ANNUAL REPORT 2020-21

31st March 2021, the Board is of the opinion that For the year under review, the questionnaire was updated
the Company has sound IFC commensurate with the suitably based on the comments and suggestions received
nature and size of its business operations and operating from Independent Directors. As in the previous years, an
effectively and no material weakness exists. The Company external consultant was engaged to receive the responses
has a process in place to continuously monitor the same of the Directors and consolidate/ analyze the responses.
and identify gaps, if any, and implement new and/or The consultant’s IT platform was used from initiation till
improved controls wherever the effect of such gaps could conclusion of the entire board evaluation process. This
have a material effect on the Company’s operations. ensured that the process was transparent and independent
of involvement of the Management or the Company’s IT
DIRECTORS’ RESPONSIBILITY STATEMENT:
system. This has enabled unbiased feedback.
The Board of Directors of the Company confirms:
The Board Performance Evaluation inputs, including
a) In the preparation of Annual Accounts, the applicable areas of improvement, for the Directors, Board processes
accounting standards have been followed along with and related issues for enhanced Board effectiveness
proper explanation relating to material departures; were discussed in the meetings of the Nomination and
b) The Directors have selected such accounting policies Remuneration Committee and the Board of Directors held
and applied them consistently and made judgements on 14th May 2021.
and estimates that are reasonable and prudent so as DISCLOSURE OF REMUNERATION:
to give a true and fair view of the state of affairs of
The details of remuneration as required to be disclosed
the Company at the end of the financial year and of
under the Companies Act, 2013 and the rules made
the profit of the Company for that period;
thereunder, are given in Annexure ‘D’ forming part of this
c) The Directors have taken proper and sufficient care Board report.
for the maintenance of adequate accounting records
The information in respect of employees of the Company
in accordance with the provisions of the Companies
required pursuant to Rule 5(2) and 5(3) of the Companies
Act, 2013 for safeguarding the assets of the
(Appointment and Remuneration of Managerial
Company and for preventing and detecting fraud and
Personnel) Rules, 2014, as amended from time to time,
other irregularities;
is provided in Annexure ‘H’ forming part of this report.
d) The Directors have prepared the Annual Accounts on In terms of Section 136(1) of the Act and the rules made
a going concern basis; thereunder, the Report and Accounts are being sent to
the shareholders excluding the aforesaid Annexure. Any
e) The Directors have laid down an adequate system
Shareholder interested in obtaining a copy of the same
of internal financial controls to be followed by the
may write to the Company Secretary at the Registered
Company and such internal financial controls are
Office of the Company. None of the employees listed
adequate and operating efficiently;
in the said Annexure is related to any Director of the
f) The Directors have devised proper systems to ensure Company.
compliance with the provisions of all applicable laws
COMPLIANCE WITH SECRETARIAL STANDARDS ON
and that such systems were adequate and were
BOARD AND GENERAL MEETINGS:
operating effectively.
The Company has complied with Secretarial Standards
PERFORMANCE EVALUATION OF THE BOARD, ITS issued by the Institute of Company Secretaries of India on
COMMITTEES, DIRECTORS AND CHAIRMAN: Board Meetings and General Meetings.
The Nomination and Remuneration Committee and the
PROTECTION OF WOMEN AT WORKPLACE:
Board have laid down the manner in which formal annual
evaluation of the performance of the Board, Committees, The Company believes that every employee should have
Individual Directors and the Chairman has to be made. All the opportunity to work in an environment free from any
Directors responded through a structured questionnaire conduct which can be considered as sexual harassment.
giving feedback about the performance of the Board, its The Company is committed to treating every employee
Committees, Individual Directors and the Chairman. with dignity and respect. The Company has formulated a

88
policy on ‘Protection of Women’s Rights at Workplace’ as 2013 and the rules made thereunder and the SBEB
per the provisions of the Sexual Harassment of Women Regulations together with a certificate obtained
at Workplace (Prevention, Prohibition & Redressal) Act, from the Statutory Auditors, confirming compliance,
2013 and Rules, 2013. The policy is applicable to all L&T is provided on the website of the Company
establishments located in India. The policy has been widely https://investors.larsentoubro.com/Listing-Compliance.aspx.
disseminated. The Company has constituted Internal
The certificate obtained from the Statutory Auditors,
Complaints Committees to ensure implementation and
confirming compliance with the Companies Act, 2013
compliance with the provisions of the aforesaid Act and
and the SBEB Regulations is also provided in Annexure
the Rules.
‘B’ forming part of this Report.
This Policy addresses the following objectives:
• Corporate Governance: Pursuant to Regulation
• To define Sexual Harassment; 34 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a Report on
• To lay down the guidelines for reporting acts of
Corporate Governance and a certificate obtained
Sexual Harassment at the workplace; and
from the Statutory Auditors confirming compliance,
• To provide the procedure for the resolution and are provided in Annexure ‘B’ forming part of this
redressal of complaints of Sexual Harassment. Report.

A detailed procedure for making a Complaint and • Business Responsibility Reporting: As per
initiating an Enquiry to the redressal process, and finally Regulation 34 of the SEBI (Listing Obligations and
the process of preparation of a report within a stipulated Disclosure Requirements) Regulations, 2015, a
timeline is well laid out in the Policy document. The Policy separate section on Business Responsibility Reporting
also covers Disciplinary Action for sexual harassment and forms a part of this Annual Report (refer to pages 28
is a part of the Company’s Code of Conduct. to 53).

Training programs and workshops for employees • Integrated Reporting: The Company has adopted
are organised throughout the year. The orientation the Integrated Reporting Framework as laid down
programs for new recruits include awareness sessions by International Integrated Reporting Council.
on prevention of sexual harassment and upholding The Integrated Report tracks the sustainability
the dignity of employees. Specific programs have been performance of the organization and its
created on the digital platform to sensitize employees interconnectedness with the financial performance,
to uphold the dignity of their colleagues and prevention showcasing how the Company is adding value to its
of sexual harassment. During FY 2021, about 13,400 stakeholders.
employees have undergone training through the programs
The Integrated Report encompasses areas such as
/ workshops including the awareness sessions held on
Corporate Governance, the Integrated Reporting
digital platform.
and Sustainability Structure, Sustainability Roadmap
There were 3 complaints received during the FY 2021. All 2021, Risks and Opportunities, enhancement of
the complaints were redressed as per the provisions of the Financial Capital, Manufactured Capital, Intellectual
Sexual Harassment of Women at Workplace (Prevention, Capital, Human Capital, Natural Capital and Social
Prohibition and Redressal) Act, 2013 and Rules, 2013. & Relationship Capital and alignment to sustainable
development goals. It also covers strategy, business
OTHER DISCLOSURES:
model and resource allocation.
• ESOP Disclosures: There has been no material
change in the Employee Stock Option Schemes The Integrated Report for the FY 2020
(ESOP schemes) during the current financial year. is available on the Company’s website
The ESOP Schemes are in compliance with Securities https://www.lntsustainability.com/integrated-report/
and Exchange Board of India (Share Based Employee and the report for the FY 2021 shall be published
Benefit) Regulations, 2014 (“SBEB Regulations”). shortly.

The disclosures relating to ESOPs required to be • Statutory Compliance: The Company complies with
made under the provisions of the Companies Act, all applicable laws and regulations, pays applicable

89
Board Report    ANNUAL REPORT 2020-21

taxes on time, takes care of all its stakeholders, Committee of the Company oversees the implementation
ensures statutory CSR spend and initiates sustainable of the Whistle-Blower Policy.
activities.
The Company has disclosed information about the
• MSME: The Ministry of Micro, Small and Medium establishment of the Whistle Blower Policy on its website
Enterprises vide their Notification dated 2nd https://investors.larsentoubro.com/CorporateGovernance.aspx.
November 2018 has instructed all the Companies During the year, no person has been declined access to the
registered under the Companies Act, 2013, with a Audit Committee, wherever desired.
turnover of more than Rupees Five Hundred crore to
Also see pages 112 and 113 forming part of Annexure ‘B’
get themselves onboarded on the Trade Receivables
of this Board Report.
Discounting system platform (TReDS), set up by
the Reserve Bank of India. In compliance with this DETAILS OF SIGNIFICANT AND MATERIAL ORDERS
requirement, the Company has registered itself on PASSED BY THE REGULATORS OR COURTS OR
TReDS. TRIBUNALS:

The Company complies with the requirement of During the year under review, there were no material
submitting a half yearly return to the Ministry of and significant orders passed by the regulators or courts
Corporate Affairs within the prescribed timelines. or tribunals impacting the going concern status and the
Company’s operations in future.
• IBC: There is no Corporate Insolvency Resolution
Process initiated under the Insolvency and Bankruptcy CONSOLIDATED FINANCIAL STATEMENTS:
Code, 2016. Your Directors have pleasure in attaching the Consolidated
Financial Statements pursuant to Section 129(3) of
• Remuneration received by Whole time Director
the Companies Act, 2013 and Regulation 34 of the
from subsidiary company: Mr. Subramanian Sarma,
SEBI (Listing Obligations and Disclosure Requirements)
Whole-time Director of the Company is also the
Regulations, 2015 and prepared in accordance with
Managing Director of a Wholly Owned Subsidiary,
the provisions of the Companies Act, 2013 and the
L&T Hydrocarbon Engineering Limited. During the FY
Indian Accounting Standards (Ind AS) notified under the
2021, part of the remuneration received by Mr. Sarma
Companies (Indian Accounting Standards) Rules, 2015 and
was charged to L&T Hydrocarbon Engineering Limited
amendments thereof issued by the Ministry of Corporate
(LTHE). Accordingly, the Company has recovered an
Affairs in exercise of the powers conferred by section 133
amount of R 3.17 crore from LTHE for remuneration
of the Companies Act, 2013.
paid to Mr. Sarma.
AUDIT REPORT:
VIGIL MECHANISM:
The Auditors’ report to the shareholders does not contain
As per the provisions of Section 177(9) of the Companies
any qualification, observation or adverse comment.
Act, 2013 (‘Act’), the Company is required to establish an
effective Vigil Mechanism for directors and employees to SECRETARIAL AUDIT REPORT:
report genuine concerns. The Secretarial Audit Report issued by M/s. S. N.
The Company has a Whistle-blower Policy in place since Ananthasubramanian & Co., Company Secretaries, is
2004 to encourage and facilitate employees to report attached as Annexure ‘E’ forming part of this Board
concerns about unethical behaviour, actual/ suspected Report.
frauds and violation of Company’s Code of Conduct or AUDITORS:
Ethics Policy. The Policy has been suitably modified to
In view of the mandatory rotation of auditors’ requirement
meet the requirements of Vigil Mechanism under the
and in accordance with the provisions of Companies Act,
Companies Act, 2013. The policy provides for adequate
2013, M/s. Deloitte Haskins & Sells LLP were re-appointed
safeguards against victimisation of persons who avail the
as Statutory Auditors for a period of 5 continuous years
same and provides for direct access to the Chairperson of
from the conclusion of 75th Annual General Meeting till
the Audit Committee. The policy also establishes adequate
the conclusion of 80th Annual General Meeting of the
mechanism to enable employees report instances of leak
Company.
of unpublished price sensitive information. The Audit

90
The Auditors have confirmed that they have subjected Records and Audit) Rules, 2014 and amendments
themselves to the peer review process of Institute of thereof, the Board, on the recommendation of the Audit
Chartered Accountants of India (ICAI) and hold valid Committee, at its meeting held on 14th May 2021, has
certificate issued by the Peer Review Board of the ICAI. approved the appointment of M/s R. Nanabhoy & Co.,
Cost Accountants as the Cost Auditors for the Company
The Auditors have also furnished a declaration confirming
for the financial year ending 31st March 2022 at a
their independence, their arm’s length relationship with
remuneration of R 13 lakhs.
the Company as well as declaring that they have not
taken up any prohibited non-audit assignments for the A proposal for ratification of remuneration of the Cost
Company. Auditor for the FY 2022 is placed before the shareholders.

The Audit Committee reviews the independence and The Report of the Cost Auditors for the financial year
objectivity of the Auditors and the effectiveness of the ended 31st March 2021 is under finalization and shall
Audit process. be filed with the Ministry of Corporate Affairs within the
prescribed period.
The Auditors attend the Annual General Meeting of the
Company. ACKNOWLEDGEMENT:

Also see page no. 113 forming part of Annexure ‘B’ of this The Directors take this opportunity to thank the
Board Report. customers, supply chain partners, employees, Financial
Institutions, Banks, Central and State Government
REPORTING OF FRAUD: authorities, Regulatory Authorities, Stock Exchanges and
The Auditors of the Company have not reported any all the various other stakeholders for their continued
instances of fraud committed against the Company by its co-operation and support to the Company. Your Directors
officers or employees as specified under Section 143(12) also wish to record their appreciation for the continued
of the Companies Act, 2013. co-operation and support received from the Joint Venture
Partners / Associates.
COST AUDITORS:
The provisions of Section 148(1) of the Companies Act,
For and on behalf of the Board
2013 are applicable to the Company and accordingly
the Company has maintained cost accounts and records
A.M. NAIK
in respect of the applicable products for the year ended
Group Chairman
31st March 2021. (DIN: 00001514)
Pursuant to the provisions of Section 148 of the Date : 14th May 2021
Companies Act, 2013 and as per the Companies (Cost Place : Mumbai

91
Annexure to the Board Report    ANNUAL REPORT 2020-21

Annexure ‘A’ to the Board Report burners which are equipped with magnetic
resonators.
Information as required to be given under Section 134(3) zz Successfully completed Bureau Veritas
(m) read with Rule 8(3) of the Companies (Accounts) Surveillance audit Of ISO50001 Energy
Rules, 2014. Management System of all 3 ASW ESP MFG.
[A] CONSERVATION OF ENERGY: campus.

(i) Steps taken or impact on conservation of energy: zz Zinc Recovery machines installed to recover zinc
from zinc ash generated during galvanizing
zz Retrofitting of CNC Plasma Cutting machine with
process.
energy efficient drive system.
zz Retrofitting of EOT crane of 15T capacity with zz Installed gantry cranes, for reducing hydra usage
energy efficient drives, IE2 class motors and thereby saving requirement of High Speed Diesel.
improved feedback mechanism. zz Increased use of digital collaboration tools such
zz Retrofitting of electrical panels of Air compressors as Microsoft Teams and Virtual Inspections led to
and ETP area gentry cranes with energy efficient reduced travel and carbon footprint.
switch gears. zz Adoption of Integrated Vehicle Management
zz Maintaining Unity Power Factor at distribution System led to fuel savings.
level through APFC controller. zz Implementation of Digital Smart Building - A. M.
zz Compressed air management through “Tag-Your- Naik Tower with Cisco Software Defined Network
Leak” Program. and LTTS iBEMS solution.
zz Compressor using X8I-Air Manager for Blasting zz Usage of PoE (Power Over Ethernet) based
and Painting. devices.
zz Dedicated adequate rating 15 HP compressor zz Reduction in the MD-Demand in EB 315 KVA to
instead of 160 KW Compressor for Grit collection 200 KVA in Chennai.
and Painting Operation.
zz Implemented IOT Based Energy Meter in main
zz Replacing aged inefficient Pumps (Water, Sewage incomer to monitor the power consumption.
& HVAC ) with energy efficient ones.
(ii) Steps taken by the Company for utilizing
zz Replacing aged inefficient Split AC units with
alternate sources of energy:
energy efficient units.
zz Shift towards usage of windmill power in the
zz Utilization of Chiller for HVAC System – Campus place of State Electricity Board.
FMD initiated and controlled the chiller running
hour for HVAC on holidays and extended zz Dedicated motor for oil cooling to reduce energy
working hours. consumption.

zz Initiated replacement of Air-Cooled Chiller with zz Development of IE3 Class Motor for OTR Presses.
Water Cooled Chiller.
zz Use of Therminol Fluid in place of Steam heating
zz Power generation through Solar Roof top PV for 55” Tube Presses.
installation.
zz Implemented 120w led luminaries instead of
zz Commissioned Air Compressor with Variable 250w HPMH lamp in Shop floor and Energy
Speed Drive which reduced the air pressure from saved 3500 KWH / Annum.
5.5 to 6.5 bar to 5.2 bar constant pressure.
zz Implemented VFD drive in Line 1 De dusting and
zz Utilization of Solar Lights for lighting around energy saved 66000 KWH/Annum.
compound walls.
zz Rainwater harvesting implemented.
zz Developed Panasonic make MIG Welding
Machines. zz Replacement of Mono-block pumps; B-class
insulation with F-class insulation, SS impeller +
zz Installed Magnetic Resonators in all furnaces
shaft, Mechanical seal Mono-block pump.
- 100% furnace charges are conducted with

92
zz Time based ON /OFF compressor controller local region. The Technology is implemented for
implemented and Energy saved 9000 KWH / various complex on-site fabrication jobs.
Annum.
zz In-house design developed for cryogenic service
zz Installed Solar panels at project sites. Vaporisers, which are critical for equipment
operating in cyclic service.
zz Alternate usage of M-sand instead of Natural
Sand at all project sites helped in conserving the zz Capability development for design of
natural resources. components with consideration of advanced
creep-fatigue interaction evaluations.
zz Usage of alternative solution of curing compound
for all vertical structures in the projects. zz Development of chemical process technology
in the area of residue up-gradation (Petroleum
zz Developed in-house hybrid light masts and Refining) and Coal/Petcoke Gasification.
deployed it across sites.
zz Developed manufacturing technology for
zz Installation of customised solar panels for Titanium Steam Generators.
weighbridges.
zz Advanced welding process implemented for Coke
zz Installation of online emission monitoring system Drum overlay, resulting in quantum improvement
for tracking real-time pollution level status to in quality and productivity.
remain energy efficient.
zz 3-D printing of critical fixtures yielded excellent
(iii) Capital investment on energy conservation flexibility to manufacturing of complex designs.
equipments:
zz POC for Wireless HMI successfully demonstrated
zz Use of High-Tension breakers maintenance (for on IOT welding station.
effective monitoring of power consumption).
zz Successful implementation of predictive
zz Transformer Oil servicing towards effective maintenance through use of connected sensors
functioning and reducing heat losses. and in-house developed data processing software
zz Installation of Auto Cut off sensors. zz Launching Girder, Straddle carrier and Girder
transporter required for High speed rail projects.
zz Use of zero speed ship fin stabilizer and Ship
Degaussing Technology. zz Developed cascading chute (Telescopic chute
with adjustable height to control the material fall
zz Capability enhancement in underwater Acoustic
while stacking).
simulation.
zz Developed Wagon loading system by traverser/
zz Installation of POE based devices – Switched,
ejector/ side arm charger.
Wi-Fi, IP Telephone, Cameras.
zz Introduced grid collection trolley for quick
zz Implemented iBEMS solutions with Sensors at sucking of the grids.
various touch points.
zz Developed UVGI installation in air handling units
The measures taken have resulted in savings in cost of for increased cooling efficiency.
production, power consumption and processing time at all
locations. zz Introduced batch curing process.

[B] TECHNOLOGY ABSORPTION: zz Joint collaborative effort undertaken with SINTEF

(i) Efforts made towards technology absorption: (Norway) for RCA Sand production.

zz Technology developed for design and supply of zz Digital system developed to list full kitting, track
Molten Salt Bath Reactor (MSBR) systems. each equipment/material packed, containerized
and shipped to ensure full traceability and
zz Development of improved design of Boiler for reliability.
ammonia synthesis process. The application for
Indian patent is in progress. zz Developed Robotic Process Automation systems
(RPA) for repetitive activities of the F&A and IT
zz Advanced manufacturing simulation technology teams.
for 3D analysis of overlay induced distortion in

93
Annexure to the Board Report    ANNUAL REPORT 2020-21

zz Developed in-house solutions (Privilege (ii) Benefits derived like product improvement,
Management System) to enable IT secured cost reduction, product development or import
remote access to the project servers for work substitution:
from home. zz Reduction in carbon footprint by usage of GGBS
zz Developed Scrap and End Bit Rod in Our P42 (Ground Granulated Blast furnace Slag), Flyash
Manual Bending Machine for MLCP Project size. and Admixtures.
zz Usage of Curing Compound which are paint
zz Implementation of cured tyre handling
like and are applied on the finish structures to
Automation system, load control for 84” cracker
achieve the maximum strength.
Mill through Digital load cell arrangement, OTR
Presses for Tulip Mold and OTR – Radial II Stage zz Developed first-of-its-kind crowd management
Tire building. system that proactively interprets crowd dynamics
and provides timely alerts.
zz Development of higher capacity surface miner for
coal application. zz Deployed Computer Vision enabled Pothole
detection algorithm to notify city authorities on
zz Developed Bulk Reception unit for feeding coal areas with high intensity of potholes.
after receiving from dumper.
zz Development of Amogh acts as import
zz Developed tertiary reversible impact crusher substitution for applications of oceanographic
(RI6363T). surveys up to depth of 1000 m.
zz Implemented RFID system in Shop floor machine zz Development of efficient hull forms to select
to ensure authorized operation and to reduce idle lower capacity propulsion systems, which is a
running hours and Energy consumption. major cost element in the ships.
zz Pilot with CISCO on new POE based technologies. zz Integration of new communication technologies
such as 4G, NBIoT and LoRa in the Smart Meters.
zz Virtual Site visit and Audit using Internet enabled
Goggles by Project team and Vendors. zz Usage of smart glass for remote project review
and remote inspection at vendor’s saves travel
zz Adopted Precast Ballastlesss Slab Track time and cost.
manufactured in a sophisticated factory-
zz Increased self-reliance and savings in Foreign
controlled setup.
Exchange in process plant, refinery and power
zz Development of highway and aircraft pavement plant equipment sector.
design with cement-treated sub-base optimizing zz Reduction in production cycle time, cost and
the pavement crust thickness by 15% to 20%. rework due to implementation of advanced
zz Adoption of introjected walls as an alternative to manufacturing.
conventional retaining walls. zz Continuous improvement in on-site fabrication
zz Flexible pavement overlay design using falling capability.
weight deflectometer data. zz Developed a new resurfacing technology
for bridge decks with light weight concrete,
zz Usage of Geocomposite drains as an alternative
geotextiles and asphalt concrete.
to conventional filter media.
zz Implemented optimized pavement overlay
zz Installation of 3D kits in Graders, excavators,
solution by LTCRTC for foundation structures.
pavers and base stations at project sites.
zz PID Technology to reduce energy wastage.

94
(iii) Information regarding technology imported
S. Technology Year of Status of absorption
during the last 3 years: No. Imported Import & reasons for non-
absorption, if any
S. Technology Year of Status of absorption
No. Imported Import & reasons for non- d) DC Traction 2019 Optimization of ratings of
absorption, if any System Design rectifiers and transformers
a) Magnetic Field 2018 Electromagnetic Field using the overload
Analysis for for Underground Cables capacity has also been
Underground inside Power Duct developed, leading to
220kV Power with different level economy in project
cables inside depths for Amaravati execution.
Power Duct Projects has been done
and analyzed which e) POE based devices 2020 Fully absorbed and helped
henceforth concluded in cost reduction.
with a satisfactory result,
Field Strength being
(iv) Expenditure incurred on Research &
under the acceptable
electromagnetic pollution Development:
limit set to protect health v crore
of the public. 2020-21
b) Verse Equipment 2019 Non-destructive
Capital 11.11
measurement of stress-
free temperature of track. Recurring 115.17
c) Electrical Storage 2019 The Electrical Storage Total 126.28
System System (ESS) are capable
of storing energy and Total R&D expenditure as a percentage of 0.16%
powering trains during total turnover
failure of Traction Supply.
ESS system are also [C] FOREIGN EXCHANGE EARNINGS AND OUTGO:
capable of voltage v crore
stabilization-smoothening
2020-21
the voltage fluctuation
caused by normal traction Foreign Exchange earned 5,435.29
operations.
Foreign Exchange saved / deemed exports 23.16
Optimization of both
inverter capacity as well as Total 5,458.45
battery capacity has been Foreign Exchange used 5,602.50
achieved for ESS system,
leading to economies in
project execution.

95
Annexure to the Board Report    ANNUAL REPORT 2020-21

Annexure ‘B’ to the Board Report

A. CORPORATE GOVERNANCE
Corporate Governance is a set of principles, processes and systems which govern a company. The elements of
Corporate Governance are independence, transparency, accountability, responsibility, compliance, ethics, values and
trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth
and create value for all its stakeholders.
The Company believes that sound Corporate Governance is critical for enhancing and retaining stakeholder trust and
always seeks to ensure that its performance goals are met accordingly. The Company has established systems and
procedures to ensure that its Board of Directors is well informed and well equipped to fulfill its overall responsibilities
and to provide management with the strategic direction needed to create long term shareholders value. The
Company had adopted many ethical and transparent governance practices even before they were mandated by law.
The Company has always worked towards building trust with shareholders, employees, customers, suppliers and
other stakeholders based on the principles of good corporate governance.
B. COMPANY’S CORPORATE GOVERNANCE PHILOSOPHY
The Company’s essential character revolves around values based on transparency, integrity, professionalism and
accountability. At the highest level, the Company continuously endeavors to improve upon these aspects on an
ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements
through proper empowerment and motivation, fostering a healthy growth and development of human resources to
take the Company forward.
C. THE GOVERNANCE STRUCTURE
The Company has four tiers of Corporate Governance structure, viz.:
(i) Strategic Supervision – by the Board of Directors comprising the Executive, Non-Executive Directors and
Independent Directors.
Executive Management – by the Executive Committee (ECom) comprising of the Chief Executive Officer and
(ii)
Managing Director, 7 Executive Directors and a few senior leaders.
Strategy and Operational Management – by the Independent Company Boards of each Independent
(iii)
Company (IC) (not legal entities) comprising of representatives from the Company’s Board, Senior Executives
from the IC and independent members.
Operational Management – by the Business Unit (BU) Heads.
(iv)
The four-tier governance structure, besides ensuring greater management accountability and credibility, facilitates
increased autonomy to the businesses, performance discipline and development of business leaders, leading to
increased public confidence.
D. ROLES OF VARIOUS CONSTITUENTS OF CORPORATE GOVERNANCE IN THE COMPANY
a. Board of Directors (the Board):
The Directors of the Company are in a fiduciary position, empowered to oversee the management functions with
a view to ensuring its effectiveness and enhancement of shareholder value. The Board also provides strategic
direction, reviews and approves management’s business objectives, plans and oversees risk management.
b. The Group Chairman (GC):
The GC is the Chairman of the Board. His primary role is to provide leadership to the Board and guidance and
mentorship to the CEO & MD and Executive Directors for realizing the approved strategic plan and business
objectives. He presides over the Board and the Shareholders’ meetings.
c. Executive Committee (ECom):
The ECom provides a companywide operations review and plays a key role in strengthening linkages between
the ICs and the Company’s Board, as well as in rapidly realizing inter-IC synergies. In addition, the ECom
deliberates upon strategic and tactical issues that cut across ICs and Corporate. The agenda includes:

96
zz Review of major order prospects (Standalone/ Group) / “Integrated offerings”
zz Review of consolidated financials including working capital, cash flow, capital structure, etc.
zz Review of Monthly / Quarterly / Yearly financial performance
zz Review of Revenue, Capital and Manpower Budget and performance there against
zz Review and discuss strategic issues which impact the entire organization, viz.,
i. International business expansion
ii. IC synergies
iii. HR Update/ Talent Management / Service contract extensions for senior management personnel /
Leadership development and succession planning
iv. Digitalization and Analytics initiatives
v. Managing the current covid scenario, both business and humane side for all stakeholders
zz Approval of common policies
zz Sharing of best practices
zz Strategic plans and business portfolio reviews
d. The Chief Executive Officer and Managing Director (CEO & MD):
The CEO & MD is fully accountable to the Board for the Company’s business development, operational
excellence, business results, leadership development and other related responsibilities.
e. Executive Directors (ED) / Senior Management Personnel:
The Executive Directors, as members of the Board, along with the Senior Management Personnel in the ECom,
contribute to the strategic management of the Company’s businesses within Board approved direction and
framework. They assume overall responsibility for strategic management of business and corporate functions
including its governance processes and top management effectiveness.
f. Non-Executive Directors (NED) / Independent Directors:
The Non-Executive Directors / Independent directors play a critical role in enhancing balance to the Board
processes with their independent judgment on issues of strategy, performance, resources, standards of conduct,
safety, etc., besides providing the Board with valuable inputs.
g. Independent Company Board (IC Board):
As a part of Lakshya 2010-2015 strategic plan, the Company decided to have Hybrid Holdco Structure. Each
Independent Company (IC) has a Board comprising of Members from the Parent Board, 2 or 3 Independent
Members from the Industry and 2-3 Senior Executives of the IC. The IC Board helps the Business Head in
bringing outside-in view and assessing the business performance.
E. BOARD OF DIRECTORS
a. Composition of the Board:
The Company’s policy is to have an appropriate mix of Executive, Non-Executive and Independent Directors.
As on 31st March 2021, the Board comprised the Group Chairman, the Chief Executive Officer & Managing
Director, 7 Executive Directors, 2 Non-Executive Directors (representing financial institutions) and 8 Independent
Directors, including one Independent Woman Director. The composition of the Board, as on 31st March 2021, is
in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR Regulations’).
b. Meetings of the Board:
The Meetings of the Board are generally held at the Registered Office of the Company at L&T House, Ballard
Estate, Mumbai 400 001 and whenever necessary, in locations, where the Company operates. However, in view
of the COVID 19 pandemic and the restrictions on movement imposed by the government authorities, during
FY 2021 Board Meetings were held through video conferencing. The Meetings of the Board have been held at
regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the year
under review, 8 meetings were held on 9th April 2020, 5th June 2020, 11th July 2020, 22nd July 2020, 28th
October 2020, 25th January 2021, 25th March 2021 and 26th March 2021.

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Annexure to the Board Report    ANNUAL REPORT 2020-21

The Independent Directors met on 18th May 2020, 28th May 2020, 20th July 2020 and 27th October 2020
to discuss, interalia, the performance evaluation of the Board as a whole and assess the quality, quantity and
timeliness of flow of information between the management and the Board of Directors that is necessary for the
Board to effectively and reasonably perform their duties.
The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Group
Chairman / Chief Executive Officer & Managing Director and circulates the same in advance to the Directors.
Every Director is free to suggest inclusion of items on the agenda. The Board meets at least once every quarter,
inter alia, to review the quarterly results. Additional meetings are held, whenever necessary. The meetings
were conducted through video conference during the year. Presentations are made on business operations to
the Board by Independent Companies / Business Units. Senior management personnel are invited to provide
additional inputs for the items being discussed by the Board of Directors as and when necessary. The respective
Chairman of the Board Committees apprise the Board Members of the important issues and discussions in the
Committee Meetings. Minutes of Committee meetings are also circulated to the Board.
The Minutes of the proceedings of the Meetings of the Board of Directors are noted and the draft minutes are
circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors
are also incorporated in the Minutes, in consultation with the Chairman. The minutes are approved and entered
in the minutes book within 30 days of the Board meeting. Thereafter, the minutes are signed and dated by the
Chairman of the Board at the next meeting.
The composition of the Board of Directors as on 31st March 2021 and their attendance at the Meetings during
the year and at the last Annual General Meeting is as under:
Name of Director Category Meetings held No. of Board Attendance at
during the year Meetings last AGM
attended
Mr. A. M. Naik GC 8 8 Yes
Mr. S. N. Subrahmanyan CEO & MD 8 8 Yes
Mr. R. Shankar Raman ED 8 8 Yes
Mr. D. K. Sen ED 8 8 Yes
Mr. M. V. Satish ED 8 8 Yes
Mr. J. D. Patil ED 8 8 Yes
Mr. Subramanian Sarma@ ED 8 8 Yes
Mr. S. V. Desai^ ED 6 6 Yes
Mr. T. Madhava Das ^ ED 6 6 Yes
Mr. M. M. Chitale ID 8 8 Yes
Mr. Subodh Bhargava ID 8 8 Yes
Mr. M. Damodaran ID 8 8 No
Mr. Vikram Singh Mehta ID 8 8 Yes
Mr. Adil Zainulbhai ID 8 8 Yes
Mrs. Sunita Sharma*(Note 1) NED 8 8 Yes
Mr. Sanjeev Aga ID 8 8 Yes
Mr. Narayanan Kumar ID 8 8 Yes
Mr. Hemant Bhargava (Note 1) NED 8 8 Yes
Mrs. Preetha Reddy # ID 2 2 NA
Meetings held during the year are expressed as number of meetings eligible to attend.
Note 1: Representing equity interest of LIC
@ Non-executive director upto 18th August 2020 and appointed as whole-time director w.e.f. 19th August 2020.
^ appointed as whole-time directors w.e.f. 11th July 2020.
# Appointed as an Independent Director w.e.f. 1st March 2021
* Resigned as a Director w.e.f. 3rd May 2021 pursuant to withdrawal of nomination by LIC.
GC - Group Chairman CEO & MD - Chief Executive Officer & Managing Director
ED - Executive Director NED - Non-Executive Director
ID - Independent Director

98
1. None of the above Directors are related inter se.
2. None of the Directors hold the office of director in more than the permissible number of companies under
the Companies Act, 2013 or Regulation 17A of the SEBI LODR Regulations.
As on 31st March 2021, the number of other Directorships and Memberships / Chairmanships of Committees of
the Board of Directors along with the names of the listed entities (whose equity securities are listed) wherein the
Director holds directorships are as follows:

Name of Director No. of other No. of No. of Names of other Listed Category of
company Committee Committee entities where he Directorship
Directorships Membership Chairmanship holds Directorship
Mr. A. M. Naik 5 0 0 Larsen & Toubro Infotech Non-Executive
Limited Chairman
L&T Technology Services Non-Executive
Limited Chairman
Mindtree Limited Non-Executive
Chairman
Mr. S. N. 5 0 0 Larsen & Toubro Infotech Non- Executive
Subrahmanyan Limited Vice- Chairman
L&T Technology Services Non- Executive
Limited Vice- Chairman
Mindtree Limited Non- Executive
Vice- Chairman
Mr. R. Shankar 9 6 0 Larsen & Toubro Infotech Non-Executive Director
Raman Limited
L&T Finance Holdings Non-Executive Director
Limited
Mindtree Limited Non- Executive
Director
Mr. D. K. Sen 6 0 0 Nil
Mr. M. V. Satish 1 0 0 Nil
Mr. J. D. Patil 1 1 0 Nil
Mr. Subramanian 3 0 0 Nil
Sarma @
Mr. S. V. Desai^ 4 0 0 Nil
Mr. T. Madhava 0 0 0 Nil
Das^
Mr. M. M. Chitale 6 4 3 Atul Limited Independent Director
Larsen & Toubro Infotech Independent Director
Limited
Bhageria Industries Independent Director
Limited
Mr. Subodh 1 1 0 Batliboi Limited Independent Director
Bhargava
Mr. M. Damodaran 8 4 4 Crisil Limited Independent Director
Hero Motocorp Limited Independent Director
Tech Mahindra Limited Independent Director
Biocon Limited Independent Director
Interglobe Aviation Chairman and
Limited Independent Director

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Annexure to the Board Report    ANNUAL REPORT 2020-21

Name of Director No. of other No. of No. of Names of other Listed Category of
company Committee Committee entities where he Directorship
Directorships Membership Chairmanship holds Directorship
Mr. Vikram Singh 6 4 1 Colgate-Palmolive (India) Independent Director
Mehta Limited
HT Media Limited Independent Director
Apollo Tyres Limited Independent Director
Mahindra & Mahindra Independent Director
Limited
Jubilant Foodworks Independent Director
Limited
Mr. Adil Zainulbhai 7 4 5 Reliance Industries Independent Director
Limited
Network18 Media & Chairman and
Investment Limited Independent Director
Cipla Limited Independent Director
TV18 Broadcast Limited Chairman and
Independent Director
Mrs. Sunita 1 2 1 Nil
Sharma*
Mr. Sanjeev Aga 4 3 2 Larsen & Toubro Infotech Independent Director
Limited
UFO Moviez India Chairman and
Limited Independent Director
Pidilite Industries Limited Independent Director
Mahindra Holidays & Independent Director
Resorts India Limited
Mr. Narayanan 7 3 4 L&T Technology Services Independent Director
Kumar Limited
Mphasis Limited Independent Director
Take Solutions Limited Chairman and
Independent Director
Entertainment Network Independent Director
(India) Limited
Indus Towers Limited Independent Director
Mr. Hemant 3 2 0 The Tata Power Company Nominee Director
Bhargava Limited
Voltas Limited Non-Executive Director
ITC Limited Non- Executive
Director
Mrs. Preetha Reddy 9 2 0 Apollo Hospitals Whole-time Director
# Enterprise Limited
Notes:
^ appointed as whole-time directors w.e.f. 11th July 2020.
# Appointed as an Independent Director w.e.f. 1st March 2021
@ Non-executive director upto 18th August 2020 and appointed as Whole-time director w.e.f. 19th August 2020.
* Resigned as a Director w.e.f. 3rd May 2021 pursuant to withdrawal of nomination by LIC.
zz Other Company Directorships includes directorships in all public limited companies and excludes private
limited companies, foreign companies and Section 8 companies.
zz The details of Committee Chairmanships / Memberships are disclosed as per Regulation 26 of the SEBI LODR
Regulations.

100
c. Information to the Board:
The Board of Directors are provided information relating to the Company, which inter alia includes-
zz Annual revenue budgets and capital expenditure plans
zz Quarterly results and results of operations of ICs and business segments
zz Financing plans of the Company
zz Minutes of meeting of Board of Directors, Audit Committee, Nomination and Remuneration Committee,
Stakeholders Relationship Committee, Risk Management Committee and Corporate Social Responsibility
Committee
zz Details of any joint venture, acquisitions of companies or collaboration agreement or sale of investments,
subsidiaries, assets and quarterly report on fatal or serious accidents or dangerous occurrences.
zz Any materially relevant default, if any, in financial obligations to and by the Company or substantial non-
payment for goods sold or services rendered, if any
zz Any issue, which involves possible public or product liability claims of substantial nature, including any
Judgment or Order, if any, which may have strictures on the conduct of the Company
zz Developments in respect of human resources/industrial relations
zz Compliance or Non-compliance of any regulatory, statutory nature or listing requirements and investor
service such as non-payment of dividend, delay in share transfer, etc., if any.
d. Post-meeting internal communication system:
The important decisions taken at the Board / Committee meetings are communicated to the concerned
departments / ICs promptly. An Action Taken Report is regularly presented to the Board.
e. Board Skill Matrix:
The matrix setting out the skills / expertise/competence of the Board of Directors is given below:

Sr. Experience Comments

No / Expertise /
Attribute
1 Leadership Ability to envision the future and prescribe a strategic goal for the Company, help the Company to
identify possible road maps, inspire and motivate the strategy, approach, processes and other such
key deliverables and mentor the leadership team to channelize its energy/efforts in appropriate
direction. Be a thought leader for the Company and be a role model in good governance and ethical
conduct of business, while encouraging the organization to maximize shareholder value. Should have
had hands on experience of leading an entity at the highest level of management practices.
2 Industry Should possess domain knowledge in businesses in which the Company participates viz.
knowledge and Infrastructure, Power, Heavy Engineering, Defence, Hydrocarbon, Financial Services, Information
experience Technology and Technology Services. Must have the ability to leverage the developments in the
areas of engineering and technology and other areas as appropriate for betterment of Company’s
businesses.
3 Experience and Should possess ability to develop professional relationship with the Policy makers and Regulators for
Exposure in policy contributing to the shaping of Government policies in the areas of Company’s businesses.
shaping and
industry advocacy
4 Governance Commitment, belief and experience in setting corporate governance practices to support the
including legal Company’s robust legal compliance systems and governance policies/practices.
compliance

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Annexure to the Board Report    ANNUAL REPORT 2020-21

Sr. Experience Comments

No / Expertise /
Attribute
5 Expertise/ Ability to understand financial policies, accounting statements and disclosure practices and
Experience contribute to the financial/risk management policies/ practices of the Company across its business
in Finance & lines and geography of operations.
Accounts / Audit /
Risk Management
areas
6 Global Experience Ability to have access and understand business models of global corporations, relate to the
/ International developments with respect to leading global corporations and assist the Company to adapt to
Exposure the local environment, understand the geo political dynamics and its relations to the Company’s
strategies and business prospects and have a network of contacts in global corporations and industry
worldwide.
The above list of core skills/expertise/competencies identified by the Board of Directors as required in the context
of its business(es) and sector(s) for it to function effectively, are available with the Board.
The mapping of the Skill Matrix for the FY 2021 for all the Directors is as follows:

Sr. Name of the Director 1 2 3 4 5 6

No
1. Mr. A. M. Naik √ √ √ √ √ √
2. Mr. S. N. Subrahmanyan √ √ √ √ √ √
3. Mr. R. Shankar Raman √ √ √ √ √ X
4. Mr. D. K. Sen √ √ X √ X √
5. Mr. M. V. Satish √ √ X √ X √
6. Mr. J. D. Patil √ √ √ √ X X
7. Mr. Subramanian Sarma √ √ √ X X √
8. Mr. S. V. Desai √ √ X √ X √
9. Mr. T. Madhava Das √ √ X √ X √
10. Mr. M. M. Chitale √ X √ √ √ X
11. Mr. Subodh Bhargava √ X √ √ X √
12. Mr. M. Damodaran √ X √ √ √ X
13. Mr. Vikram Singh Mehta √ √ √ X X √
14. Mr. Adil Zainulbhai √ X √ √ X √
15. Ms. Sunita Sharma^ √ X √ √ √ X
16. Ms. Naina Lal Kidwai* √ X √ √ √ X
17. Mr. Sanjeev Aga √ X √ √ √ X
18. Mr. Narayanan Kumar √ √ √ X √ X
19. Mr. Hemant Bhargava √ X √ √ √ X
* ceased to be a director w.e.f. 28th February 2021.
^ Resigned as a Director w.e.f. 3rd May 2021 pursuant to withdrawal of nomination by LIC.
Mrs. Preetha Reddy joined the Board on 1st March 2021. Her skill sets would be evaluated and reported in FY 2022.
Note: Absence of any skill does not necessarily mean that the Director does not possess the skill.

102
F. BOARD COMMITTEES 1. Matters required to be included
The Board currently has 5 Committees: 1) Audit in the Director’s Responsibility
Committee, 2) Nomination and Remuneration Statement in the Board’s report in
Committee, 3) Stakeholders’ Relationship Committee, terms of sub-section (5) of Section
4) Corporate Social Responsibility Committee and 134 of the Companies Act, 2013
5) Risk Management Committee. The terms of 2. Changes, if any, in accounting
reference of the Board Committees are in compliance policies and practices and reasons
with the provisions of the Companies Act, 2013, for the same
SEBI LODR Regulations and are also reviewed by the
Board from time to time. The Board is responsible for 3. Major accounting entries involving
constituting, assigning and co-opting the members estimates based on the exercise of
of the Committees. The meetings of each Board judgment by management
Committee are convened by the Company Secretary 4. Significant adjustments made in the
in consultation with the respective Committee financial statements arising out of
Chairperson. The role and composition of these audit findings
Committees, including the number of meetings held
during the financial year and the related attendance 5. Compliance with listing and other
are provided below. legal requirements relating to
financial statements
1) Audit Committee
6. Disclosure of any related party
The Company constituted the Audit Committee (AC)
transactions
in 1986, well before it was made mandatory by law.
7. Qualifications in the draft audit
i) Terms of reference:
report.
The role of the Audit Committee includes
the following: zz Reviewing, with the management, the
quarterly financial statements before
zz Oversight of the Company’s financial submission to the board for approval.
reporting process and the disclosure
of its financial information to ensure zz Reviewing, with the management,
that the financial statement is correct, the statement of uses / application of
sufficient and credible. funds raised through an issue (public
issue, rights issue, preferential issue,
zz Recommending to the Board, the etc.), the statement of funds utilized for
appointment, re-appointment, terms purposes other than those stated in the
of appointment and, if required, the offer document/prospectus/notice and
replacement or removal of the statutory the report submitted by the monitoring
auditor and the fixation of audit fees. agency monitoring the utilisation of
zz Approval of payment to statutory proceeds of public or rights issue, and
auditors for any other services rendered making appropriate recommendations
by the statutory auditors. to the Board to take up steps in this
matter, if any.
zz Discussion with statutory auditors
before the audit commences, about the zz Reviewing, with the management,
nature and scope of audit as well as performance of statutory and internal
post-audit discussion to ascertain any auditors, and adequacy of the internal
area of concern. control systems.

zz Reviewing, with the management, the zz Reviewing the adequacy of internal

annual financial statements and the audit function, if any, including
audit report before submission to the the structure of the internal audit
board for approval, with particular department, staffing and seniority of
reference to: the official heading the department,

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Annexure to the Board Report    ANNUAL REPORT 2020-21

reporting structure coverage and zz Evaluation of internal financial controls

frequency of internal audit. and risk management systems.
zz Discussion with internal auditors about zz Monitoring the end use of funds raised
any significant findings and follow up through public offers and related
there on. matters.
zz Reviewing the findings of any internal zz Carrying out any other function as is
investigations by the internal auditors mentioned in the terms of reference of
into matters where there is suspected the Audit Committee.
fraud or irregularity or a failure of
ii) Composition:
internal control systems of a material
nature and reporting the matter to the As on 31st March 2021, the Audit
board. Committee comprised three Independent
Directors.
zz To look into the reasons for
substantial defaults in the payment iii)
Meetings:
to the depositors, debenture holders, During the year ended 31st March 2021, 8
shareholders (in case of non-payment of meetings of the Audit Committee were held
declared dividends) and creditors. on 25th April 2020, 4th June 2020, 22nd
July 2020, 26th August 2020, 27th October
zz To review the functioning of the Whistle
2020, 15th December 2020, 23rd January
Blower mechanism.
2021 and 1st March 2021.
zz Approval of appointment of CFO (i.e.,
The attendance of Members at the Meetings
the whole-time Finance Director or
was as follows:
any other person heading the finance
function or discharging that function) Name Status No. of No. of
after assessing the qualifications, meetings Meetings
experience and background, etc. of the held Attended
candidate. during
zz Recommendation for appointment, the year
remuneration and terms of appointment Mr. M. M. Chitale Chairman 8 8
of cost auditors of the Company.
Mr. M. Damodaran Member 8 8
zz Review and monitor the auditor’s
Mr. Sanjeev Aga Member 8 8
independence and performance, and
effectiveness of audit process. Mr. Narayanan Member 2 2
Kumar*
zz Review the management discussion
and analysis of financial condition and Meetings held during the year are expressed as number of
results of operations. meetings eligible to attend.

zz Approval or any subsequent * Ceased to be a member of the committee after the Audit
modification of transactions of the Committee Meeting held on 4th June 2020.
Company with related parties.
All the members of the Audit Committee are
zz Reviewing the utilization of loans and/ financially literate and have accounting or
or advances from/investment in the related financial management expertise.
subsidiary companies exceeding rupees
The Chief Executive Officer & Managing
100 crore or 10% of the asset size
Director, Whole-time Director & Chief
of the subsidiary, whichever is lower
Financial Officer and Head - Corporate
including existing loans / advances /
Audit Services are permanent invitees to
investments.
the Meetings of the Audit Committee. The
zz Valuation of undertakings or assets of Company Secretary is the Secretary to the
the Company, wherever it is necessary. Committee.

104
iv)
Internal Audit: variations and the suggested corrective
The Company has an internal corporate audit actions are also placed before the Audit
team consisting of Chartered Accountants Committee/Board of the Company. Some
/ Cost Accountants and Engineers. Over subsidiaries have engaged external firms for
a period, the Corporate Audit Services conducting internal audit.
department (“CAS”) has acquired in-depth 2) Nomination and Remuneration Committee
knowledge about the Company, its (NRC)
businesses, its systems and procedures,
The Nomination and Remuneration Committee
which knowledge is now institutionalized.
was constituted in 1999, before it was mandated
The Company’s Internal Audit function is
by law.
ISO 9001:2015 certified. The Head of CAS
reports to the Audit Committee. The staff of i) Terms of reference:
CAS is rotated periodically to have a holistic zz Identify persons who are qualified to
view of the entire operations and share the become directors and who may be
findings and good practices. appointed in senior management in
The CAS team carries out theme-based accordance with the criteria laid down
audits (revenue recognition, IT controls, by the Committee;
etc.), joint audits with other corporate
zz Recommend to the Board appointment
departments for specific functions, identifies
and removal of such persons;
risk-based focus areas in project audits,
benchmarks the audit processes with large zz Formulate criteria for determining
companies, encourages its team members to qualifications, positive attributes and
obtain globally renowned CISA, CIA and CFE independence of a director;
Certification, etc. Every year, the CAS reviews
the Audit Universe which is an exhaustive zz Devise a policy on Board diversity;
list of businesses, functions, activities and
locations across the Company and the yearly zz Formulation of criteria and carrying
plan then details out the scope and coverage out evaluation of individual Directors,
of audits proposed for the year . It is ensured Chairman, Board and the Board
that, on an average, all operations in the Committees;
Audit Universe gets into an audit coverage,
zz Recommend to the Board a policy,
at least once in 2 years. The CAS team has
relating to remuneration for the
its offices at Mumbai and Chennai and all
Directors, Key Managerial Personnel
overseas audits are shared between these
(KMP) and senior management;
two teams.
From time to time, the Company’s systems zz Administration of Employee Stock
of internal controls covering financial, Option Scheme (ESOS).
operational, compliance, IT applications, ii) Composition:
etc. are reviewed by external experts.
Presentations are made to the Audit As at 31st March 2021, the Committee
Committee, on the findings of such reviews. comprised 3 Independent Directors and the
Group Chairman.
The CAS team of the Company also covers
the internal audit of all ICs and Subsidiary iii)
Meetings:
Companies. An in-depth audit is conducted During the year ended 31st March 2021,
by the team. The major deviations are 5 meetings of the Nomination and
highlighted and discussed with the Remuneration Committee were held on 5th
concerned IC and / or subsidiary company June 2020, 4th July 2020, 22nd July 2020,
Boards and the report highlighting the 28th October 2020 and 25th January 2021.

105
Annexure to the Board Report    ANNUAL REPORT 2020-21

The attendance of Members at the Meetings “independence criteria” as mentioned in

was as follows: Section 149(6) of the Companies Act, 2013
and SEBI LODR Regulations.
Name Status No. of No. of
meetings Meetings The Board has taken on record the
held Attended declaration and confirmation submitted
during by the Independent Directors and after
the year assessing the veracity of the same, the
Mr. Subodh Chairman 5 5 Board is of the opinion that the Independent
Bhargava Directors fulfill the conditions specified in the
Mr. A. M. Naik Member 5 5
SEBI LODR Regulations and are independent
of the management.
Mr. Adil Zainulbhai Member 5 5
Mr. Narayanan Member 4 4 These certificates have been placed
Kumar * on the website of the Company
https://investors.larsentoubro.com/corporategovernance.aspx
Meetings held during the year are expressed as number of
meetings eligible to attend. v) Remuneration Policy:

* Appointed as a member w.e.f. 5th June 2020 The remuneration of the Board members
is based on the Company’s size and global
iv) Board Membership Criteria: presence, its economic and financial position,
While screening, selecting and industrial trends, compensation paid by the
recommending to the Board new members, peer companies, etc. Compensation reflects
the Committee ensures that the Board each Board member’s responsibility and
is objective, there is absence of conflict performance. The level of compensation
of interest, ensures availability of diverse to Executive Directors is designed to be
perspectives, business experience, legal, competitive in the market for highly qualified
financial & other expertise, integrity, executives.
leadership and managerial qualities, practical
The Company pays remuneration to
wisdom, ability to read and understand
Executive Directors by way of salary,
financial statements, commitment to ethical
perquisites and retirement benefits (fixed
standards and values of the Company
components) and commission (variable
and there are healthy debates and sound
component), based on recommendation
decisions.
of the NRC, approval of the Board and the
While evaluating the suitability of a Director shareholders. The commission payable is
for re-appointment, besides the above based on the overall performance of the
criteria, the NRC considers Board evaluation Company, performance of the business /
results, attendance and participation in and function as well as qualitative factors. The
contribution to the activities of the Board by commission is calculated with reference to
the Director. net profits of the Company in the financial
year subject to overall ceilings stipulated
The Independent Directors satisfy the
under Section 197 of the Companies Act,
definition of Independent Directors as given
2013.
under Section 149(6) of the Companies Act,
2013 and all the applicable provisions of the The Independent Directors / Non-Executive
SEBI LODR Regulations. While appointing / Directors are paid remuneration by way of
re-appointing any Independent Directors / commission and sitting fees. The Company
Non-Executive Directors on the Board, the paid sitting fees of R 1,00,000/- per meeting
NRC considers the criteria as laid down in of the Board and R 50,000/- for Audit
the Companies Act, 2013 and the SEBI LODR Committee, Nomination and Remuneration
Regulations. Committee and Risk Management
Committee meetings and R 35,000/- for
Each Independent Director gives a
Stakeholders Relationship Committee and
certificate confirming that they meet the
Corporate Social Responsibility Committee

106
meetings during the year to the Independent the Non-Executive Directors and Independent
Directors / Non-Executive Directors. The Directors. The NRC Chairman interacts with
commission is paid in accordance with the the Executive Directors.
provisions of section 197 and Schedule V of
Members are also requested to refer to page
the Companies Act, 2013.
no. 88 of the Board Report.
The commission to the Independent
vi) Training and Succession Planning:
Directors / Non-Executive Directors is
distributed broadly on the basis of their The organisation has a robust process of
attendance, contribution at the Board, the building its talent pipeline which helps to
Committee meetings, Chairmanship of feed in succession planning. The process
Committees and participation in IC meetings. starts with the Development Centre (DC)
where high performing employees get
In the case of nominees of Financial assessed on defined competencies at four
Institutions, the commission is paid to the different levels in the organisation. The
Financial Institutions. process identifies competency gaps which
As required by the provisions of Regulation are addressed with specific Individual
46 of the SEBI LODR Regulations, the Development Plans (IDP’s) and competency
criteria for payment to Independent programs organised for these levels. This
Directors / Non-Executive Directors is helps the organisation to have a pool of
provided on the investor page of our website leaders at every level who are “Competency
https://investors.larsentoubro.com/KeyOfficials.aspx. Ready”. The DC process and the subsequent
development programs were conducted in
Performance Evaluation Criteria for Virtual mode in FY 2021.
Independent Directors:
The organisation also provides managerial
The performance evaluation questionnaire
inputs to high potential employees through
covers qualitative/ subjective criteria with
its famed 7-Steps leadership development
respect to the structure, culture, Board
program which culminates with mentoring
processes and selection, effectiveness
by the Group Chairman and the MD &CEO.
of the Board and Committees, strategic
The 7-Steps leadership program is done in
decision making, functioning of the Board
association with global premier B-Schools.
and Committees, Committee composition,
In FY 2021 the STEP 1 in association with
information availability, remuneration
IIM Ahmedabad & STEP 3 in association with
framework, familiarization program,
MICHIGAN ROSS were conducted using
succession planning, adequate participation,
a virtual medium and suitable pedagogy
assessment of their independence, etc. It
associated with it.
also contains specific criteria for evaluating
the Chairman and individual Directors. An The organisation also conducts its Core
external consultant is engaged to receive the Development programs with tie-ups with
responses of the Directors and consolidate/ reputed Indian B-Schools like IIT Mumbai,
analyze the responses. This is done through a IIM-Bangalore and Kolkata, Narsee Monjee
software platform of the external consultant. and S P Jain to provide inputs to its leaders
and in the process build a strong pipeline
The Chairman of the Company discusses
at every level. Multiple instances of these
the performance evaluation results with the
programs were conducted in FY 2021 in the
Chairman of the NRC and interacts with all
virtual mode.

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Annexure to the Board Report    ANNUAL REPORT 2020-21

vii) Details of remuneration paid / payable stock options. The perquisite amount on
to Directors for the year ended 31st exercise of these options is considered
March 2021: as a part of his remuneration.
(a)
Executive Directors: zz Apart from ESOPs of the Company,
The details of remuneration paid / Mr. S. N. Subrahmanyam has also been
payable to the Executive Directors for vested 40,000 stock options in Larsen
FY 2021 is as follows: & Toubro Infotech Limited and L&T
Technology Services Limited each and he
v crore
has exercised the same. Mr. R. Shankar
Names Salary Perquisites Perquisites Retirement Commission Total
Raman has been vested 20,000 stock
related to Benefits
ESOP * options in Larsen & Toubro Infotech
Mr. S. N. 2.59 0.39 14.15 2.97 8.40 28.50 Limited and he has exercised the same.
Subrahmanyan The perquisite amount on exercise of
Mr. R. Shankar 1.83 0.26 3.67 1.98 5.49 13.23 these options is considered as a part of
Raman the remuneration of these Directors.
Mr. Shailendra 0.49 0.13 – 17.84 4.29 22.75
N. Roy # (b)
Non-Executive Directors:
Mr. D. K. Sen 1.35 0.22 – 1.01 2.40 4.98 The details of remuneration paid /
Mr. M. V. 1.35 0.28 – 1.08 2.66 5.37 payable to the Non-Executive Directors
Satish
for the FY 2021 is as follows:
Mr. J. D. Patil 1.14 0.22 – 1.09 2.91 5.36
Mr. 1.06 0.11 5.89 1.02 3.31 11.40 v crore
Subramanian Names Sitting Sitting Commission Others† Total
Sarma @ Fees for Fees for
S. V. Desai ^ 0.19 0.35 – 0.64 2.29 3.47 Board Committee
Meeting Meeting
T. Madhava 0.22 0.29 – 0.72 2.43 3.66
Das^ Mr. A. M. Naik 0.08 0.03 3.10 3.00 6.21
# ceased to be a director w.e.f. 7th July 2020. Mr. M. M. Chitale 0.08 0.05 0.59 – 0.72
@ Non-executive director upto 18th August 2020 and Mr. Subodh 0.08 0.03 0.55 – 0.66
appointed as whole-time director w.e.f. 19th August Bhargava
2020. Mr. M. Damodaran 0.08 0.04 0.52 – 0.64
^ appointed as whole-time directors w.e.f. 11th July Mr. Vikram Singh 0.08 – 0.31 – 0.39
2020. Mehta
* Represents perquisite value related to ESOPs Mr. Adil Zainulbhai 0.08 0.04 0.50 – 0.62
exercised during the year in respect of stock Mrs. Sunita Sharma 0.08 0.01 0.27# – 0.36
options granted over the past several years by the @
Company, Larsen & Toubro Infotech Limited and Mr. Ajay Shankar $ 0.01 – 0.05 – 0.06
L&T Technology Services Limited and includes tax on
ESOPs borne by the Company wherever applicable. Ms. Naina Lal 0.06 – 0.17 – 0.23
Kidwai*
zz Notice period for termination of Mr. Sanjeev Aga 0.08 0.06 0.42 – 0.56
appointment of Chief Executive Officer Mr. Narayanan 0.08 0.04 0.36 – 0.48
& Managing Director and other Whole- Kumar
time Directors is six months on either Mr. Hemant 0.08 – 0.23# – 0.31
side. Bhargava
Mrs. Preetha Reddy^ 0.02 – 0.06 – 0.08
zz No severance pay is payable on † Others include pension
termination of appointment. $ ceased to be an Independent Director w.e.f.
29th May 2020
zz Details of Options granted under
* ceased to be an Independent Director w.e.f.
Employee Stock Option Schemes
28th February 2021
are provided on the website of the
^ appointed as an Independent Director w.e.f.
Company www.larsentoubro.com. 1st March 2021
zz Mr. Subramanian Sarma has been # Payable to respective Institutions they represent.
granted 1,00,000 stock options in the @ Resigned as a Director w.e.f. 3rd May 2021 pursuant
to withdrawal of nomination by LIC.
Company and he has exercised 31,500

108
Details of shares and convertible dividends and ensuring timely receipt
instruments of the Company held by of dividend warrants/annual reports/
the Non-Executive Directors as on 31st statutory notices by the shareholders of
March 2021 are as follows: the Company.

Names No. of Shares held ii) Composition:

As on 31st March 2021 the Stakeholders’
Mr. A. M. Naik 6,24,958
Relationship Committee comprised 1 Non-
Mr. M. M. Chitale 3,568 Executive Director, 1 Independent Director
Mr. Subodh Bhargava 1,125 and 1 Executive Director.
Mr. M. Damodaran 225 iii)
Meetings:
Mr. Vikram Singh Mehta 1,327 During the year ended 31st March 2021, 3
Mr. Adil Zainulbhai 150
meetings of the Stakeholders’ Relationship
Committee were held on 22nd July 2020,
Mr. Sanjeev Aga 100 16th October 2020 and 22nd January 2021.
Mr. Narayanan Kumar 1,500
The attendance of Members at the Meetings
Mrs. Sunita Sharma *@ 100 was as follows-
Mr. Hemant Bhargava * 100
Name Status No. of No. of
Mr. Hemant Bhargava 90 meetings Meetings
Mrs. Preetha Reddy 180 held during Attended
the year
* held jointly with the Institution they
represent. Mrs. Sunita Sharma@ Chairperson 3 3

@ Resigned as a Director w.e.f. 3rd May 2021 Mr. Narayanan Kumar* Chairman 3 3
pursuant to withdrawal of nomination by LIC. Mr. J. D. Patil^ Member 3 3
3) Stakeholders’ Relationship Committee: Mr. Hemant Bhargava# Member 0 0
i) Terms of reference: Meetings held during the year are expressed as number of
meetings eligible to attend.
The terms of reference of the Stakeholders’
Relationship Committee are as follows: * appointed as a member w.e.f. 5th June 2020 and
appointed as Chairman of the committee w.e.f. 14th May
2021.
zz Resolving the grievances of the security
^ appointed as a member w.e.f. 11th July 2020.
holders of the Company including
complaints related to transfer/ @ ceased to be a member w.e.f. 3rd May 2021.
transmission of shares, non-receipt of # appointed as a member w.e.f. 14th May 2021.
annual report, non-receipt of declared
Mr. Ajay Shankar and Mr. Shailendra Roy
dividends, issue of new/duplicate
ceased to be members of the Committee
certificates, general meetings etc.
w.e.f. 29th May 2020 and 7th July 2020,
zz Review of measures taken for effective respectively.
exercise of voting rights by shareholders. Mr. Sivaram Nair A, Company Secretary is
the Compliance Officer.
zz Review of adherence to the service
standards adopted by the Company iv) Number of Requests / Complaints:
in respect of various services being During the year, the Company has resolved
rendered by the Registrar & Share investor grievances expeditiously except for
Transfer Agent. the cases constrained by disputes or legal
proceedings.
zz Review of the various measures and
initiatives taken by the Company for During the year, the Company / its Registrars
reducing the quantum of unclaimed received the following complaints from

109
Annexure to the Board Report    ANNUAL REPORT 2020-21

SEBI / Stock Exchanges and queries from ii. Provide guidance for the
shareholders, which were resolved within the development of annual CSR Action
time frames laid down by SEBI. Plan
Particulars Opening Received Resolved Pending* iii. Recommend CSR annual budget to
Balance
the Board for approval
Complaints:
iv. Monitor the implementation of the
SEBI / Stock 1 97 95 3
CSR Action Plan of the Company
Exchange
from time to time; and
Shareholder
Queries: v. Identify and recommend to the
Board the CSR projects that will
Dividend 11 41663 41391 283
qualify to be ongoing projects
Related
Transmission/ 0 1204 1117 87 B. Sustainability:
Transfer i. Sustainability Policy and suggest
Demat / 4 744 741 7 any changes thereto
Remat ii. Provide guidance for the

* Investor complaints / queries shown outstanding as on development of the long-term
31st March 2021 have been subsequently resolved to Sustainability Plan; and
the complete satisfaction of the investors. The Company
repeatedly sends reminders to shareholders regarding iii. Monitor the implementation of the
unclaimed shares and dividends. This results in an increase
in the number of queries received. Sustainability Plan of the Company
from time to time
The Board has delegated the powers to
approve transfer of shares to a Share ii) Composition:
Transfer Committee of Executives comprising As on 31st March 2021, the CSR Committee
of four Senior Executives. This Committee comprised 1 Independent Director and 2
held 5 meetings during the year and Executive Directors.
approved the transfer of shares lodged
with the Company. Pursuant to SEBI iii)
Meetings:
press release dated 3rd December 2018 During the year ended 31st March 2021, 4
and 27th March 2019, except in case of meetings of the CSR Committee were held
transmission or transposition of securities, on 2nd April 2020, 9th July 2020, 27th
requests for effecting transfer of securities November 2020 and 13th March 2021.
subsequent to 1st April 2019, have not been
The attendance of Members at the Meetings
processed by the Company.
was as follows-
4) Corporate Social Responsibility Committee:
Name Status No. of No. of
i) Terms of reference: meetings Meetings
During the financial year, the Corporate held Attended
during
Social Responsibility (“CSR”) Committee
the year
has also been entrusted with the task of
reviewing the sustainability initiatives of Mr. M. M. Chitale Chairman 4 4
the Company. Accordingly, the terms of Mr. R. Shankar Member 4 4
reference of the CSR Committee have been Raman
amended. Mr. D. K. Sen Member 4 4
The CSR Committee shall formulate and
recommend to the Board: Meetings held during the year are expressed as number of
meetings eligible to attend.
Corporate Social Responsibility:
A.
i. A Corporate Social Responsibility iv) CSR Activities and Impact Assessment:
Policy and suggest any changes The Company, through its CSR Committee,
thereto is committed to improve the social

110
infrastructure / fabric of the country. The 11.20 Lakhs individuals through our CSR
Company is leveraging its countrywide Programs in FY 2021.
presence to reduce disparities through
All CSR projects have defined goals and
interventions in Water and Sanitation,
milestones which are tracked as per the
Healthcare, Education and Skill Building.
periodicity defined for the project. The
Close interactions with the local community
progress is compared with the baseline data
members have enabled the Company to
that is gathered before the commencement
identify and address their most pressing
of the project. This is carried out through
needs and the social interventions for
an onsite evaluation as well as the reports
community development have been
generated from the project. The indirect
specifically aligned.
impacts that accrue are also factored and
Under flagship program of “Integrated documented in the monthly reporting
Community Development” (ICD), the process. These are subsequently vetted /
Company has launched programs towards measured during the external Social Audit or
holistic development in the following areas Impact Assessment. The Social Audit/ Impact
based on need assessment: Assessment report is discussed during the
Committee meetings and it forms a part of
zz Water and Sanitation: For the
Annexure C to this Board Report.
availability of safe drinking water and
proper sanitation facilities This year despite COVID we were able to
reach out to the communities with revised
zz Education: To improve access to
strategies and address the needs with active
education (increased enrollment in pre‐
participation from the community Groups
school, children attending neighborhood
and NGO partners such as remote online
schools), improving quality of learning
education sessions with use of Technology,
(better school infrastructure, better
providing Covid related infrastructure to
teaching‐learning process) and learning
Government hospitals, using local material
STEM (Science, Technology, Engineering
and human resources for civil activities and
and Math) subjects with fun and hands
awareness related to Covid through existing
on experiments
community forums with Covid norms
zz Health: Improvement in access followed.
to quality health care (expanding
The detailed disclosures of CSR spending
infrastructure of health centres,
during the year has been given in Annexure
increased number of people availing
‘C’ forming part of this Board Report. Please
quality health care)
refer to pages 129 to 143 of this Annual
zz Skill development: Enhancing Report.
employability of youth (enhancing
5) Risk Management Committee:
training capacity, improved
infrastructure of skill development i) Terms of reference:
centres). The terms of reference of the Board Risk
Management Committee (BRMC) are as
78 Village Development Committees (VDCs)
follows:
and Farmers Groups have been formed
across locations in FY 2021 with participation zz Review of the existing Risk Management
from women. A quarterly review of the ICD Policy, framework and processes,
projects is done with the village Panchayats Risk Management Structure and Risk
and local authorities. Mitigation Systems. Broadly, the key
risks will cover strategic risks of the
Access to cleaner water, hygienic
group at the domestic and international
surroundings, better health, education and
level, including sectoral developments,
new skills, has improved the lives of around
risk related to market, financial,

111
Annexure to the Board Report    ANNUAL REPORT 2020-21

geographical, political and reputational Directors so that they are updated about the
issues, Environment, Social and operations of the Company.
Governance (ESG) risks, etc.
Presentations are made regularly to the Board
zz Evaluate risks related to cyber security. / NRC / AC / BRMC / CSR Committee, where
Directors get an opportunity to interact with
The Company also has an Apex Risk
senior managers. Presentations, inter alia, cover
Management Committee, comprising of
business strategies, management structure,
Executive Directors, which reviews the
HR policy, management development and
operational risks including client quality,
succession planning, quarterly and annual results,
manpower availability, logistic and other
budgets, treasury policy, review of internal audit,
aspects which impact the Company and the
risk management framework, operations of
Group.
subsidiaries and associates, etc. Also the Minutes
ii) Composition: of these committees are circulated to the Board.
As on 31st March 2021, the Board Risk Independent Directors have the freedom to
Management Committee comprised 2 interact with the Company’s Management.
Independent Directors and 1 Executive Interactions happen during Board / Committee
Director. meetings, when senior company personnel are
iii)
Meetings: asked to make presentations about performance
of their Independent Company (IC) / Business
During the year ended 31st March 2021,
Unit, to the Board.
3 meetings of the Board Risk Management
Committee were held on 22nd April 2020, Some of the Independent Directors are members
16th October 2020 and 3rd December 2020. of the IC Board. They share the learnings from
these meetings with the remaining Non-Executive
The attendance of Members at the Meetings
Directors / Independent Directors formally and
was as follows-
informally. Such interactions also happen when
Name Status No. of No. of these Directors meet senior management in IC
meetings Meetings meetings and informal gatherings.
held Attended
during the As part of the appointment letter issued to
year
Independent Directors, the Company has stated
Mr. Adil Zainulbhai Member 3 3
that it will facilitate attending seminars/programs/
Mr. Sanjeev Aga Member 3 3
conferences designed to train directors to
Mr. Subramanian Member 3 3
enhance their role as an Independent Director.
Sarma
Meetings held during the year are expressed as number of This information is also available
meetings eligible to attend. on the website of the Company
Members are also requested to refer to https://investors.larsentoubro.com/Listing-Compliance.aspx.
pages 85 and 86 of the Board Report. b) Risk Management Framework:
G. OTHER INFORMATION Please refer to pages 85 and 86 of the Board
a) Directors’ Familiarization Program: Report.
All our directors are aware and are also c) Vigil Mechanism / Whistle Blower Policy:
updated as and when required, of their role,
The Company has a Whistle Blower Policy in
responsibilities and liabilities.
place since April 2004. The said policy was
The Company holds Board meetings at its modified in line with the requirements of the
registered office and wherever necessary, in Vigil Mechanism under the Companies Act, 2013.
locations, where it operates. Due to the COVID- The Company has a Whistle Blower Investigation
19 pandemic, during the year, all the meetings Committee (WBIC) to manage complaints from
were conducted virtually. “Identified” Whistle Blowers. In addition, WBIC
considers “Anonymous” complaints which in
The internal newsletters of the Company, the
their judgement are serious in nature and require
press releases, etc. are circulated to all the

112
investigation. The WBIC has five members viz. on approved criteria as given herein below. The
Chief Financial Officer, Company Secretary, Head- audit firms shortlisted, are required to make a
Corporate HR, Chief Internal Auditor and a senior presentation to this Committee. The Committee
Finance & Accounts person from business. The considers factors such as compliance with the
WBIC is responsible for end to end management legal provisions, number / nature / size and
of the investigations from receipt of complaints variation in client base, skill sets available in
to bringing them to a logical conclusion, keeping the firm both at partner level and staff level,
in mind the interest of the Company. Suitable international experience, systems and processes
actions are taken against employees, wherever followed by the firm, training and development
investigation confirms the allegations. by the firm to its partners and staff, etc.
during the process of evaluation. Based on
Employees are encouraged to report any acts
merit and the factors mentioned above, the
of unacceptable behaviour inconsistent with
Committee finalizes the firm to be appointed and
the Company’s Code of Conduct having an
recommends the same to the Audit Committee.
adverse effect on the Company’s financials /
The Audit Committee reviews the same before
image and instances of sharing of unpublished
recommending to the Board and shareholders for
price sensitive information. An employee can
approval.
report any such conduct in oral or written form.
Whistle-blowers are assured by the management The above process was followed by the Company
of full protection from any kind of harassment, while re-appointing M/s Deloitte Haskins & Sells
retaliation, victimization or unfair treatment. LLP (‘DHS’) as the Auditors of the Company for
second and final term of five years in 2020.
Complaints under the Whistle Blower Policy
are received by the Corporate Audit Services Deloitte Haskins & Sells, Mumbai has been
(CAS) of the Company. The Chief Internal converted to a Limited Liability Partnership (LLP),
Auditor reviews the same and the WBIC, after with the name Deloitte Haskins & Sells LLP (“DHS
screening the complaint, decides on the further LLP” or “Firm”), with effect from November 20,
course of action which will include requesting 2013. DHS LLP is registered with the Institute
the complainant to provide further details, of Chartered Accountants of India (Registration
internal investigation by the CAS department, No. 117366W/W-100018). The Firm has around
investigation by external agencies, wherever 2,500 professionals and staff. DHS LLP has offices
necessary, opportunity to the defendant to in Mumbai, Delhi, Kolkata, Chennai, Bangalore,
present his / her case, etc. Based on the findings Ahmedabad, Hyderabad, Coimbatore, Kochi,
of the investigation, the WBIC decides the action Pune, Jamshedpur and Goa. The registered office
to be taken. of the Firm is One International Center, Tower
3, 27th to 32nd Floor, Senapati Bapat Marg,
The WBIC is apprised periodically on the
Elphinstone Road (West), Mumbai - 400013,
complaints received, current status, actions
Maharashtra, India.
contemplated and closure of the cases. The WBIC
reviews the complaints and their progress. In For the FY 2021, the total fees paid by the
addition, discussions also take place over video- Company and its subsidiaries, on a consolidated
conferencing, telephone and emails amongst the basis, to Deloitte Haskins & Sells LLP, Statutory
WBIC members. Auditor and all entities in the network firm/
network entity of which the statutory auditors
The Audit Committee is periodically briefed about
are a part thereof for all the services provided by
the various cases received, the status of the
them is R 14.39 crore.
investigation, findings and action taken.
Also refer to pages 90 and 91 of the Board Report.
Also refer to page no. 90 of the Board Report.
e) Code of Conduct:
d) Statutory Auditors:
The Company has laid down a Code of
In the case of appointment of new auditors, a
Conduct for all Board members and senior
Committee, comprising the Chairman of the
management personnel. The Code of Conduct
Audit Committee, the CFO and the Company
is available on the website of the Company
Secretary, evaluates various audit firms based
www.larsentourbo.com. The declaration of the

113
Annexure to the Board Report    ANNUAL REPORT 2020-21

Chief Executive Officer & Managing Director is zz To re-appoint Mr. Vikram Singh Mehta as an
given below: Independent Director of the Company for a
five year term upto 31st March 2024.
To the Shareholders of Larsen & Toubro Limited
zz To re-appoint Mr. Adil Zainulbhai as an
Sub: Compliance with Code of Conduct Independent Director of the Company for a
I hereby declare that all the Board Members and five year term upto 28th May 2024.
Senior Management Personnel have affirmed zz To amend the object clause of the
compliance with the Code of Conduct as Memorandum of Association of the
adopted by the Board of Directors and Senior
Company.
Management Personnel.
zz To approve raising of capital through QIP’s
S. N. Subrahmanyan
Chief Executive Officer & Managing Director by issue of shares / convertible debentures
/ securities upto an amount of USD 600
Date: 14th May 2021 million or R 4,000 crore.
Place: Mumbai
Annual General Meeting held on 23rd August
f) General Body Meetings: 2018:
The last three Annual General Meetings of the zz To appoint Mr. A.M. Naik as a Non- Executive
Company were held as under: Director of the Company who has attained
Financial Date Venue Time the age of 75 years.
Year zz To approve the payment of remuneration
2019-2020 13th August Meeting 3.30 p.m. to Mr. A.M. Naik, being in excess of fifty
2020 was held
through Video
percent of the total annual remuneration
Conferencing/ payable to all the Non-Executive Directors.
Other Audio-
zz To approve raising of finances through issue
Visual Means
of debentures upto R 6000 crore.
2018-2019 1st August Birla Matushri 3.00 p.m.
2019 Sabhagar Note : The resolution relating to raising of
2017-2018 23rd August Birla Matushri 3.00 p.m. finances have been taken at each of the above
2018 Sabhagar AGMs since the validity of the resolution is one
The following Special Resolutions were passed by year.
the members during the past 3 Annual General g) Resolution(s) passed through Postal Ballot:
Meetings: No postal ballot was conducted during FY 2021.
Annual General Meeting held on 13th August There is no immediate proposal for passing any
2020: resolution through postal ballot.
zz To re-appoint and continue the appointment h) Disclosures:
of Mr. A. M. Naik as Non-Executive Director
1. During the year, there were no transactions
of the Company who has attained the age of
of material nature with the Directors or the
75 years.
Management or relatives or the subsidiaries
zz To approve raising of capital through QIP’s that had potential conflict with the interests
by issue of shares / convertible debentures of the Company.
/ securities upto an amount of USD 600
2. Details of all related party transactions form
million or R 4,500 crore.
a part of the accounts as required under IND
Annual General Meeting held on 1st August AS 24 and the same are given in Note No. 47
2019: forming part of the financial statements.
zz To re-appoint Mr. M. M. Chitale as an
3. The Company has followed all relevant
Independent Director of the Company for a
Accounting Standards notified by the
five year term upto 31st March 2024.
Companies (Indian Accounting Standards)
zz To re-appoint Mr. M. Damodaran as an Rules, 2015 while preparing the Financial
Independent Director of the Company for a Statements.
five year term upto 31st March 2024.

114
4. The Company makes presentations to News Releases Official news releases that carry
Institutional Investors and Equity Analysts on material price sensitive information
the Company’s performance on a quarterly are sent to stock exchanges as well
basis. The same are provided to the Stock as displayed on the Company’s
Exchanges and also available on our website
website: www.larsentoubro.com.
https://investors.larsentoubro.com/AnalystPresentations.aspx.
Website The Company’s corporate website
5. There were no instances of non-compliance, www.larsentoubro.com provides
penalties, strictures imposed on the comprehensive information about
Company by the Stock Exchanges on any its portfolio of businesses. Section
matter related to the capital markets, during on “Investors” serves to inform and
the last three years. service the Shareholders allowing
6. The policies for determining material them to access information at
subsidiaries and related party transactions their convenience. The quarterly
are available on the Company’s website shareholding pattern of the
https://investors.larsentoubro.com/Listing- Company is available on the website
Compliance.aspx. of the Company as well as the stock
exchanges. The entire Annual Report
7. Details of risk management including including Accounts of the Company
foreign exchange risk, commodity price risk and subsidiaries are available in
and hedging activities form a part of the
downloadable formats. The entire
Management Discussion & Analysis. Please
Annual Report including Accounts of
refer to pages 307 to 310 of this Annual
the Company would also be made
Report.
available on the websites of the
8. As required under the provisions of SEBI Stock Exchanges.
LODR Regulations, a certificate from Filing with Stock Information to Stock Exchanges
M/s S. N. Ananthasubramanian & Co., Exchanges is now being also filed online on
Company Secretaries, confirming that none NEAPS for NSE, BSE Online for BSE
of the Directors on the Board have been and RNS for London Stock Exchange.
debarred or disqualified by the Securities Annual Report and Annual Report is circulated to all the
and Exchange Board of India/Ministry of Annual General members and all others like auditors,
Corporate Affairs or any such statutory Meeting equity analysts, etc. To enable a
authority, is a part of the Corporate larger participation of shareholders
Governance report. for the Annual General Meeting,
the Company has provided Webcast
9. Details in relation to the Sexual Harassment facility of its last three Annual
of Women at Workplace (Prevention, General Meetings in co-ordination
Prohibition and Redressal) Act, 2013 form with NSDL/KFin Technologies.
a part of the Board Report. Please refer to This year, like the previous year,
pages 88 and 89 of this Annual Report. due to the continuing COVID-19
pandemic, the Company will be
i) Means of communication: once again conducting the Annual
Financial Results Quarterly and Annual Results General Meeting through Video
and other are published in prominent daily Conferencing/Other Audio Visual
Communications newspapers viz. The Financial Means, as permitted by Ministry
Express, The Hindu Business Line and of Corporate Affairs and SEBI. The
Annual Report is e-mailed to all
Loksatta. The results are also posted
members who have registered their
on the Company’s website: www.
email ids with the Company. The
larsentoubro.com. Annual Report would also be made
Advertisements relating to IEPF, available on the website of the
E-Voting, AGM related compliances, Company. The Chairman suitably
etc. are published in The Financial responds to the queries raised by the
Express and Loksatta. shareholders during the AGM.

115
Annexure to the Board Report    ANNUAL REPORT 2020-21

SEBI Complaints Investor complaints are processed I. GENERAL SHAREHOLDERS’ INFORMATION

Redress System at SEBI in a centralized web-based a) Annual General Meeting:
(SCORES) complaints redress system. The
The Annual General Meeting of the Company
salient features of this system
has been convened on Thursday, 5th August
are centralised database of all
complaints, online upload of Action 2021 through Video Conferencing (“VC”) / Other
Taken Reports (ATRs) by concerned Audio Visual Means (“OAVM”) pursuant to the
companies and online viewing by MCA Circular dated 5th May 2020 at 3:30 p.m.
investors of actions taken on the
b) Financial calendar:
complaints and their current status.
The Company timely submits ATR 1. Annual Results of 14th May 2021
with respect to the complaint 2020-21
received on SCORES. 2. E-Mailing of Annual First week of July 2021 *
Management This forms a part of the Annual Reports
Discussion & Report which is mailed to the 3. First Quarter Results During the last week of
Analysis shareholders of the Company. July 2021 *
Presentations made The schedule of analyst / institutional 4. Annual General 5th August 2021
to Institutional investor meets and presentations Meeting
Investors and made to them on a quarterly basis 5. Payment of Dividend On or before 21st August
Analysts are informed to the Stock Exchanges 2021
and also displayed on the website.
6. Second Quarter During last week of
H. UNCLAIMED SHARES results October 2021 *

The Company does not have any unclaimed shares 7. Third Quarter results During last week of
January 2022 *
lying with it from any public issue. However certain
shares resulting out of the bonus shares issued by * Tentative
the Company are unclaimed by the shareholders. As c) Book Closure:
required under Regulation 39(4) of the SEBI LODR
The dates of Book Closure are from Friday,
Regulations, the Company has already sent reminders
30th July 2021 to Thursday, 5th August 2021
in the past to the shareholders to claim these shares.
(both days inclusive) to determine the members
These share certificates are regularly released on
entitled to receive the final dividend for FY 2021.
requests received from the eligible shareholders after
due verification. d) Listing of equity shares / shares underlying
GDRs on Stock Exchanges:
In accordance with the provisions of the Section
124(6) and Rule 6(3)(a) of the Investor Education The shares of the Company are listed on BSE
and Protection Fund Authority (Accounting, Audit, Limited (BSE) and the National Stock Exchange of
Transfer and Refund) Rules, 2016 (‘IEPF Rules’), India Limited (NSE).
the Company has transferred to IEPF equity shares GDRs are listed on Luxembourg Stock Exchange
on which dividend has remained unclaimed for a and admitted for trading on London Stock
period of seven consecutive years from FY 2013. The Exchange.
details are given in the Board Report. Please refer to
pages 83 and 84 of this Annual Report. e) Listing Fees to Stock Exchanges:
The Company has paid the Listing Fees for FY
All corporate benefits on such shares viz. bonus
2021 to BSE and NSE in April 2021 and May
shares, etc. shall be transferred in accordance with
2021 respectively. The fees to Luxembourg Stock
the provisions of IEPF Rules read with Section 124(6)
Exchange has been paid in February 2021. The
of the Companies Act, 2013. The eligible shareholders
fees to London Stock Exchange will be paid on
are requested to note the same and make an
receipt of the bill.
application to IEPF Authority in accordance with the
procedure available on www.iepf.gov.in and submit f) Custodial Fees to Depositories:
such documents as prescribed under the IEPF Rules The fees to National Securities Depository Limited
to claim these shares. Mr. Sivaram Nair A has been (NSDL) and Central Depository Services (India)
appointed as the Nodal officer of the Company. Limited (CDSL) shall be paid on the receipt of
their invoice.

116
g) Stock Code / Symbol: Month L&T NSE Price (v) NIFTY
The Company’s equity shares / GDRs are listed on High Low Month High Low Month
the following Stock Exchanges and admitted for 2020 Close Close
trading in London Stock Exchange: April 943.00 762.80 897.55 9889.05 8055.80 9859.90
May 937.50 791.70 932.25 9598.85 8806.75 9580.30
BSE Limited (BSE) : Scrip Code - 500510
June 995.00 874.00 943.65 10553.15 9544.35 10302.10
National Stock Exchange of India : Scrip Code - LT July 964.40 896.30 913.45 11341.40 10299.60 11073.45
Limited (NSE)
August 1024.95 903.55 944.95 11794.25 10882.25 11387.50
ISIN : INE018A01030
September 971.00 843.00 901.60 11618.10 10790.20 11247.55
Reuters RIC : LART.BO
October 994.65 876.05 929.50 12025.45 11347.05 11642.40
Luxembourg Exchange Stock Code : 005428157
November 1177.00 920.65 1122.40 13145.85 11557.40 12968.95
London Exchange Stock Code : LTOD
December 1338.50 1104.10 1287.60 14024.85 12962.80 13981.75
The Company’s shares constitute a part of BSE 30 2021
Index of the BSE Limited as well as NIFTY Index of January 1396.40 1283.00 1334.70 14753.55 13596.75 13634.60
the National Stock Exchange of India Limited.
February 1593.00 1337.20 1442.50 15431.75 13661.75 14529.15
h) Stock market data for the year 2020-21: March 1565.00 1360.05 1418.90 15336.30 14264.40 14690.70

Month L&T BSE Price (v) BSE SENSEX Stock Performance

2000 L&T NSE (v) NSE NIFTY 17000
High Low Month High Low Month
1900 16000
2020 Close Close 1800
1700 15000
April 945.00 763.00 897.35 33887.25 27500.79 33717.62
1600 14000
May 937.00 791.55 932.30 32845.48 29968.45 32424.10
L&T-NSE (V) 1500

NSE NIFTY
1400 13000
June 995.00 874.40 944.05 35706.55 32348.10 34915.80 1300 12000
1200 11000
July 963.80 896.50 913.35 38617.03 34927.20 37606.89 1100
1000 10000
August 1024.95 903.40 945.30 40010.17 36911.23 38628.29 900 9000
800
September 970.85 842.50 902.45 39359.51 36495.98 38067.93 700 8000
600 7000
October 994.85 876.25 929.60 41048.05 38410.20 39614.07 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
20 20 20 20 20 20 20 20 20 21 21 21
November 1176.75 920.50 1115.80 44825.37 39334.92 44149.72
Daily Closing Price
December 1338.40 1104.20 1287.55 47896.97 44118.10 47751.33
2021
i) Registrar and Share Transfer Agents (RTA):

January 1395.75 1281.00 1334.60 50184.01 46160.46 46285.77 KFin Technologies Private Limited (previously
known as Karvy Fintech Pvt. Ltd)
February 1593.00 1337.75 1442.25 52516.76 46433.65 49099.99
Unit: Larsen & Toubro Limited
March 1565.00 1360.50 1418.35 51821.84 48236.35 49509.15 Selenium Tower B, Plot number 31 & 32
Financial District Gachibowli, Nanakramguda,
Stock Performance Hyderabad, Telangana - 500 032.
2000 L&T BSE (v) BSE SENSEX 57000
1900
1800 53000 j) Share Transfer System:
1700
1600
49000 Pursuant to SEBI press release dated 3rd
1500 45000 December 2018 and 27th March 2019, except in
BSE SENSEX
L&T-BSE (V)

1400
1300 41000 case of transmission or transposition of securities,
1200
37000
requests for effecting transfer of securities
1100
1000 subsequent to 1st April 2019, have not been
33000
900 processed by the Company. The share related
800 29000
700 information is available online.
600 25000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Physical shares received for dematerialization are
20 20 20 20 20 20 20 20 20 21 21 21
Daily Closing Price processed and completed within a period of 21
days from the date of receipt.

117
Annexure to the Board Report    ANNUAL REPORT 2020-21

As required under Regulation 40 of the SEBI m) Dematerialization of shares and Liquidity:

LODR Regulations, a certificate on half yearly The Company’s Shares are required to be
basis confirming due compliance of share transfer compulsorily traded in the Stock Exchanges in
formalities by the Company from Practicing dematerialized form.
Company Secretary has been submitted to Stock
Exchanges within stipulated time. The number of shares held in dematerialized
and physical mode as on 31st March 2021 is as
k) Distribution of Shareholding as on 31st
under:
March 2021:
No. of Shares Shareholders Shareholding No. of shares % of
total
Number % Number % capital
upto 500 12,70,834 92.66 9,45,22,790 6.73 issued
501 - 1000 49,714 3.62 3,64,44,224 2.59 Held in dematerialized form in NSDL 131,38,40,115 93.54
1001 - 2000 27,616 2.01 3,85,30,383 2.74
Held in dematerialized form in CDSL 7,35,40,850 5.24
2001 - 3000 9,237 0.67 2,25,59,369 1.61
Physical 1,71,74,332 1.22
3001 - 4000 3,923 0.29 1,35,81,307 0.97
4001 - 5000 2,571 0.19 1,15,66,686 0.82 Total 140,45,55,297 100.00
5001 - 10000 4,153 0.30 2,88,67,610 2.06
Shares held in Demat / Physical Form
10001 - and 3,487 0.25 115,84,82,928 82.48
as on March 31, 2021
above
TOTAL: 13,71,535 100.00 140,45,55,297 100.00 CDSL Physical
7,35,40,850 1,71,74,332
l) Categories of Shareholders is as under: 5.24% 1.22%

31.03.2021 31.03.2020 NSDL

Category 131,38,40,115
No. of % No. of % 93.54%
Shares Shares
Financial Institutions 23,97,88,975 17.07 25,73,31,891 18.33
Foreign Institutional 30,47,52,410 21.70 23,43,64,607 16.69
Investors
Shares underlying GDRs 2,02,61,741 1.44 1,72,96,884 1.23 n) Outstanding GDRs / ADRs / Warrants or any
Convertible Instruments, conversion date
Mutual Funds 21,25,49,034 15.13 26,60,38,659 18.95
and likely impact on equity:
Bodies Corporate 7,85,44,719 5.59 9,62,45,948 6.86
The outstanding GDRs are backed up by
Directors & Relatives 17,31,586 0.12 15,62,000 0.11 underlying equity shares which are part of the
L&T Employees Trust 19,25,58,158 13.71 18,55,24,682 13.22 existing paid-up capital.
General Public 35,43,68,674 25.24 34,55,27,351 24.61 o) Listing of Debt Securities:
TOTAL 140,45,55,297 100.00 140,38,92,022 100.00 The redeemable Non-Convertible debentures
Categories of Shareholders issued by the Company are listed on the
as on March 31, 2021 Wholesale Debt Market (WDM) of National Stock
Financial Exchange of India Limited and / or BSE Limited.
General Institutions
Public 17.07% p) Listing of Commercial Paper:
25.24%
Foreign The Commercial Papers issued by the Company
L&T Institutional are listed on BSE Limited.
Employees Investors
Trust 21.70% q) Debenture Trustees (for privately placed
13.71%
debentures):
Directors & Shares
Relatives underlying IDBI Trusteeship Services Limited
0.12% Bodies Mutual
GDRs Ground Floor, Asian Building, 17, R. Kamani Marg,
Corporate Funds
5.59% 15.13% 1.44% Ballard Estate, Mumbai – 400 001

118
r) Credit Rating: Shareholder correspondence may be directed
The Company has obtained rating from CRISIL to the Company’s Registrar and Share Transfer
Limited, ICRA Limited and India Ratings and Agent, whose address is given below:
Research Private Limited during FY 2021. There 1. KFin Technologies Private Limited
has been no revision in credit ratings during Unit: Larsen & Toubro Limited
FY 2021. Selenium Tower B,
Plot 31 & 32, Gachibowli,
Rating Type of Rating Financial District, Nanakramguda,
Agency Instrument Hyderabad, Telengana - 500 032
CRISIL Non-Convertible ‘CRISIL AAA/Stable’ Tel : (040) 6716 2222
Limited Debentures Toll free number: 1-800-3454-001
Fax: (040) 2342 0814
Inflation-linked ‘CRISIL AAA/Stable’
Email: [email protected]
Capital- Indexed
Website: www.kfintech.com
Non-Convertible
Debentures 2. KFin Technologies Private Limited
Commercial Paper ‘CRISIL A1+’ Unit: Larsen & Toubro Limited
24-B, Raja Bahadur Mansion,
ICRA Non-Convertible ‘[ICRA] AAA Ground Floor, Ambalal Doshi Marg,
Limited Debentures (stable)’ Behind BSE Limited,
Programme Fort, Mumbai – 400 023.
Commercial Paper ‘[ICRA] A1+’ Tel : (022) 6623 5454/ 5412/ 5427

India Non-Convertible ‘IND AAA/ Stable’ u) Investor Grievances:

Ratings Debentures The Company has designated an exclusive e-mail
and id viz. [email protected] to enable
Research investors to register their complaints, if any.
Private
Limited v) Securities Dealing Code:
Pursuant to the SEBI (Prohibition of Insider
s) Plant Locations: Trading) Regulations, 2015 (‘SEBI PIT
The L&T Group’s facilities for design, engineering, Regulations’), the Company had suitably
manufacture, modular fabrication and production modified its Securities Dealing Code (‘Code’) for
are based at multiple locations within India prevention of insider trading with effect from
including, Bengaluru, Chennai, Coimbatore, May 15, 2015. The objective of the Code is to
Faridabad, Hazira (Surat), Kattupalli (near prevent purchase and / or sale of shares of the
Chennai), Kanchipuram, Mumbai, Pithampur, Company by an Insider based on unpublished
Puducherry, Rajpura, Kansbahal (Rourkela), price sensitive information. Under this Code,
Talegaon, Vadodara and Visakhapatnam. L&T’s Designated Persons (Directors, Advisors, Officers
international manufacturing footprint covers and other concerned employees / persons) are
Oman, Saudi Arabia, UAE, Kuwait and USA. The prevented from dealing in the Company’s shares
L&T Group also has an extensive network of during the closure of Trading Window. To deal in
offices in India and around the globe. See pages securities beyond specified limit, permission of
12 and 13 of this Annual Report. Compliance Officer is also required. Directors and
designated employees who buy and sell shares
t) Address for correspondence:
of the Company are prohibited from executing
Larsen & Toubro Limited, contra-trades during the next six months
L&T House, Ballard Estate, Mumbai 400 001. following the prior transactions. The Company
Tel. No. (022) 6752 5656, has a policy for acting against employees who
Fax No. (022) 6752 5893

119
Annexure to the Board Report    ANNUAL REPORT 2020-21

violate the SEBI PIT Regulations / Code. Pursuant employees and their families, online news
to the enactment of the SEBI (Prohibition of bulletins for conveying topical developments,
Insider Trading) (Amendment) Regulations, 2018, large bouquet of print and online in-house
the Company has suitably modified the provisions magazines, helpdesk facility, etc.
of the Code which are effective from 1st April
Each of the businesses have their internal
2019.
mechanisms to address the grievances of its
Mr. Sivaram Nair A, Company Secretary has been stakeholders. In addition, at the corporate level,
designated as the Compliance Officer. there are committees which can be approached
if the stakeholders are not satisfied with the
The Company has appointed Mr. P.
functioning of such internal mechanisms. As part
Ramakrishnan, Vice President (Corporate
of the vigil mechanism, the Whistle Blower Policy
Accounts & Investor Relations), as Chief
provides access for various stakeholders to the
Investor Relations Officer. The Company
Chairperson of the Audit Committee. The Whistle
also formulated Code of Practices
Blower Policy for Vendors and Channel Partners
and Procedures for Fair Disclosure of
is displayed on the website of the Company
Unpublished Price Sensitive Information
https://investors.larsentoubro.com/CorporateGovernance.aspx.
which is available on Company’s Website
https://investors.larsentoubro.com/Listing-Compliance.aspx. x) Awareness Sessions / Workshops on
Governance practices:
w) Stakeholder Engagement:
Employees across the Company as well as the
The Company recognizes that its stakeholders
group are being sensitized about the various
form a vast and heterogeneous community. Our
policies and governance practices of the
customers, shareholders, employees, suppliers,
Company. The Company conducts in-house
community, etc. have been guideposts of our
training workshops on Corporate Governance
decision-making process. The Company engages
with the help of an external faculty covering
with its identified stakeholders on an ongoing
basics of Corporate Governance as well as
basis through business level engagements and
internal policies and compliances under Code
structured stakeholder engagement programs.
of Conduct, Whistle Blower Policy, Sexual
The Company maintains its focus on delivering
Harassment of Women at Workplace (Prevention,
value to all its stakeholders, especially the
Prohibition & Redressal) Act, 2013, SEBI PIT
disadvantaged communities.
Regulations, etc.
The Company has a dedicated Corporate Brand
The Company has created a batch of trainers
Management and Communications department
across businesses who in turn conduct training
which facilitates exchange of information
/ awareness sessions within their business
between the Company and its stakeholders. The
regularly.
communication channels include:
y) ISO 9001:2015 Certification:
zz For external stakeholders - Stakeholder
engagement sessions, client satisfaction The Company’s Secretarial Department which
surveys, shareholder satisfaction assessment, provides secretarial services and investor services
dealer and stockists meet, analyst / investors for the Company and its Subsidiaries and
meet, periodic feedback mechanism, general Associate Companies is ISO 9001:2015 certified.
meeting for shareholders, online service z) Audit as per SEBI requirements:
and dedicated e-mail service for grievances,
As stipulated by SEBI, a Qualified Practicing
corporate website and access to business
Company Secretary carries out Reconciliation
media to respond to queries, etc.
of Share Capital Audit to reconcile the total
zz For internal stakeholders – Employee admitted capital with National Securities
satisfaction surveys, employee engagement Depository Limited (NSDL) and Central Depository
surveys for improvement in employee Services (India) Limited (CDSL) and the total
engagement processes, circulars and issued and listed capital. This audit is carried
messages from management, corporate out every quarter and the report thereon is
social initiatives, welfare initiatives for submitted to the Stock Exchanges. The Audit

120
confirms that the total Listed and Paid-up capital controls are also reviewed. The audit process
is in agreement with the aggregate of the total includes planning the audit, discussion with
number of shares in dematerialized form and in auditee before audit commencement to explain
physical form. the scope and purpose of the audit, verifying
the compliances based on the supporting
The Secretarial Department of the Company
documentation, post audit meeting for explaining
at Mumbai is manned by competent and
the observations, etc.
experienced professionals. The Company has
a system to review and audit its secretarial cc) Group Governance Policy:
and other statutory compliances by competent Vide its circular dated 10th May 2018, SEBI has
professionals, who are employees of the introduced the concept of Group Governance
Company. Appropriate actions are taken to Unit. The circular expects listed companies to
continuously improve the quality of compliance. monitor their governance through a Governance
aa) Secretarial Audit as per Companies Act, 2013: Committee and establishment of a strong and
effective group governance policy.
Pursuant to the provisions of Section 204(1)
of the Companies Act, 2013, M/s. S. N. “Corporate Governance” in the Company and its
Ananthasubramanian & Co., Company subsidiaries broadly includes strategic supervision
Secretaries, conducts the secretarial audit of the by the Board and its Committees, compliance
compliance of applicable statutory provisions and of Code of Conduct, Statutory Compliance
the adherence of good corporate practices by the including compliance of Companies Act /
Company. applicable SEBI Regulations, avoiding conflict of
interest, Risk Management, Internal Controls and
Pursuant to the SEBI circular no. CIR/CFD/
Audit.
CMD1/27/2019 dated 8th February 2019,
the Company has obtained an annual The Company has four listed entities within the
secretarial compliance report from M/s. S. group. Each of these entities have their own
N. Ananthasubramanian & Co., Company Board and Board Committees in compliance
Secretaries, and shall submit the same to the with the Companies Act 2013 and SEBI LODR
Stock Exchanges within the prescribed timelines. Regulations. The oversight of their subsidiaries
(52 subsidiaries) is as per Companies Act 2013
bb) Statutory Compliance System:
and SEBI LODR Regulations. The Board Report
The Company complies with applicable laws, and its annexures of these listed companies
rules and regulations impacting Company’s contains various disclosures dealing with
business. These comprise of Central Acts / subsidiary companies.
Rules and those of state governments where
the Company generally carries on business. Most of these listed entities has one Executive
The applicable laws are reviewed by the Director and one or more Independent Director
Corporate Legal and Legal departments of each of the Company on its Board.
Independent Company (IC) as well as an external These listed entities publish their independent
consultant on a periodic basis and updated Auditors’ certificate on Corporate Governance,
whenever required. secretarial audit report of Practicing Company
Each IC / Business head certifies compliance of Secretary and CEO/CFO’s certificate for internal
all applicable laws by the IC on a quarterly basis. controls for financial reporting.
Based on these confirmations, the Company Responsibility of the Company’s corporate team
Secretary gives a compliance certificate to the in the areas of statutory compliance (including
Board of Directors. corporate laws), Risk Management, Internal
The Company has a process of verifying the Controls and Internal Audit, covers all unlisted
compliances through a random review of the subsidiaries. The four listed entities have their
process / system / documentation of the location own teams to carry out these functions.
of the IC / Corporate function / Group Company. The ICs have separate internal teams to
The review is placed before the Board of the oversee their legal and compliance functions.
respective IC / group company. Existing internal All Subsidiary Companies associated with the

121
Annexure to the Board Report    ANNUAL REPORT 2020-21

respective ICs are reviewed by their respective IC The Company’s Code of Conduct (Code) is
Boards. required to be adhered by all unlisted group
companies covering employees, directors,
The subsidiary companies also function
suppliers, contractors, etc. In addition to
independently and have separate Boards which
this, the subsidiaries also have their own vigil
consists of representatives of the Company
mechanism, if they meet the thresholds given in
who are senior executives of the Company,
the Companies Act. The Audit Committee/Board
representatives of Joint Venture partners,
of these companies monitor this mechanism. The
representative of the Company’s Board as well
Vigil Mechanism Framework to report breach of
as Independent Directors as required by law. As
code is a structured process, which encourages
per law, these companies, wherever required,
and facilitates all covered, to report without
also have Audit Committee, Nomination and
fear, wrongdoings or any unethical or improper
Remuneration Committee and CSR Committee.
practice which may adversely impact the image,
Major subsidiary companies have some Executive credibility and/or the financials of the Company,
Directors and Independent Directors of the through an appropriate forum.
Company on their Board. The Key Managerial
The Secretarial Department of the Company has
Personnel of subsidiary companies like Chief
qualified Company Secretaries (CS) with vast
Executives, Chief Financial Officers and Company
experience in the field of compliance and law.
Secretaries are mostly employees of the Company
It consists of fulltime professionals dedicated to
or are nominated by the Company as per the
performing corporate secretarial and subsidiary
terms of the Joint Venture Agreement. The
governance duties. Qualified CS in secretarial
subsidiary companies’ performance is also
department monitor the compliance related to
reviewed by the Company’s Board periodically
subsidiaries under Companies Act / Rules. The
(included in quarterly results presented to the
Company’s Secretarial Department develops a
Company’s Board). F&A heads of some of the
broad Governance policy for the Company and
subsidiary companies functionally report to select
its group of subsidiaries.
senior finance officers of the Company.
The Company’s Secretarial Department is involved
Thus, the overall functioning of these Subsidiary
in all major corporate actions of subsidiaries
companies is monitored by the Group directly or
like IPO’s, raising of capital, restructuring, major
through their respective ICs.
financial assistance to subsidiaries etc.
A voluntary Secretarial Audit is conducted for
Appropriate disclosures related to subsidiaries
all subsidiary companies, including foreign
are made in financial statements / directors’
companies and companies which are not covered
report of the Company as well as its subsidiaries
under the purview of Companies Act, 2013.
as per Companies Act 2013 / applicable
Thus, there is a complete audit of the compliance
SEBI Regulations and applicable Accounting
of applicable statutory provisions and adherence
Standards. All companies are subject to Statutory
to good corporate practices.
Audit and applicable Secretarial Audit.

122
Independent Auditor’s Certificate on Corporate Governance
TO THE MEMBERS OF Governance issued by the Institute of the Chartered
LARSEN & TOUBRO LIMITED Accountants of India (the ”ICAI”), the Standards
on Auditing specified under Section 143(10) of the
INDEPENDENT AUDITOR’S CERTIFICATE ON Companies Act 2013, in so far as applicable for the
CORPORATE GOVERNANCE purpose of this certificate and as per the Guidance
1. This certificate is issued in accordance with the terms Note on Reports or Certificates for Special Purposes
of our engagement letter dated September 23, 2020. issued by the ICAI which requires that we comply with
the ethical requirements of the Code of Ethics issued
2. We, Deloitte Haskins & Sells LLP, Chartered
by the ICAI.
Accountants, the Statutory Auditors of Larsen &
Toubro Limited (the “Company”), have examined the 7. We have complied with the relevant applicable
compliance of conditions of Corporate Governance by requirements of the Standard on Quality Control
the Company, for the year ended on March 31, 2021, (SQC) 1, Quality Control for Firms that Perform Audits
as stipulated in regulations 17 to 27 and clauses (b) to and Reviews of Historical Financial Information, and
(i) of regulation 46(2) and para C and D of Schedule Other Assurance and Related Services Engagements.
V of the SEBI (Listing Obligations and Disclosure Opinion
Requirements) Regulations, 2015, as amended from
time to time (the “Listing Regulations”). 8. Based on our examination of the relevant records
and according to the information and explanations
Managements’ Responsibility provided to us and the representations provided
3. The compliance of conditions of Corporate by the Management, we certify that the Company
Governance is the responsibility of the Management. has complied with the conditions of Corporate
This responsibility includes the design, implementation Governance as stipulated in regulations 17 to 27 and
and maintenance of internal control and procedures clauses (b) to (i) of regulation 46(2) and para C and
to ensure the compliance with the conditions of D of Schedule V of the Listing Regulations during the
the Corporate Governance stipulated in Listing year ended March 31, 2021.
Regulations. 9. We state that such compliance is neither an
Auditor’s Responsibility assurance as to the future viability of the Company
nor the efficiency or effectiveness with which the
4. Our responsibility is limited to examining the
Management has conducted the affairs of the
procedures and implementation thereof, adopted
Company.
by the Company for ensuring compliance with the
conditions of the Corporate Governance. It is neither
an audit nor an expression of opinion on the financial For DELOITTE HASKINS & SELLS LLP
statements of the Company. Chartered Accountants
(Firm’s Registration No. 117366W/W100018)
5. We have examined the books of account and other
relevant records and documents maintained by the
Company for the purposes of providing reasonable Sanjiv V. Pilgaonkar
assurance on the compliance with Corporate (Partner)
Governance requirements by the Company. (Membership No. 039826)
6. We have carried out an examination of the relevant UDIN: 21039826AAAAEE1819
records of the Company in accordance with the Place: Mumbai
Guidance Note on Certification of Corporate Date: May 14, 2021

123
Annexure to the Board Report    ANNUAL REPORT 2020-21

Independent Auditor’s Certificate in respect of the implementation of

Employee Stock Option Schemes of the Company
TO THE MEMBERS OF Auditor’s Responsibility
LARSEN & TOUBRO LIMITED 4. It is our responsibility to certify whether the Company
INDEPENDENT AUDITOR’S CERTIFICATE IN RESPECT has complied with the applicable provisions of the
OF THE IMPLEMENTATION OF EMPLOYEE STOCK Regulations and Resolutions during the year ended
OPTION SCHEMES OF THE COMPANY. March 31, 2021, in implementing the Schemes on
the basis of information compiled or collated by
1. This certificate is issued in accordance with the terms
Management and the accounting and other relevant
of our engagement letter dated September 23, 2020.
supporting records and documents provided to us for
2. We, Deloitte Haskins & Sells LLP, Chartered our examination.
Accountants (Firm Registration Number 117366W/W-
5. We conducted our examination and obtained the
100018), the Statutory Auditors of Larsen & Toubro
explanations in accordance with the Guidance Note
Limited (“L&T”/ “Company”), pursuant to the
on Reports or Certificates for Special Purposes issued
requirement of clause 13 of Securities and Exchange
by the Institute of Chartered Accountants of India
Board of India (Share Based Employee Benefits)
(“ICAI”) and the Standards on Auditing specified
Regulations, 2014, as amended by Circular No. SEBI/
under Section 143(10) of the Companies Act, 2013,
LADNRO/GN/2015-16/021 dated September 18, 2015
which include the concepts of test checks and
and vide Notification no. SEBI/LAD/NGO/GN/2016-
materiality. This Guidance Note requires that we
17/037 dated March 6, 2017 (the “Regulations”) are
comply with the ethical requirements of the Code of
required to certify for the year ended March 31, 2021,
Ethics issued by the ICAI.
that the Employee Stock Option Schemes, L&T Limited
ESOP Scheme -2003 and L&T Limited ESOP Scheme 6. We have complied with the relevant applicable
-2006 (the “Schemes”) have been implemented in requirements of the Standard on Quality Control
accordance with the Regulations and in accordance (SQC) 1, Quality Control for Firms that Perform Audits
with the special resolutions passed in the general and Review Historical Financial Information, and
meeting held on August 26, 1999 and August 25, Other Assurance and Related Services Engagements.
2006 (the “Resolutions”).
Criteria and Scope
Management’s Responsibility 7. The criteria against which the information is evaluated
3. Implementation of the Schemes in accordance with are the following:
the provisions of the Regulations and Resolutions a) the Schemes;
and compilation of the relevant information for b) the Regulations;
financial reporting is the responsibility of the c) the Resolutions; and
Management of the Company. This includes the d) Written representation provided by the
design, implementation and maintenance of internal Management.
control necessary to ensure accurate compilation
Opinion
of information necessary of the purpose and
maintenance of all accounting and other relevant 8. Based on our examination of the accounting and
supporting records and documents and applying other relevant supporting records and documents
an appropriate basis of preparation of the relevant maintained by the Company as aforesaid, and
information for financial reporting; and making according to the information and explanations give
estimates that are reasonable in the circumstances. to us, in our opinion, the Company has complied

124
with the applicable provisions of the Regulations and shown or into whose hands it may come without our
Resolutions in implementing the Schemes during the prior consent in writing.
year ended March 31, 2021.
For DELOITTE HASKINS & SELLS LLP
Restriction on Use Chartered Accountants
9. This certificate is addressed to and provided to the (Firm’s Registration No. 117366W/W-100018)
Members of the Company solely for the purpose of
compliance with Clause 13 of the Regulations. This Sanjiv V. Pilgaonkar
certificate should not be circulated, copied, used/ Partner
referred to for any other purpose, without our prior (Membership No. 039826)
written consent. Accordingly, we do not accept or UDIN: 21039826AAAAEF9739
assume any liability or any duty of care of for any Place: Mumbai
other purpose or to any other party to whom it is Date: May 14, 2021

125
Annexure to the Board Report    ANNUAL REPORT 2020-21

Certificate of Non-Disqualification of Directors

[Pursuant to Regulation 34(3) and Schedule V Para C Clause (10) (i) of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015]
To,
The Members of
Larsen & Toubro Limited
L & T House,
Ballard Estate,
Mumbai 400001.
We have examined the following documents:
i) Declaration of non-disqualification as required under Section 164 of Companies Act, 2013 (‘the Act’);
ii) Disclosure of concern or interests as required under Section 184 of the Act; (hereinafter referred to as ‘relevant
documents’)
as submitted by the Directors of Larsen & Toubro Limited (‘the Company’) bearing CIN: L99999MH1946PLC004768
and having its registered office at L & T House, Ballard Estate, Mumbai 400001, to the Board of Directors of the Company
(‘the Board’) for the Financial Year 2020-21 and Financial Year 2021-22 and relevant registers, records, forms and
returns maintained by the Company and as made available to us for the purpose of issuing this Certificate in accordance
with Regulation 34(3) read with Schedule V Para C Clause 10(i) of SEBI (LODR) Regulations, 2015. We have considered
non-disqualification to include non-debarment by Regulatory/ Statutory Authorities.
It is the responsibility of Directors to submit relevant documents with complete and accurate information in accordance
with the provisions of the Act.
Due to the pandemic caused by COVID-19 and prevailing lockdowns / restrictions on movement of people imposed by the
Government, for the purpose of issuing this certification, we have conducted our audit remotely based on the records and
information made available to us by the Company electronically.
Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the
management of the Company. Our responsibility is to express an opinion based on our verification.
Based on our examination as aforesaid and such other verifications carried out by us as deemed necessary and adequate
(including Directors Identification Number (DIN) status at the portal www.mca.gov.in), in our opinion and to the best of
our information and knowledge and according to the explanations provided by the Company, its officers and authorized
representatives, we hereby certify that during the Financial Year ended 31st March 2021, none of the Directors on
the Board of the Company, as listed hereunder have been debarred or disqualified from being appointed or continuing
as Directors of Companies by Securities and Exchange Board of India/ Ministry of Corporate Affairs or any such statutory
authority.

Sr. Name of Director Director Date of Date of Cessation

No. Identification Appointment
Number (DIN)
01 Mr. Anilkumar Manibhai Naik 00001514 23-11-1989 –
02 Mr. Mukund Manohar Chitale 00101004 06-07-2004 –
03 Mr. Subodh Kumar Bhargava 00035672 03-07-2007 –
04 Mr. Sekharipuram Narayanan Subrahmanyan 02255382 01-07-2011 –
05 Mr. Ramamurthi Shankar Raman 00019798 01-10-2011 –
06 Mr. Shailendra Narain Roy 02144836 09-03-2012 07-07-2020
07 Mr. Meleveetil Damodaran 02106990 22-10-2012 –

126
Sr. Name of Director Director Date of Date of Cessation
No. Identification Appointment
Number (DIN)
08 Mr. Vikram Singh Mehta 00041197 22-10-2012 –
09 Mr. Adil Siraj Zainulbhai 06646490 30-05-2014 –
10 Mrs. Sunita Sharma 02949529 01-04-2015 –
11 Mr. Thomas Mathew T. 00130282 03-04-2015 02-04-2020
12 Mr. Ajay Shankar 01800443 30-05-2015 29-05-2020
13 Mr. Subramanian Sarma 00554221 19-08-2015 –
14 Mr. Dip Kishore Sen 03554707 01-10-2015 –
15 Mr. M. V. Satish 06393156 29-01-2016 –
16 Mrs. Naina Lal Kidwai 00017806 01-03-2016 28-02-2021
17 Mr. Sanjeev Aga 00022065 25-05-2016 –
18 Mr. N. Kumar 00007848 27-05-2016 –
19 Mr. Jayant Damodar Patil 01252184 01-07-2017 –
20 Mr. Hemant Bhargava 01922717 28-05-2018 –
21 Mr. Sudhindra Vasantrao Desai 07648203 11-07-2020 –
22 Mr. Tharayil Madhava Das 08586766 11-07-2020 –
23 Mrs. Preetha Reddy 00001871 01-03-2021 –
This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with
which the management has conducted the affairs of the Company.
This Certificate has been issued at the request of the Company to make disclosure in its Corporate Governance Report for
the Financial Year ended 31st March, 2021.

For S. N. ANANTHASUBRAMANIAN & Co.

Company Secretaries
ICSI Unique Code P1991MH040400
Peer Review Cert. No. 606/2019

S. N. Ananthasubramanian
Partner
FCS : 4206
COP No. : 1774
ICSI UDIN : F004206C000240552
Date : May 4, 2021
Place: Thane

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Annexure to the Board Report    ANNUAL REPORT 2020-21

To the Board of Directors of Larsen & Toubro Limited

Dear Sirs,
Sub: CEO / CFO Certificate
[Issued in accordance with provisions of Regulation 17(8) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015]
We have reviewed the consolidated financial statements, read with the consolidated cash flow statement of Larsen &
Toubro Limited for the year ended March 31, 2021 and that to the best of our knowledge and belief, we state that;
(a) (i) these statements do not contain any materially untrue statement or omit any material fact or contain statements
that may be misleading;
(ii) these statements present a true and fair view of the Company’s affairs and are in compliance with current
accounting standards, applicable laws and regulations.
(b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the period
which are fraudulent, illegal or in violation of the Company’s code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated
the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to
the Auditors and the Audit Committee, deficiencies, if any, in the design or operation of such internal controls of
which we are aware and steps taken or proposed to be taken for rectifying these deficiencies.
(d) We have indicated to the Auditors and the Audit Committee:
(i) that there were no significant changes in internal controls over financial reporting during the year; and
(ii) that there were no significant changes in accounting policies made during the year; and
(iii) that there were no instances of significant fraud of which we have become aware.

Yours sincerely,

_____________________ _______________________
R. Shankar Raman S. N. Subrahmanyan
Whole-time Director and Chief Executive Officer and
Chief Financial Officer Managing Director
DIN: 00019798 DIN: 02255382
Date: May 14, 2021

128
Annexure ‘C’ to the Board Report
ANNUAL REPORT ON CSR ACTIVITIES FOR FINANCIAL YEAR ENDED 31ST MARCH, 2021
1. Brief outline on CSR Policy of the Company
The CSR projects of the Company are focused on communities that are disadvantaged, vulnerable and marginalized.
The Company strives to contribute to improve their standard of living, through its interventions in water & sanitation,
heath, education and skill development.

The Company’s CSR Policy framework details the mechanisms for undertaking various programmes in accordance
with Section 135 of the Companies Act, 2013 (the Act) for the benefit of the community.

In the context of the crisis brought forth by Covid-19 and the nationwide lockdown, considerable efforts were
deployed to tackle the impact of the crisis. Responding to the request from the Hon’ble Prime Minister, Larsen &
Toubro Limited (L&T) along with its Group Companies and its employees immediately contributed R 150 crore in
March 2020 to the PM CARES Fund, which included L&T’s contribution of R 53.23 crore. During FY 2021, an amount
of R 31.32 crore was additionally spent directly by the Company towards Covid relief activities, allocating funds to
address immediate medical requirements for frontline workers as well as meals and groceries for migrant labour and
vulnerable communities, concerted efforts continued throughout the year through various health, education and
livelihood initiatives.

The Company’s primary theme is on ‘Building India’s Social Infrastructure’ as part of its CSR programme which
include, amongst others, the following areas, viz.

zz Water & Sanitation – includes but not limited to watershed development,access to potable water, promoting
rain water harvesting, soil and moisture conservation, recharging ground water levels by facilitating setting up
of community-based institutions such as village development committees, self-help groups, farmer groups and
community management of water resources for improving conditions related to sanitation, health and awareness
amongst communities through an integrated approach.
zz Education - includes but not limited to education infrastructure support to educational institutions, learning
programs and nurturing talent at various levels. Promoting learning enhancement amongst children, both in
schools and in communities through interventions in pre-school education, innovative teaching methodology
and training teachers in formal schools, providing interesting “teaching learning material”, with special focus on
Science, Technology, Engineering and Maths (STEM) subjects.
This is achieved through support to Balwadis and Anganwadis, strengthening the in-school interventions and
providing after school study classes in the community. Ongoing community-based education programs are
significantly impacted by Covid-19 induced lockdown. Efforts are being taken to remain digitally connected to
the children, despite challenges.
zz Health - In an unprecedented year like FY 2021, focus and outlay on health was substantially increased. Regular
health activities including but not limited to community health centres, mobile medical vans, dialysis centres,
general and specialized health camps and outreach programs, support to HIV / AIDS, Tuberculosis control
programs continued, albeit on a lower scale.
zz Skill Development - includes but not limited to vocational training such as skill building, computer training,
women empowerment, support to ITI’s, support to specially-abled (infrastructure support and vocational
training), Construction Skills Training Centres and providing employability skills to women and youth.
Governance, Technology and Innovation would be the key enabling factors across all these initiatives.

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Annexure to the Board Report    ANNUAL REPORT 2020-21

2. Composition of CSR Committee.

The CSR Committee of the Board comprises
Sl. Name of Director Designation /Nature of Number of meetings of CSR Number of meetings of CSR
No. Directorship Committee held during the year Committee attended during the year
1 Mr. M. M. Chitale Chairman 4 4
2 Mr. R. Shankar Raman Member 4 4
3 Mr D. K. Sen Member 4 4

Mr. Sivaram Nair A acts as the Secretary of the Committee.

3. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the
board are disclosed on the website of the company.
The Composition of CSR committee, CSR Policy Framework and CSR Projects approved by the Board are available
in the Governance section on the website of the Company. Please see the link https://investors.larsentoubro.com/
Listing-Compliance.aspx.

4. Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8
of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable (attach the report).
While impact assessment was not mandatory in FY 2021, the Company has been carrying out this activity through an
independent third party for the past several years. The Independent auditor’s report is enclosed as Exhibit A.

5. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies
(Corporate Social responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if
any
Sl. Financial Year Amount available for set-off from Amount required to be setoff for the financial
No. preceding financial years (in R) year, if any (in R)
1 2019-20 53.23 crore* NIL
TOTAL 53.23 crore NIL

*Company’s contribution to PM CARES Fund in March, 2020.

6. Average net profit of the company as per section 135(5).

The average net profit of the Company for the last three financial years is R 7277.81 crore

7. (a) Two percent of average net profit of the company of last three financial years as per section 135(5)
R 145.56 crore

(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years.
NA

(c) Amount required to be set off for the financial year, if any
NA

(d) Total CSR obligation for the financial year (7a+7b-7c).

The Company is required to spend an amount of R145.56 crore as CSR expenditure during the financial year
2020-21.

130
8. (a) CSR amount spent or unspent for the financial year:
Total Amount Spent for the Financial Year. (in R)
Against the mandated spend of R145.56 crore, the Company spent R150.07 crore towards various activities for
the benefit of the community. This exceeds the required spend by R 4.51 Crores. The CSR spend for FY 2021 is
2.06% of the average net profit of last three financial years.
Amount Unspent (in R)
Nil

(b) Details of CSR amount spent against ongoing projects for the financial year:
Amount Mode of
Amount Implementation
Item from Location of the Amount transferred to
Local spent – Through
the list of project allocated Unspent CSR Mode of
Sl. area Project in the
Name of the Project activities in for the Account for the Implementation - Implementing Agency
No. (Yes / duration current
Schedule VII project project as per Direct (Yes/No) CSR
No) State District F.Y. Name
to the Act (in R) Section 135(6) Registration
(in R)
(in R) number
1. NOT APPLICABLE
TOTAL

(c) Details of CSR amount spent against other than ongoing projects for the financial year:
Item from Mode of implementation –
Local Location of the project Amount
the list of Mode of Through implementing agency.
Sl. area spent for
Name of the Project activities in implementation
No. (Yes/ the project CSR
schedule VII - Direct (Yes/No)
No) State District (in R crore) Name registration number
to the Act
As mentioned under Table 8c 144.06

(d) Amount spent in Administrative Overheads

R 6.01 Crores

(e) Amount spent on Impact Assessment, if applicable

NA

(f) Total amount spent for the Financial Year (8b+8c+8d+8e)

R 150.07 Crores

(g) Excess amount for set off, if any

Sl. No. Particulars Amount
(i) Two percent of the average net profit of the company of last three financial years as per section 135(5) R 145.56 crore
(ii) Total amount spent for the Financial Year R 150.07 crore
(iii) Excess amount spent for the financial year [(ii)-(i)] R 4.51 Crores
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any NA
(v) Amount available for set off in succeeding financial years [(iii)-(iv)] R 4.51 Crores

9. (a) Details of Unspent CSR amount for the preceding three financial years
NA

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial
year(s):
NA

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Annexure to the Board Report    ANNUAL REPORT 2020-21

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or
acquired through CSR spent in the financial year (asset-wise details).
Capital Purchase FY 20-21 1 2 3
(a) Date of creation or acquisition of the capital asset(s) 28th January, 2021 & 31st 26th November 2020 & 5th May 2020 & 16th
March 2021 17th March 2021 December 2020
(b) Amount of CSR spent for creation or acquisition of capital 263,730.00 1,404,400.00 253,200.00
asset (in R)
(c) Details of the entity or public authority or beneficiary under Larsen & Toubro Limited Larsen & Toubro Limited Larsen & Toubro Limited
whose name such capital asset is registered, their address etc.
(d) Provide details of the capital asset(s) created or acquired Face Recognition Time Medical equipment at Medical equipment at Thane
(including complete address and location of the capital asset). Attendance Device and Andheri Health Center Health Center - 400601
Laptops at MSTC, Plot No: - 400093
D-11, B-Block, Autonagar,
Visakhapatnam - 530012.
Note: Capital Assets created will be transferred to a section 8 company within the stipulated period

11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per
section 135(5).
NA

S. N. Subrahmanyan M. M. Chitale
Chief Executive Officer & Chairman - CSR Committee
Managing Director DIN: 00101004
DIN: 02255382

132
EXHIBIT - A 3. Key findings
Executive Summary – Social Audit of L&T CSR Majority of the projects adhered to the processes
Programmes and activities as planned and most key performance
1. Introduction indicators have been rated as ‘present and well-
executed’. As an example, key performance indicators
Samhita Social Ventures conducted an extensive social of an education project are - process of selection of
audit study of 41 CSR projects implemented by Larsen schools, provision of infrastructure, curriculum and
& Toubro in FY 2019-20. A social audit is a technique pedagogy, involvement of stakeholders, condition and
of understanding, reporting and improving a project’s maintenance of infrastructure, and outcomes such as
social performance. It is a way to narrow gaps enhanced learning experience for students, improved
between goal and reality, by enhancing efficiency and attendance and enrolment of students, retention, to
effectiveness. The objective of the social audit was to: name a few.
zz Verify the extent to which proposed project
activities have been carried out Summary of Key Performance Indicators

zz Assess various stakeholders’ response to the 200

project so far
150 15
zz Provide suggestions for more effective project
implementation
100
136
These objectives were achieved by following a 3x3 8
model that focused on: 50
52
zz Assessing three aspects of every project – 0
stakeholder participation (internal and external), Efficient Effective
efficiency in planning and delivering the project,
and effectiveness of the project in achieving the Not present
objectives Partially present, could be improved
Present and well executed
zz Auditing the project at three levels – L&T’s local
teams, implementing NGOs (if applicable), and
Figure 2: Summary of key performance indicators
community/end beneficiaries
across all audited projects
2. Sample distribution of the audited projects
3.1. Skill development projects
L&T focused on five cause areas - education, skill
Social audit was conducted for Construction Skills
development, health, Environment Health & Safety
Training Institute (CSTI) and other vocational
(EHS) and water & sanitation. The graph below
skill building projects including training on use
indicates the percentage share of the sample 41
of computer software, basic computer skills, MS
projects audited by cause area.
Office, tailoring and beautician skills.
CSTI is a flagship skill training project of L&T,
implemented in different centres across India.
CSTI demonstrated strong performance on the
‘training’ parameters due to state-of-the-art
infrastructure, robust technical curriculum and
competent trainers. CSTIs have incorporated soft
skills that help in boosting retention at work and
encourage self-employment. The post-training
process was also found to be adequate.
The other skill building projects demonstrated
Education Skill Development Health that indicators like quality of trainers,
mobilisation of trainees, was good. Depending
EHS Water and Sanitation
on the nature of the project, the primary
stakeholders witnessed positive outcome in terms
Figure 1: Sample distribution of projects by cause area
of improvement in skills and confidence.

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Annexure to the Board Report    ANNUAL REPORT 2020-21

3.2. Education projects premises, provision of machinery and equipment.

Education projects for social audit comprised Overall, the projects related to health were found
of four different types of interventions – STEM to be very beneficial to the primary stakeholders.
education, provision of infrastructure, financial 3.4. EHS projects
assistance, and extra-curricular development.
EHS projects for social audit included those on
The infrastructure support in schools was
maintenance of a public garden, afforestation
provided on a need basis and all the primary
and desilting and cleaning of water bodies.
stakeholders expressed their satisfaction for the
The objective of EHS projects was to provide
same. The STEM pedagogy received a positive
holistic support to the community and received
acknowledgement from the students and has
overwhelming support from the concerned
reached them despite delivery challenges during
stakeholders.
the pandemic.
3.5. Water and sanitation projects
3.3. Health projects
Water and sanitation projects were mainly
Health projects for social audit included
conducted in schools situated in remote rural
health and hygiene awareness projects in
locations and where prior to the intervention
schools, provision of prosthetic modular foot,
schools did not have a hygienic toilet facility for
L&T’s Community Health Centre in Thane,
students. The students and the staff at schools
breast cancer awareness camps and health
mentioned that they feel secure and have
infrastructure support including construction of
benefitted greatly from the intervention.
4. Overall trends

Deeper understanding of the sector

Local teams’ capacity, understanding of and involvement with the social
sector has deepened

Responding to emerging needs of the

Robust database of project community
stakeholders • L ocal teams have consistently
• T he remote methodology entailed incorporated the views of the
dependency on L&T local teams for community members they are serving
contact details.
• N
eeds assessment was carried out by
• M
IS for almost all of the projects was L&T directly or with the help of the
maintained well to extract the required partner organization before finalizing
information the projects.

Digital interface and blended approach

Holistic project implementation • CSR projects have been intgegrating digital
• P rojects have been focusing on holistic interface wherever feasible to improve the
development through integrated efforts robustness of the project and to ensure
(multi-year) rather then one-time, short maintenance of digital records
term interventions.
• T his has been helpful during the pandemic
time when digital engagement gained
traction

134
5. Recommendations 5.3. Post intervention follow-up & tracking
5.1. Sustained maintenance of infrastructure To enhance the projects’ outcomes, it is
The company could ensure continued suggested to strengthen post treatment/support
maintenance of facility constructed/supported follow-up. Stronger post training tracking and
by L&T through capacity building of partner monitoring mechanisms could assist in gathering
institution to manage maintenance and accurate intelligence on retention and offer
operational cost. Leveraging on local community further support to trainees.
support for maintenance of infrastructure 5.4 Overall
post-handover could prove beneficial.
L&T could consider operational, maintenance
5.2. Internal capacity building or capacity building support for few years after
It is suggested to leverage existing provisions by project delivery. Additionally, projects in the area
the government such as the DIKSHA initiative to of environment, clean energy (as a differentiator)
access digital content and learning. L&T could could be increased in the portfolio. L&T could
create avenues to cross fertilise learning across design programmes for labour welfare as part of
teams and establish a common R&D. CSTI or other CSR initiatives.

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TABLE 8C
Sl. Name of the Project. Item from Local Location of the project. Amount Mode of Mode of Implementation
No. the list of area spent Implementa - Through Implementing
activities in (Yes/ for the tion - Direct Agency
Schedule VII No). State District project (in (Yes/No). Name
to the Act. R Lakhs).
1 Sustainable Soil & (iv) (x) No Maharashtra Ahmednagar 0.34 No Watershed Organization Trust
Water Conservation at
Pathardi*
2 WASH awareness & (i) (x) No Maharashtra Ahmednagar 184.39 No Watershed Organization Trust
construction of Toilets
in Pathardi*
3 Integrated Community (x) No Maharashtra Aurangabad 164.08 No Watershed Organization Trust
Development
Programme at
Devgaon*
4 Integrated Community (x) No Maharashtra Jalna 142.18 No Watershed Organization Trust
Development
Programme at
Nagzari*
5 Enhancing education (ii) (x) No Rajasthan Rajsamand 64.36 No Bal Raksha Bharat
level and infrastructure
support in Bhim*
6 Construction of water (iv) (x) Yes Tamil Nadu Coimbatore 149.68 No National Agro Foundation
harvesting structures,
Individual Household
toilets & Sanitation
Awareness at
Pappampatti*
7 Construction of water (iv) (x) Yes Tamil Nadu Coimbatore 229.89 No National Agro Foundation
harvesting structure &
Individual Household
toilets & Sanitation
Awareness at
Chettipalayam*
8 Integrated community (iv) (x) Yes Tamil Nadu Vellore 338.46 No DHAN Foundation
development
programme at
Gudiyatham*
9 Water and soil (iv) (x) No Rajasthan Rajsamand 19.61 No Seva Mandir
conservation at
Kumbhalgarh*
10 Improving education (ii) (x) No Rajasthan Rajsamand 34.30 No Seva Mandir
at Kumbhalgarh*
11 Improvement of (i) (x) No Rajasthan Rajsamand 91.43 No Seva Mandir
women & Child health
and Nutrition at
Kumbhalgarh*
12 Integrated Community (iv) (x) No Rajasthan Rajsamand 181.52 No Seva Mandir
Development
Programme at
Sewantri*
13 Educate and empower (ii) (x) No Maharashtra Ahmednagar 26.49 No Light of Life Trust
children at risk of
dropping out in
Pathardi*
14 WASH awareness and (i) (x) Yes Tamil Nadu Vellore 223.13 No DHAN Foundation
Sanitation Project at
Gudiyatham*

136
Sl. Name of the Project. Item from Local Location of the project. Amount Mode of Mode of Implementation
No. the list of area spent Implementa - Through Implementing
activities in (Yes/ for the tion - Direct Agency
Schedule VII No). State District project (in (Yes/No). Name
to the Act. R Lakhs).
15 Livelihood (ii) (x) No Rajasthan Rajsamand 49.32 No Arpan Seva Sansthan
Enhancement for
women at Bhim*
16 Water, soil (iv) (x) No Rajasthan Rajsamand 192.14 No Arpan Seva Sansthan
conservation & water
distribution at Bhim*
17 Infrastructure (ii) (x) No Rajasthan Rajsamand 115.83 No Arpan Seva Sansthan
Improvement
of Schools and
AnganWadi Centres
at Bhim*
18 Community Health (i) Yes Maharashtra Mumbai 307.75 Yes
Centre at Andheri*
19 Community Health (i) Yes Maharashtra Thane 177.64 Yes
Centre at Thane*
20 Skills development (ii) Yes Tamil Nadu Kanchipuram 404.56 Yes
training for rural youth
at Kanchipuram*
21 Skills development (ii) Yes Maharashtra Raigad 346.00 Yes
training for rural youth
at Panvel*
22 Skills development (ii) Yes Uttar Pradesh Hapur 308.52 Yes
training for rural youth
at Pilkhuwa*
23 Skills development (ii) Yes Telangana Mahbubnagar 237.66 Yes
training for rural youth
at Jadcherla*
24 Skills development (ii) Yes West Bengal Hooghly 480.00 Yes
training for rural youth
at Serampore*
25 Skills development (ii) Yes Orissa Cuttack 250.00 Yes
training for rural youth
at Cuttack*
26 Skills development (ii) Yes Telangana Ranga Reddy 80.72 Yes
training for rural youth
at Hyderabad*
27 Skills development (ii) Yes Gujarat Ahmedabad 333.84 Yes
training for rural youth
at Ahmedabad*
28 Skills development (ii) Yes Karnataka Bangalore 392.58 Yes
training for rural youth
at Bengaluru*
29 Community (i) (ii) (iii) (x) Yes Tamil Nadu, TN (Chennai), GJ (Vadodara), 169.56 No Prayas Trust
Development Activities Gujarat, Odisha, OD (Sundargarh), MH (Mumbai,
Maharashtra, Nagpur), HR (Faridabad), KA
Haryana, (Bangalore), AP (Vishakhapatnam),
Karnataka, Chandigarh, MP (Bhopal), TS
Andhra Pradesh, (Hyderabad) & WB (Kolkata)
Madhya
Pradesh,
Telangana &
West Bengal

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Sl. Name of the Project. Item from Local Location of the project. Amount Mode of Mode of Implementation
No. the list of area spent Implementa - Through Implementing
activities in (Yes/ for the tion - Direct Agency
Schedule VII No). State District project (in (Yes/No). Name
to the Act. R Lakhs).
30 Employee Volunteering (ii) Yes Maharashtra, MH (Mumbai), DL (New Delhi), TN 51.69 yes
Projects New Delhi, Tamil (Chennai, Coimbatore) & GJ (Surat,
Nadu & Gujarat Vadodara)
31 STEM education (ii) Yes Tamil Nadu, Chennai, Hazira, Vadodara and 83.72 No American India Foundation
project (Urban) Haryana & Faridabad
Gujarat
32 STEM Education (ii) Yes Rajasthan, Jaipur, Chengalpattu & Puducherry 27.59 No Navnirmiti Eduquality
Project (Rural) Tamil Nadu & Foundation
Puducherry
33 Maintenance of Public (iv) Yes Maharashtra Mumbai & Nashik 91.10 yes
green spaces
34 Providing support (i) Yes Tamil Nadu Chennai 175.00 No Cancer Institute (WIA)
to Cancer Institute
(WIA)for Installation
of Radiation
equipment and care
of underprivileged
patients
35 Construction of (ii) Yes Gujarat Vadodara 823.63 No BAPS Swaminarayan Sanstha
school building & skill
development center
36 Education (ii) Yes Maharashtra & Mahape, Ahmednagar & Mysore 27.74 yes
Infrastructure and Karnataka
Educational kit
support for schools
37 Infrastructure (i) Yes Tamil Nadu Kancheepuram 74.96 No Shri Sankara Kripa
enhancement for Educational
Multi-Speciality
Hospital
38 Set up of computer lab (ii) Yes Gujarat Gandhinagar 50.00 No Love India Foundation For
in school Education 
39 Support to Health & (i) Yes Gujarat, Surat, Vadodara, Coimbatore, 920.31 No L&T Public Charitable Trust
Dialysis Centres and Tamil Nadu, Chennai, Pune, Mumbai, Tiruvallur,
Mobile Medical Units Maharashtra & Chittoor, Ahmednagar & Raigad
Andhra Pradesh
40 Distribution of Cooked (i) (xii) Yes Maharashtra & Mumbai & Chennai 135.77 No Pratham Mumbai Education
Meals & kits for Tamil Nadu Initiative, Save the Children
Covid-19 affected India & Yr Gaitonde Medical
Research Foundation
41 COVID-19 Relief (i) (xii) Yes Andhra Pradesh, Pan India 2,996.71 Yes
efforts- Pan India Assam, Bihar,
Delhi, Gujarat,
Madhya
Pradesh,
Maharashtra,
Tamil Nadu,
Telangana,
Uttar Pradesh,
Uttarakhand &
West Bengal
42 Designing & (i) Yes Maharashtra, MH (Mumbai), RJ(Rajsamand) & 64.58 yes
implementation of Rajasthan & TN (Coimbatore, Vellore)
Projects Tamil Nadu

138
Sl. Name of the Project. Item from Local Location of the project. Amount Mode of Mode of Implementation
No. the list of area spent Implementa - Through Implementing
activities in (Yes/ for the tion - Direct Agency
Schedule VII No). State District project (in (Yes/No). Name
to the Act. R Lakhs).
43 Early Childhood (ii) Yes Maharashtra Mumbai 21.18 No Pratham Mumbai Education
Intervention through Initiative
Pre-school readiness
Program
44 Mobile Toy Van (ii) Yes Maharashtra Mumbai 12.69 No Children Toy Foundation
outreach
45 Support to Community (ii) Yes Maharashtra Mumbai 31.39 No Angel Xpress Foundation
Learning Centres
for urban children
from vulnerable
communities
46 Support to Community (ii) Yes Maharashtra Mumbai 71.83 No Save The Children India
Learning centres
through Study Centers
& Balwadis
47 Support to Community (ii) Yes Maharashtra Thane 12.81 No Pratham Education
Learning Center at Foundation
Mahape
48 Medical Infrastructure (i) Yes Tamil Nadu Coimbatore 75.00 No Genesis Foundation
enhancement support
49 Soft skills and (ii) Yes Maharashtra Mumbai 0.83 No National Centre for the
personality Performing Arts
development for
urban children
from vulnerable
communities
50 Health Awareness and (i) Yes Tamil Nadu Chennai 0.50 No Indian Red Cross Society
Blood Donation Camp
51 Educational support (i) (ii) Yes Tamil Nadu Chennai 44.06 No Vidyasagar Trust
for Special Children at
School
52 Promoting awareness (ii) Yes Tamil Nadu Chennai 7.43 No Deaf Enabled Foundation
and inclusion of India
53 ‘Green Hands’ – (iv) Yes Tamil Nadu Chennai 3.60 Yes
Building Awareness
for Greenery
Development in
Nearby Communities
54 Support to Study (i) (ii) Yes Tamil Nadu Chennai 32.38 No Bhumi
Centres for
urban children
from vulnerable
Communities
55 E-Content (ii) Yes Tamil Nadu Chennai 300.00 Yes
development for Skills
development training
Institutes for rural
youth
56 Support to (ii) Yes New Delhi New Delhi 60.75 No Seth Vidyalaya Trust
Evening School
for urban children
from vulnerable
communities

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Sl. Name of the Project. Item from Local Location of the project. Amount Mode of Mode of Implementation
No. the list of area spent Implementa - Through Implementing
activities in (Yes/ for the tion - Direct Agency
Schedule VII No). State District project (in (Yes/No). Name
to the Act. R Lakhs).
57 Skill Upgradation (ii) Yes Gujarat Ahmedabad 9.43 Yes
Training for Women
construction Workers
58 School infrastructure (i) (ii) Yes Puducherry, Puducherry, Bangalore, Dibrugarh, 41.73 Yes
development Karnataka, Raigarh, Sangareddy, Hooghly,
Assam, Palamu, Mohali, Meerut,
Maharashtra, Saharanpur, Hapur, Bulandshahr,
Telangana, Ranchi & Ahmedabad
West Bengal,
Jharkhand,
Punjab, Uttar
Pradesh &
Gujarat
59 Infrastructure (i) Yes Puducherry & Puducherry & Tiruvallur 10.97 Yes
development at Tamil Nadu
Primary Health Centre
60 School Adoption (i) (ii) Yes Tamil Nadu Coimbatore 203.89 Yes
Project in government
schools
61 Greening of public (iv) Yes Maharashtra Pune 5.05 Yes
spaces at Talegaon
62 Multi skill training (ii) Yes Andhra Pradesh Visakhapatnam 69.74 Direct TATA Strive
center for rural youth implementation
till Dec. 2020
63 Education support for (ii) Yes Andhra Pradesh Visakhapatnam 15.34 No The Ability Peopole and The
Special Children hidden sprout special school,
Vizag
64 Maintenance of Public (iv) Yes Andhra Pradesh Visakhapatnam 3.98 Yes
green spaces
65 WASH Facilities in (i) (ii) Yes Tamil Nadu Coimbatore 23.94 Yes
Government Schools
66 Infrastructure support (i) (ii) Yes Andhra Pradesh Visakhapatnam 20.94 Yes
for Model School
67 Support for School (i) (ii) Yes Maharashtra Pune 11.02 Yes
Infrastructure
Upgradation
68 Support for education (ii) Yes Punjab & Mohali & Sonipat 7.30 Yes
to vulnerable children Haryana
69 Tree Plantation (iv) Yes Tamil Nadu, Chennai, Allahabad, Nagpur, 0.55 Yes
Uttar Pradesh, Hyderabad, Lucknow & Bhopal
Maharashtra,
Telangana &
Madhya Pradesh
70 Health Support to (i) Yes Orissa Khordha 0.59 Yes
underprivileged
children
71 Blood donation Camp (i) Yes Orissa Khordha 0.40 Yes
72 Providing Skill Training (ii) Yes New Delhi New Delhi 2.40 No 1. NIIT Foundation
to Youth On Data 2. Max Educational Trust
Entry / Retail Courses

140
Sl. Name of the Project. Item from Local Location of the project. Amount Mode of Mode of Implementation
No. the list of area spent Implementa - Through Implementing
activities in (Yes/ for the tion - Direct Agency
Schedule VII No). State District project (in (Yes/No). Name
to the Act. R Lakhs).
73 Education Support (i) (ii) Yes West Bengal Kolkata 26.56 No 1. RNL Force
for vulnerable 2. Bagmari Government
children from urban Highschool
communities 3. Disha Foundation
4. Path welfare
5. All Bengal Women union
74 Vocational Training for (ii) Yes West Bengal Kolkata 25.68 No 1. Anandan
Women 2. Disha Foundation
3. Cathedral Relief Services
75 Support to children (ii) Yes West Bengal Kolkata 25.21 No Child in Need Institute
for urban children Care and Counselling
from vulnerable Institute of child health
Communities CRS foundation
76 WASH programme in (i) (ii) Yes West Bengal Kolkata 3.35 Yes
government School
77 Mother & Child – (i) (iii) Yes West Bengal Kolkata 1.29 No Cathedral Relief Services
Health Programme
78 Mobility Aids and (ii) Yes Maharashtra Pune 12.00 No Bharat Vikash Parishad
Mainstreaming
79 Infrastructure support (i) (ii) Yes Tamil Nadu Kanchipuram 3.50 No Integrated Development
for WASH programme, Initiatives & Alternatives
rainwater harvesting Foundation India – NGO
at Government school (India NGO)
80 Infrastructure (x) Yes Maharashtra Ahmednagar 14.99 Yes
development of village
81 Creation of public (i) Yes Maharashtra Buldhana 6.16 Yes
green spaces
82 ITI Workshop (ii) Yes Gujarat Vadodara 20.96 Yes
Upgradation
83 HIV AIDS Awareness (i) Yes Gujarat Surat 18.77 No Gujarat State Network of
Prevention & Support people Living with HIV+
System (GSNP+) and Swayam
Welfare Center
84 Support to Community (ii) Yes Gujarat Surat 16.41 Yes
Development Centre
at Mora
85 Providing educational (ii) Yes Gujarat Surat 21.88 No Hazira Vikas Mandali
kits
86 Providing Digital (i) (ii) Yes Gujarat Surat 132.13 Yes
Classrooms in Schools
87 Providing educational (i) (ii) Yes Gujarat Surat 65.30 Yes
kits
88 Health & Hygiene (i) Yes Gujarat Surat 1.77 Yes
programme for
adolescent health
Awareness
89 Maintenance of Public (iv) Yes Gujarat Surat 76.93 Yes
green spaces
90 Infrastructural support (i) (ii) Yes Gujarat Surat 50.02 Yes
to rural school
91 Drinking Water (i) (x) Yes Gujarat Surat 75.60 Yes
facilities at village

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Annexure to the Board Report    ANNUAL REPORT 2020-21

Sl. Name of the Project. Item from Local Location of the project. Amount Mode of Mode of Implementation
No. the list of area spent Implementa - Through Implementing
activities in (Yes/ for the tion - Direct Agency
Schedule VII No). State District project (in (Yes/No). Name
to the Act. R Lakhs).
92 Drinking Water (i) (ii) Yes Gujarat Surat 54.22 Yes
facilities at
government school
93 Construction of (i) (ii) Yes Gujarat Surat 45.10 Yes
Classrooms at
government School
94 Setting up Computer (i) (ii) Yes Gujarat Surat 28.08 Yes
Lab at High School
95 Rural health support (i) Yes Gujarat Surat 3.04 Yes
96 ‘Aadhaar’- Skill (ii) Yes Gujarat Surat 4.55 Yes
Building for
Community Women
97 School Infrastructure (i) (ii) Yes Gujarat Vadodara 19.56 Yes
Support for Boys
government school
98 Infrastructure (i) (ii) Yes Gujarat Vadodara 37.69 Yes
development support
at Primary School
99 Renovation of (i) (x) Yes Gujarat Surat 74.56 Yes
Community drinking
water facilities
100 AutoCAD training for (ii) Yes West Bengal Hooghly 21.99 Yes
underprivileged youth
101 Providing educational (i) (ii) Yes Orissa Sundargarh 280.00 Yes
support to tribal
communities around
L&T campus
102 Maintenance of Public (iv) Yes Gujarat Vadodara 30.21 Yes
green spaces
103 Education support to (ii) Yes Gujarat Vadodara 39.59 No 1. Swami Vivekanand School
vulnerable children 2. Roosevelt School
3. Sai Angel
104 Educational (i) (ii) Yes Madhya Singrauli, Faridabad, Chittorgarh & 52.95 Yes
infrastructural support Pradesh, Paschim Bardhaman
to vulnerable children Haryana,
Rajasthan &
West Bengal
105 Health Infrastructural (i) Yes Uttar Pradesh Ambedkar Nagar 1.94 Yes
Support at Tanda
106 Infrastructural support (i) (ii) Yes Tamil Nadu Cuddalore 2.66 Yes
at special children
School
107 Infrastructure (i) (ii) Yes Tamil Nadu Chennai 35.00 Yes
Development for
Government Boys
Higher Secondary
School
108 Support to (i) (ii) Yes Tamil Nadu Chengalpattu 25.00 Yes
Government Higher
Secondary School

142
Sl. Name of the Project. Item from Local Location of the project. Amount Mode of Mode of Implementation
No. the list of area spent Implementa - Through Implementing
activities in (Yes/ for the tion - Direct Agency
Schedule VII No). State District project (in (Yes/No). Name
to the Act. R Lakhs).
109 Support to (i) (ii) Yes Tamil Nadu Chennai 15.00 Yes
Government Girls
Higher Secondary
School
110 Basic Infrastructure (i) (ii) Yes Uttar Pradesh Sultanpur, Jaunpur, Ghazipur & 62.40 Yes
upgradation in Mirzapur
government primary
schools
111 Basic Infrastructure (i) (ii) Yes Tamil Nadu Cuddalore 10.00 Yes
upgradation in
Government Primary
School
112 Basic Infrastructure (i) (ii) Yes Tamil Nadu Namakkal 40.00 Yes
development in
Government Boys and
Girls Higher Secondary
School
113 Sanitary Napkin (i) (ii) Yes Maharashtra Pune 47.60 Yes
Vending Machine and
Incinerator Installation
114 Basic infrastructure (i) (ii) Yes Tamil Nadu Erode 53.01 Yes
Upgradation in
Getticheviyur girls
government school
115 Creating Infrastructure (i) (ii) Yes Orissa & West Jharsuguda, Mayurbhanj, Darjiling 20.41 Yes
Facilities in School Bengal & Jalpaiguri
116 Breast Cancer Brigade (i) Yes Kerala Kannur 13.14 No Malabar Cancer Care Society
Project
117 School Infrastructure (i) (ii) Yes Gujarat, Mehsana, Vadodara, Mumbai, 64.66 Yes
Development Rajasthan & Satara, Aurangabad, Raigad, Pali
Maharashtra & Jodhpur
118 WASH facilities (i) (ii) Yes Rajasthan, RJ(Naguar, Dungarpur, Ajmer, 56.60 Yes
and awareness at Madhya Ganganagar, Jhunjhunu, Tonk),
Government Schools Pradesh, MP (Chhatarpur, Rajgarh, Sehore,
Odisha, Satna), OD (Keonjhar, Subarnapur),
Maharashtra & MH (Nashik) & HR (Faridabad)
Haryana
119 Infrastructure (i) (ii) Yes Rajasthan, RJ (Alwar, Nagaur), MP (East 13.89 Yes
development (Solar Madhya Pradesh Nimar) & OD (Sundargarh)
Power System) at & Odisha
Government Schools
120 Infrastructure (i) (ii) Yes Rajasthan, West RJ (Banswara, Dungarpur, 40.25 Yes
development (Desks Bengal, Madhya Kushalgarh, Naguar), WB
and Benches) at Pradesh, (Medinipur, Bankura), MP
Government Schools Maharashtra, (Tikamgarh,Chhaigaonmakhan,
Gujarat & Kalisindh), MH (Pune), GJ
Haryana (Surendranagar) & HR (Faridabad)
121 Health infrastructure (i) Yes Madhya Pradesh Rajgarh & Coimbatore 4.54 Yes
support & Tamil Nadu
122 Contribution to PM (viii) Yes Pan India Pan India 289.00 Yes
Cares Fund
TOTAL 14,405.61
* While these are multi year projects, the budget allocation for these projects is approved on an annual basis.

143
Annexure to the Board Report    ANNUAL REPORT 2020-21

Annexure ‘D’ to the Board Report

A. Ratio of the remuneration of each director to the median remuneration of the employees of the Company
for the financial year 2020-21, the percentage increase in remuneration of each Director and Company
Secretary during the financial year 2020-21 and comparison of the remuneration of each of the Key
Managerial Personnel against the performance of the Company:
v crore
Name of the Director/ Designation Total Ratio of remuneration Percentage
KMP Remuneration of director to the increase in
median remuneration $ Remuneration
A. M. Naik Group Chairman 6.21 73.51 0.37%
S. N. Subrahmanyan Chief Executive Officer & 28.50 337.64 4.86%
Managing Director
R. Shankar Raman Whole-time Director & 13.23 156.72 0.16%
Chief Financial Officer
Shailendra Roy# Whole-time Director & 22.75 # •
Senior Executive Vice
President (Power)
D. K. Sen Whole-time Director & 4.98 58.96 11.38%
Senior Executive Vice
President (Infrastructure)
M. V. Satish Whole-time Director & 5.37 63.63 (7.05)%
Senior Executive Vice
President (Buildings,
Minerals & Metals)
J. D. Patil Whole-time Director & 5.36 63.50 5.38%
Senior Executive Vice
President (Defence)
Subramanian Sarma@ Whole-time Director & Sr. 11.40 219.00 •
Executive Vice President
(Energy)
S. V. Desai% Whole-time Director & Sr. 3.47 56.85 •
Executive Vice President
(Civil Infrastructure)
T. Madhava Das% Whole-time Director & Sr. 3.66 59.92 •
Executive Vice President
(Utilities)
M. M. Chitale Independent Director 0.72 8.55 47.65%
Subodh Bhargava Independent Director 0.66 7.81 31.11%
M. Damodaran Independent Director 0.64 7.61 173.19%
Vikram Singh Mehta Independent Director 0.39 4.58 31.63%
Adil Zainulbhai Independent Director 0.62 7.40 62.21%
Sunita Sharma^ * Nominee of Life Insurance 0.36 4.24 40.20%
Corporation of India

144
v crore
Name of the Director/ Designation Total Ratio of remuneration Percentage
KMP Remuneration of director to the increase in
median remuneration $ Remuneration
Ajay Shankar & Independent Director 0.06 4.70 •
Naina Lal Kidwai~ Independent Director 0.23 3.03 •
Sanjeev Aga Independent Director 0.56 6.58 72.52%
Narayanan Kumar Independent Director 0.48 5.67 72.30%
Hemant Bhargava ^ Nominee of Life Insurance 0.31 3.70 625.58%
Corporation of India
Preetha Reddy ^^ Independent Director 0.08 10.83 •
Sivaram Nair A Company Secretary 1.66 19.63 282.82%

$ Ratio of remuneration of director to the median remuneration is calculated on pro-rata basis for those directors who served for only part of
the financial year 2020-21.
^ Part of the remuneration has been paid to the financial institution he/she represents.
• Details not given as the Director / KMP was there for part of the year.
& Ceased to be a Director w.e.f. 29th May 2020.
# Ceased to be a Director w.e.f 7th July 2020. Ratio of remuneration to the median remuneration is not calculated since (a) the director is
retired on 7th July 2020 and (b) total remuneration of the director also includes retirement benefits.
~ Ceased to be a Director w.e.f 28th February 2021.
@ Non-executive director upto 18th August 2020 and appointed as Whole-time Director w.e.f. 19th August 2020.
% Appointed as Whole-time Directors w.e.f 11th July 2020.
^^ Appointed as an Independent Director w.e.f 1st March 2021.
* Resigned as a Director w.e.f. 3rd May 2021 pursuant to withdrawal of nomination by LIC.

B. Percentage increase in the median remuneration any exceptional circumstances for increase in
of all employees in the financial year 2020-21: managerial remuneration:
The median remuneration of employees of the Average percentage decrease made in the salaries
Company during the financial year was R 8.44 lakh. In of employees other than the managerial personnel
the financial year, there was a decrease of 1.59% in for the year 2020-21 was 10.12% whereas there
the median remuneration of employees. is an increase in the managerial remuneration by
54.07%. Reduction in remuneration to employees
C. Number of permanent employees on the rolls of
other than managerial personnel is mainly due to cost
Company as on 31st March 2021:
reduction measures adopted by the Company in the
There were 40,253 permanent employees on the rolls current pandemic scenario and increase in managerial
of Company as on 31st March 2021. remuneration is mainly due to 3 new Executive
D. Average percentile increase already made in Directors appointed during the year and retirement
the salaries of the employees other than the benefits paid to the retiring Executive Director.
managerial personnel in the last financial E. Affirmation that the remuneration is as per the
year and its comparison with the percentile remuneration policy of the Company:
increase in the managerial remuneration and
It is hereby affirmed that the remuneration paid is
justification thereof and point out if there are
as per the Remuneration Policy for Directors, Key
Managerial Personnel and other Employees.

145
Annexure to the Board Report    ANNUAL REPORT 2020-21

Annexure ‘E’ to the Board Report

Form No. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2021
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014]

To, v. The following Regulations and Guidelines prescribed

The Members, under the Securities and Exchange Board of India Act,
Larsen & Toubro Limited 1992 (‘SEBI Act’):
CIN: L99999MH1946PLC004768
L&T House, Ballard Estate, a. The Securities and Exchange Board of India
Mumbai – 400001. (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011;
We have conducted the Secretarial Audit of the
compliance of applicable statutory provisions and the b. The Securities and Exchange Board of India
adherence to good corporate practices by Larsen & (Prohibition of Insider Trading) Regulations, 2015;
Toubro Limited (hereinafter called ‘the Company’).
Secretarial Audit was conducted in a manner that provided c. The Securities and Exchange Board of India
us a reasonable basis for evaluating the corporate (Issue of Capital and Disclosure Requirements)
conducts / statutory compliances and expressing our Regulations, 2018 - Not Applicable as there
opinion thereon. was no reportable event during the financial
Based on our verification of the Company’s books, year under review;
papers, minute books, forms and returns filed and d. The Securities and Exchange Board of India (Share
other records maintained by the Company and also the Based Employee Benefits) Regulations, 2014;
information provided by the Company, its officers, agents
and authorized representatives during the conduct of e. The Securities and Exchange Board of India (Issue
secretarial audit, we hereby report that in our opinion, and Listing of Debt Securities) Regulations, 2008;
the Company has, during the audit period covering the
f. The Securities and Exchange Board of India
financial year ended on 31st March 2021, complied with
the statutory provisions listed hereunder and also that the (Registrars to an Issue and Share Transfer Agents)
Company has proper Board-processes and compliance- Regulations, 1993 regarding the Companies Act
mechanism in place to the extent, in the manner and and dealing with client - Not Applicable as the
subject to the reporting made hereinafter. Company is not registered as Registrar to
Issue and Share Transfer Agent during the
We have examined the books, papers, minute books,
forms and returns filed and other records maintained by financial year under review;
the Company for the financial year ended on 31st March, g. The Securities and Exchange Board of India
2021 according to the provisions of: (Delisting of Equity Shares) Regulations,
i. The Companies Act, 2013 (the Act) and the rules 2009 - Not Applicable as the Company has
made thereunder; not delisted/ proposed to delist its equity
shares from any Stock Exchange during the
ii. The Securities Contracts (Regulation) Act, 1956
financial year under review;
(‘SCRA’) and the rules made thereunder;
h. The Securities and Exchange Board of India
iii. The Depositories Act, 1996 and the Regulations and
(Buyback of Securities) Regulations, 2018 - Not
Bye-laws framed thereunder;
Applicable as there was no reportable event
iv. Foreign Exchange Management Act, 1999 and during the financial year under review;
the rules and regulations made thereunder to the
i. The Securities and Exchange Board of India
extent of Foreign Direct Investment, Overseas Direct
(Listing Obligations and Disclosure Requirements)
Investment and External Commercial Borrowings;
Regulations, 2015;

146
vi. The Company has informed that there are no laws adequate systems and processes in place in the Company
which are specifically applicable to the Company. which is commensurate with the size and operations of
the Company to monitor and ensure compliance with
We have also examined compliance with the applicable applicable laws, rules, regulations and guidelines.
provisions of the following:
We further report that during the audit period the
(i) Secretarial Standards with regard to Meetings of following events have occurred which had a major bearing
Board of Directors (SS-1) and General Meetings (SS-2) on the Company’s affairs in pursuance of the above
issued by The Institute of Company Secretaries of referred laws, rules, regulations, guidelines, standards etc:
India;
The Company has:
(ii) Listing Agreements entered into by the Company with zz Issued and allotted 90,000 Non- Convertible
BSE Limited and National Stock Exchange of India Debentures of R 10 Lac each aggregating to R 9000
Limited. Crore (Rupees Nine Thousand Crore only)
During the period under review the Company has zz Non- Convertible Debentures amounting to R 3200
complied with the provisions of the Act, Rules, Crore were duly redeemed on their respective due
Regulations, Guidelines, Standards, etc.
dates.
We further report that:-
zz The members at the Annual General Meeting held on
zz The Board of Directors of the Company is duly 13th August 2020, passed Special Resolutions :
constituted with proper balance of Executive
Directors, Non-Executive Directors including zz to authorise the Board of Directors to raise funds
Independent Directors and Women Directors. The through issuance of convertible bonds and/
changes in the composition of the Board of Directors or equity shares through depository receipts,
which took place during the period under review including by way of Qualified Institutions
were carried out in compliance with the provisions of Placement, in one or more tranches upto amount
the Act; not exceeding R 4500 Crore (Rupees Four
Thousand Five hundred Crore only) or US $600
zz Adequate notice is given to all Directors of the Mn (US Dollars Six Hundred Million), whichever is
schedule of the Board and Committee Meetings and higher.
Agenda & detailed notes on agenda were sent at least
seven days in advance except for the meetings where This Report is to be read with our letter of even date
consent of the Directors was obtained for receiving which is annexed as Annexure A and forms an integral
notice and agenda and notes to agenda less than part of this report.
seven days before the meeting;
zz There exists a system for seeking and obtaining For S. N. ANANTHASUBRAMANIAN & Co.
further information and clarifications on the agenda Company Secretaries
ICSI Unique Code: P1991MH040400
items before the meeting for meaningful participation
Peer Review Cert. No.: 606/2019
at the meeting;
zz All decisions of Board and Committee meetings were
S. N. Ananthasubramanian
carried unanimously.
Partner
We further report that based on review of compliance FCS: 4206 | COP No.: 1774
mechanism established by the Company and on the basis ICSI UDIN: F004206C000253565
of the Compliance Certificate(s) issued by the Company
Secretary and taken on record by the Board of Directors Date : 06th May, 2021
at their meeting(s), we are of the opinion that there are Place : Thane

147
Annexure to the Board Report    ANNUAL REPORT 2020-21

Annexure-‘A’

To, Disclaimer
The Members, 5. Due to the pandemic caused by COVID-19 and
Larsen & Toubro Limited
prevailing lockdowns/ restrictions on movement of
CIN: L99999MH1946PLC004768
people imposed by the Government, for the purpose
L& T House, Ballard Estate,
of issuing this report we have conducted our audit
Mumbai – 400001.
remotely based on the records and information made
Our Secretarial Audit Report for the Financial Year ended available to us by the Company electronically.
31st March, 2021, of even date is to be read along with
this letter. 6. The Secretarial Audit Report is neither an assurance
Management’s Responsibility as to the future viability of the Company nor of the
efficacy or effectiveness with which the management
1. It is the responsibility of the management of the
has conducted the affairs of the Company.
Company to maintain secretarial records, devise
proper systems to ensure compliance with the 7. We have not verified the correctness and
provisions of all applicable laws and regulations and appropriateness of financial records and books of
to ensure that the systems are adequate and operate accounts of the Company.
effectively.
Auditor’s Responsibility For S. N. ANANTHASUBRAMANIAN & Co.
2. Our responsibility is to express an opinion on these Company Secretaries
secretarial records, standards and procedures ICSI Unique Code: P1991MH040400
followed by the Company with respect to secretarial Peer Review Cert. No.: 606/2019
compliances.
3. We believe that audit evidence and information S. N. Ananthasubramanian
Partner
obtained from the Company’s management is
FCS: 4206 | COP No.: 1774
adequate and appropriate for us to provide a basis for
ICSI UDIN: F004206C000253565
our opinion.
4. Wherever required, we have obtained the Date : 06th May, 2021
management’s representation about the compliance Place : Thane
of laws, rules and regulations and happening of
events etc.

148
Annexure ‘F’ to the Board Report
DIVIDEND DISTRIBUTION POLICY of the Company and the cash requirement for financing
INTRODUCTION the Company’s future growth. In line with the past
practice, the dividend payout is expected to grow in
As per Regulation 43A of the Securities and Exchange
accordance with the profitable growth of the Company
Board of India (Listing Obligations and Disclosure
under normal circumstances.
Requirements) Regulations, 2015, prescribed Listed
Companies are required to frame a Dividend Distribution DECLARATION OF DIVIDEND
Policy. Dividend shall be declared or paid only out of-
PURPOSE 1) Current financial year’s profit:
The purpose of this Policy is to regulate the process of
a) after providing for depreciation in accordance
dividend declaration and its pay-out by the Company
with law;
which would ensure a regular dividend income for the
shareholders and long term capital appreciation for all b) after transferring to reserves such amount as may
stakeholders of the Company. be prescribed or as may be otherwise considered
appropriate by the Board at its discretion
AUTHORITY
This Policy has been adopted by the Board of Directors of 2) The profits for any previous financial year(s) after
Larsen & Toubro Limited (‘the Company’) at its Meeting providing for depreciation in accordance with law and
held on 22nd November, 2016. The Policy shall also be remaining undistributed; or
displayed in the annual reports and also on the website of 3) out of 1) & 2) both.
the Company.
The circumstances under which shareholders may not
FORMS OF DIVIDENDS expect dividend/or when the dividend could not be
The Companies Act provides for two forms of Dividend: declared by the Company shall include, but are not limited
to, the following:
• Final Dividend
The final dividend is paid once for the financial a. Due to operation of any other law in force;
year after the annual accounts are prepared. The b. Due to losses incurred by the Company and the Board
Board of Directors of the Company has the power considers it appropriate not to declare dividend for
to recommend the payment of final dividend to the any particular year;
shareholders for their approval at the general meeting
of the Company. The declaration of final dividend c. Due to any restrictions and covenants contained in
shall be included in the ordinary business items that any agreement as may be entered with the Lenders
are required to be transacted at the Annual General and
Meeting. d. Due to any default on part of the company.
• Interim Dividend FACTORS AFFECTING DIVIDEND DECLARATION
This form of dividend can be declared by the Board of The Dividend pay-out decision of any company, depends
Directors one or more times in a financial year as may upon certain external and internal factors-
be deemed fit by it. The Board of Directors shall have
the absolute power to declare interim dividend during External Factors:
the financial year, in line with this policy. The Board • Legal/ Statutory Provisions and Regulatory concern:
should consider declaring an interim dividend after The Board should keep in mind the restrictions
finalization of quarterly/ half yearly financial results. imposed by Companies Act, any other applicable
This would be in order to supplement the annual laws with regard to declaration and distribution
dividend or to reward shareholders in exceptional of dividend. Further, any restrictions on payment
circumstances. of dividends by virtue of any regulation as may be
applicable to the Company may also impact the
QUANTUM OF DIVIDEND AND DISTRIBUTION
declaration of dividend.
Dividend payout in a particular year shall be determined
after considering the operating and financial performance

149
Annexure to the Board Report    ANNUAL REPORT 2020-21

• State of Economy: The Board will retain appropriate • Future Requirements: If a company foresees some
part of profits to build up reserves to absorb future profitable investment opportunities in near future
shocks in case of uncertain or recessionary economic including but not limited to Brand/ Business
conditions and in situation where the policy decisions Acquisitions, Expansion / Modernization of existing
of the Government have a bearing on or affect the businesses, Additional investments in subsidiaries/
business of the Company. associates of the Company, Fresh investments into
external businesses, then it may decide for lower
• Nature of Industry: The nature of industry in which
dividend payout and vice-versa.
a company is operating, influences the dividend
decision. Like the industries with stable demand • Leverage profile and liabilities of the Company.
throughout the year are in a position to have stable
• Any other factor as deemed fit by the Board.
earnings and thus declare stable dividends.
RETAINED EARNINGS
• Taxation Policy: The tax policy of a country also
influences the dividend policy of a company. The The portion of profits not distributed among the
rate of tax directly influences the amount of profits shareholders but retained and used in business are termed
available to the company for declaring dividends. as retained earnings. It is also referred to as ploughing
back of profit. The Company should ensure to strike
• Capital Markets: In case of unfavorable market or the right balance between the quantum of dividend
economic or business conditions, Board may resort to paid and amount of profits retained in the business for
a conservative dividend pay-out in order to conserve various purposes. These earnings may be utilized for
cash outflows and reduce the cost of raising funds internal financing of its various projects and for fixed as
through alternate resources. well as working capital. Thus the retained earnings shall
Internal Factors: be utilized for carrying out the main objectives of the
company and maintaining adequate liquidity levels.
Apart from the various external factors, the Board shall
take into account various internal factors including the PARAMETERS THAT SHALL BE ADOPTED WITH
financial parameters while declaring dividend, which inter REGARD TO VARIOUS CLASSES OF SHARE
alia will include - The Company does not have different classes of shares
• Magnitude and Stability of Earnings: The extent of and follows the ‘one share, one vote’ principle.
stability and magnitude of company’s earnings will REVIEW & AMENDMENT
directly influence the dividend declaration. Thus, the
The Policy shall be reviewed as and when required
dividend is directly linked with the availability of the
to ensure that it meets the objectives of the relevant
earnings (including accumulated earnings) with the
legislation and remains effective. The Executive
company.
Management Committee has been authorized to change/
• Liquidity Position: A company’s liquidity position also amend the policy as may be expedient taking into account
determines the level of dividend. If a company does the law for the time being in force and the same shall be
not have sufficient cash resources to make dividend intimated to the Board.
payment, then it may reduce the amount of dividend
pay-out.

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Annexure ‘G’ to the Board Report
Nomination and remuneration policy 2.3. Directors mean Directors of the Company.
(As per Companies Act, 2013) 2.4. Executive Directors means the Executive
The Board of Directors of Larsen & Toubro Limited Chairman if any, Chief Executive Officer and
(“the Company”) had constituted the “Nomination and Managing Director, Deputy Managing Director, if
Remuneration Committee” which is in compliance with any and Whole-time Directors.
the requirements of the Companies Act, 2013 (“Act”) 2.5. Key Managerial Personnel (KMP) means
and SEBI (Listing Obligations and Disclosure Requirements)
zz Chief Executive Officer or the Managing Director
Regulations, 2015 (“LODR”).
or the Manager;
1. OBJECTIVE: zz Whole-time directors;
The Nomination and Remuneration Committee and
zz Chief Financial Officer;
this Policy shall be in compliance with Section 178 of
the Act read along with the applicable rules thereto zz Company Secretary;
and Regulation 19 of LODR. The Key Objectives of the zz Senior Management Personnel designated as
Committee would be: such by the Board; and
zz To identify persons who are qualified to become zz Such other officer as may be prescribed.
directors and who may be appointed in senior
management in accordance with the criteria laid 2.6. Senior Management Personnel means all
down, recommend to the Board their appointment members of management one level below the
and removal and shall specify the manner for effective Executive Directors including the Chief Financial
evaluation of performance of Board, its Committees Officer and Company Secretary. Presently,
and individual directors to be carried out by the Board persons in Sr. Vice President grade and F&A
or the Nomination & Remuneration Committee or heads of Independent Companies reporting to
by an Independent External Agency and review its Whole-time Directors will be covered as Senior
implementation and compliance; Management Personnel.
zz To formulate the criteria for determining 3. ROLE OF COMMITTEE:
qualifications, positive attributes and independence 3.1. Matters to be dealt with, perused and
of a director and recommend to the Board a policy, recommended to the Board by the Nomination
relating to the remuneration for the directors, key and Remuneration Committee
managerial personnel and other employees;
The Committee shall:
zz To ensure that level and composition of remuneration
is reasonable and sufficient to attract, retain and zz Formulate the criteria for determining
motivate directors of the quality required to run the qualifications, positive attributes and
company successfully; independence of a director.

zz Relationship of remuneration to performance is clear zz Identify persons who are qualified to become
and meets appropriate performance benchmarks; Director and persons who may be appointed
in Key Managerial and Senior Management
zz Remuneration to directors, key managerial personnel
positions in accordance with the criteria laid
and senior management involves a balance between
down in this policy.
fixed and incentive pay reflecting short and long-term
performance objectives appropriate to the working of zz Recommend to the Board, appointment
the company and its goals; and removal of Director, KMP and Senior
Management Personnel.
zz Devising a policy on Board diversity;
3.2. Policy for appointment and removal of Director,
2. DEFINITIONS:
KMP and Senior Management
2.1. Act means the Companies Act, 2013 or Companies
Act, 1956 as may be applicable and Rules framed 3.2.1. Appointment criteria and qualifications
thereunder, as amended from time to time. a) The Committee shall identify and ascertain the
2.2. Board means Board of Directors of the Company. integrity, qualification, expertise and experience

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Annexure to the Board Report    ANNUAL REPORT 2020-21

of the person for appointment as Director and Company in any other capacity, either
recommend to the Board his/her appointment. directly or indirectly.
Appointment and Remuneration of KMP or - At the time of appointment of Independent
Senior Management Personnel is in accordance Director it should be ensured that number of
with the HR Policy of the Company. The Boards on which such Independent Director
Company’s policy is committed to acquire, serves is restricted to seven listed companies
develop and retain a pool of high calibre talent, as an Independent Director and three listed
establish systems and practises for maintaining companies as an Independent Director in
transparency, fairness and equity and provides for case such person is serving as a Whole-time
payment of competitive pay packages matching Director of a listed company or such other
industry standards. number as may be prescribed under the Act.
b) A person should possess adequate qualification, c) Maximum Number of Directorships:
expertise and experience for the position he / she - A person shall not be appointed as a
is considered for appointment. The Committee Director in case he is a Director in more
has discretion to decide whether qualification, than eight listed companies after April 1,
expertise and experience possessed by a person 2019 and seven listed companies after April
is sufficient / satisfactory for the concerned 1, 2020. For the purpose of this clause
position. listed companies would mean only those
c) The Company shall not appoint or continue the companies whose equity shares are listed.
employment of any person as Director who has 3.2.3. Evaluation
attained the retirement age fixed by the Board or
The Committee shall by itself or through the Board or
as approved by the Shareholders pursuant to the
an independent external agency carry out evaluation
requirement of the Act/LODR.
of performance of the Board/Committee(s), Individual
3.2.2. Term / Tenure Directors and Chairman at regular interval (yearly) and
a) Executive Directors: review implementation and compliance.
The Company shall appoint or re-appoint any The Company may disclose in the Annual Report:
person as its Executive Director for a term not
a. Observation of the Board Evaluation for the year
exceeding five years at a time. No re-appointment
under review
shall be made earlier than one year before the
expiry of term. b. Previous years observations and actions taken
b) Independent Directors: c. Proposed actions based on current year’s
- An Independent Director shall hold office for observations
a term up to five consecutive years on the 3.2.4. Removal
Board of the Company and will be eligible
Due to reasons for any disqualification mentioned
for re-appointment on passing of a special
in the Act or under any other applicable Act, rules
resolution by the Company and disclosure of
and regulations thereunder, the Committee may
such appointment in the Board’s report. The
recommend, to the Board with reasons recorded
rationale for such re-appointment shall also
in writing, removal of a Director, KMP or Senior
be provided in the Notice to Shareholders
Management Personnel subject to the provisions and
proposing such re-appointment.
compliance of the said Act, rules and regulations.
- No Independent Director shall hold office for
3.2.5. Retirement
more than two consecutive terms, but such
Independent Director shall be eligible for The Director, KMP and Senior Management Personnel
appointment after expiry of three years of shall retire as per the applicable provisions of the Act
ceasing to become an Independent Director. or the prevailing policy of the Company, as applicable.
Provided that an Independent Director shall The Board/Committee will have the discretion
not, during the said period of three years, to retain the Director, KMP, Senior Management
be appointed in or be associated with the Personnel in the same position/ remuneration or

152
otherwise even after attaining the retirement age, for including, employer’s contribution to P.F, pension
the benefit of the Company. scheme, medical expenses, club fees etc. shall be
decided and approved by the Board/ the Person
3.3. Policy relating to the Remuneration of Executive
authorized by the Board on the recommendation
Director, KMP and Senior Management Personnel
of the Committee and approved by the
3.3.1. General: shareholders and Central Government, wherever
a) The remuneration / compensation / commission required.
etc. to the Executive Directors will be determined
b) Minimum Remuneration:
by the Committee and recommended to
the Board for approval. The remuneration / If, in any financial year, the Company has no
compensation / commission etc. shall be subject profits or its profits are inadequate, the Company
to the approval of the shareholders of the shall pay remuneration to its Executive Directors
Company and Central Government, wherever in accordance with the provisions of Schedule
required. V of the Act and if it is not able to comply with
such provisions, with the previous approval of the
b) The remuneration and commission to be paid Central Government.
to the Executive Directors shall be in accordance
with the percentage / limits / conditions laid c) Provisions for excess remuneration:
down in the Articles of Association of the If any Chairman/Managing Director/Whole-time
Company and as per the provisions of the Act. Directors draws or receives, directly or indirectly
by way of remuneration any such sums in excess
c) Increments to the existing remuneration/
of the limits prescribed under the Act or without
compensation structure may be recommended
the prior sanction of the Central Government,
by the Committee to the Board which should be
where required, he / she shall refund such
within the limits approved by the Shareholders in
sums to the Company and until such sum is
the case of Executive Directors.
refunded, hold it in trust for the Company. The
d) Where any insurance is taken by the Company Company shall not waive recovery of such sum
on behalf of its Executive Directors, Chief refundable to it unless permitted by the Central
Executive Officer, Chief Financial Officer, the Government.
Company Secretary and any other employees
d) Stock Options in Subsidiary Companies:
for indemnifying them against any liability, the
premium paid on such insurance shall not be Executive Directors may be granted stock options
treated as part of the remuneration payable to in subsidiary companies as per their Schemes
any such personnel. Provided that if such person and after taking necessary approvals. Perquisites
is proved to be guilty, the premium paid on may be added to the remuneration of concerned
such insurance shall be treated as part of the directors and considered in the limits applicable
remuneration. to the Company.

e) Remuneration of other KMP or Senior 3.3.3. Remuneration to Non- Executive / Independent

Management Personnel, in any form, shall be Director:
as per the policy of the Company based on the a) Remuneration / Commission:
grade structure in the Company. The remuneration / commission shall be fixed as
3.3.2. Remuneration to Executive Directors/KMP and per the limits and conditions mentioned in the
Senior Management Personnel: Articles of Association of the Company and the
Act.
a) Fixed pay:
The Executive Directors/ KMP and Senior b) Sitting Fees:
Management Personnel shall be eligible for The Non- Executive / Independent Director
a monthly remuneration as may be approved may receive remuneration by way of fees for
by the Board on the recommendation of the attending meetings of Board or Committee
Committee or policy of the Company. In case thereof. Provided that the amount of such fees
of remuneration to Directors, the breakup shall not exceed Rs. One Lac per meeting of the
of the pay scale and quantum of perquisites Board or Committee or such amount as may be

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Annexure to the Board Report    ANNUAL REPORT 2020-21

prescribed by the Central Government from time 6. FREQUENCY OF MEETINGS

to time. The meeting of the Committee shall be held atleast
c) Commission: once in a year and at such regular intervals as may be
required.
Commission may be paid within the monetary
limit approved by shareholders, subject to 7. COMMITTEE MEMBERS’ INTERESTS
the limit not exceeding 1% of the profits of 7.1 A member of the Committee is not entitled to be
the Company computed as per the applicable present/participate in discussion when his or her own
provisions of the Act. The Board of Directors will remuneration is discussed at a meeting or when his or
fix the Commission payable to Directors on the her performance is being evaluated.
basis of number of Board/Committee meetings
attended during the year and Chairmanships of 7.2 The Committee may invite such executives, as it
Committees. considers appropriate, to be present at the meetings
of the Committee.
d) Stock Options:
8. SECRETARY
An Independent Director shall not be entitled
to any stock option of the Company. Non- The Company Secretary of the Company shall act as
Executive Directors are eligible for Stock options Secretary of the Committee.
in accordance with Schemes formulated by the 9. VOTING
Company. Nominee Directors are not entitled to
Matters arising for determination at Committee
stock options as per their respective nomination
meetings shall be decided by a majority of votes of
letters received by the Company.
Members present and voting and any such decision
4. MEMBERSHIP shall for all purposes be deemed a decision of the
4.1 The Committee shall consist of a minimum 3 non- Committee.
executive directors, half of them being independent. 10. NOMINATION DUTIES
4.2 Minimum two (2) members or one-third of the The duties of the Committee in relation to nomination
members whichever is greater including atleast one matters include:
Independent Director shall constitute a quorum for
10.1 Ensuring that on appointment to the Board,
the Committee meeting.
Non-Executive Directors receive a formal letter of
4.3 Membership of the Committee shall be disclosed in appointment in accordance with the Guidelines
the Annual Report. provided under the Act;
4.4 Term of the Committee shall be continued unless 10.2 Determining the appropriate size, diversity and
terminated by the Board of Directors. composition of the Board;
5. CHAIRPERSON 10.3 Setting a formal and transparent procedure for
5.1 Chairperson of the Committee shall be an selecting new Directors for appointment to the Board;
Independent Director. 10.4 Developing a succession plan for the Board and Senior
5.2 Chairperson of the Company may be appointed Management and regularly reviewing the plan;
as a member of the Committee but shall not be a 10.5 Evaluating the performance of the Board members
Chairman of the Committee. and Senior Management in the context of the
5.3 In the absence of the Chairperson, the members of Company’s performance from business and
the Committee present at the meeting shall choose compliance perspective;
one amongst them to act as Chairperson. 10.6 Making recommendations to the Board concerning
5.4 Chairman of the Nomination and Remuneration any matters relating to the continuation in office of
Committee meeting could be present at the Annual any Director at any time including the suspension or
General Meeting or may nominate some other termination of service of an Executive Director as an
member to answer the shareholders’ queries.

154
employee of the Company subject to the provision of long term performance objectives appropriate to the
the law and their service contract; working of the Company.
10.7 Delegating any of its powers to one or more of its 11.3 To delegate any of its powers to one or more of its
members or the Secretary of the Committee; members or the Secretary of the Committee.
10.8 Recommend any necessary changes to the Board; and 11.4 To consider any other matters as may be requested by
the Board.
10.9 Considering any other matters, as may be requested
by the Board. 11.5 Professional indemnity and liability insurance for
Directors and senior management.
11. REMUNERATION DUTIES
The duties of the Committee in relation to remuneration 12. M
INUTES OF NOMINATION AND REMUNERATION
matters include: COMMITTEE MEETING
Proceedings of all meetings must be minuted and signed
11.1 To consider and determine the Remuneration Policy,
by the Chairman of the Committee at the subsequent
based on the performance and also bearing in mind
meeting. Minutes of the Committee meetings will be
that the remuneration is reasonable and sufficient to
tabled at the subsequent Board and Committee meeting.
attract, retain and motivate members of the Board
and such other factors as the Committee shall deem 13. REVIEW & AMENDMENT:
appropriate all elements of the remuneration of the The Policy shall be reviewed as and when required
members of the Board. to ensure that it meets the objectives of the relevant
11.2 To ensure the remuneration maintains a balance legislation and remains effective. The Executive Committee
between fixed and incentive pay reflecting short and has the right to change/amend the policy as may be
expedient taking into account the law for the time being
in force.

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MANAGEMENT DISCUSSION AND ANALYSIS    ANNUAL REPORT 2020-21

MANAGEMENT
DISCUSSION towards calibrated fiscal support during lockdown and to

AND boost demand during the unlock phase.

ANALYSIS
With an aim to speed up the economic normalisation,
the Government accelerated the public investment in the
key infrastructure sector. The wheels of India’s capex cycle
were set in motion with a strong revival in investment-led
growth supported by the ‘Atmanirbhar Bharat Mission’ and
a massive boost to infrastructure and capital expenditure
provided for in the Union Budget 2021.

Apart from economic reforms, the government also

Indian Economy implemented various structural reforms in the country
The year 2020-21 has been an unprecedented one. The covering sectors like Agriculture, MSMEs, Labour, Power
Covid-19 pandemic is the severest global health crisis of this and Industry. The agricultural sector remains the bright spot
century, endangering the whole of humanity and resulting of the Indian economy. However, the surge in commodity
in a substantial weakening of most economies. prices is expected to create some cost pressures.

The Indian economy witnessed its first ever technical With the economic activity gaining momentum post the
recession in the year FY 2020-21, with gross domestic Covid-19 lockdown, the measures announced by the
product (GDP) growth remaining in the negative territory for government and rollout of coronavirus vaccines resulted
two consecutive quarters. Lockdowns and travel restrictions in an uptick in economic sentiments, but the resurgent
imposed significant supply-side constraints on the economy, Covid-19 second wave has put a dampener on India’s
drastically reducing output and employment. growth trajectory. Hopefully, the country should be in a
position to control this second wave of Covid-19 infections
The Government announced multiple financial measures and, with progress in vaccination and strict implementation
and structural reforms at different stages of the pandemic of prevention and detection protocols, the country should
be on the growth track for the larger part of FY 2021-22.

156
Global Economy & maintenance, safety, quality, customer experience and
The onset of the Covid-19 pandemic led the entire global enabling functions such as human resources, finance and
economy into a recession that is unprecedented. Growth administration.
suffered broad-based deterioration with a decline in global
While the digital solutions deal with several cutting-edge
trade and marked slowing down in the manufacturing and
complex technologies, they have been encapsulated
services sectors across the globe. Contact-based services
into easily adoptable ways. This has resulted in larger
were majorly affected and, with travel restrictions imposed
deployment of various solutions. More than 75% of the
to contain the spread of the virus, service sectors like
workforce across all levels use these digital solutions.
airlines, tourism, hospitality, etc. were the worst hit.
As several solutions that were deployed have matured
On a positive note, the accelerated progress in vaccination
well, a new plan is in place to productise these solutions
efforts and generous fiscal support is ensuring that many
and make them useful to a wider client base. The industry
of the developed nations regain ground and bring the
is moving towards integrated solutions to realize higher
economy back on the growth track.
benefits than the traditional siloed solution. The digital
Digital @ L&T solutions are imbued with several years of domain
knowledge that L&T has gained while executing multiple
The hallmark of digital transformation at L&T is in its projects. New innovative experiences are added to these
business benefits, widescale adaptation and innovation. solutions using new-age tools like Artificial Intelligence,
The seeds which were sown for digitisation have started Machine Learning, Computer Vision, etc.
showing results, as was clearly evident during the Covid-19-
led lockdown. With the help of digital technologies, L&T not The IoT-based Asset Insights solution, which continuously
only continued its activities, but also made rapid strides into monitors more than 11000 nos. of site / construction
multiple areas and created superior experience, internally equipment, machines and devices, is enhanced with
and for external customers. These transformations have predictive analytics algorithms which provides alerts of any
positively impacted all areas of the value chain, including failures in advance. This helps in reducing the downtime of
core business areas such as tendering, engineering, the equipment and achieving higher operational efficiencies.
procurement, construction, manufacturing, operations The solution is also enhanced to cater to different uses,

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MANAGEMENT DISCUSSION AND ANALYSIS    ANNUAL REPORT 2020-21

from basic monitoring to more advanced edge analytics Design Optimisation is the process of finding the best
solutions where multiple parameters of the equipment are design among the set of all feasible designs that would
monitored at a very high fidelity rate. work for a given set of constraints. The chosen Differential
Evolution (DE) Algorithm is based on bio-inspired
The AI-powered Unmanned Weigh Bridge (UWB) computing and is an evolutionary optimisation algorithm
solution is enabling conventional weigh bridges to be which iterates through generations of feasible solutions.
operated in a completely automated mode without It uses the ‘Survival of the Fittest’ theory to find the most
requiring a human operator. This is achieved by leveraging optimal solution. The solution is deployed to create the
computer vision for Automatic Number Plate Recognition most optimised design for various construction use cases –
(ANPR) and AI-based object detection and retrofitting this especially foundation design of substation and transmission
on conventional weighbridges. It is an end-to-end solution lines as well as structure, and foundation of solar farms.
that also integrates with the Material Inward System and It encompasses the design norms not only for domestic
multiple weigh bridges within a plant to consolidate all standards but also for American, British, and European
weighment transactions. This enables quick deployment standards.
and helps provide a real-time view of material flow – right
from entry till the point of material unloading. Unmanned The solution has produced up to 15% savings in cost and
weigh bridges are being rolled out into plants, construction close to 25% reduction in design time. In addition to this,
sites, etc. The integration of this solution with the ERP has the solution has enhanced the consistency and accuracy
reduced the possibility of pilferage, erroneous entries, etc. (quality) in the design approach, as it removes human errors
in the design process.
Quest, a solution based on Conversational Artificial
Intelligence (AI) & Natural Language Processing (NLP) sits Geospatial Technology has been a powerful tool to
on many field personnel’s mobile devices. The solution uses deal with this pandemic by ensuring frictionless business
Natural Language Processing to understand a question continuity. It helps to create a Map to Plan solution,
asked in plain English and to find the most relevant answer. designed to help project teams to identify sites in pandemic
This has eased the work of the site personnel by providing green zones for resumption of work while also helping the
correct information without any delays. HR teams to map employees around red zones to ensure
workplace safety. Among the operational initiatives, the
Lexis, an Image Processing and Natural Language open-yard management solution helps in end-to-end
Processing platform has been helping employees material management in an open place including material
comprehend and process the information in multiple receipt, individual tagging, storage, location tagging with a
bulky documents in a quick manner. Business units are high accuracy external GNSS (Global Navigational Satellite
using Lexis to compare lengthy spec sheets for equipment System), internal transfer and delivery of the material.
from multiple suppliers and identify gaps from customer Digital solutions also cater to Structural Health Monitoring
requirements, while yet others are using its image and distress mapping using LiDAR scanning, providing 3D
processing capabilities to comprehend and auto-identify models for an area of more than 3.5 lakh square kilometres,
BoQs from P&ID (Piping and Instrumentation Diagrams). with more than 8000 scans and 6000 as-built design
drawings for release.
AR-based remote assistance: Augmented Reality (AR)
has significantly improved the organisation’s capabilities In addition to the above areas, L&T also achieved an
with respect to real-time support and assistance. AR-based exciting milestone by implementing Aerial LiDAR survey
remote assistance uses AR and video streaming to enable and sub-surface investigation for the first-ever bullet train
experts to guide and assist field personnel in real time. project in India. The geospatial team won the FICCI award
This allows experts to remotely solve challenging issues on for Geospatial Excellence for Business Applications. Further
complex equipment thereby seamlessly bridging the physical work is happening on automated drone operations for
and digital worlds. This has worked out very well during remote surveillance and inspection purposes.
the current pandemic situation. Some of the businesses use
cases that are addressed by the solution are commissioning The Path Forward
assistance using pre-defined SOPs, assisted maintenance Digital technologies have been gradually infused into the
operations and routine inspection support for complex operational processes in L&T and have become a way of life.
machinery. Every L&T facility – be it a factory, a project site or an office

158
– uses multiple digital solutions that have been seamlessly Security Officer (CISO) organisation has been strengthened,
integrated into their day-to-day operations. scanning old and new landscapes for new cyber threats
and constantly working with stakeholders to reduce and
The solutions are being transformed into an integrated mitigate the risk. The enterprise is working steadfastly on a
platform which combines man, machine and processes multi-year cyber security assurance framework to uniformly
together to reduce the downtime of the equipment, ramp up cyber security controls across all businesses.
increase worker productivity, automate workflows and
provide more insights for informed decisions. Digital While the digital transformation permeates across L&T, IT
transformation at L&T is at a stage where opportunities are stands ready to collaborate with its businesses to enable
continuously being identified and innovation deployed. New them to retain their competitiveness and stay ahead of the
benchmarks are set with the integrated approach through curve.
all these digital technologies.
Human Resources
Information Technology Talent is the biggest anchor and differentiator for the
The pandemic has upended all traditional business models business success of the organisation. The Company was
and has thrown up a new set of challenges. In the changed able to face the challenges arising out of the Covid-19
landscape, the IT function across L&T rose to the challenge, situation primarily due to its committed workforce, a
supporting the business during this critical time. leadership that inspires and gets the best out of talent and
the Company’s people-led philosophy and practices. This
WFH (Work from Home) was the norm during FY 2020-21 enviable combination of talent, commitment, leadership
where IT supported the businesses by ensuring secure and and culture continues to give L&T a competitive edge and
continuous access to the workplace from anywhere and helps exceed performance expectations. L&T’s ability to
anytime. Adequate training to employees was provided to surpass expectations in a diverse business landscape that
deal with this new situation. The result was a very high level includes engineering, projects, manufacturing, and services
of employee communication and collaboration through the is a shining example of managing a truly diverse talent pool.
digital mode. This culture shift has had the positive impact
of improved productivity. This improved performance has been achieved through a
core belief in attracting young talent and grooming them
Today, technologies are on the cusp of a Digital ‘Perfect in-house. Further, L&T’s best-in-class and award-winning
Storm’. These events force entities to re-think how IT is people practices give life to this core belief and philosophy.
consumed at the enterprise and elsewhere; the previous L&T’s talent management framework comprises the
such ‘Perfect-Storm’ was when all systems started getting core building blocks of attraction, development and
connected 20 years ago on private and public networks and engagement.
the information scarcity suddenly turned into an information
deluge for everyone. L&T continues to attract the best engineering talent
from top-tier engineering campuses across the country,
The second such storm has begun, which is the digital on-boarding them as Graduate Engineer Trainees (GETs)
transformation of the business. This has already led to new and putting them through a rigorous 12-month process
applications that are being created rapidly using digitally of acclimatisation and training. L&T’s Performance
disruptive technologies such as Artificial Intelligence, Management System, aptly named FAIR (Framework for
Machine Learning, Robotic Process Automation, Process Linking Appraisals with Incentives and Rewards), ensures
Mining, Data analytics, IoT, etc. to empower real-time that top-class talent gets visibility and contributes to a
information in order to make informed decisions, thereby meritocratic environment.
lowering the cost of doing business, improving customer
experiences and improving employee productivity. The Leadership Development Centres, pivotal to the
Company’s core philosophy of grooming internal talent,
Thus, it is imperative that IT is on top of new and evolving ensures that the right leadership talent is identified through
technologies to ensure they can be leveraged ahead of the an intense and objective process. The structure, content
curve to provide the competitive edge to the business. and methodology of such Centres are periodically revisited
to ensure that they are contemporary and aligned with
While adapting the new technologies, it is important that it the growth aspirations of the Company. The deployment
is done in a safe and secure manner. The Chief Information of these Centres is now through a digital platform,

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MANAGEMENT DISCUSSION AND ANALYSIS    ANNUAL REPORT 2020-21

ensuring an expanded reach, cost savings and flexibility disseminates its best practices repository on Project
to seamlessly induct external expertise. The Centres Management with practising and budding project managers
provide a developmental experience to the participating in L&T. This has created a cadre of well-trained and certified
employees and reinforce the collaborative approach to project managers equipped to take up challenging projects
talent enrichment. HR interventions such as these are used and deliver them with excellence. IPM has now established
for talent management, succession planning, training and the Knowledge@Work platform tailored to provide project
leadership development. execution related knowledge assets in digital form.

The Company’s signature Seven-Step Leadership The Company has a matured Safety Education Programme
Development Programme is an established best practice that is designed to build and strengthen a culture of
in talent development. It continues to identify, train and safety at workplace. Ensuring safety for its employees and
nurture young managers to develop broader business workmen is a critical objective. The Corporate Learning
perspectives, appreciate new business opportunities and & Development team offers specialised programmes to
accomplish challenging tasks. This flagship programme train employees on Safety and instructs them on how to
provides young employees with high potential access integrate safety into every aspect of work. The Company
to curated learning experiences delivered by reputed has partnered with the National Examination Board in
thought leaders from Indian and international business Occupational Safety & Health (NEBOSH) and The Institution
education institutes. The Action Learning Projects that of Occupational Safety & Health (IOSH) to develop internal
participants undertake offer immediate opportunity to training capabilities in EHS and is an accredited course
apply learnings in live business improvement projects provider for its employees on diverse aspects of industrial
and be part of breakthrough and high-impact outcomes. and project safety.
They bring participants in close working engagement
with senior business leaders and help assimilate the finer L&T has established a scalable, multi-featured and externally
points of business strategies and leadership attributes. The integrated Digital Learning Platform called ATLNext. This
emerging leaders who move up the Seven-Step Leadership has emerged as the bulwark of remote and real-time
Programme are mentored by senior executives including learning in the organisation. The platform makes use of
the Group Chairman, CEO & MD and other Directors and Artificial Intelligence and Machine Learning-driven learning
Business Heads. This ensures a robustness in the continuity algorithms. It has access to curated course content from
of leadership thought process and value systems among global learning publishers and has been successful in
promising talent. inducing the culture of learning among L&T’s employees.
This platform has seen continuous enhancement and wide
L&T’s world-class Leadership Development Academy (LDA) acceptability, winning many prestigious industry awards in
at Lonavala is a sought-after facility for employees to the segment of digital learning.
hone their supervisory and managerial skills. Many of the
marquee residential leadership development programmes The journey of HR Digitalisation has made substantial
are offered in this sprawling campus that boasts of an progress this year, and the cloud-based platform
unmatched learning ambience. The LDA delivers business- implemented in earlier years has become a single source of
centric skills and capability-building programmes that employee data and a robust anchor for current and future
impact the quality and innovation evident in L&T’s business talent modules. This digital platform has become a go-to
deliverables. forum for employees for life-cycle transactions, performance
management, development plans and employee-connect
The Corporate Technology & Engineering Academy (CTEA) initiatives, including during the remote working mode.
at Madh and Mysore, perform a critical role in bridging The Company is in a position to derive real-time talent
the domain skill gap of young engineers. The custom-built dashboards for the corporate leadership team.
training programmes focus on developing technical
competence by providing practical hands-on training in The tenacious focus on developing talent for business
contemporary technologies and make the employees excellence was balanced with care and concern for
task-ready. its people. The HR function in the Company played a
pivotal role in designing and executing its response to the
L&T Institute of Project Management (L&T IPM) at Vadodara Covid-19 pandemic. Multiple initiatives were crafted and
leverages L&T’s wealth of knowledge in conceiving, implemented to continuously communicate pandemic
planning and executing mega-scale projects. IPM seamlessly specifics to the employees and their families, extend medical

160
services and support, action SOPs on work resumption, Jury Award in `Technical Skill Development Aligned to
create quarantine centres equipped with medical care, Business needs’ by CII Mysore’s HR & IR Panel. L&T’s
provide support for hospitalisation and ensure additional Leadership Development Academy (LDA) won 1st Prize
insurance coverage for pandemic-related medical expenses. in the 15th State Level Award for Excellence in Energy
Huge efforts were invested in motivating workmen at Conservation and Management. L&T also won the
project sites to stay back at the sites, with all amenities OLX People HR Excellence Award, in association with
and medical care being provided by the Company. This ETHRWorld, for ‘Innovation in Onboarding Category’, and
contributed towards business continuity and minimum the Excellence in Learning & Development Award from
work disruption, apart from enabling the Company to Business World. L&T has been ranked 4th in LinkedIn’s top
continuously live its values and its commitment to its 25 workplaces in India List (2021) considering LinkedIn
people. data, and other parameters like ability to advance, skills
growth, company stability, external opportunity, company
All the above practices have been recognised by prestigious affinity, gender diversity, and educational background.
and premier industry bodies through countless accolades. This recognition once again reinforces L&T’s philosophy of
The Company won the SHRM Excellence Awards for putting its employees first. L&T is the only infrastructure
‘Developing Leaders of Tomorrow’ and ‘Learning & company to feature in the top 10.
Development’. CTEA, Mysore, was conferred the Special

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Cable-stayed bridge across Durgam Cheruvu Lake, Telangana

INFRASTRUCTURE the virus by following the social distancing norms, proper

BUSINESS sanitisation and by restricting physical movement.

Despite the Covid-19 pandemic, in FY 2020-21, both
contract awards and construction activities were robust.
Tenders of ~R 7.8 lakh crore were floated in FY 2020-21,
higher by ~50% Y-o-Y. The FY 2020-21 saw cumulative
awards of ~R 3.5 lakh crore. Several large-ticket projects
were tendered, some of which were also awarded, viz.
expressways, metro and defence.
The slew of other relief measures undertaken by the Central
Government – including relaxation on EMD (Earnest Money
Deposit) and performance security, relaxation of bidding
Sector Performance in FY 2020-21 eligibility criterion and increased frequency of payments for
The Infrastructure sector is a key driver of the Indian on-going contracts, relief for contractors/developers under
economy and contributes to India’s overall development. the Atmanirbhar Bharat Scheme – has aided the growth of
The sector, accordingly, receives focused attention construction players.
and resource allocation from both Central and State
Governments. MoRTH constructed a record total length of 13,394 km of
national highway, translating into 37kms/day of highway
FY 2020-21 started with the nationwide lockdown due construction, whereas in FY 2019-20 it had constructed a
to the Covid-19 pandemic which had stalled all economic total length of 10,236 km. The NHAI awarded/opened bids
activities during the first quarter of the year. The lockdown for projects worth ~R 1.4 lakh crore and spanning ~4,800
took a heavy toll on the economy, with up to two-thirds km during FY 2020-21.
of activity either shut or working at reduced capacity. Post
the lockdown, businesses took various steps to bring back The Government has extended its R 111 lakh crore National
labour and materials to site. Gradually, the operations at Infrastructure Pipeline (NIP) to cover more projects by 2025,
sites picked up, and by the second quarter of the year, there in an effort to kick-start the economy. The NIP, which was
was improved labour presence at sites and work progress. launched with 6,835 projects, has now expanded to 7,400
Adequate precautions were taken to curtail the spread of projects.

162
The 1.6-km Medigadda Barrage, Telangana

The National Bank for Financing Infrastructure and Prime Minister, including the renewable energy target of
Development Bill has already been passed by both Houses 450 GW by 2030.
of the Parliament, paving the way for the creation of a
development finance institution (DFI). The proposed DFI is Furthermore, the asset monetisation programme was one of
expected to raise low-cost funds for long-term infrastructure the other highlights of the Budget. A National Monetisation
financing to the tune of R 5 lakh crore over the next three Pipeline is proposed to be set up for brownfield infra
years, leveraging with an initial equity capital of R 20,000 investment and monetising public infrastructure
crore. investments. Several measures have been rolled out in the
direction of monetisation. It has been proposed that NHAI
The Union Budget 2021 has an unprecedented increase in and PGCIL sponsor InvIT to attract foreign and domestic
capital expenditure allocation for FY 2021-22 by 34.5%
investors. There are proposed plans of monetisation of the
to R 5.5 lakh crore to push growth through infrastructure
Dedicated Freight Corridor and other infrastructure assets
investment. Key growth areas like Railways, Highways,
of the Railways. The privatisation of airports, oil and gas
Metros, Transmission & Distribution and Water (Jal Jeevan
pipelines, warehousing assets under CPSE shall further
Mission) have witnessed a significant rise in allocations.
contribute to the monetisation plan. SPVs shall be set up to
The public transportation system has received a lot of focus monetise the land assets of various PSUs and CPSEs.
in the budget, with increased allocation to major ongoing
metro projects and proposed plans of deploying two new International
technologies, i.e. ‘MetroLite’ and ‘MetroNeo’ in Tier-2 cities
The construction industry in the MENA region struggled
and the peripheral areas of Tier-1 cities.
in 2020, leading to a contraction of about 4.5%, with
The Union Budget 2021 allocated R 3.05 lakh crore for a the challenges presented by the outbreak of Covid-19,
revamped reform scheme for cash- starved power Discoms, low oil prices and the impact of sovereign credit rating
to be released over five years. The increase in allocation downgrades. The construction sector is expected to witness
for infrastructure will boost the power sector overall. It will a slow recovery in 2021, but the pace of recovery will be
help in upgrading the country’s Transmission & Distribution uneven across the countries in the region. However, large-
network and build on grid connectivity to ensure efficient scale projects in the oil, gas, power and water sectors have
evacuation of solar energy, particularly the ambitious Green gained traction against the downturn in market conditions
Energy Corridor scheme. this year, and this is likely to continue. A lot of contract
For the renewables power sector, the budgetary measures awards are expected as the region pushes its renewable
support the ambitious energy transition announced by the energy programme, particularly solar photovoltaic and

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Hero Factory, Chittor, Andhra Pradesh

wind power. Overall, the construction sector is expected to execution, the infrastructure business is set for good growth
recover with growth of 1.9% in 2021 and 4.1% in 2022 ahead. However, the second wave of Covid-19 infections,
in the MENA region as the region ramps up vaccination if not disrupt, could delay the scale-up. Nevertheless, the
programmes. disruption, owing to the efforts underway, is unlikely to be
of the magnitude of the last time.
The African construction market is expected to register a
CAGR of 6.4% (2019-2024), aided by the availability of Change in Segment Reporting
huge natural resources, cheap labour, significant investment
Effective April 1, 2020, the Smart World and
opportunities in energy and infrastructure, and a fast-
Communication business, which was reported under the
growing consumer market. Improvement in the business
Infrastructure Segment, has been reclassified to the ‘Others’
environment, including favourable economic development
Segment.
policies, rising commodity prices and stable governments,
should support the growth of the construction sector. The
transport sector, followed by power and energy projects,
constitute half of the total ongoing projects. However, the BUILDINGS AND FACTORIES
constant rise of project costs due to rise in the prices of
steel, cement and oil further accentuated by the weakening
of local currencies against the dollar, may act as headwinds Overview:
to the overall construction sector. L&T’s Buildings & Factories business is an industry leader
in Design & Engineering, Procurement and Construction
The construction sector suffered a contraction in the ASEAN (EPC) of projects ranging from airports, hospitals,
region as well, due to lockdown measures implemented stadiums, retail spaces, educational institutions, IT parks,
to stem the spread of the pandemic. Public spending is office buildings, data centres to high-rise structures,
expected to be increased to accelerate recovery in 2021. mass housing complexes, cement plants, industrial
Increasing population, rapid urbanisation and increasing warehouses, test tracks and other factory structures. The
investments in infrastructure development shall remain the business offers total solutions, including in-house design
key factors to stimulate market growth in the region. expertise using advanced systems like BIM 4D, 5D and
BIM 360 field, an efficient supply chain management and
With execution efficiencies largely back from the initial extraordinary project management expertise.
Covid-19 wave and a large active Order Book awaiting

164
Artist’s Impression

India International Convention Centre, New Delhi

The business has a track record of building tall, large convention centres, secretariat buildings, hotels, malls,
and complex structures across India and overseas. The integrated development, and educational institutions.
business is a forerunner in offering modular, mechanised
processes for fast-track construction. ITOS and Datacentres: The BU focuses on providing
turnkey office space solutions for IT and office spaces.
The business comprises six Business Units (BUs) – Leveraging the strong mechanical, electrical and
Airports, Health, Public Spaces, IT & Office Space (ITOS) plumbing (MEP) competencies of the business, it also
and Datacentres, Residential Buildings and Factories. offers concept-to-commissioning services for setting up
data centres.
Airports: The BU offers design-and-build solutions for
passenger terminal buildings and allied service buildings, Residential Buildings: The BU is a prime EPC solutions
and cargo terminal buildings, with integrated airport provider of elite, affordable and mass housing projects.
system solutions such as baggage-handling systems,
passenger-flow monitoring system, passenger boarding A new vertical, B&F Fast, is identified to explore and
bridges, visual docking guidance systems and other create value from advanced construction technologies
facilities. such as Prefabricated Prefinished Volumetric
Construction, Offsite Manufacturing, Structural Steel
Health: The BU handles the design and execution of Construction, and 3D printing that will fast track project
hospitals, medical and nursing colleges. Healthcare delivery.
infrastructure is delivered with end-to-end healthcare
facilities, including medical equipment, right from Dedicated engineering design centres, competency
concept to commissioning. cells, advanced formwork systems, mechanised
project execution, a wide network of consultants and
Factories: The BU is a one-stop solution for the EPC vendors, digitised project control and a talented pool of
requirements of factories such as cement plants, employees help the business sustain leadership position.
automobile plants, glass & paint manufacturing, The construction excellence, technology and expertise
warehouses, automobile test tracks and food processing gained over several decades gives the business a
plants. competitive advantage in the construction industry.

Public Spaces: The BU provides design and execution

of special structures such as tall statues, metro stations,

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Artist’s Impression

Patna Medical College and Hospital

Business Environment The huge inventory level of unsold houses has reduced
In a move to give a boost to the infrastructure segment, the investment in the elite housing sector. The ‘housing for
Government has kick-started the National Highspeed Rail all’ concept for affordable mass housing is yet to pick up
Project. There is significant allocation for building premier significantly.
educational institutions across the country. However, private
investments in buildings such as hotels and malls were In the international arena, though there were no major
insignificant. prospects seen in any segment, a breakthrough order was
bagged by the Factories BU in Saudi Arabia during the year
The Government’s Atmanirbhar Bharat scheme, the PLI for warehouse construction.
scheme and the logistics policy have helped in the growth
of the manufacturing and warehousing segments. The Major Achievements
Factories business has bagged orders from various private Major Orders secured
sector manufacturing and logistics companies.
• Warehouse project at KSA
With tourism and travel coming to a griding halt, prospects • Government Hospital and Medical College in Haryana and
in the Airports segment have been deferred. Odisha respectively

With the Government’s focus on improving healthcare • High Speed Rail projects – building-related works in C4 &
facilities within the country, this sector has seen increased C6 packages
tendering activity.
• Factories for various private clients in cement
The challenge in the IT and Office Spaces business continues manufacturing, warehouses and painting industry
as there were no major investments from IT majors for
Key projects completed
capacity expansion. With the Work from Home concept
catching on in the IT industry, the need for new facilities is • Narendra Modi Stadium, Motera, Gujarat
being reviewed.
• Al Rayyan Stadium, Qatar
The need for data centres and the private investment in • IKEA Showroom, Navi Mumbai
these buildings have increased multi-fold in recent years.
The market looks quite positive for this business.

166
Artist’s Impression

CIDCO Housing Project, Navi Mumbai, Maharashtra

• Government Medical College, Madhepura Awards

• Medical Colleges in Coochbehar, West Bengal and Patna During the year, the business won the following awards:

• Prestige Leela Residences, Bengaluru • ICI Award for Innovative Concrete Structure and
Outstanding Concrete - Ford GTBC, Chennai and
• RAMCO Cement plant, Odisha Narendra Modi Stadium respectively
Other Key Achievements • The Best MEP Contractor Award in Oman from Dossier
In first-of-its-kind accomplishments, the business achieved Construction’s Infrastructure Awards & Summit 2020
the following in the execution of major landmark projects:
Significant Initiatives
• 3-dimensional in-situ folded roof slab with huge span Under B&F Fast, a business initiative was undertaken that
varying from 42-56 m was cast in the IIT Hyderabad aims to cut down the time taken for construction, using the
project latest technologies such as DfMA (Design for manufacturing
and assembly) and PPVC (Prefabricated, Prefinished
• Erection of roof truss modules weighing 1000 MT using Volumetric Construction). This business promotes factory-
the new innovative hybrid methodology was executed based, off-site construction that reduces the overall timeline
in 5 stages – 4 modules each weighing 200 MT in IICC, of the project and ensures high quality of the end product.
Dwarka project As a trial, a modular set-up for setting up quick hospital
• First to build a parabolic asphalt high-speed test track buildings has already been established.
with a unique 44-degree curvature, at Mahindra test track
project, Tamil Nadu In the quest of using advanced technologies in construction,
the business also tried 3D printing in FY 2020-21 and built a
The business erected a 425 MT roof truss at the Hyderabad single-storey building as a pilot project. Further research on
International Airport Limited project. The erection, which the same subject enabled the business to complete India’s
was part of a total of 1075 MT of roof erection (650 MT first 3D printing of a G+1 building with reinforcement.
erection was done earlier this year) using a strand jack was
equipped with digital control with an automatic lifting Both the modular facility for hospitals and the 3D printed
system. The whole erection was carried out without the use structure were done at L&T’s Kancheepuram facility.
of any heavy cranes.

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

DLF Cyber Park, New Delhi

The business has developed “L&T Buildings Occupational Human Resources

Standards” (LTBOS) in line with National Occupation To nurture the psychological well-being of staff during
Standards (N.O.S) by NSDC. These standards will help to the Covid-19 crisis, an Online Behavioural Intervention,
screen workmen for their designated trade and skill before encompassing anxiety and fear management, the
deployment. importance of positive thinking and managing change
during turbulence, was designed. Employees were also
Environment, Health and Safety encouraged to attend VILT (virtual instructor led training)
The business has been continuously improving safety sessions to maintain the pace of learning. Around 430
standards by introducing various training programmes, virtual training sessions were conducted during the year.
digital / VR training and awareness sessions. To better Through these initiatives, 4 training man-days per staffer
manage the EHS training of workmen and supervisors, were achieved, with coverage of 79% of staff.
an integrated training module has been rolled out as part
of the WISA (Workforce Induction and Skills Application) Diagnostically Evolved Site Intervention (DESI) was
digital app. This online training module enables the project implemented through Training Need Analysis at the Project
teams to identify the training needs for specific trades of Site Level and a tailor-made training session was designed in
workmen, effect better scheduling of the training, build the 18 Project Sites pan- India.
worker profile, track individual worker competence levels
and maintain training records, etc. The learning edge platform (LEDGE) was made to improve
the engagement of the engineering trainees that are
The business was conferred several prestigious awards inducted every year by providing them with a structured
during the year: learning plan and hands-on experience of the various
functions involved in a project.
• L&T is the only construction Company in India to bag
Eight British Sword of Honour awards for eight project Buildings and Factories digital skill inventory comprises
sites. The business also received five-star certification from employee’s knowledge, experience and skills. A database
the British Safety Council of profiles of 6000 staff was built through a digital solution
which structures, categorises and stores up-to-date skill
• Fifteen Projects won Gold Awards conferred by The Royal information under 40 major skills and 540 sub-skills with
Society for Prevention of Accidents (RoSPA). proficiency levels from Basic to Role Model.

168
Ahmed Bin Ali Stadium, Doha, Qatar, built for the FIFA World Cup 2022

Risks and Concerns the establishment of Critical Care Hospitals in 602 districts
The recent surge in the prices of commodities triggered by a and 12 Central Institutions are the visible opportunities.
pent-up demand may impact input costs, most of which are
managed contractually through price variation clauses. With more manufacturing leaders trying to set up their
hubs in India, it is expected that the factories sector will
With the second wave of Covid-19 infections, there is a have a significant boost. Cement manufacturing units are
concern about workmen returning to their native places due expanding their production capacities. The new National
to the surge in cases. As most projects are labour-intensive, Logistics Policy and increased FDI Inflow for the warehouse
any such situation may impact execution/progress. sector have been introduced with an expected 20%
CAGR. New manufacturing units are planned to cater
Private investments may recede further if the pandemic to domestic and export demand with expected CAGR
continues for a longer period. In the case of prospects from of 25%. Automotive Mission Plan 2026, NEMMP 2020
Central / State Governments, although they show promise and promotion of E-vehicles manufacturing have been
for the business in terms of opportunities, there is the risk of introduced with expected CAGR of 5%. Warehousing and
delay / deferment in tendering of new projects. logistics are picking up pace and many retail businesses
are coming up with warehouse projects across India. The
The ongoing pandemic may adversely impact the supply- uptrend will lead to the increase in new manufacturing and
chain. In order to mitigate this, the business is creating warehousing establishments across the country.
awareness among its supply chain partners regarding the
transport / import restrictions and they are advised to avoid The State and the Central Governments and a few public
sourcing from locations that may be impacted due to the sector units are coming up with development projects of
lockdown. public buildings such as the state secretariat, public offices,
directorate complex, museums, educational institutions,
and mixed-use development. The high-speed rail projects
Outlook for depots and stations are showing good momentum.
The Health sector has garnered significant attention from Upcoming campuses and the expansion of existing campus
the Government after the pandemic. The Government has for IITs/IIMs are also expected. Budget allocation for
allocated about R 65,000 crore for healthcare infrastructure sports stadia through NITI Aayog will also lead to further
over the next 6 years. Ayushman Bharat aimed at affordable opportunities.
healthcare, the Medical Tourism Hub in the North East and

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

A section of the 13-km Phase 1 of the Mauritius Metro project

The data centre market is quite promising, with India’s data Overall, with increased focus of government spending on
localisation polices and investors seeing it as a lucrative infrastructure projects, the outlook for the upcoming year
investment option. looks quite promising.

Travel and tourism will take more time to rebound to the

pre-Covid levels. This may impact the airport business and
TRANSPORTATION
related transit facilities. AAI is looking at investing in new INFRASTRUCTURE
markets and opportunities for tie-ups. Prospects are also
being explored in foreign markets such as SAARC, South
East Asia and Africa. However, with 100% FDI allowance Overview:
for greenfield airports, it is anticipated that India is set to L&T’s Transportation Infrastructure business is one of
become the 3rd largest aviation market by 2025. the oldest and largest reputed contractors in India
for Engineering, Procurement & Construction of
The inventory levels of residential houses are still very high infrastructure projects in the Road, Railway & Airport
despite the revival that is being attempted and hence launch sectors. The business is broadly divided into two Strategic
of new projects is very limited in the metros, especially in Business Groups (SBG), namely, Railways Business Group
Mumbai. However, affordable housing is set to get a boost (RBG) and Roads Runways & Elevated Corridors (RREC).
from the extension of the tax holiday till March 31, 2022.
The Railways Business Group is further subdivided
The business will also pursue select prospects like design & into Mainline Business Unit (MLBU) and the Metro
build – EPC hospitals, stadiums, and airports in geographies Business Units (MTBU). MLBU is in the domain of civil
like Bangladesh, Africa and Sri Lanka. & trackwork, electrification, system integration for all
mainline railway projects, Western & Eastern Dedicated
The prospects in Saudi Arabia under Vision 2030 – including Freight Corridors, and Rail Links for Port, Mining and
Amaala, NEOM, the Red Sea Project, and Qiddiya projects Power Plant facilities, etc. MTBU business involves
– are yet to pick up and may show movement in the ballastless trackwork, electrification (rigid and flexible
upcoming year. In Oman with divergence of focus from OHE) and system integration for all Mass Rapid Transit
the oil sector, thrust is expected on tourism and hospitality System (MRTS) projects and Regional Rapid Transit
development. System (RRTS), both in India and abroad. This BU also

170
Dhaka Metro MRT Line 6

addresses end-to-end Integrated Transit Systems, Business Environment

complete with civil and systems works.
a) Railway Business Unit
The Road, Runways & Elevated Corridor Business Group The Railway sector has been on a high growth trajectory
is divided into Roads & Runways (R&R) and Elevated since the past few years. The Indian Railway (IR) has set a
Corridor and Dedicated Freight Corridor (EC&DFCC). target of 100% electrification by the year 2023. This will
R&R provides EPC Design & Build Construction services make IR the first major railway in the world to have a fully
for all types of roads (asphalt and concrete) including electrified broad-gauge railway network of such a size. To
all associated structures, cross-drainage, toll booths, achieve this target, IR has planned to electrify an average
wayside amenities, etc. to NHAI, MoRTH, State of 9500 route km annually in the next 3 years. The Central
Government and certain private clients. In the airport Organization for Railway Electrification (CORE) / Zonal
sector, the R&R BU is involved in the construction of Railways have also been actively floating and finalising
complete airside infrastructure, viz. runways, taxiways, large-scale tenders for electrification works.
aprons, airfield ground lighting, fuel hydrant systems,
etc. complete for international airports, both greenfield This year, the business saw significant progress in the
& brownfield. The R&R BU is also a pioneer in providing construction works for ongoing Eastern and Western
complete civil infrastructure for greenfield city Freight Corridors, the commissioning of which are expected
infrastructure projects such as smart cities. The EC&DFCC by June 2022.
Segment provides design & build construction services
for all types of urban flyover projects and civil works Another major development this year has been the kick-
(earthwork, blanket, earth-retaining structures, drain) in start of award of the High-Speed Rail Project.
dedicated freight corridor projects.
b) Roads, Runways & Elevated Corridor SBG
The business leverages its vast experience in Project
Management, Engineering, Design & Construction Over the last 5 years, the budgetary support for Road
Management to achieve international standards and Highways sector has seen a steady increase of more
of safety, quality and operational efficiency. It has than 5.5 times. The Government announced the National
Engineering Design Centres located at Mumbai, Infrastructure Pipeline with total outlay of R 111 lakh crore
Faridabad and Chennai. It also has a competency for FY20-FY25, out of which 18% of capital expenditure
development centre at Kancheepuram for RBG and a is earmarked for roads which is expected to give a further
workmen training centre at Ahmedabad for RREC. boost to the sector.

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Mumbai-Nagpur Expressway

Over the last 7 years, the length of National Highways Major Orders
has gone up by 50% - from 91,287 km (as of April 2014) • Mumbai – Ahmedabad High Speed Rail Project, Package
to 1,37,625 km (as on 20 March 2021). Construction of C6 from NHSRC
highways has increased to 37 km/day in 2020-21 with
respect to 27 km/day in 2019-20, with an increased focus • Delhi – Vadodara Expressway, Packages 11 and 22 from
on delivery of projects. NHAI

Also, in view of the exponential increase in traffic over the • EPC overhead electrification projects, EPC-6 and EPC-15A
years in urban areas, the Government has shifted its focus (1630 Tkm), from CORE
on developing many new Elevated Corridor/ Flyover projects
• Delhi – Meerut RRTS Track Package (80 Tkm) from NCRTC
across major cities, with the primary aim of decongesting
urban roads and highways. • Ballastless track package for Kanpur and Agra Metro (125
Tkm) from UPMRCL
Airports as well as the smart/industrial city sector has not
seen any major development in FY 2020-21. However, • Overseas – Order received for 3.5 km extension in
few opportunities, such as Jewar and Dholera in Airports Mauritius LRT
and Krishnapatnam and Tumakuru in City Infrastructure,
are in advanced stages, and would be awarded in the next Projects Completed
financial year. Although the Covid-19 pandemic has severely The business has completed the following projects:
affected construction activities due to lockdown restrictions
and the reverse migration of workmen that followed, the • Civil, Trackwork in WDFC CTP 1 & 2 sections of Rewari to
business remained active in terms of new tenders and Madar (306 rkm) and electrification in the same section
project awards, which helped maintain a healthy order (EMP 4 Project). The section is among the first in the
book. world that allows plying of heavy haul rakes, 1.5-km-long,
to transport double- stacked freight containers from the
Further to Covid-19, there has been a significant change major ports to the hinterland.
in client attitude, owing to which project milestones have
become more realistic and closely intertwined with site • First EPC electrification project from Delhi Sarai Rohilla –
progress, which has eased working capital pressure. Jaipur – Ajmer

172
Mumbai-Vadodara Expressway

• 4-Lane Rewa – Katni – Jabalapur – Lakhnadon Road oversight of adherence to safety norms at each and every
Project, Packages 1, 2 & JL work-front simultaneously itself poses a major challenge.
To overcome this, various initiatives were undertaken to
• 4-Lane Yadgiri – Warangal Road Project enforce and monitor EHS protocols across all work-fronts.
• 4-Lane Chandigarh – Kharar Elevated Corridor
• Periodic virtual training by means of SPARSH (Standard
Significant Initiatives Precautions using Augmented Reality for Safety and
Health) and Virtual Reality devices at various work
Further to full range railway system integration projects such locations for workmen have been introduced in addition
as the Dhaka and Mauritius LRTs, the Railway business is to the basic induction training. In FY 2020-21, 27,587
gearing up to assimilate newer technology skills to address trainings, corresponding to 0.27 million man-hours, were
some of recent projects, such as the RRTS Slab Track and conducted across all sites.
Mumbai Metro LVT Track.
• Inspection and verification are done online through
Digitalisation a Digital App – RtR (Reverse the Risk) and Dome 360
The Covid-19 pandemic has reinforced the importance of Degree that allows safety officers to remotely inspect and
digitalisation. One such initiative, Workmen Induction and monitor safety measures and ground conditions before
Skills Application (WISA), has helped the business immensely giving the go-ahead for execution.
in identifying and approaching workmen with specific • The Green Card System is implemented across the
skill-sets during the remobilisation planning. Connected business for fitness verification of P&M equipment before
Assets & Geospatial are another crucial initiative that helped deployment through the IB4U digital app.
the business capture and monitor site data remotely. This
tracking and monitoring of P&M assets via digital chipset The Environment Management System (EMS) has been
and LiDAR and drone-based project surveys is becoming the implemented in the business and various control measures
‘new normal’. to reduce environmental impact are being followed across
project sites. Good practices are being followed, such as
Environment, Health and Safety use of fog cannons, water sprinklers for dust suppression,
proper disposal of C&G and hazardous wastes and use of
Transportation Infrastructure projects are typically spread
renewable energy (solar power).
across hundreds of kilometres, with a multitude of discrete
safety risks that are both location and task-specific, and

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Roha-Verna Konkan Railway Electrification Project

During FY 2020-21, the business was conferred 17 Risks and Concerns

international awards, 7 of which were from RoSPA (Royal Land acquisition remains one of the critical concerns for
Society for the Prevention of Accidents) and 10 from the the business, as most of the projects are predominantly
BSC (British Safety Council). The business has also won ‘linear’ in nature. Indefinite delays in handing over of
3 prestigious safety awards from NSC (National Safety an encumbrance-free work-front not only impacts the
Council), India. progress but also costs dearly in terms of under-utilisation of
resources and increase in overheads and prolonged project
Human Resources duration. Moreover, delays in environmental clearance,
During the pandemic and the resultant nationwide mining approvals, and variation approvals further lead to a
lockdown that followed, the HR team proactively started drop in the execution momentum.
various initiatives to keep the staff motivated and
engaged at their homes by conducting various awareness Besides the above, extreme environmental events such as
programmes, training programmes, webinars and personal unprecedented rainfall, cyclones, and air pollution leading
connect to check on their well-being and offer any to National Green Tribunal Act bans on construction
help required. To keep the staff motivated, the business activities also pose an adverse risk to project timelines.
introduced Hi5 – an online portal for recognising staff
members who have done extraordinary work amidst the Following Covid-19, global supply chain disruption and
lockdown. reverse migration of workmen also pose a major risk.
Sourcing from China, EU and UK continue to affect the
The business has taken a significant step to enhance the supply of critical items, especially for the Railway business.
safety culture by instituting the LIFE (Loss and Injury Free Reverse migration of workmen continues to be a concern
Environment) Awards to recognise and reward project teams due to the second wave.
that demonstrated excellence in safety practices.
To address and mitigate these risks, risk management
Also, to ensure Learning & Development of the staff, two teams have been formed, and primarily tasked with the
comprehensive Competency Developmental Programmes identification of the risks and the development of a risk
were designed and initiated this year – ‘NPL – Nurturing map categorising these risks on the basis of probability
Potential Leaders’ for senior potential leaders and ‘PEDP – and severity. This acts as an early warning system to
Planning Engineers’ Development Programme’ for Planning assess, mitigate or minimise the impact of risks on the key
staff in junior cadres. parameters of schedule, cost, quality and safety.

174
The 1-km bridge over River Teesta, Ghoshpukur-Salsalabari Road Project

Outlook In the Mainline Segment, a significant amount of capacity

augmentation is planned in the next 3 years, and to achieve
a) RREC Business 100% electrification by 2023, the electrification projects
The Government has planned to expand the National are being floated on an EPC basis. Also, the upgradation
Highway network by ~ 60,000 km by 2025 in major of Signalling System projects worth ~ R 16,000 crore is
economic corridors, strategic areas, and Elevated Corridor expected to pick up from FY 2021-22.
& Flyovers network in major cities such as Delhi, Chennai,
Kolkata, Mumbai and Bengaluru, with an investment outlay The Intercity Segment is a new emerging area of
of R 20.33 lakh crore under the National Infrastructure opportunities and the business is shifting focus towards
Pipeline (NIP). While a daily average of constructing 37 RRTS. NCRTC is implementing its first RRTS in three elevated
km of road per day has been achieved in March 2021, corridors on priority, of which Delhi – Meerut corridor
the Government aims to step up to its ambitious target of has already been awarded in FY 2020-21 and tenders for
building 45 km of road per day in FY 2021-22. the Delhi – Alwar and Delhi – Panipat RRTS corridors are
expected in the next 1 to 2 years.
In the airport sector, the Government has envisaged an
investment of more than R 1.43 lakh crore under NIP, over On the High-Speed Rail (HSR) front, Indian Railways
a period of 5 years. The Ministry of Civil Aviation (MoCA) has announced plans to develop 7 more HSR corridors,
envisages 100 new airports to be built in the country over feasibility studies and environmental assessment for which
the next 10 to 15 years. The MoCA is also working on the have already been initiated. Apart from the HSR, Railways
cargo policy, which will provide a boost to the nation’s is also pursuing select semi-HSR corridor projects like
logistics capacity. Thiruvananthapuram – Kasaragod, Ahmedabad – Rajkot
and Pune – Nashik sections in which tracks and systems
b) Railway Business projects worth R 19,000 crore are expected to be finalised in
The Union Budget 2021 has allocated a ‘record’ budgetary next 2-3 years.
allocation of R 1.10 lakh crore for the Railways, with total
capital expenditure outlay of R 1.07 lakh crore. In specific, Rapid commissioning in the Western and Eastern Dedicated
the thrust will be on the development of New DFC, RRTS, Freight Corridors will catalyse development of three new
HSR Corridors and upcoming metro sections in Tier 1 and freight corridors, i.e., East Coast, East-West and North-
Tier 2 cities. South. The feasibility reports for these corridors have been

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Artist’s Impression

The Mumbai Coastal Road Project. L&T is executing Packages 1 and 4.

completed and projects worth R 58,500 crore are expected instrumentation, including seismic qualification and
to be finalised over the next 5 years. modular construction technology. Its expertise extends to
both Pressurised Heavy Water Reactor (PHWR) and Light
On the international front, the focus will be on Water Reactor (LWR) technologies.
neighbouring countries like Bangladesh, Sri Lanka and also
on ASEAN, North and East Africa where the projects are The Special Bridges segment has extensive experience
funded through secured sources like GoI lines of credit or in executing a wide range of bridges – such as cable-
through bilateral / multilateral agencies such as JICA, EBRD, stayed, precast, pre-stressed concrete, steel and concrete
ADB, etc. composite construction – using ingenious cutting-edge
construction techniques, viz. incremental launching,
HEAVY CIVIL INFRASTRUCTURE segmental construction, balance cantilever construction
and span-by-span construction.

Overview: The Hydel and Tunnel segment offers EPC solutions for
L&T’s Heavy Civil Infrastructure business is a market complete hydroelectric power projects, large-diameter
leader in Engineering, Procurement, and Construction transport / water tunnels and complex irrigation projects.
(EPC) projects in core civil infrastructure segments that The business also provides expertise for road and railway
are crucial to the economy viz. metros, nuclear, special tunnelling projects which cater to nation-building.
bridges, hydel and tunnels, ports and harbours and
defence. The Ports & Harbours vertical has extensive experience in
greenfield ports, shipyard structures and seawater intake
As an industry leader in augmenting capabilities for systems in all the coastal states of India. It provides EPC
urban mass rail transit systems, the business is involved solutions for breakwaters, berths, jetties and wharfs,
in the construction of metro rail systems and has projects dry docks and shore protection structures. It has unique
in almost all the major Indian cities. It provides extensive expertise in providing design and construction solutions
end-to-end engineering and construction services for for state-of-the-art ship-lift structures.
both elevated and underground metro systems.
Backed by the expertise and experience gained from
In the Nuclear segment, the business provides managing mega projects, the business has established
EPC solutions in civil, mechanical, electrical and a position of pre-eminence in shoring up the country’s

176
Artist’s Impression

When completed, the 19.28-km Dhubri-Phulbari bridge over River Brahmaputra will be India’s longest road bridge

defences. The business offers single-point EPC solutions accommodate the growing urban commute requirements
in the form of infrastructure facilities for defence bases, and connectivity to the neighbouring cities.
underground facilities and surveillance.
India’s National High-Speed Rail Corporation Limited
The business has a strong presence in India, the Middle (NHSRCL) has initiated work on 2,365 km of new high-
East, Bhutan and Bangladesh. The ability to provide speed rail lines with bids being invited for conducting survey
tailor-made design-&-build and EPC solutions to suit work for preparation of Detailed Project Reports (DPRs) for
the specific requirements of customers for complex high-speed rail corridors connecting Mumbai – Hyderabad
infrastructure projects has made the business market (711 km), Delhi – Amritsar (459 km), Chennai – Mysore
leader in India. Dedicated design and technical centres, (435 km) and Varanasi – Howrah (760 km). The Kerala
competency cells, specialised training centres, digital State Government has cleared the Thiruvananthapuram
project management, and a talented pool of employees – Kasaragod semi high-speed rail corridor involving an
help the business sustain a leading role, attract key investment of R 63,941 crore. The Maharashtra State
clients, penetrate new geographies and secure major Government approved the R 16,039 crore Pune – Nashik
orders. semi-high-speed rail corridor project.

L&T GeoStructure is a unique entity which focuses on In the Hydel & Tunnels segment, NHPC signed an MoU with
foundation and ground improvement related projects. It JKSPDCL for the execution of hydro projects in J&K. To shore
has a strong and professional foundation specialist team up road infrastructure along the border with China, the
with the knowledge of design, equipment and methods Union Transport Minister has announced the construction
to execute and supervise sophisticated foundation of six new tunnels in Jammu and Kashmir and Ladakh that
works. It has expertise in deep piling and diaphragm would help in ensuring quicker movement of troops and
walls, multi-cellular intake wells for river-linking, marine machines to the area during any border crisis. The DPRs of
terminals with berths and jetties and deep cut-off walls. the tunnel projects are in progress.

Business Environment The Bridges segment experienced a challenging first half of

the year, and not many projects were awarded. India has
Rapid urbanisation in India is driving demand for better
committed to fund the Greater Male Connectivity Project
urban mobility in Tier 1 and Tier 2 cities. Also, the existing
at Maldives through an Indian line of credit and grant. The
metro cities are expanding their metro network to
package consists of a 6.7 km bridge connecting Male with

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Artist’s Impression

The High Speed Rail -- India’s first Bullet Train project and the largest EPC order awarded in India till date

Gulhifalhu Port and Thilafushi industrial zone to revitalise • Construction of tunnels and construction shafts and
and transform the Maldivian economy. ancillary works between Rishikesh and Karanprayag in
Uttarakhand by Rail Vikas Nigam Limited (RVNL)
The Ministry of Ports, Shipping, and Waterways (MoPSW)
has created a compendium of 400 investable projects with • Construction of Sitamma Sagar Multipurpose Bund from
an investment potential of R 2.24 lakh crore. Increased the Government of Telangana
investments from the private sector is expected by the
Ministry. More than 574 projects at a cost R 6 lakh crore • Construction of reactor, auxiliary, turbine and diesel
have been identified under the Sagarmala project for generator building and other safety related structures for
investment. The Bangladesh Government has approved Kudankulam Nuclear Power Plant (KKNPP) 5&6 awarded
the enhancement of the Mongla Port Capacity. India has by Nuclear Power Corporation of India Limited (NPCIL)
extended a line of credit for the expansion of the Mongla
Port capacity. • Contract to construct India’s longest road bridge of 19
km across river Brahmaputra connecting Dhubri in Assam
The Defence capital outlay in the recent Union Budget 2021 to Phulbari in Meghalaya from National Highway &
has increased compared to last year to R 1.4 lakh crore, Infrastructure Development Corporation Limited
leading to the creation of various defence infrastructure
including maintenance, upgrade and repair. There is a • Delhi – Meerut Regional Rapid Transit System (RRTS)
definitive thrust to accelerate the naval infrastructure at elevated Package-7
Naval Base Seabird in Karwar and Project Varsha in Vizag.
• 2nd Vikramshila Bridge across the Ganges, Bihar
Major Achievements
Orders Won Projects completed
• Kakrapar Atomic Power plant (MPCW), Gujarat –
• Mega contract from the National High-Speed Rail
criticality achieved on 22nd July 2020
Corporation Limited (NHSRCL) to construct the 237 km
C4 section of the Mumbai – Ahmedabad High Speed
• Durgam Cheruvu project, Hyderabad the world’s longest
Rail (MAHSR) project from Zaroli Village – Maharashtra –
extradosed cable-stayed concrete bridge was inaugurated
Gujarat Border to Vadodara
on 25th September 2020

178
L&T is constructing 13 km of the 21-km Mumbai Trans Harbour Link – which will be India’s longest sea bridge

Other Key Achievements training. The EHS app was launched to ensure compliance
• India’s largest barge (110m x 64m x 6m), which is equal with corporate SOPs on restarting projects. The supervisor
to one football ground, started functioning at Mumbai EHS checklist was developed to ensure activity risk control
Trans Harbour Link Package 1 by the Supervisor. The Artificial Intelligence platform was
implemented which improves construction safety through
• India’s largest TBM of 12.19 m dia. assembled and hazard- spotting at construction stages and suggests the
launched by in-house expertise at Mumbai Coastal Road applicable requirements for the hazards identified.
Package 4
British Safety Council (BSC)-accredited 1-day BBS (Behaviour
• Ahmedabad Metro tunneling activity completed Based Safety) awareness certification courses were
organised for projects. A total of 8 training programmes
• WDFC CTP-14 project successfully achieved first-of-its- were conducted during the year.
kind tunnel with the largest cross-section and electrified
double tracks The business provides control measures for emission
control, wastewater treatment and waste management at
Significant Initiatives construction sites in line with regulatory requirements and
Digitalisation has become a way of life and integrated into ISO 14001 EMS requirement. Wastewater from the labour
project delivery process. The business digitally monitors, colonies and site offices is being treated by STP. Bio-toilets
in real-time, productivity of the 3M – Men, Material and are also being used for sewage treatment at project sites.
Machinery – factors critical to project success. For effective Various projects across the business have received EHS
project delivery, the business leverages contemporary digital awards:
technologies and drone-based project monitoring, 5D BIM
and innovative digital platforms such as WISA (Workmen • Gold Award from RoSPA (The Royal Society for the
Induction and Skills Application) for workmen mobilisation Prevention of Accidents) – UK, has been conferred upon
and induction and Virtual Reality (VR) based training of KKNPP 3 & 4 MPCW projects
workforce in EHS (Environment Health and Safety) aspects.
• The Prestigious Golden Peacock Environment
Management Award for 2020
Environment, Health and Safety
Committed to the mission of ‘Zero Harm’ the business • In October 2020, Kakrapar Atomic Power Project won the
clocked 343 million safe man-hours in the year, and 16 ‘Sarvashreshtha Suraksha Puraskar Award’ (Gold Trophy)
thousand man-hours were invested in EHS awareness and from National Safety Council of India (NSCI)

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Bangalore Metro – an underground section Rishikesh-Karnaprayag Rail Link Package 2

• Kakrapar Atomic Power Project 3 & 4 bagged the ‘Best Further, the business has been conferred prestigious
Safe Contractor Award (Winner) – 2020-21’ from NPCIL awards such as the Golden Peacock HR Excellence Award
(Nuclear Power Corporation of India Limited) and ATD Best Award for Talent Development from the
internationally acclaimed Association of Talent Development
Human Resources body of USA.
The business has always been focusing on employees and
innovative initiatives towards employee development. Risks and Concerns
Leadership interventions such as Global Leadership The major risk faced by the business during this financial
Development Programme (GLDP), Frontline Leadership year was the outcome of the Covid-19 pandemic, viz.
Programme (FLLP), and Project Leaders Assessment and stoppage of work at project sites due to the lockdown
development (PLDP) are held regularly. and reverse migration of labour. This further accentuated
the other challenges faced in the business, viz. delay in
The initiative of Trainee Engagement and Development obtaining right of way, statutory clearance delays, claim
Center (TEDC) for Graduate Engineer Trainees (GETs) is well management and payment delays.
institutionalised.
To address the risks emanating from the changed business
A 360-degree feedback has been introduced for Project environment, the business assessed the impact of Covid-19
Directors, followed by rigorous coaching based on the and a collective representation by the industry was made
‘GROW’ (Goal, Current Reality, Options & Way Forward) to the Government at various forums. The additional cost
model. impact emanating from the lockdown is under discussion
with the clients.
During the lockdown and thereafter, various employee
engagement and well-being programmes such as awareness Further, the business has a strong risk management
on Covid-19, mental health, on-line cultural programmes system and process in place. Various measures to
Rock Off and Rave On, talent shows and various mitigate the risk include enhanced contracts administration
competitions were organised, with continuous employee and risk management at sites, deployment of Contracts
reach-out initiatives. Administration & Claim Management (CACM), war
rooms on priority jobs to realise variation and claims
The HR Talent Acquisition function has been accredited with
and close follow-up with the client for pending payments.
ISO 30405 : 2016, endorsing its transparent recruitment
process.

180
400 kV Kamudhi-Ottapidaram Transmission Line, Tamil Nadu

Outlook As India aims to emerge as a leading Blue Economy of

Continued thrust on infrastructure investment by the the world, the Ministry of Ports, Shipping, and Waterways
Government will provide a thrust and the infrastructure (MoPSW) has created a compendium of 400 investable
business is expected to return to its growth path in FY projects with an investment potential of R 2.24 lakh crore.
2021-22. The Government has also expanded the National The Government is focusing on building new capacities
Infrastructure Pipeline (NIP) during the Budget to 7,400 and upgrading the existing defence infrastructure with
projects from 6,835 projects and announced plans for the increase in Defence capital outlay in budget from last year
National Monetisation Pipeline and Development Finance to R 1.4 lakh crore.
Institution (DFI) to improve the financing of infrastructure
projects. Bridge construction in India is expected to grow with new
funding mechanisms by NHAI, such as ToT (Toll Operate
With the Union Budget 2021 promoting metro rail as Transfer) and InvIT (Infrastructure Investment Trust) and
public transport for sustainability reasons, cost-efficient interest from international funding agencies such as JICA,
technologies such as Metro-Lite and Light Rail Transit the World Bank, ADB.
systems are expected to gain traction, especially in Tier 2
cities. The above initiatives by the GoI continue to provide a
positive outlook for the business in the coming years.
With hydel power evolving as a source of flexibility and
grid stability, multiple large hydro power projects are
being planned in J&K and the North East states. The POWER TRANSMISSION &
Union Government is also focusing on developing road
infrastructure in border areas and has announced multiple
DISTRIBUTION
major tunnel projects to ensure border connectivity.
Overview:
India’s installed nuclear capacity is expected to reach
15 GW by 2027 from the present 6780 MW and contribute L&T’s Power Transmission and Distribution business
to 56.5% non-fossil sources such as nuclear, hydro and vertical is a leading EPC player in the field of power
renewables. Along with continued thrust on 10 pressurised transmission & distribution and renewable energy. It
heavy water reactor (PHWR) projects, civil nuclear business is offers integrated solutions and end-to-end services,
expected to continue its growth. ranging from design, manufacture, supply, installation
and commissioning of transmission lines, substations,

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

400 kV GIS Substation, Chennai, Tamil Nadu 400/220 kV Mylsandra GIS, Bengaluru, Karnataka

underground cable networks, distribution networks, Kancheepuram have a combined capacity to produce
power quality improvement projects, infrastructure more than 1.5 lakh tonnes of tower components per
electrification, fibre optic backbone infrastructure, solar annum. The Tower Testing and Research station at
PV plants including floating solar, battery energy storage Kancheepuram is amongst the most renowned testing
systems, mini / micro grid projects and related digital centres in the world. The clientele for this testing facility
solutions. Besides being a dominant player in the Indian includes utilities from 30 different countries.
subcontinent, the business enjoys a significant share and
a strong reputation in the Middle East, Africa and ASEAN The Optic Fibre Cabling (OFC) projects segment
markets. provides turnkey solutions for deploying gigabit scale
optical fibre backbone for both Government agencies
The business comprises several business units: and private telecos by establishing a state-of-the-art
network infrastructure typically involving a vast
Substation business unit provides turnkey solutions for geographic spread. The business also provides operation
Extra High Voltage (EHV) air insulated / gas insulated & maintenance support to ensure healthiness of the
substations, Flexible AC Transmission Systems (FACTS) Optic Fibre Cable by maintaining Mean Time Between
and digital substation related solutions, EHV cable Failure (MTBF) and Mean Time To Repair (MTTR) figures
systems and complete electrical and instrumentation as per agreed Service Level Agreements (SLAs).
solutions for various utilities, plants and infrastructure
projects, such as metros, airports, etc. These business units cater to the Indian market including
the neighbouring countries of Bangladesh and Nepal.
Power Distribution business unit provides a range
of EPC services related to urban / rural electrification Renewables business unit provides single-point
including last-mile connectivity, augmenting, reforming EPC turnkey solutions for Solar Photo Voltaic (PV)
and strengthening of high voltage and low voltage related projects including energy storage solutions
distribution networks, power quality improvement works and microgrids, in India and abroad. With more than
and advanced distribution management solutions. a decade of experience in solar, the business has a
strong track record of ground-mounted and floating
Transmission Line business unit offers turnkey EPC solar projects with different module technologies,
solutions for overhead lines for power evacuation and module mounting structures and storage types. It has
transmission up to 800 kV. The digitally-driven, green accumulated vast engineering and construction know-
tower manufacturing units at Puducherry, Pithampur and how to execute Gigawatt (GW) scale solar projects, be it

182
400/220/132/11 kV Mawana Substation, Botswana

hybrid, floating or linear, with best suited technologies business is now poised to make further inroads in
for terrain type and tracking. The in-house Battery Energy southern and western parts of Africa.
Storage System containerisation facility augments the
capabilities to offer large-scale renewable integration In the ASEAN region, buoyed by the proven track record
solutions as grid stability and power conditioning of successful project execution in Malaysia and Thailand,
requirements gain significance. the business is consolidating its gains in Myanmar and
Philippines as well, besides achieving deeper penetration
The international units of the business in the Middle in existing regions.
East, Africa and the ASEAN region offer complete
solutions in the field of power transmission and Larsen & Toubro Saudi Arabia LLC (LTSA), a wholly
distribution up to 500 kV level. These include substations, owned subsidiary, provides engineering, construction
power transmission lines, EHV cabling, distribution and contracting services in the sphere of transmission &
networks, solar plants and Electrical, Instrumentation and distribution in the Kingdom of Saudi Arabia.
Controls (EI&C) works for infrastructure projects such as
airports, oil & gas industries, etc. Business Environment
In the domestic transmission & distribution space, projects
The Middle East business unit that caters to the countries
from the centrally sponsored schemes were scarce, as the
of the UAE, Saudi Arabia, Qatar, Oman, Kuwait and
priority of Government spend shifted to healthcare in the
Bahrain has garnered a coveted place in the GCC region.
pandemic year. The majority of the multi-lateral funding
With about three decades of presence in the region, it
projects have been deferred to the next financial year.
enjoys an enviable track record having achieved many
After a lull, the order finalisation in Green Energy Corridor
milestones.
related Tariff Based Competitive Bidding (TBCB) packages
Having commissioned several landmark projects, the commenced.
Africa business unit has established itself in 12 countries
across the continent. The four regional offices located Certain state distribution companies finalised underground
in Egypt, Kenya, South Africa and Ghana cater to the cabling and High Voltage Distribution System (HVDS)
different regions of the vast continent. With a sizeable packages that are aimed at grid modernisation and
market share in the addressable segment and projects improving reliability and availability of power supply. The
from all the business lines within the spectrum, the pace of finalisation of tunnel electrification packages for a
project of national importance was noteworthy.

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

500 kV HVDC Transmission Line, Kenya

On the domestic Renewables front, solar capacity addition Vital substation and transmission line packages were
remained below 3 GW in the face of the pandemic and finalised in other countries as well.
the uncertainty in module prices. However, the traditional
power generation companies are seen adding renewable Several countries in Africa opted for the Debt Service
capacities in their portfolio, which lead to finalisation of Suspension Initiative of G20 countries facilitated by the
solar Engineering, Procurement and Construction (EPC) World Bank Group. The finalisation of bilateral / multilateral
packages especially in Gujarat. funded projects remained muted. In view of the renewable
generation capacity being added, Morocco has launched a
Being a fast-growing economy in the region, Bangladesh slew of projects to expand its power transmission network.
has embarked on the alleviation of infrastructure The business is well poised to achieve a breakthrough in
deficiencies and upgradation of its power system to sustain West Africa and quickly expand its presence in the region.
growth. To cater to the power demand in emerging load In the ASEAN region, Thailand remained comparatively
centres and the Greater Dhaka region, several projects unaffected especially with regard to execution progress.
are planned to include construction of the country’s first
nuclear power plant. This provided a slew of Transmission FY 2020-21 was a challenging year for Supply Chain
Line opportunities in Bangladesh. Nepal also augmented Management. The Covid-19 pandemic brought in a global
its power transmission network with gas and air insulated disruption of supplies and logistics, to begin with, and
substations. moved on to a high volatility and scarcity of raw material,
restriction of imports and delayed award of contracts by
Already constrained by lower oil prices, the Middle East clients. At the same time, the business quickly adapted
economies had limited avenues for growth in the face of to the ‘new normal’ through various mitigative actions to
the pandemic. Travel restrictions, quarantine requirements, re-stabilise the chain and achieve significant savings through
supply chain disruptions, etc. affected the initial months re-negotiation of existing contracts.
of the financial year. However, Saudi Arabia’s ambitious
National Renewable Energy Programme provided impetus Several orders materialised in the last quarter of an
for international solar orders. In Qatar, due to the expansion otherwise difficult financial year that witnessed Covid-19
of the 400 kV electricity network, grid elements such as related lockdowns, adverse commodity price movements
series reactors were necessitated to improve grid stability. and customer-end delays in order finalisation.

184
500 kV Bang Saphan 2 to Surat Thani 2 Transmission Line, Thailand

Major Achievements • 230 kV Substations at Ranchi, Chennai and Ratangarh

Key Orders Won • 132 kV Receiving substation & 132 kV cabling for Dhaka
• 4 major transmission line packages in Bangladesh Metro

• Substation order in Nepal • Power distribution packages in Uttar Pradesh, West

Bengal and New Delhi
• 1.5 GW solar PV project in Saudi Arabia – the largest
overseas order for the business • Packages associated with 800 kV Raigarh – Pugalur HVDC
transmission line
• 380 kV Transmission lines in Saudi Arabia
• Unique series reactor package in Qatar • 765 kV Ghatampur Agra – Greater Noida transmission
line
• 132 kV Substations in Dubai
• 765 kV Ranchi – Medinipur transmission line
• 400 kV Transmission line in Oman
• 23 substations and 72 km of overhead / underground
• 500 kV Transmission line in Peninsular Malaysia transmission corridor in the Middle East
• 400 kV SS & TL for Telangana TRANSCO
• One of the biggest 400 kV substations and one of the
• Tunnel electrification packages for Udhampur Sri Nagar longest 400 kV transmission lines in Botswana
Baramulla Railway Link
• Substations and transmission lines in Egypt, Ethiopia and
• High voltage distribution system and cabling packages in Morocco
West Bengal
• 500 kV Surat Thani – Bang Saphan transmission line in
• 400+MW Solar EPC orders in Gujarat Thailand

Projects completed and commissioned Awards and Recognitions

• 400 kV Gas insulated substations at Lahal, Guindy,
The business won laurels for its technological and execution
Mylasandra and Papankalan
prowess. The power transmission & distribution projects in
KSA and UAE bagged four Middle East Economic Digest

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

India’s first large-scale solar PV project of 2 x 10 MW with 16 MW / 8 MWh battery energy storage system in the Andamans

(MEED) awards in different categories. The 400/132 kV Al A special thrust was given on Stakeholder Connect, a
Qabel project earned L&T the Dossier Award for the Best drive through which the supply chain team reached out to
Contractor for Infrastructure Projects. different levels of vendors to deliberate on challenges and
mitigation measures.
The transmission line tower manufacturing facility at
Kancheepuram won the DL Shah Quality Award, the Quality Digitalisation
System Excellence Award from FICCI and the EHS Excellence
A digitally integrated project management ecosystem has
Award from CII Southern Region. The transmission line
been created to enable timely completion of projects. It
tower factory at Pithampur won the Golden Peacock Award
encompasses, integrates and enables sophisticated analytics
for Occupational Health & Safety performance.
of all the processes in the project lifecycle, right from
prospecting to post-completion obligations. The predictive
Also, 11 projects emerged as winners, each for National
abilities of the platform equip the team with the requisite
Safety Council of India Awards 2020 and British Safety
tools and analytics to create optimised plans initially and
Council International Awards 2021. Several overseas
during the course of the project.
projects won awards from American Society of Safety
Professionals (ASSP) and Royal Society for the Prevention of
Significant process changes and digital initiatives were
Accidents (RoSPA) under various categories.
adopted in the supply chain front to reduce process time
and to improve price discovery.
Significant Initiatives
As the electricity system gets increasingly decentralised, The experience gained in applying Building Information
decarbonised and digitalised, a specialised team of top- Modelling (BIM) for substation projects to advanced
notch experts has been created to develop and deliver smart refinement Levels of Development (LOD) has provided an
digital solutions worldwide, leveraging the engineering edge to the engineering capabilities. Aerial LiDAR survey
know-how and integration abilities. techniques, usage of drones, user-friendly incident-reporting
systems and deployment of smart glasses, mobility devices,
The first international battery energy storage system order etc. have yielded tangible benefits. Virtual collaboration
secured in Thailand has achieved substantial progress. The tools came in handy during remote design review,
52 MWh system is meant to provide grid stability in a region inspection, installation supervision and testing processes and
with a large, inherently intermittent renewable generation. have now become the norm.

186
110 MWp NLC Project, Tamil Nadu

Environment, Health and Safety A major step in this direction of engagement was a range
The implementation of ‘Vision Zero Harm’ related initiatives of virtual learning activities and digitally collaborated tools.
and enforcing of appropriate SOPs were pursued with Several learning opportunities and knowledge-sharing
vigour and enthusiastic participation. Helmets with in-built sessions were provided for upgradation of skills.
Bluetooth devices were deployed to improve communication While the business continued to explore new geographies
amongst workmen engaged in height work. The analytics and new businesses for growth, the workforce was
generated through the improvised SHEiLD application were shaped to fit the new roles that were emerging through
helpful in identifying root causes and associated behaviours, robust processes of performance management, succession
thereby enabling implementation of suitable interventions. planning and internal career movement efforts. As part of
Various digital and technical initiatives such as One Time employee development and talent build-up, the business
Password-based approval for shutdown works, deployment continues to create a talent pipeline across the levels
of safety kiosks and biometric access for forklift operation through bespoke development programmes and coaching.
in factories were implemented. More than 2.75 lakh
manhours of training were provided to staff and workmen A framework named ‘REACH’ has been rolled out, with
to enable them to imbibe the safety culture. These helped year-long activities that are designed to elevate the
the business earn many awards, as described in a preceding employee engagement experience.
section, and appreciation certificates from customers.
Risks and Concerns
Human Resources Mature stage gate and escalation mechanisms were helpful
HR played a key part in keeping employees engaged to in treading through the challenging times. Advocacy efforts
overcome the emotional challenges during the pandemic. were made to obtain contractual relief from customers
It included creating awareness among employees for for pandemic- induced delays in terms of time and cost,
preventive health care. The constant interaction and the reduction of bank guarantee exposure to ease liquidity,
leadership communication forums ensured that there was etc. Being countries with considerable business prospects,
absolute clarity and connect across the organisation. The the volatile political environment in Myanmar and parts of
well laid-down set of safety and health protocols ensured Ethiopia are under watch.
the well-being of employees and their families and earned
the employees’ trust in adapting to the dynamic work A number of physical and virtual workshops were
conditions. conducted across the business to promote a strong risk
awareness-led entrepreneurial culture.

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MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Al Daayen 2 GIS, Qatar Haliba, Containerised Substation

Outlook Despite the longer durations taken for bid evaluation,

After a year that witnessed shrinkage of substation several substation and transmission line opportunities are
prospects as projects got deferred, the next fiscal year expected to fructify in Malaysia, Thailand and Philippines.
looks promising, with grid strengthening by key states, With the strengthening of the local team, Indonesian
specific GEC-II related substations, metro receiving stations breakthrough is expected to help significant scaling up of
and multilateral-funded gas insulated substations in activities in the ASEAN region.
neighbouring countries. Though the pandemic has reduced the borrowing capacities
of low-income African countries, a substantial amount of
Transmission line construction is expected to see continued
funding has been already committed in the region, and
levels of substantial activity with finalisation of orders
several projects are under various stages of bidding. Despite
pertaining to already-approved schemes, grid expansion by
heavy competition, the business has been able to garner
states and neighbouring countries.
a significant share in the countries in which it is present
As the priority of central funding shifted to other sectors, and has opened up in a few more countries. In the post-
the distribution sector has not been so upbeat in the recent pandemic scenario, the multilateral funding is expected to
months with DISCOMs relying on multilateral funding for surge, which bodes well with the growth ambition.
the projects. The reforms-based result-linked distribution As vaccination levels increase and further prospects of oil
scheme announced in the Budget should give the much- prices going lower diminish, the situation in the Middle
needed impetus, and election-bound states may augment East is expected to ease. Massive developmental projects in
infrastructure with UG cabling, feeder segregation, HVDS, KSA, residential projects in Kuwait, transmission network
etc., in addition to metering. The fallout of proposed expansion in Oman, the end of the blockade in Qatar, etc.
privatisation of DISCOMs and the preference for OPEX may harbour positive developments while budget deficits
models are the factors to watch for. The focus will shift and preference for locals may pose some challenges.
from electricity access and connectivity to power quality and
reliability. 8-15 GW of solar capacity may get added in the next year
in India with a perceivable shift towards hybrid projects.
With the renewed thrust on broadband access to villages The evacuation infrastructure seems to be commensurate
and digital communications, FY 2021-22 may see with capacity-addition plans, which is a positive factor.
finalisation of delayed Bharatnet tenders and increased The volatility in module prices, insistence on domestically
fiberisation. manufactured content and the imposition of BCD (Basic
Customs Duty) etc., may pose challenges.

188
Bansujara Irrigation Scheme, Madhya Pradesh

The renewable capacity addition plans in the Middle East, value chain. The business has a proven track record
led by KSA, will receive a further boost with growing of executing a multitude of projects in the areas of
interests in green hydrogen. African countries, such as water supply, water transmission and distribution,
Egypt, Morocco and Ethiopia, have plans for large utility- water treatment, desalination, municipal and industrial
scale solar plants. Coupled with visible prospects in SAARC wastewater network, wastewater treatment, integrated
countries and the ASEAN region, the overseas Renewables urban utilities, irrigation, canal rehabilitation, riverfront
business is set to gain significant momentum in the budget development, etc.
year.
Recently, the Water & Effluent Treatment business
The nebulous nature of localised lockdowns due to the re-organised its business lines to reflect the changing
recurring Covid-19 waves has now become the ‘new trends and be more agile towards future opportunities.
normal’. The business has been verticalised into three units
– (i) Water & Wastewater; (ii) Industrial, Irrigation &
With the business outlook remaining largely favourable, the Infrastructure; (iii) Water International.
business expects an accelerated recovery to pre-pandemic
The Water & Wastewater vertical comprises Rural Water
levels of growth aspirations. The business continues to
Supply, Urban Water Supply, Water Management and
enable the highest standards of reliability, availability and
Wastewater Treatment. Thus, it deals with the complete
efficiency of power transmission and distribution networks
value chain of water & wastewater solutions for domestic
and provides a green technology path to clean energy
consumers.
transition in India and abroad.
The Irrigation, Industrial & Infrastructure vertical
WATER & EFFLUENT TREATMENT constitutes Mega & Micro Irrigation, Industrial Water
Systems & Effluent Treatment, Desalination and Smart
Water Infrastructure, helping to focus and increase its
Overview: business footprint in the domestic market.
L&T’s Water & Effluent Treatment business is engaged
in building comprehensive water management The Water International vertical focuses on the
infrastructure with capabilities covering engineering international markets and will continue to tap business
and design, procurement, construction, operation opportunities in the regions of Middle East, East Africa,
& maintenance, and caters to the entire business ASEAN and SAARC.

189
MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Mukkombu Upper Anaicut Project, Tamil Nadu

Business Environment also has a strong presence in the international market, with
The water infrastructure market in India is on an upward projects in Qatar, Oman, UAE, Tanzania and Sri Lanka.
trajectory with a sustained focus on bridging the
demand-supply mismatch in rural and urban areas. Urban The Covid-19 pandemic has impacted the Government
agglomerations necessitate the establishment of smart finances, with diversion of spending towards Covid-19
and future-ready water and wastewater infrastructure to related relief work as well as social support. This had a
boost the overall quality of life. Rapid population growth serious impact on capex spending for new projects and
and erratic and unpredictable monsoons have necessitated led to delays in order finalisation. On the execution front,
manifold irrigation schemes to expand the total area under though some disruptions were experienced in initial phase,
cultivation in the country. There is also a considerable thrust the activities picked up at sites as normalcy returned. The
on industrial treatment and desalination projects, which business ensured uninterrupted operations of projects
bodes well for the business. under O&M even during lockdown by continuously
supplying potable water, treating wastewater, and irrigating
The UN Sustainable Development Goal to provide clean farmlands, thereby benefitting 30 million people.
water and sanitation is driving investments in Africa and
ASEAN Markets. The water demand in the Middle East is Major Achievements
expected to grow significantly and the business foresees Major Orders Secured
significant spending in the areas of wastewater treatment
• Multi-village water supply schemes to various districts in
and desalination.
Madhya Pradesh
The Water sector is seeing increasing thrust from the • Piped water supply schemes to various districts in Uttar
government and new competitors are emerging to capture Pradesh
this market. The business sees a wide variety of competition
from global technology giants, India-based EPC players • Upgradation of sewerage treatment plant for Chandigarh
and local state-specific contractors as well. The business, Smart City
through its cost leadership, excellent track record and
financial capabilities has been able to thrive against this • 24 x 7 Drinking water supply project at Patiala, Punjab
stiff competition. Further, the business remains a market
leader in India, with a presence across all the major states • Slurry pipeline project, Chhattisgarh
and enjoys a market share of more than 30%. The business

190
Water carrier system, Kanpur, Uttar Pradesh

• Sauni Yojana Irrigation Scheme, Gujarat • 15 Awards from Construction Industry Development
Council under the categories of Corona Warriors and EHS
• Bargarh Canal Project, Odisha Implementation
• Integrated project for development of Maharajbada, • 12 Awards from British Safety Council and 11 CII Awards
Gwalior, Madhya Pradesh for Safety, Health and Environment

• Industrial area effluent treatment plant, Qatar • 10 Water Digest Awards including Best Water Company
and Best Complete Domestic Water Solutions provider
Projects Commissioned Patents
In the year FY 2020-21, 30+ projects were completed. Some In a constant endeavour towards achieving self-sufficiency
of the key projects commissioned are: in treatment processes and transforming into a ‘Technology
Driven EPC’, the business has developed, incubated and
• Lift canal system of Upper Indravati Irrigation Project,
patented a new technology for domestic wastewater
Odisha
treatment with a competitive edge over other existing
• Erode water supply scheme, Tamil Nadu technologies.

• Kadana and Kakrapar Irrigation Schemes, Gujarat Significant Initiatives

• 40 MLD STP at Rourkerla, Odisha Digitalisation & Productivity Improvement
The business has been a forerunner in digitalisation and
• Tabora Water Supply Scheme, Tanzania digital interventions have been implemented across the
entire business value chain. Some of the key solutions are:
Awards
• ViewEHS, a patented app for centralised reporting,
During the year, the business bagged a slew of prestigious documentation, and performance measurement system
awards from industrial forums across the world. Key awards for EHS Management System
and accolades received include:
• Quality Incident Reporting (QIR), a mobile application to
• The coveted AEC Excellence Award from Autodesk for an raise observations for quality defects and to escalate the
advanced water treatment plant at Chandrawal, Delhi observation, when required

191
MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Moga Water Supply Scheme Project, Punjab

• Smart glass to visually monitor real-time progress of and implementing safe, healthy and environmentally
projects friendly workplaces across offices and sites

• Advanced data analytics for labour productivity • EHS Climate Survey to evaluate the maturity level of the
benchmarking and improvement EHS culture in the organisation

In addition, the business is also working on developing new Sustainability Initiatives

digital solutions based on the latest technologies, such as
• The business works with local communities, NGOs,
artificial intelligence and machine learning for cognitive
schools and colleges to increase green cover and spread
search, image analytics, robotics, etc.
awareness about the environment. Over 7 Lakh saplings
were planted across the country during the year
Environment, Health and Safety
Some of the key EHS highlights for the business are: • Go Green campaign conducted across project sites to
encourage reuse and recycle of waste materials. 12,000
• Achieved 117 million safe man-hours for the year MT of waste was recycled so far

• 600+ Virtual EHS audits conducted to monitor EHS • ‘Ulta Chatha’ initiative was curated to facilitate ground
implementation across project sites water recharge by rainwater harvesting in all project sites

• Proactive risk mitigation through patented ViewEHS • Solar panels were installed across project sites to reduce
app for centralised reporting, documentation and EHS dependence on non-renewable energy sources
performance measurement
Human Resources
• 0.56 million man-hours spent on training staff and
workmen at project sites. Training modules are tailor- Catering to employee needs, aspirations and their well-
made project-wise for identified hazards that could lead being is a philosophy deeply enshrined in the business.
to major incidents Learning & Development, employee engagement, excellence
through innovation and continuous improvement have been
• Development of ATL (Any Time Learning) Modules on ISO the major areas of focus. The key initiatives undertaken
45001:2018 and ISO 14001:2015 Standards for designing during the financial year are:

192
Dedicated Water Supply Project for Erode Corporation, Tamil Nadu

• Thrust on leadership development, competency • The constrained finances led to delays in payment for
development and succession planning with focused ongoing projects. To mitigate this, client-wise project
competency development programmes, coaching exposure is monitored periodically, and project activities
programmes and capability building courses are carried out based on the client’s fund availability to
avoid increasing the working capital.
• Employee Recognition Programmes, such as PRAISE and
RAVE, to spark the innovative spirit of our employees and • As water projects are labour-intensive, the availability
ensure continued excellence at work of workmen plays a major role in the progress of the
projects. The Covid-19 crisis saw a large-scale workmen
• Development Week 2020: A unique learning initiative to exodus leading to a shortage of manpower and an
create awareness about the training and development increase in labour costs. New ways of working with social
offerings available for all the employees to upskill distancing norms also impacted labour productivity.
themselves The business is focusing on attracting and retaining
high-skilled workmen. Initiatives like automation and
• Learner’s Corner: An internal website which serves as an mechanisation are being implemented to enhance
easy-to-access and user-friendly platform to host Learning productivity and reduce dependency on labour.
& Development offerings
• Projects of the business are linear in nature and they
• ‘WET IC Radio’: A new medium of internal involve extensive approval for ROW/ROU as well as land
communication with employees using podcasts acquisition. The business engages a strong IR/Admin team
to ensure all approvals are taken well in advance. Any
Risks and Concerns delays on account of external factors are also properly
documented and appropriate EOTs/cost claims are filed
The business has a robust risk management process where
with the clients.
upcoming tenders and ongoing projects are analysed
periodically by the Risk Management Committee to
• Raw materials like pipes, valves, fittings, etc. form a major
ascertain the various risks and appropriate mitigation
portion of the project costs and volatility in commodity
measures.
prices has an impact on the margins. To hedge this
risk, the business also enters into strategic tie-ups with
• The business is focused on increasing the share of projects
vendors.
from multi-lateral funding agencies.

193
MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Blast furnace, JSW, Dolvi, Maharashtra

Outlook METALLURGICAL AND MATERIAL

The water sector possesses tremendous potential on the
back of a large unserved population, rapid urbanisation,
HANDLING
industrialisation, and climate change. There is a growing
shortage of freshwater resources, and recycle and reuse, Overview:
water management, desalination, efficient irrigation
L&T’s Metallurgical and Material Handling business
technologies are gaining traction as means of addressing
offers complete EPC solutions for the Mining, Minerals &
this shortage.
Metals sectors across the globe. The business undertakes
end-to-end engineering, procurement, manufacture,
The Government of India, under the Jal Jeevan Mission,
supply, construction, erection and commissioning of the
has set a target to provide piped water supply to every
projects covering the complete spectrum – from mineral
rural household by 2024. The Government has allocated
processing to finished metals.
R 50,000 crore in the union budget of FY 2021-22 with an
expected outlay of R 3,60,000 crore till 2024. Under the
The business also has a Product Business Unit offering
Jal Jeevan Mission (Urban), the government plans to treat
comprehensive product solutions, including customised
100% sewage in 500 cities and meet 20% of the total
mineral crushing equipment for the cement and coal
water demand and 40% of industrial non-potable demand
sectors, surface miners for blast-free eco- friendly
through recycle and reuse of wastewater. The National
open cast mining, advanced sand manufacturing
Infrastructure Pipeline (NIP) expects to create an additional
plants which can replace usage of river sand, material
irrigation potential of 170 Lakh hectares. The Government
handling equipment (stackers, reclaimers, ship unloaders,
is also focussing on desalination as an alternative source
multipurpose cranes and other mining equipment), steel
of water supply for domestic and industrial use. The
plant machinery and other custom-made equipment
Government’s focus on building India as an alternative
and critical fabricated structures (such as bridges,
manufacturing hub leads to opportunities in the areas of
reformer modules & complex assemblies involving heavy
industrial effluent treatment and smart water infrastructure
fabrication, precision machining and critical assembly
businesses. In addition, the Government is also focusing on
& testing) catering to core industrial sectors, including
the creation of new smart cities, industrial parks, defence
cement plants, the mining sector, power plants, the
corridors, bulk drug parks, textile parks etc., which augurs
construction industry, steel plants, fertilisers and chemical
well for the business.
plants, etc.

194
Coke dry quenching plant at JSW, Dolvi, Maharashtra

The complete range of product solutions is backed by 5 alumina refinery, 1.5 MTPA in aluminium and 0.3 MTPA in
decades of experience and knowledge, in-house design zinc and lead manufacturing in India.
resources, state-of-the-art manufacturing capabilities
and providing cost- effective and value-added after-sales International Projects – MENA BU
product support. The manufacturing centres of the The Mining and Metallurgical sector is emerging as a
Product BU are in Kansbahal, Odisha and Kancheepuram, frontrunner in the economic diversification of the GCC
Tamil Nadu. from oil dependency. All GCC countries are boosting their
mining sectors with strategic long-term plans to exploit the
Business Environment untapped mineral deposits.

Domestic Projects – M&M BU The Kingdom of Saudi Arabia (KSA), in particular, has been
As the pandemic-related restrictions were gradually aggressively pursuing reforms and changes in legislature
withdrawn from Q2 FY2020-21 onwards, both metal to facilitate foreign and private investments in the mining
demand and production picked up in the domestic market. sector. The mining sector has been earmarked to become
Buoyed by global demand (more specifically from China) the third pillar of the Saudi Arabian industry after oil and
metal prices started improving from Q2 FY2020-21 onwards petrochemicals, with the establishment of a Mining Fund to
and continued in Q4 FY2020-21. Post the consolidation in provide sustainable finance for the sector.
the steel industry, capacity addition of 34 million tonnes The aluminium, copper and gold industries are likely to
is expected in the next 4 years. With the committed present new investment opportunities, especially in the KSA
investments by the GoI in infrastructure development and UAE.
coupled with the rally in the prices of steel, major steel
manufacturers have announced expansion plans. Backed by The GCC member countries’ vision to be net exporter
more than 2 decades of experience in providing large EPC of value-added products by 2030 is expected to provide
packages in steel plants, the business is poised to capture opportunities in the development of the downstream metal
the market opportunities. industry.

The non-ferrous industries are in expansion mode with Product BU

the sustainable rally in base metal prices due to increased The core products (such as crushers, surface miners, sand
consumption by the downstream industries, and have plants and bulk material handling equipment) growth are
planned additions of 0.4 MTPA in copper, 3 MTPA in primarily driven by the following industrial sectors:

195
MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Stacker-Reclaimer

Cement Sector: Cement production witnessed a negative traction is also seen in Tier III cities, especially for advanced
growth and had a steep fall during first 2 quarters of FY sand manufacturing plants.
2020-21, mainly due to the Covid-19 pandemic. In the first
3 quarters of FY 2020-21, cement production reported 209 The Government has announced various road projects
MTPA, and recovered on a positive note in the last quarter across India in Q4 FY2020-21 to boost the infrastructure
and expected to reach 353 MTPA. economy. A surge in demand for sand air classifiers is
expected in FY 2021-22.
Major cement producers embarked on their expansion
plans. Being fast-track expansions, some of the finalisations Major Achievements
for crushing plants were completed favourably in March
With increased demand and growth in domestic industrial
2021 itself and more are expected to follow. L&T’s
sectors, the business has received some prestigious orders:
‘Limestone, Coal and Additive/Corrective Crushing
Solutions’ supplied by the Metallurgical and Material • 5 MTPA blast furnace and steel melt shop projects for
Handling Product BU continue to be the preferred choice for JSW Steel, Bellary
the Indian cement industry and has a market share of more
than 90%. • 3 MTPA Alumina Refinery project for Vedanta at Lanjigarh

Mining Sector: The continued augmentation of capacities • In-house design, development and manufacturing of
in coal and iron ore has increased business potential for launching girder for high-speed railway project
mineral beneficiation and processing industries, coupled
with mechanised evacuation systems from mine to rail to Marquee projects commissioned / at an advanced stage of
plant, offers business opportunities for the business to completion in FY 2020-21 are:
provide EPC solutions and has also increased requirements
• Slab caster, Bokaro Steel Plant – first slab casted
for its equipment range covering surface miners and skid-
mounted coal-crushers, stacker-reclaimers, wagon tipplers, • Coke oven project, JSW Steel, Dolvi – Completion of first
plough feeders, etc. coke push of Battery D

Construction: The sand plant business largely depends • Blast furnace, JSW Steel, Dolvi – Commencement of stove
upon the real estate and infrastructure market, which is heating up
showing revival from Q3 FY2020-21 onwards. Further,

196
Coal-handling plant at Khargone, Madhya Pradesh

• SK Mines PH III – Commissioning of Phase III graphite The business has implemented Design Automation and
package the AI-enabled engineering approach with continuous
improvement on various processes in its domain area.
• 12 Surface miners commissioned across India for various
clients
Environment, Health and Safety
There is continued commitment from leadership and
Significant Initiatives management at all locations and levels for improvement
The business has formed strategic alliances with leading in the EHS processes and their implementation. EHS
global technologists to offer comprehensive EPC solutions roadmaps were launched based on organisation-wide
across various sectors of mineral beneficiation, steel policies. To combat the Covid-19 pandemic at sites and
processing units and various by-product plants of mega size. offices, proactive initiatives were taken, such as strict
Technical collaboration has been strengthened with Kemco, implementation of SOPs, adequate quarantine / isolation
Japan for the addition of new products for the construction rooms, recording attendance through facial recognition,
industry. and webinars/training programmes for resumption of work
post-lockdown.
The business has embarked on significant modularised and
mechanised construction approaches to improve efficiency Increased implementation of digital technologies helps
and the speed of delivery. to regulate safe working conditions. Various digital tools
include Virtual Reality (VR) based training modules for
Digitalisation ‘Safe Material Handling’ and the IB4U app for tracking
The systemic implementation of the EPC 4.0 initiative the inspection of various equipment and PPE, EHS Training
for digitising and integrating all processes across the integrated through the WISA app and Chatbot for health
spectrum was undertaken. Increased 3D engineering monitoring.
capability, coupled with Building Information Modelling
(BIM) implementation, Smart EDMS for effective project, 3700+ EHS Training Programmes were conducted during
communication and document management, construction the year, covering 0.43 million training man-hours. Various
automation / mechanisation are being implemented across projects and factories received 7 RoSPA Health & Safety
major projects. In addition, ongoing digital solutions awards during the year.
are stabilised, such as IoT, WISA, AR/VR for EHS, Image
Analytics, Rigging App, etc.

197
MANAGEMENT DISCUSSION AND ANALYSIS    INFRASTRUCTURE BUSINESS    ANNUAL REPORT 2020-21

Raw Water Storage Tank for MENA, Maaden Gold Project, Kingdom of Saudi Arabia

Environmental initiatives undertaken are as under: and orientation of GET/PGETs was successfully executed
using the digital platform. Learning & Development went
• Recycled plastic plywood extensively deployed along with totally virtual during the lockdown, in view of all SOPs /
plastic formwork to reduce the dependence on natural Covid protocols.
hardwood or treated plywood
• Dust-suppression through bio-based solution A wide range of technical and behavioural programmes
implemented at a project site were conducted, ranging from Data Analytics, Construction
4.0, Smart EDMS system, Primavera, Aveva, Building
• Occupancy sensors at office buildings (EWL facility) to Agile Teams, Creativity & Innovation, Analytical Thinking
optimise power consumption and Situational Leadership. ATL Next has also played
an important role in meeting the training needs of staff
• Usage of spillage tray implemented at several project sites members, being an effective virtual mode of imparting
training.
Human Resources
Focus was laid on creating a robust talent pipeline by During the lockdown, initiatives focused around ‘Wellness’
identifying future and potential leaders. The impetus was of the staff as well as their availability for business through
on all-round development of business leaders by providing ‘Work from Home’. Flexi-time was introduced to make it
challenging opportunities, job rotation, active handholding, easy for staff to attend office. Dedicated medical support,
and mentoring / grooming by senior leaders. Across the doctor on call, counselling sessions through TISS and
cadres, key high-potential talent is identified right from Covid-19 SPOC across the locations were key interventions
‘Talent in Cradle’ for staff in S&E Band to ‘Leaders on the to maintain staff health and morale. At sites, as per the SOP,
Go’ for senior Tier 3 staff. Leaders for senior key positions arrangements were made for stay, food and site commute
are identified as part of succession planning. A host of to ensure staff availability and wellness.
specific competency-based programmes are organised to
shape and fine-tune their leadership skills. A series of Town Hall Leadership Speak sessions for the
business, Call to Staff and Joy @ WFH established effective
During the lockdown period, the business continued with communication channels for clarity amongst staff on the
talent acquisition activities through virtual mode, right from way forward during such challenging times.
interviewing until onboarding. For the first time, onboarding

198
KSM-304C Surface Miner

Risks and Concerns term and metal producers recording unprecedented margins
With the resurgence of Covid-19, uncertainty of availability are solid impetus towards the new capex cycle.
of the work force and disruptions in the supply chain may
have adverse effects on the projects under execution. The GCC economy is returning to pre-Covid levels, with
However, strategies to overcome these difficulties are being massive vaccination drives by local Governments, enabling
put in place to minimise the impact, and customers are quicker recovery.
taken into confidence.
With the resumption of normalcy post the Covid-19
outbreak and with expected growth pick-up in the
Outlook infrastructure, coal and cement sectors, all core products are
Market sentiments remaining positive with strong demand, expected to grow in the next year.
commodity price forecasts remaining bullish in the near

199
MANAGEMENT DISCUSSION AND ANALYSIS    POWER BUSINESS    ANNUAL REPORT 2020-21

India’s first ultra-supercritical power plant – 2x660 MW Khargone Thermal

POWER
Power Plant, Madhya Pradesh

The business executes combined cycle gas-based power

BUSINESS projects on a turnkey basis. It has an excellent track-

record in implementing projects in India and overseas.

The business has built on its core competencies and

capabilities and has emerged as a major player in
new emission-control technologies, such as Flue Gas
Desulphurisation (FGD) in the thermal power plant
industry. It now has a sizeable presence in the FGD
business.

The business has project management offices at

Vadodara, Faridabad, Dhaka and various project sites.
Overview:
The business also manages the following JVs:
L&T has established itself as one of the leading EPC
players in the thermal Power Plant business in India and L&T-MHI Power Boilers Private Limited, a joint
is known to deliver complete turnkey business solutions venture with Mitsubishi Power Limited, Japan, for
from concept to commissioning. The business has the engineering, design, manufacture, erection and
expertise which encompasses every aspect of design, commissioning of ultra-supercritical / supercritical boilers
engineering, manufacture, construction and project in India up to a single unit of 1000 MW.
management.
L&T-MHI Power Turbine Generators Private Limited,
The business has developed its own capabilities a joint venture with Mitsubishi Power Limited, Japan and
for executing large and complex power projects, Mitsubishi Electric Corp. (MELCO), for manufacture of
which include in-house engineering, state-of-the-art Steam Turbine Generator (STG) equipment of capacity
manufacturing facilities, competent manpower and ranging from 500 MW to 1000 MW. The Company
decades of experience earned in executing large and is engaged in the engineering, design, manufacture,
complex projects within and outside India. It has a proven erection and commissioning of ultra-supercritical /
track record of delivering complete power plant solutions supercritical turbines and generators in India.
with the scale and sophistication to meet India’s growing
energy needs.

200
2x660 MW Shree Singaji Thermal Power Plant (Stage-II), Madhya Pradesh

L&T Howden Private Limited, a joint venture with for renewable energy, makes it extremely difficult for new
Howden Holdings B.V. L&T Howden, is in the business of gas-based power generation projects to take off.
regenerative air-preheaters and variable pitch axial fans
(equipment, after-market spares and services) for power In international markets, the business continued with the
plants. execution of projects in Bangladesh. Other markets, such as
the GCC and South East Asia, also remained subdued due
L&T-Sargent & Lundy Private Limited, a joint venture to reduced demand growth in the wake of the pandemic
with Sargent & Lundy LLC, USA, which is engaged in the and the focus on renewable energy.
business of providing design, engineering and project
management services for the power sector. While utility-scale gas-based power generation projects
are a good and viable solution for grid balancing with
Business Environment renewable energy, in the near term, the sector will continue
The Covid-19 pandemic has led to the acceleration of to face challenges such as the inclination of countries
the shift to renewable energy, thus leading to subdued towards the installation of more renewable energy projects,
tendering activity in the thermal power sector and stiff competition for tariffs and muted power demand
postponement of tenders. Tenders for FGD Units were growth. The limited availability of projects and the over-
also delayed due to changes made by the Government capacity of manufacturing capabilities across the sector
in procurement policies with respect to sourcing from continue to put pressure on prices.
countries sharing a land border with India, which form the
major source of raw material supplies for FGD units. The Major Achievements
industry is now gearing up to attain self-sufficiency under Major achievements by the business during the year include:
‘Atmanirbhar Bharat’ initiative of the Government of India
to reduce its dependency on imports. • Completion of facilities of India’s first ultra supercritical
power project for Central Utility in Madhya Pradesh
The gas availability in India for power generation projects • Final take-over of 2nd Unit by State Utility for a project in
continues to remain subdued, with a large part of installed Rajasthan
gas-based power generation capacity being idle. While
the LNG prices in international markets had softened • Received provisional acceptance for a gas project in
due to the pandemic, the landed cost of LNG in India still Bangladesh
remains unviable. This, along with low tariffs discovered

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MANAGEMENT DISCUSSION AND ANALYSIS    POWER BUSINESS    ANNUAL REPORT 2020-21

Ultra-supercritical / supercritical turbine manufacturing facility at Hazira, Gujarat

• Performance guarantee test of a gas project in Digitalisation

Bangladesh The digital adoption in the business is progressing at a
• Commercial operation of a central utility project in Uttar rapid pace. The business had implemented multiple digital
Pradesh where the supercritical boilers are supplied by technologies, such as IoT, AR/VR and mobility, in multiple
boiler JV areas of project execution and manufacturing. The business
benefits of these implementations are being monitored
• A dominant player in the FGD market, with over 20% of and measured closely. The next phase of digital has begun,
the market share where the focus is on developing new solutions using AI,
ML, RPA and Analytics to get insights, achieve automation
Significant Initiatives in most aspects of project execution. Solutions such as
connected machines and vehicles to improve productivity
The business is strategically focusing on new energy areas
and utilisation by predictive analytics, various Bots and
having significant potential such as energy storage, carbon
mobility apps for efficient business operations and Artificial
capture, etc. It is working on a business plan for technology
Intelligence (AI) & Machine Learning (ML) for Video / image
selection and finalisation of Go-To Market strategy.
analytics are helping project sites in maintaining compliance
related to Covid-19 protocols and safety.
The business continues to focus on initiatives to reduce
cost in areas such as procurement, manufacturing,
logistics, value engineering, overheads, etc. to improve its Environment, Health and Safety
competitiveness, and intends to continue its cost-saving The business has always laid great emphasis on
journey in the coming years. The business also enhanced Environment, Health & Safety of all stakeholders. With the
its focus on initiatives to achieve quality and EHS excellence pandemic, challenges were faced at project sites, which
and expand its global footprint. were addressed by:
• Liaison / tie-ups with nearby Covid-19 treatment hospitals
To expand its international footprint, the business is laying
/ facilities
emphasis on business development activities in select
international geographies. It has taken steps to strengthen • Augmenting medical facilities and resources to take care
its presence in such geographies to capitalise on the of the employees
opportunities available in this sector.
• Regular sanitisation of all facilities and vehicles

202
400 MW Bibiyana South Combined Cycle Power Plant, Bangladesh

• Provision of isolation facilities and conducting of Use of digital technologies to regulate safe working
regular inspections of labour colony and bachelor conditions:
accommodation
• Developed and implemented Online App STARRT (Safety
• Continuous health monitoring (temperature as well as Task Analysis Risk Reduction Talk) card for multiple or
SpO2) of all employees simultaneous or multi-level activities
• Regular training / counselling of all employees regarding
• Cameras installed in sites / facilities for real-time
precautions to be taken viz. maintaining immunity,
monitoring and capturing of unsafe acts / conditions
wearing a mask, maintaining hygiene, social distancing,
and communicating the same to site safety personnel for
etc. Provided essential supplies in labour colony during
immediate and long-term corrective action
lockdown.

The business continues to focus on safety awareness • Conducted six monthly online Internal EHS audits on the
through weekly theme-based Safety Toolbox Talks, monthly Teams platform with a virtual tour of site operations and
theme-based safety skits based on monthly Life Saver interviewing of contractor and operations’ employees
programme campaigns and activity-based skill orientation
programmes for workmen. Specialised external trainings Risks and Concerns
were conducted in welding and gas cutting operations, With the increased emphasis on renewable energy,
safe usage of PPEs and a demo on work-at- height rescue, the business continues to face headwinds as regards
fire safety and fire-fighting techniques at all project sites. the opportunities available for thermal power. Further,
An external virtual training programme was conducted excess manufacturing capacity continues to drive prices
on ‘Scaffolding and Lifting & Rigging’ for various sites downwards and would reflect in the financials of EPC
for frontline engineers, contractor supervisors, foreman players.
and scaffolders and riggers. Detailed sessions regarding
implementation of the EHS Council’s ‘Mission Zero Harm’ The pandemic has set in some uncertainty on project
roll-out plan for each site were organised. execution timelines, for which the business has initiated the
required steps, considering force majeure conditions.

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MANAGEMENT DISCUSSION AND ANALYSIS    POWER BUSINESS    ANNUAL REPORT 2020-21

Ultra-supercritical / supercritical boiler manufacturing facility at Hazira, Gujarat

Outlook opportunities in this segment and has tied up with world-

While the projections of 267 GW thermal power capacity class OEMs.
by FY 2030 as per CEA projections and retirals of old,
inefficient, and polluting power plants indicate that thermal The business is also focusing on international markets for
power is still going to be the mainstay in country’s power opportunities. The inherent advantages of gas-based power
generation mix, the business is gearing up for the shift projects, i.e. fuel flexibility and fast ramp up and ramp down
towards new energy opportunities in the near future. capabilities, make it most suitable for grid balancing along
with renewable energy projects. New developments for the
It is estimated that the total installed capacity of power usage of hydrogen and ammonia as fuel for green power
plants for which FGDs are to be installed is around 167 GW, generation are likely to present meaningful opportunities in
involving 440 FGD units. About 73 GW of FGDs have been medium-term future.
ordered till date, while the balance units are expected to
gain momentum in next couple of years in order to meet L&T-MHPS Boiler JV and L&T-MHPS Turbine Generator JV are
the revised deadlines stipulated by MoEFCC. looking forward to leveraging upcoming spares and service
opportunities in the domestic market and will continue to
The Government has an ambitious plan to increase the explore business opportunities in the international market
nuclear power production to 23 GW by 2031 from the for export orders.
current level of 7 GW. The business sees large-value

204
HEAVY ARDS Reactor for ADNOC, UAE

ENGINEERING reactors, gasifiers, ammonia converters, urea reactors,

coke drums, FCC reactor – regenerator system, LNG /

BUSINESS gas processing pressure vessels and heavy columns

• Heat Transfer Equipment (HTE) PBU specialises in
ammonia & urea plant exchangers, hydrocracker BLE
high pressure heat exchangers, methanol converters,
PO reactors, VAM reactors and fired-tube waste heat
boiler packages
• Process Plant Internals (PPI) PBU specialises in reactor
and proprietary process plant internals
• Modification, Revamp & Upgrade (MRU) PBU offers
Overview: value-added end-to-end solutions for FCC reactor,
CDU / VDU revamps, urea reactor life extension, coke
L&T Heavy Engineering is amongst the top 3 global
drum repairs, heat exchanger revamp, urea energy
fabricators. The business has achieved international
saving projects and emergency repairs
recognition through an impeccable track record of
executing large complex projects and constantly • Nuclear PBU specialises in core nuclear island
creating international benchmarks. Capabilities include equipment such as steam generators, reactor
state-of-the-art, fully integrated globally benchmarked components (end shield assembly, end fittings),
manufacturing facilities, an experienced skilled talent pressurisers, safety heat exchanger, spent fuel storage
pool and fully equipped technology centres. The cask / canister, fusion reactor (ITER assemblies), fast
safety standards at its manufacturing facilities located breeder reactor critical for nuclear power sector and
in Mumbai, Hazira and Vadodara are on par with critical equipment for ATVP / BARC programmes
international standards.
• The Piping center fabricates critical piping spools for
The business is organised into Product Business Units power plants and other process industries
(PBU) based on their specialisation.
L&T Special Steels and Heavy Forgings Private Limited
• Reactor & Pressure Vessels (RPV) PBU specialises (LTSSHF) is a JV with Nuclear Power Corporation
in fabrication of hydro-processing reactors, tubular India Limited (NPCIL) and caters to the demand for

205
MANAGEMENT DISCUSSION AND ANALYSIS    HEAVY ENGINEERING BUSINESS    ANNUAL REPORT 2020-21

Ethylene Oxide Reactor weighing 1157 MT for IOCL’s Paradip Refinery

critical forgings required for the Indian Nuclear Power to the 21st Conference of the Parties (COP 21) environment
programme and for other critical sectors, such as regulation, the Government has launched an initiative to
Defence, Hydrocarbon and Oil & Gas. The JV has set gasify Indian coal (100 million tonnes) to methanol. These
up a fully integrated forging facility (from steel scrap to initiatives have improved the prospects for the business.
finished forgings of alloy steels, carbon steel & stainless
The MRU business is identified as a growth initiative, since
steels) with the capacity to produce a single piece ingot
clients increasingly opt for revamps and defer investments
up to 200 MT and finished forgings up to 120 MT.
in new greenfield projects. There are good revamp and
Business Environment upgrade opportunities expected in the coming years.
The business was impacted due to the challenges posed by The Indian Nuclear programme entered fleet mode
the unprecedented Covid-19 pandemic. Oil prices touched procurement for 700 MWe PHWR. NPCIL has introduced
historic lows and are now seen settling in the price band of a tender clause to recognise good performance of
$55-65 per barrel. This led to many projects in the refinery suppliers by their commitment to award repeat orders. The
sector being shelved or deferred. In the USA and the EU, business stands to gain on this based on the good delivery
enforcement of clean fuel standards – Renewable Energy performance in recent orders.
Directive (RED) II, Renewable Fuel Standard (RFS) & Low
Carbon Fuel Standard (LCFS) – and Government subsidies Major Achievements
have attracted investments to convert old refineries to
In the domestic market, the business secured
produce ‘Green Diesel / Biofuel’. The business has been
breakthrough orders of acrylic acid reactors for
successful in making inroads into these new areas and
Indian refineries, breaking the monopoly of European
has booked a few orders recently from customers in the
manufacturers, and received an order for supply of titanium
USA and the EU. The business also expects growth in the
heat exchangers for IOCL’s PTA plant.
Petrochemical sector due to higher demand of pet-chem
products and less volatility in the product prices. Good During the year, the world’s heaviest LC-MAX reactor,
impetus is expected for integrated petrochemical plants, weighing 2313 MT, was dispatched to HPCL’s Vizag
especially in Asia led by China and the Middle East. Refinery.
The Government has approved mega projects as a part
In the international market, the business secured orders
of economic stimulus to revive the pandemic-affected
for the supply of 11 hydro processing reactors for renewable
economy. The ‘Atmanirbhar Bharat’ initiative to drive
diesel projects in the EU and the USA. In the Petrochemical
self-sufficiency is helping local industry. As a commitment
sector, the business secured orders for new products: four

206
The world’s heaviest LC MAX Reactors, weighing 2313 MT, on the way to HPCL, Vizag

PO reactors from Thyssenkrupp Industrial Solutions, a VAM In the Nuclear sector, the LTSSHF JV has received orders
reactor from Sheng Hong, China and an ethylene oxide for the supply of steam generator forgings for 6 units,
reactor from Sibur, Russia. end shield plates for 4 units and forgings for pressuriser
and bleed cooler for 4 units, to be set up in fleet mode. In
The business ensured uninterrupted customer supplies
the Defence sector, the JV has been certified as the only
throughout the pandemic year by dispatch of four ARDS
indigenous producer of large and heavy forgings and thick
reactors to Takreer, Abu Dhabi; four coke drums to DUQM,
plates for the prestigious submarine programmes.
Oman; two EO reactors to Lianyungang, China and the ITER
top lid assemblies to France. Significant Initiatives
In the Nuclear business, good performance in the execution The business weathered the challenges posed by the
of the ITER cryostat was rewarded with a contract for pandemic by adopting safe working practices, encouraging
assembly integration work of the vacuum vessel at work from home, increasing virtual meetings, virtual audits
Cadarache, France. The business team flagged off the most and inspections, online approvals, etc.
complex and final assembly of the cryostat, the world’s
largest stainless-steel, high-vacuum pressure chamber. The business launched the ‘Knowledge Management’
This was an important milestone in the global nuclear initiative with the aim of being a ‘one stop solution’ for
fusion arena as well as a moment of pride for the Make young engineers seeking information on core product,
in India initiative. The business has secured an order for process and functional knowledge. The Mentoring Wave III
12 Steam Generators (SGs) from NPCIL for the prestigious initiative was launched, wherein senior colleagues help in
3 x 700 MWe Pressurised Heavy Water Reactor (PHWR), competency development of young colleagues through their
strengthening its position as a key nuclear power equipment guidance and support.
supplier for the Government of India’s fleet-mode
The Quality at Root initiative was embarked upon by the
procurement programme. The business also created a new
business to reduce the cycle time of manufacturing by
global benchmark in nuclear manufacturing by delivering
eliminating duplicate activities. This initiative requires high
the first out of four 700 MWe steam generators for the
levels of sensitivity towards quality, and casts responsibility
Gorakhpur Haryana Anu Vidyut Pariyojana (GHAVP) 1 &
for quality on the same set of employees who are
2 project in 36 months (12 months in advance) and also
responsible for manufacturing – ensuring ‘First time right’.
dispatched three Ti steam generators for ATVP (3 months in
advance of the schedule). Digitalisation has become way of life. The business was
named the ‘Most Digitally Enabled Manufacturing Plant

207
MANAGEMENT DISCUSSION AND ANALYSIS    HEAVY ENGINEERING BUSINESS    ANNUAL REPORT 2020-21

Forged Hydro Shaft, weighing 36 MT, for BHEL

in L&T’ amongst non-construction businesses. Notable ’reactive’ indicators – dangerous occurrences, lost-time
digitalisation initiatives include IOT-enabled smart welding injuries and fatalities. The business launched a major
stations in welding and overlay operations. Digitalisation in initiative, the Behavior Based Safety programme (BBS) to
office areas includes automation of design & procurement, internalise the concept of a safe workplace as a core value.
supply chain management and estimation system. Many
other digital initiatives have been taken, such as virtual The business team achieved 0.32 million safe man hours
3D layout simulation and Digi-Eye – for real-time project in last year. During the year, 49 webinars on various safety
progress monitoring. modules were organised by the Safety Innovation School,
Hazira.
In the MRU area, the digital initiatives include coke drum
life cycle management using IOT stations, remote safety Human Resources
surveillance using IOT cameras, remote welding monitoring, The business was quick in adopting digital platforms
manpower tracking in confined spaces, detection of for use during the lockdown period to upskill the talent
hazardous gases in confined spaces, VR bases execution pool. It effectively utilised Facebook at Workplace to
and safety training. All these initiatives have helped in keep employees engaged during lockdowns and reduce
reducing costs, improving productivity and enhancing pandemic fatigue. ‘Baatcheet’ sessions were organised
competitiveness. to strengthen connect and communication with female
employees. The topics discussed included women’s
Environment, Health and Safety development, work from home experiences, retaining
The business has developed and implemented SOPs women employees, etc. Digitalisation of the entire talent
complying with Covid-19 protocols for social distancing, acquisition processes – from sourcing to hiring and
PPEs and hygiene. onboarding to placement – was implemented, resulting
in process efficiencies, and realising virtual hiring. Cultural
As a part of the energy conservation drive, installation transformation programmes, designed with the help of
of magnetic resonators in all furnaces was carried out. internal and external experts, focus on driving the culture of
Magnetic resonators maximise the specific contact Seven Core Values, i.e. Safety, Quality, Customer-centricity,
area between fuel molecules and inlet air for complete Trust, Transparency, Action Orientation and Boundaryless
combustion, which results in less consumption of input gas. Team. The ‘Abhivyakti’ platform is used for regular
interaction with young engineers.
Safety is monitored with both ‘proactive’ indicators –
Reported Safety Concerns (RSCs), Near Miss reporting – and

208
End Shield for the 700 MWe Nuclear Power Plant – GHAVP HMEL Bhatinda Multi-unit Turnaround by Modification Revamp and Upgrade

Risks and Concerns on shorter delivery commitments and retain its leadership
The significant demand destruction arising from the position in the market.
pandemic has weakened the financial performance of the
global refining industry. Deferment of projects / holds on Outlook
current projects / customers’ facing financial difficulties are FY 2021-22 is expected to provide higher growth in view
some of the key challenges faced by the business. However, of global economy recovery and lower base effect. It is
the business was quick to identify new opportunities in expected that the investment in renewables / biofuels may
renewable diesel projects and expand the product offering. increase further due to the legislations. A good number of
petrochemical and refinery projects are expected in China,
The resurgence of Covid-19 and its impact remains the USA, Europe, South East Asia and Middle East. LNG
a challenge. The business is closely monitoring this Projects in the USA, Qatar, Australia, Nigeria and Canada
development and is geared to take appropriate steps, in are expected to move forward in FY22.
case needed.
Domestically, the business expects new projects in the
The business continues to face foreign competition coal gasification, petrochemical and specialty chemicals
in domestic projects. To have a level playing field, it is industries. The MRU business is expected to have an
proactively working through industry associates with increased demand due to deferred investment which is
the ministries to mitigate the gaps. The anomalies in the driving revamp and modifications of existing projects.
implementation of public procurement and ‘Atmanirbhar
Bharat’, Bureau of Indian Standards (BIS) and GST by Public Nuclear projects ordering is likely to pick up in FY22 on
Sector Unit (PSU) procurement are being addressed. account of the fleet programme of NPCIL and the foreign
technology programme with technology providers such as
Further, the business has launched many improvement EDF, Westinghouse and Rosatom. However, Government
initiatives, viz. optimisation of plant layouts, cycle time needs to expedite the pace of tendering process for timely
reduction, implementation of ‘Quality at root’, upgradation procurement action.
of facilities at Hazira (West) to international standards
and extensive use of digital technology. These initiatives Digital and organisational excellence initiatives have
have helped the business to meet customer expectations accelerated the journey to be the best global Heavy
Engineering company.

209
MANAGEMENT DISCUSSION AND ANALYSIS    DEFENCE ENGINEERING BUSINESS    ANNUAL REPORT 2020-21

DEFENCE K9 Vajra-T self-propelled howitzer at Republic Day Parade rehearsal in New

Delhi

ENGINEERING The Defence Engineering operations extends across two

R&D centres, three Design & Engineering Centres, and six

BUSINESS
production centres across India:
• Submarine hull-building facility and an armoured
systems manufacturing, integration & testing facility at
L&T’s Hazira Complex (near Surat)
• Strategic Systems Complex for weapon and
engineering systems and sensors at Talegaon near Pune
• Aerospace manufacturing shops for India’s space
launch vehicle subsystems at Powai (Mumbai) and
Coimbatore
• Aerospace and missile subsystems manufacturing at
Overview: the Precision Manufacturing & Systems Complex and
Centre of Excellence for Advanced Composites at
L&T has been active in the Defence sector since the Coimbatore
mid-80s, well ahead of the opening up of the sector for
private industry participation, by associating with the • Strategic Electronics Centre at Bengaluru
Defence Research & Development Organisation (DRDO) • Modern shipyard at Kattupalli (near Chennai)
and naval indigenisation programmes. Having built a Besides these dedicated facilities, the business also
portfolio of technologies, products, systems, platforms operates a facility at Visakhapatnam under the
and solutions, the business provides design-to-delivery Government Owned Contractor Operated (GOCO) model.
solutions across chosen defence segments with a focus These Work Centres are complemented by R&D Centres
on indigenous design, development and production of at Powai and Bengaluru, and Design & Engineering
naval (submarines and warships) and land platforms Centres for submarines and warships at Powai and
(armoured systems, howitzers), weapon systems, Chennai, respectively, and a Design & Engineering Centre
engineering systems, missile & space launch vehicle for weapon and engineering equipment at Powai.
subsystems, sensors, radar systems and avionics. These
are complemented by R&D and Design & Engineering The business is structured into two strategic
Centres for targeted platforms, systems and solutions business groups (SBGs):
development. 1. Defence & Aerospace
2. Defence Shipbuilding

210
L&T has provided critical subsystems for most of India’s space missions

Defence & Aerospace located across a sprawling 980-acre complex. The

Over the years, the Defence and Aerospace (D&A) Kattupalli Shipyard is India’s largest shipyard, considering
business has built a wide range of indigenous products, just the first phase spread across 150 acres that has
systems, solutions, platforms and technologies through been operational for nearly a decade. The design and
in-house efforts as well as by teaming up with the construction of the yard is modelled to adapt global best
DRDO, and has participated in the Indian Navy’s practices, such as modular construction, construction
indigenisation programme for the development of a under covered shops, use of a ship-lift with dry and
range of engineering systems and weapon systems wet berths, etc., to enable simultaneous construction
within the country. To date, the SBG has indigenously of different classes of vessels until near completion on
developed more than 250 defence products, and more land, and then launching them through the ship-lift. It
than 50 of them have been delivered in serial production is the only Indian shipyard with Industry 4.0 practices
mode. The business model is uniquely differentiated embedded, enhancing construction efficiency, cycle time
through its focus on in-house technology and product and build quality.
development, innovation for serial production, mature A dedicated Warship Design Centre at Chennai is
and equated partnerships with global majors and equipped with the latest integrated 3D design, analysis
through-life support offerings. These enable the business and Product Lifecycle Management tools, and interfaced
to maintain its market leadership position (in the private with project management and ERP systems, in line with
sector) in an environment where the Government is global best practices.
aggressively pursuing the indigenisation agenda through
‘Atmanirbhar Bharat Abhiyan’. The Kattupalli Shipyard has been largely engaged in
new builds and refits / repairs of defence ships of the
The SBG also has a Joint Venture (JV) with MBDA, is well Indian Navy and Indian Coast Guard. Since 2010, the
positioned to indigenously offer advanced missile systems Shipbuilding business has designed and constructed 62
to the Indian Armed Forces. defence vessels and delivered 61 of them, which include
a floating dock for Indian Navy, interceptor boats and
Defence Shipbuilding offshore patrol vessels for the Coast Guard in record
L&T’s Shipbuilding business offers end-to-end solutions time. The unique capability of the business to achieve
for design, construction of defence ships and refit on-time or ahead of contractual delivery performance
services. The business owns and operates a greenfield in all the contracts for defence vessels is a benchmark
mega defence shipyard at Kattupalli, near Chennai, in the Indian shipbuilding industry. The shipyard has a

211
MANAGEMENT DISCUSSION AND ANALYSIS    DEFENCE ENGINEERING BUSINESS    ANNUAL REPORT 2020-21

Modular Bridging System

track record of delivering first-of-class vessels on / ahead favour of indigenous procurement of defence systems and
of schedule and with design and construction maturity accelerating it from the grant of AoNs to RFPs, while, on the
and in-built quality. A global benchmark was attained other hand, budget constraints have seen order deferments.
by the Yard in the sea acceptance trials of a 2130 MT While there is a significant increase (~10% YoY) in the
class offshore patrol vessel by completing the entire Defence Services Capital budget in past two years and
acceptance trials in the maiden sea sortie of the vessel to the same has been enhanced by 19% for FY 2021-22,
affirm its design and build quality. there is still a substantial gap between the Capital budget
The business does not manufacture any explosives or demanded by the Armed Forces and the amount allocated.
ammunition of any kind, including cluster munitions or anti- To bridge this gap, a non-lapsable Modernisation Fund for
personnel landmines or nuclear weapons or components for Defence and Internal Security (MFDIS) has been given prima
such munitions. The business also does not customise any facie approval by the MoF. Also, the MoD has started to
delivery systems for such munitions. demarcate funds for domestic capital procurement from
FY 2020-21 onwards (R 52,000 crore in FY 2020-21 going
Business Environment up to R 71,000 crore in FY 2021-22).
FY 2020-21 started on a challenging note, with Covid-19 Major Achievements
pandemic triggering a series of nation-wide lockdowns.
The Government’s focus on health care and social spending During the year, the business has achieved multiple
coupled with complete / partial closure of customer offices successes and proud moments, uniquely reaffirming L&T’s
/ operations resulted in disruption in business during the positioning as a ‘nation-builder’ through a series of Make-
early part of the year. However, in order to minimise the in-India successes. These include:
Covid-19 impact on the defence sector, the MoD took • New benchmarks set up by work centres in terms of
several proactive steps, such as provision for contract deliveries of OPVs, K9 Vajra-T, Combat Engineering
extension under the force majeure clause, additional time Systems, to name few, and maintenance of safety
for submission of responses to EoI / RFI / RFP, relaxation operations aided by digitalisation and automation.
in performance BGs, etc. The macro picture has been
a mixed bag over the recent years. On the one hand, • Delivery of 45 Nos. K9 Vajra-T self-propelled howitzers
the Government of India is taking substantive steps to during the year and completing the contract for 100 Nos.
promote indigenous production by building a robust All the howitzers were delivered ahead of schedule with
acquisition pipeline with preferential categorisation in zero non-conformities.

212
Offshore Patrol Vessel for Indian Coast Guard

• Successful delivery of multiple land and naval weapon extend from equipment and systems to the building of
launch systems, engineering systems and missile systems complete platforms, such as warships and submarines.
to the Indian Armed forces
The major disruption caused due to the Covid-19 pandemic-
• Delivery of 3 interceptor boats to the Indian Coast Guard, imposed restrictions was the movement of customer and
all ahead of contracted schedule, completing the contract third-party inspectors at factory premises. This challenge
of 54 Nos. Delivered OPV-6 to the Indian Coast Guard. was overcome by resorting to digital inspection for the first
With this, L&T-built Coast Guard Vessels account for time and institutionalising the same in the Indian defence
~40% of Indian Coast Guard’s operational fleet. industry. To achieve business continuity and meet key
deadlines, innovative digital technologies and processes
• The R&D and Design & Engineering teams have developed were adopted to provide through life support, training,
a range of new technologies, products and solutions with digital Quality Assurance, trial evaluation and acceptance.
a focus on emerging technologies, such as unmanned
systems across domains, Augmented Reality (AR) and Environment, Health and Safety
Virtual Reality (VR), emphasising on the uniqueness of The safety track record across work centres, customer
offerings, innovation and presence across the value chain. locations, and business partners’ premises continued to
be exemplary. The business has also implemented digital
Significant Initiatives workmen safety systems, such as RFID-based tracking
The business has identified and signed MoUs / agreements especially in confined spaces e.g. submarines and warships,
with strategic partners to enhance business opportunities as well as tagging of assets for online tracking.
both in domestic and international markets. R&D and
The business continues to focus on the triple bottom
innovation have been the backbone of the defence business
line and green initiatives. It has achieved significant y-o-y
since its inception, and the business continues to invest in
reduction in water and energy consumption, in line with
R&D to develop new-age technologies and products such
L&T’s sustainability focus.
as unmanned systems (all four domains), robotics, additive
manufacturing and Artificial Intelligence. The Shipbuilding team has received the prestigious Award
The business has been building a strong position in digital of Honour 2021 from National Safety Council of India, Tamil
design since the mid-90s and has attained proficiency in Nadu Chapter. The Coimbatore facility excelled in very high
the elements of Industry 4.0 in its multiple R&D, Design percentage usage (>80%) of green energy in operations.
& Engineering Centres and Production work centres that

213
MANAGEMENT DISCUSSION AND ANALYSIS    DEFENCE ENGINEERING BUSINESS    ANNUAL REPORT 2020-21

Anti-Submarine Rocket-launcher Lightweight Torpedo-launcher

Human Resources execution at multiple work-centres, in-house manufacturing

HR initiatives have been aligned to the overall business of critical sub-systems and vendor consolidation into
strategy by focussing on identifying and grooming high- dedicated feeder shops to address supply chain disruptions,
potential talent, critical for maintaining a competitive etc.
advantage, through various management and technology
leadership programmes. The business has implemented Outlook
unique initiatives, such as Lead Next & D-mentors, for the While the Covid-19 pandemic could impact business in the
young talent at the middle management level. Attention to short term, the disruption it created in the global supply
leadership and talent development continues as a business chain has further reinforced the importance of self-reliance
imperative. in a strategic sector like defence. The Government’s series
of reforms in the defence sector to enhance indigenisation
The business has also received the HR SCORE Award 2021 has been given a further fillip through the ‘Atmanirbhar
conferred by FICCI in association with IIM, Trichy. Further, Bharat’ initiative. A separate budget for domestic
with renewed emphasis, the business has embarked upon procurement and a time-bound Positive Indigenisation
employee engagement initiatives to retain and grow talent Initiative (import ban) for weapons / platforms is expected
and continue to be an employer of choice. to open up huge opportunities to the competent Indian
industry in the medium term. The prevailing situation at the
Risks and Concerns Line of Control has catalysed the innovative adaption of
The cyclical nature of the business affects the entire defence existing weapons / platforms for high-altitude operations
sector. To mitigate this risk, L&T has developed a bouquet of as well as development of indigenous weapons / platforms
products across the segment through in-house efforts. and has brought renewed focus on completion of trials
and accelerated induction into service. The MoD has
The primarily risk for the business is ordering delays / also announced an outlay of @ 15% or ~R 10,500 crore
deferment of orders due to complex MoD processes. (minimum) for capital purchases directly from the private
sector in FY 2021-22 with an assurance of YoY increase.
The second wave of Covid-19, which seems to be rapidly The MoD has announced significant reforms at different
affecting the major industrialised states, may once again levels as a part of the ‘Atmanirbhar Bharat’ and Make-
disrupt operations. To mitigate this business risk, the in-India visions. At the strategic level, the Draft Defence
business has chalked out strategies such as concurrent Production & Export Promotion Policy (DPEPP) has been

214
Floating Dock for Indian Navy

published, which clearly outlines the vision and roadmap The role of NSIL (New Space India Limited), a PSU under
towards achieving significant self-reliance in the defence the Department of Space (DoS), has been redefined and
sector by 2025. Defence Acquisition Procedure 2020 (DAP empowered to offload the operational activities of ISRO in
2020) was released by the Indian MoD on 30th Sep. 2020. the areas of launch vehicles and satellite production as well
The DAP 2020 aims to accomplish industry friendly, as services through private consortiums.
simplified acquisition procedures to maximise indigenisation
L&T has been a trusted industry partner to ISRO and the
within the acquisition timelines. Also, the MoD will grant a
Indian space sector for nearly five decades and has been
level playing field in naval shipbuilding and grant escalation
involved in the production of a range of hardware for all the
on long-term contracts of tenure beyond 5 years.
launch systems of ISRO, besides partnering it to develop a
Strengthening the vision of ‘Atmanirbhar Bharat’, the host of test / simulation facilities, instrument grade sensors,
Indian MoD has notified a Positive Indigenisation List of 101 as well as strategic raw material independence. The reforms
weapons / platforms that are banned from being imported. announced in the space sector will enable private sector
The embargo on import of the listed weapons / platforms companies – like L&T, which has built, and enhanced their
will come into effect gradually between December 2020 capabilities over the last few decades – to take on the
and December 2025. complete manufacture and integration of launch vehicles as
well as satellite bus manufacturing and associated services.
Contracts worth R 4,00,000 crore are expected to be placed
on Indian industry within the next five to seven years for Overall, with increased focus of Government on
the procurement of such systems / platforms covered in the indigenisation and impetus provided to ‘Atmanirbhar
first Indigenisation list. A second Indigenisation list of 101 Bharat’ initiative, business opportunities are likely to
platforms / equipment and systems has been drafted and enhance in the coming years.
put up for Government clearance to be issued in the near
future. Change in Segment Reporting
The Government has announced several reforms towards The Military Communication Business of Defence
commercial exploitation of opportunities in the space sector. Engineering Segment has been transferred with effect from
An autonomous regulatory body, IN-SPACe (Indian National April 1, 2020 to Smart World and Communication business
Space Promotion and Authorisation), has been created to and reclassified to the ‘Others Segment’.
hand-hold and promote private industry in the space sector.

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MANAGEMENT DISCUSSION AND ANALYSIS    HYDROCARBON BUSINESS    ANNUAL REPORT 2020-21

HM platform built and installed as part of ONGC’s Heera Phase III

HYDROCARBON
Development Project

Vadodara, and Chennai, and Fabrication Yards at Hazira

BUSINESS (near Surat) and Kattupalli (near Chennai). The business

has an overseas presence in the Middle East, i.e., in
the UAE (Sharjah), Saudi Arabia (Al-Khobar), Kuwait
and Oman (Muscat) as well as Algeria. International
business is served through state-of-the-art Modular
Fabrication facilities at Sohar in Oman and an integrated
manufacturing facility at Jubail in Saudi Arabia.

LTHE caters to clients across the hydrocarbon value-chain

through following business verticals:

Offshore
Overview: Lumpsum turnkey EPCIC solutions are offered to the
global offshore oil & gas industry, and encompass
L&T Hydrocarbon Engineering Limited (LTHE), a wholly wellhead platforms, process platforms and modules,
owned subsidiary of L&T, provides integrated ‘design and subsea pipelines & systems, brownfield developments,
build’ turnkey solutions for the hydrocarbon industry offshore drilling rigs (upgrade and new builds),
globally. The business executes projects for oil and gas FPSO modules, deep-water subsea manifold &
extraction and processing, petroleum refining, chemicals structures, living-quarters platforms, transportation &
and petrochemicals, fertilisers, cross-country pipelines installation services, offshore windfarm projects, and
and terminals. In-house capabilities range from front-end decommissioning projects.
design through detailed engineering, procurement,
fabrication, project management, construction, and The offshore vertical has comprehensive in-house
installation including commissioning services. engineering capabilities offering customised ‘Fit for
Purpose’ engineering solutions covering the complete
LTHE has a fully integrated capability chain across the project life cycle, from concept to commissioning, for
value chain, accentuated with in-house engineering and offshore projects. As a vertically integrated EPCIC player,
an R&D centre, world-class modular fabrication facilities, it also has in-house fabrication and offshore installation
as well as onshore and offshore construction and capability. Marine assets comprise a self-propelled
installation capabilities. Major facilities in India include heavy-lift-cum-pipe-lay vessel – LTS 3000 – held in a joint
Engineering & Project Management Centres at Mumbai, venture, and a wholly-owned pipe-lay barge – LTB 300.

216
One of three gas PDMs installed in Hasbah and Arabia Offshore, Saudi Delivered and installed two oil PDMs and associated facilities in Zuluf
Arabia Fields, Saudi Arabia

Projects in the Middle East are being pursued by of manpower and material in large volumes at
the vertical with significant thrust to localisation for construction sites and Quality / HSE systems conforming
In-Country Value benefits in the UAE, in addition to the to international practices. The business has also
already commenced In-Kingdom Total Value Add (IKTVA) invested in strategic construction equipment, a range of
programme in Saudi Arabia. This trend can multiply pipeline-spread equipment, automatic welding machines
opportunities in the region, going forward. and other plant and machinery for electro-mechanical
construction works.
Onshore
This business vertical provides EPCC solutions for a Modular Fabrication Services
wide range of onshore hydrocarbon projects covering This vertical specialises in modular fabrication and supply
upstream oil & gas processing, petroleum refining, of offshore structures and process modules, including
petrochemicals, fertilisers (ammonia & urea complexes), free-standing static equipment for oil & gas fields,
thermal systems such as cracking furnaces, cryogenic refineries, petrochemical plants and fertiliser complexes.
storage tanks and LNG regasification terminals, cross- Leveraging its modular capability, much of the on-site
country pipelines & terminals as well as coal / pet-coke work for mega jobs – such as Residue upgradation
gasification, coal-to-chemicals and crude-to-chemicals facility (RUF) for HPCL Vizag Refinery and for Sonatrach
projects. The business has a track record of concurrent South West Gas project in Algeria – are being executed
execution of multiple mega projects successfully, with at the fabrication yard.
diverse technology process licensors. Design Engineering
World-class modular fabrication facilities are strategically
Centres for the Onshore vertical offer the complete
located in India at Hazira (India’s west coast) and
spectrum of FEED, process, and detailed engineering.
Kattupalli (India’s east coast). International projects are
Construction Services served through a state-of-the-art fabrication facility at
This business vertical renders turnkey construction Sohar (Oman). The combined annual capacity is more
services for refineries, petrochemicals, chemical plants, than 200,000 MT (depending on the product mix).
fertilisers, gas-gathering stations, crude oil & gas An integrated manufacturing facility at Jubail in Saudi
terminals, and underground cavern storage systems Arabia caters to the local market and works towards
for LPG (leveraged for gas & new development such as developing local skills and supporting the In- Kingdom
hydrogen storage) and cross-country oil & gas pipelines. Value Added programme of Saudi Arabia. The business
is also equipped to supply foundations and other
Its major capabilities include heavy-lift equipment modules for offshore wind-farm projects and e-houses.
erection competency, application of advanced welding The all-weather waterfront facilities provide easy access
technologies, high levels of automation, management to clients across the globe, and have load-out jetties

217
MANAGEMENT DISCUSSION AND ANALYSIS    HYDROCARBON BUSINESS    ANNUAL REPORT 2020-21

LNG Tanks under construction for Adani’s Dhamra LNG Terminal

suitable for the dispatch of large and heavy modules via Further, with the pandemic-led lockdowns, the eventual
ocean-going vessels and barges. new norms resulted in operational challenges due to supply
chain disruptions and workforce migration that prolonged
Advanced Value Engineering & Technology the project cycles.
Services (AdVENT) LTHE quickly adapted to the new norms by reprioritising
AdVENT vertical fosters new business lines and critical activities and leveraged digital tools effectively to
technologies to make LTHE future-ready. It provides all manage remote operations. The business implemented
the in-house support required for new areas of green safety protocols across all facilities and sites by formation
energy, modular solutions, cutting-edge hydrocarbon of several small camps to minimise the spread of Covid-19,
technologies and smart differentiated solutions in the Work from Home for office employees, incentives for labour
hydrocarbon industry. Leveraging its domain knowledge to stay back at sites, quality checks through video and new
and expertise in high-end engineering based on
production / construction process / methods.
experience gained from the execution of large-scale,
technologically complex EPC projects for the business Relaxation of lockdown restrictions, curtailment of
coupled with collaborations with well-organised R&D production by OPEC and its allies from the second quarter
centres, renowned institutions, hi-tech and core-tech of the financial year resulted in the gradual recovery of
start-ups, AdVENT delivers comprehensive customer- oil demand leading to a more favorable crude oil price
centric solutions. AdVENT will also focus on new energy between USD 55 and USD 65 per barrel, which stabilised
areas, such as grey to blue hydrogen in existing refineries the capital investment climate for ongoing projects – albeit
to reduce the carbon footprint. at a slower pace. With the rebound in oil price and
increased focus by Governments to develop gas assets, E&P
Business Environment activity is expected to slowly gain momentum.
The global oil & gas industry has faced periodic downturns Despite the above challenges, LTHE maintained a healthy
in the past. However, the industry witnessed a double order backlog and remained focussed on executing ongoing
whammy – supply glut and diminished demand caused by projects resulting in better financial performance as
the Covid-19 pandemic and the resultant lowering of oil compared with its global peers.
prices to unprecedented levels. Even before the outbreak of
the Covid-19 pandemic, the industry was reeling under very Major Achievements
low crude oil price caused by over-supplies. During 2020-21, Major orders won during the year
the oil & gas industry witnessed CAPEX cuts and deferral • EPCIC contract for new Living Quarters (LQ) and revamp
of tendering and awards. Further, excess capacity pursuing at ‘NQ Complex’ (NLRNC-RT2) involving a new living
limited prospects, the competition intensified. quarters platform

218
n-Paraffin & Derivative Complex for Farabi Petrochemical Company at Yanbu, KSA

• EPCC contract from HPCL Rajasthan Refinery Limited commissioned and handed over to the customer and
(HRRL) for setting up a Petrochemical Fluidised Catalytic accolades were received from IOCL Chairman on the
Cracking (PFCC) implementation.
• Biggest EPCC contract awarded in the country in the • Adani LNG – Dhamra – Critical milestone of ‘roof air
refinery & petrochemical sector from HRRL for setting raising’ of 2 tanks was successfully achieved.
up a Dual Feed Cracker Unit (DFCU), EPCC-07 Package
(capacity: 890 KTPA) for Rajasthan Refinery Project at • Completed offshore installation of all the 3 gas
Barmer, Rajasthan Production Deck Modules (PDM) completed in Arbiya and
Hasbah fields off KSA and 2 oil PDMs in Zuluf field.
• Contracts for CMIE (Civil, Mechanical, Instrumentation,
Electrical) works for Raba and Hanya Phase 2 Field • Construction is completed for Cairn–Vedanta Mangala
Development Project as well as Mabrouk North East Field field upgradation at Barmer and final stages of
Development Project for Petroleum Development Oman commissioning are in progress.

• Fabrication Contract for supply of offshore jackets from • IOCL’s Paradip Hyderabad Pipeline Project substantially
an international customer to be executed from LTHE’s completed.
modular fabrication facility Awards and Accolades
• CMIE works at ethane facility upgrade at Juaymah NGLF • The Company was ranked second among the top 30 EPC
plant for Saudi Aramco Contractors by the Oil & Gas Middle East magazine for
securing many huge contracts from Saudi Aramco as part
Projects Completed of its ‘long-term agreement’.
• Linear Alkyl Benzene, Normal Paraffin and Speciality Oils
Unit are commissioned and under normal operation at • The Company was presented the ‘EPC-Company of the
Yanbu, Saudi Arabia for Farabi Petrochemicals Company. Year’ award by Federation of Indian Petroleum Industry
Performance guarantee test runs are completed. (FIPI).

• Achieved full production (40K BOPD) at Haliba field for Al

Significant Initiatives
Dhafra Petroleum. 72 hours plant performance guarantee LTHE has taken a three-pronged approach to better
test run demonstrated. handle the situation brought about by the onslaught of
the Covid-19 pandemic together with many business
• INDMAX Fluid Catalytic Cracking Unit (FCCU) Project challenges, such as oil price volatility, reduced investment
for IOCL’s Bongaigaon Refinery in Assam successfully cycle, energy transition, etc. Christened the PIO

219
MANAGEMENT DISCUSSION AND ANALYSIS    HYDROCARBON BUSINESS    ANNUAL REPORT 2020-21

118-km crude transit line from North Kuwait to CMM for KOC

(Protect-Innovate-Opportunise) programmes – there are concurrently, which helped in the fabrication of a jacket
three pillars to sustain long-term growth initiatives and in a record time of just 98 days at the Sohar Fabrication
identified as ‘SHIELD’, ‘DREAMS’ and ‘DHOW’. Facility. As part of improving safety and productivity, LTHE
is maximising work on the ground rather than at a height
Programme ‘SHIELD’ is aimed at protecting the existing
for the fabrication of modules. To address construction
business, prioritising its products and services currently
challenges for onshore projects that are at remote
on offer and identifying products and services that can be
locations or at congested plants, LTHE is maximising the
quickly developed and scaled to satisfy the transforming
modularisation at yards.
market. It aims to attract new customers and geographies
with innovative ideas and deep focus on stepping-up the Programme ‘DHOW’ focuses on transforming the
business development activities, and develop localisation organisation to attract clients to support their efforts in
plans in the countries which are core to LTHE’s growth the upcoming energy transition in areas such as green
agenda by offering smart solutions. hydrogen, decarbonisation, biofuels and the circular
economy. Digitally-enabled O&M is also identified as an
Programme ‘DREAMS’ focuses on efficiency and
adjacency to its existing business capability to be one of the
speed in operations. The most significant action under
future growth engines.
DREAMS is the initiative called SESA (Simplify, Eliminate,
Standardise and Automate) which drives digital solutions, LTHE is also actively engaging with various R&D Centres and
productivity enhancement measures at fabrication yards start-up companies to develop emerging technologies and
and construction sites and knowledge management and create differentiated solutions.
capability development.
Environment, Health and Safety
As a part of Digital Transformation, LTHE continues to LTHE had taken preventive control measures to overcome
focus on the areas of Smart Collaboration & Augmented the effect of Covid-19 and safely delivered more than 32
Reality, Industrial Internet of Things, Enterprise-wide Project million man-hours at a stretch across various projects in
Lifecycle Management programme (EPSILON) and Predictive domestic and international markets, including the modular
Analytics to enhance efficiency in operations. fabrication yards.
LTHE has embraced the culture of productivity and quality For effective implementation of the HSE management
enhancement at yards as well as construction sites. These system uniformly across the business verticals and
include automated welding, extensive use of jigs & fixtures strengthening the safety culture, LTHE consolidated all its
as well as assembly line concept, full kitting, and serial operations under a single ISO Certification for ISO 14001
production technique for fabricating multiple jackets and 45001.

220
Onshore process and pipe rack modules being dispatched from MFF Kattupalli

The digital platform is used to facilitate online incident at Saudi, HURL for achieving 19 million safe man-hours at
reporting and investigation, pilot electronic permit to work Sindri and 17 million safe man-hours at Barauni.
at four locations and remote HSE assurance audit.
Human Resources
To strengthen compliance to the HSE system and raise L&T Hydrocarbon Engineering focuses on acquiring and
awareness, LTHE conducted management walkthroughs, grooming a unique and diverse set of talent, with the right
both virtual and physical, to emphasise monitoring attitude.
performance at fabrication yards and project sites, HSE audit
reporting, mock drills, safety meetings, continuous training To inculcate a culture of driving continuous career
in HSE practices and webinars. opportunities of internal talent, LTHE has initiated a career
planning architecture for the sustainable growth of its
LTHE bagged eight domestic and three international awards employees, with more emphasis on the top talent. Specific
in recognition of best performance under the category of programmes for Resident Construction Managers (RCM)
Health, Safety and Environment, e.g.: and Young Fabrication Professionals (YFP) are designed
• NSCI (National Safety Council of India) ‘Shreshtha to develop construction and yard professionals. As a
Suraksha Award – Silver’ for HPCL FCHCU Project commitment to create a highly engaged workforce, LTHE
actively communicates through multiple forums such as
• CII-SR EHS Excellence Awards-2020 with 4-Star Rating Town Hall sessions and Fireside chats. LTHE always tries to
under Infrastructure Construction Category inculcate a culture of appreciation through various reward
and recognition interventions. The ‘I-TOO’ recognition
• ICC (Indian Chambers of Commerce) Platinum Award in
framework, annual ICONS, Long Service Awards, Talent
Oil & Gas sector under Large Enterprises
Champions, Counselling & Well-being support, and a
• Frost & Sullivan’s Safety Excellence Award 2020 – MFF bouquet of custom-designed calendared interventions are
Hazira cascaded across the organisation to the most remote sites
with the aim of enhancing employee motivation. LTHE
• ASSP (American Society of Safety Professional) HSE is committed to improve the gender balance across all
Excellence Award for the KOC TL- 05 and Aramco Hasbah functions and levels.
Projects
As the Covid-19 pandemic brought uncertainties and extra
In recognition of achieving critical project HSE milestones stress in both personal and professional lives of employees,
and best HSE performance metrics, LTHE also received 17 LTHE engaged with employees at various levels by frequent
recognitions from various customers such as Farabi for interventions from senior leadership and CEO and across
achieving 31 million safe man-hours in the Paraffin project leadership strata to ensure engagement. LTHE ensured

221
MANAGEMENT DISCUSSION AND ANALYSIS    HYDROCARBON BUSINESS    ANNUAL REPORT 2020-21

Convection modules built at MFF Hazira for HMEL Cracker Furnaces Project

medical assistance on 24x7 basis by arranging doctors and templates incorporating global best practices and
ambulances for about 25000 staff and workmen. Also, procedures.
LTHE made arrangements in co-ordination with Government
departments and embassies to evacuate employees
Outlook
stranded in foreign countries. In India, the Central Government, is planning to spend
around R 7,50,000 crore to build oil and gas infrastructure
Risks and Concerns over the next five years. For the FY 2021-22, the Union
Cost-competition is becoming challenging and is further Budget has proposed a capital outlay of R 1,04,870 crore
accentuated by increasing the in-country value for for oil and gas companies. ONGC’s capex guidance for
localisation in some of the regions where the business has FY 2021-22 would once again normalise to the historical
a presence. LTHE is focussing on meeting the localisation average of R 32,000 crore for the offshore segment.
requirements in an optimal way.
The present share of natural gas in the energy mix of the
Typical risks in the EPC business are stiff contract conditions, country is 6%. The Government’s aim is to increase it to
tight schedules, counter-party risks, currency and 15% by 2030 which will bring in significant investment in
commodity exposures, vendor defaults, delay in material developing gas infrastructure, LNG regasification terminals,
delivery, QHSE, productivity, etc. The risks are mitigated pipelines (~ 14,700 km) and city gas distribution.
through specific actions, such as strong contracts and claims
Refining capacity is likely to increase from 250 MMTPA
management process, assigning strong project management
to 400 MMTPA by 2030. IOCL Panipat (from 15 to 25
teams at the pre-bid stage, operational excellence initiatives,
MMTPA), IOCL, Gujarat (from 13.7 to 18 MMTPA) and NRL
strategic partnerships, non-negotiable QHSE compliance,
(from 3 to 9 MMTPA) are planning to expand their capacity.
taking derivative covers to hedge foreign currency and
A 9 MMTPA grassroot refinery is also planned by CPCL and
commodity fluctuations.
IOCL at Nagapattinam.
Covid-19 had an unprecedented impact on business
Petrochemical demand is growing at a CAGR of about
operations. LTHE mitigated the risk with well-prepared
7.5% (~1.2 MMTPA) and this will drive investments in
plans deployed across locations, work and safety protocols,
refinery-petrochemical integration and Oil to Chemical
knowledge sharing and monitored continuously in a
(O2C) / Crude-to-Chemicals (C2C) projects. India is also
structured manner by the crisis-management team.
planning to convert 100 MT coal into gas by 2030 which
The risk management policy and guidelines have facilitated will lead to projects for coal to fertilisers / coal to methanol.
the creation of a consistent set of standard tools and

222
3-D rendering of ExxonMobil Serpentina H2S Management Project

In the Middle East, investments in Saudi Arabia are reviving The Covid-19 pandemic has fast forwarded the clean energy
and capital projects with investments in the range of USD transition across the world. Hence the capital allocation
17 billion for offshore and onshore projects in Zuluf and is likely to be diverted from fossil fuels to push new
Safaniya fields are expected to be tendered in the upcoming developments in renewable energy. However, it is also likely
period. to increase spend on de-bottlenecking facilities, brownfield
upgrades, enhanced oil recovery and similar projects to
While in the UAE, ADNOC remains committed to its 2030
enable oil & gas companies to maintain production levels in
Smart Growth Strategy of increasing its oil production
otherwise depleting extraction wells.
from 4 mbpd to 5 mbpd, though simultaneously focussing
on hydrogen and renewables. Business opportunities are E&P operators are diversifying into renewables. Rapid
expected from Qatar, which is investing in increasing its electrification of automobiles as well as the use of hydrogen
leadership as the largest gas producer in the world, and is as a fuel is gathering pace and traction. While coal may be
also restoring its diplomatic ties with Saudi Arabia and UAE. the least preferred followed by oil, natural gas will continue
as the transition fuel during this shift to renewables.
Other markets in South East Asia, such as Vietnam, are
expected to continue developing gas-based projects. LTHE LTHE will continue to expand its bid pipeline and explore
is looking for new geographies in the Far East, such as new clients and new markets for its existing business and
Mongolia. In Algeria, Sonatrach plans to invest USD 40 is building capabilities to address opportunities arising out
billion over next five years. LTHE is currently executing a of new businesses. Operations & Maintenance (O&M) and
mega project for Sonatrach and will focus on upcoming New Energy Transition have been identified as the future
opportunities. growth engines. LTHE is positioning itself to offer integrated
Power-to-X solutions across the hydrogen value chain
The US market has opportunities for the Modular
from technology, production, storage, and distribution of
Fabrication Yard for modules for LNG, carbon capture &
derivatives such as ammonia and methanol.
storage, petrochemicals and offshore windfarm segments.

223
MANAGEMENT DISCUSSION AND ANALYSIS    IT & TECHNOLOGY SERVICES    ANNUAL REPORT 2020-21

LTI Headquarters, Powai, Mumbai

IT & TECHNOLOGY and deliver value to their customers, employees and

SERVICES shareholders.

The business has a strong presence in each of the

following verticals:
• Banking and Financial Services
• Insurance
• Manufacturing
• Energy and Utilities
• Consumer Packaged Goods (CPG), Retail and Pharma
• Hi-Tech, Media and Entertainment

L&T INFOTECH The business has offerings across the following service
lines:

Overview: • Application Development & Maintenance and Testing

L&T Infotech (LTI) is a global technology consulting and • Enterprise Solutions
digital solutions company helping more than 420 clients
• Infrastructure Management Services
succeed in a converging world. With operations in over
30 countries, the business goes that extra mile for its • Analytics, AI & Cognitive
clients, and accelerates their digital transformation.
• Enterprise Integration & Mobility
Founded in 1997 as a subsidiary of Larsen & Toubro
Limited, its unique heritage gives it unrivalled real-world
expertise to solve the most complex challenges of Business Environment
enterprises across all industries. Each day, the team of FY 2020-21 has brought in an unprecedented change
more than 34,000 LTItes enables clients to improve the in LTI’s operating model in the light of the pandemic. In
effectiveness of their business and technology operations these unusual times, the primary focus at LTI has been on

224
LTI Command Centre, Johannesburg

employee safety and safeguarding the business interests of solutions around Know Your Client, Anti-Money
clients. Laundering and other regulatory requirements have
been key drivers for IT spend as well.
NASSCOM’s CEO survey pointed out that digital
transformation deals have seen a 30% jump since the b) Insurance: The pandemic and other catastrophic
pandemic. There is a clear shift in focus from legacy / cost losses, such as those caused by hurricanes and wildfires,
optimisation to front-end customer experience. The top impacted many insurers. With increased exposure, the
three tech priorities are cloud, advanced analytics and cyber lowest-ever interest rates, and increasingly sluggish
security. economic conditions, insurance companies faced
significant economic challenges. Digital spend, however,
However, with growth coming back, access to capability and continued to be prioritised by insurers, with Covid-19
right skills will need more focus as well. As organisations forcing companies to quickly adopt remote and digital
move from services to platforms, build of new business ways of working. In addition to an increased focus on
models and fast- track inorganic growth, new talent expense management, insurers are likely to prioritise
capabilities will be in demand. digitising core services, aligning and reimagining
insurance products to the ‘new normal‘, and hardening
The vertical-specific, key trends observed are as follows: the organisation against newly exposed cybersecurity
concerns and regulatory challenges.
a) Banking and Financial Services: IT spending of
the Banking industry in the digital space has largely c) Manufacturing: This sector includes Industrial
been resilient. The pandemic has accelerated digital Manufacturing, Automotive & Aerospace and was one
transformation to enable enhancement of straight of the most impacted by the pandemic during the early
through processing and improvement of operational part of the financial year. With many manufacturing
effectiveness. Banks are also dealing with Covid- facilities shutting down due to Covid-19, cost
19-induced buying behaviour and unprecedented containment became a top priority and led to reduced
liquidity in the economy due to massive global stimulus IT spend initially. The sector saw a smart recovery
programmes. As a result, technology investment in during the latter part of the year as factories and supply
lending and wealth products is seeing a significant chains opened up and started to work in innovative
surge. Banks in some regions were also hit by challenges ways. Companies in the manufacturing sector have
of money laundering and cyber security. Hence, realised that digital operating models will be the key to

225
MANAGEMENT DISCUSSION AND ANALYSIS    IT & TECHNOLOGY SERVICES    ANNUAL REPORT 2020-21

Mosaic Experience Centre, Powai, Mumbai

future growth e.g., direct-to-customer and subscription and receptive supply chain. As a result, R&D and
revenue models, as opposed to distributor and product- Manufacturing functions took precedence to accelerate
sales led models. Therefore, digital transformation time-to-market and build scale at push-button speed.
will take on greater urgency and will drive capital AI-driven R&D to expedite drug discovery, personalised
spend, both in deploying new digital business model medicines by predicting individual disease trajectory,
capabilities as well as in overall digital infrastructure and digital supply network and connected patient experience
readiness. are some of the top-of-mind business priorities. Security
and compliance also remained as key considerations in
d) Energy and Utilities: This sector was one of the most accessing patient information.
impacted due to a combination of Covid-19 and the
fall in commodity prices. Recovery is tepid, and spends f) Hi-Tech, Media and Entertainment: The shift
continued to be impacted. Going forward, improved to working from home with the help of digital
macro-economic conditions as well as full-scale collaboration tools is likely to drive demand for hi-tech
vaccination efforts across the world should aid recovery companies. To support this shift, a growing need for
in demand in the oil & gas space. Utilities have bounced infrastructure, like cloud computing for business or
back to near normalcy, showing good growth rates. increased broadband consumption for consumers, will
be much sought after. Media companies will continue
e) Consumer Packaged Goods (CPG), Retail and to make heavy investments in digital technologies and
Pharma: The CPG and Retail space witnessed focus on faster delivery of digital products by leveraging
renewed focus on omnichannel experiences and digital global delivery model. Apart from investing in building
investments focusing on online and physical stores for video streaming platforms, there will be considerable
seamless home-based shopping. The pandemic ensured focus on applying AI/ML technologies in the area of
a higher push for consumer connect and optimising B2C content discovery and content management.
business models by investments in digital commerce
capabilities, driving hyper-personalised customer Major Achievements
experiences with low touch mechanisms and using
During the year, LTI further strengthened its partnership and
new-age technologies like AI/ML.
alliances ecosystem. Key achievements include:
In the pharma industry, the focus is on fast-tracking
• LTI became an Elite Services Partner of Snowflake, the
drug discovery for vaccines and building a robust
Data Cloud company. LTI also became the maiden partner

226
LTI Delivery Centre, Mahape, Mumbai

for Snowcase, a programme that Snowflake is launching dissemination of data as information, case management
to develop and market industry-specific solutions to and fraud management using artificial intelligence.
accelerate the cloud data transformation journey of
enterprises. c) A UAE-based leader in digital transformation has
selected LTI as its partner of choice to provide
• Elevation of LTI to ‘Premier’ partnership with Google infrastructure and application operations support and
Cloud maintenance for its existing and new customers. As part
of the deal, LTI will also partner with end customers on
• ‘Platinum’ partnership with IBM, and their journey to cloud and transform operations to bring
in best-shoring and automation.
• ‘Elite’ partnership with ServiceNow
d) A Global Fortune 500 energy company has chosen LTI as
During the year, the Morgan Stanley Capital International
its primary partner for an application managed services
Index (MSCI) included LTI as part of its Global Standard
agreement to create and consolidate a business-aligned
Indexes. LTI was also recognised as one of the top 5 IT
IT services delivery platform across the organisation and
brands in India as well as one of the Top 100 brands in the
reduce the total cost of ownership.
country as per the ‘India 100 2020’ report by Brand Finance,
an independent brand valuation consultancy. e) LTI has been chosen as a long-term strategic partner in
a vendor consolidation deal for management of core
Large Deal Wins insurance platforms for a large Fortune 500 insurance
a) A UK-based wealth management firm has selected LTI company.
for a multi-million, multi-year deal to provide remote
infrastructure support, modern cyber security services f) A leading regional bank, a new logo, selected LTI for
and migration to IBM Power Cloud from their legacy a core banking transformation programme involving
wealth management platform. implementation of Temenos.

b) LTI has been selected by a key Government ministry Awards and Recognition
for large data and analytics led transformation deal.
LTI was recipient of several awards, key of which are:
As part of the deal, applications and operations will
be transformed and developed for collection and a) LTI ranked #1 in the Institutional Investor’s 2020 All-Asia
Executive Team survey, across all sell-side categories in

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MANAGEMENT DISCUSSION AND ANALYSIS    IT & TECHNOLOGY SERVICES    ANNUAL REPORT 2020-21

LTI Welcome Centre, Powai, Mumbai

the Technology / IT Services & Software space. It was the h) LTI was ranked among the top 50 companies (Rating
only IT Services Company to be included in the ‘Most- ‘A’) in the Business World India rankings for Most
Honored’ List 2020. Sustainable Companies 2020.

b) LTI topped the list of ‘IT Services Challenger 2021’ in i) LTI has been recognised as a Great Place to Work-
Everest Group’s PEAK Matrix Service Provider of the Year Certified™ Company in the USA.
TM Awards.
Significant Initiatives
c) Forrester Research recognised two key LTI product
The year gone by has made it apparent that organisations
offerings — Leni and Mosaic in its report on Tech
need to reimagine their operating models and embrace
Tide™: Enterprise Business Insights and Analytics, Q1
digital transformations to ensure that they remain relevant.
2021.
It is no longer the preserve of only large companies and
industry leaders but has become a necessity for companies
d) Information Services Group (ISG) has named LTI a Leader
of all sizes.
in Artificial Intelligence for IT Operations (AIOps) – Mid
Market in their 2020 ISG Provider Lens™ Intelligent
LTI’s Go-to-Market strategies around Digitising the Core,
Automation – Solutions and Services report for the US.
Operate to Transform, Data-driven Organisation and
Experience Transformation are finding even greater
e) LTI was recognised as a Leader in the ISG Provider
resonance with clients in their journey to new operating
Lens™ Digital Business – Solutions and Service Partners
models.
Report, US 2020.
During the year, LTI launched ‘The Grit Alliance’ framework
f) LTI recognised as Leader and Star Performer in Everest
to programmatically help clients navigate the ‘new normal’.
Group’s Application and Digital Services in Capital
Leveraging LTI’s strengths and IP to co-create material
Markets PEAK Matrix® Assessment 2021.
outcomes, the approach involves analysing client functions
across their core (product development, manufacturing,
g) LTI recognised as a Leader and Rising Star in the ISG
supply chain, sales & marketing, etc.) as well as
Provider Lens™ Next-Gen Private/Hybrid Cloud – Data
foundational functions (finance, corporate functions, shared
Center Services & Solutions Report, Nordics 2020.
services, HR) and tech enablers to bring about efficiencies
across the board.

228
LTI Delivery Centre, Whitefield, Bengaluru LTI Delivery Centre, Hinjewadi, Pune

Based on the convergence of market trends and the LTI has partnered with Temenos, the banking software
capabilities built by LTI, two areas emerged as huge company, to launch a Digital Banking Platform, powered
opportunity areas: the cloud business – including the work by Temenos technology. The platform will modernise
done in partnership with the Hyperscalers such as Amazon legacy core banking systems in the Nordic region, enabling
Web Services (AWS), Azure & Google Cloud Platform (GCP) financial institutions to be more agile and scalable while
– and the data products business with LTI’s market-leading reducing operating costs. The partnership heralds a new
platforms and products, viz. Mosaic and Leni. LTI is setting era for Nordic banks as it brings together LTI’s expertise
up units which will be dedicated and focused on building in the domain and its deep understanding of Temenos
these businesses. These units will be a key investment area functionality and advanced cloud-native, cloud-agnostic, AI
in terms of sales, marketing, alliances and capability build. and API-first technology solutions, enjoyed by over 3,000
banks in over 150 countries.
LTI’s xFH or Everything from Home framework is brought
to life by ‘LTI Canvas’, a curated platform consisting of LTI Human Resources
solutions, Microsoft technologies, and select third-party
In response to the Covid-19 outbreak, LTI swiftly enabled
tools. It is designed for a workforce to collaborate and
the work-from-home option for almost all of its employees,
deliver excellence remotely. LTI Canvas is a modern software
ensuring their safety and well-being, while maintaining
engineering platform which uses AI to nudge the right
the continuity of operations. xFH or Everything from
set of behaviour and collaboration. It harnesses data
Home framework helped smoothen the transition for all
generated from across the lifecycle – such as user stories,
employees.
code, test cases and defects to provide insights for software
development and to predict outcomes for effective decision
A global helpline and email address were set up to answer
making.
questions about Covid-19. An internal portal was set
up which acts as a one-stop destination for accurate
LTI launched an app for return-to-workplace, LTI
information and guidelines about the Covid-19 situation.
SafeRadius. It helps ensure workforce well-being and
LTI’s An AI-Powered Chatbot, through which employees
enhances operational efficiency. The app provides rich and
could share their concerns and give feedback, was also
intuitive operational risk analysis by recording, processing,
launched during the year.
integrating and presenting data from various sources
within and outside an organisation to construct a robust
The LTI culture is one of inclusivity and transparency. A
incident management process to help control the spread of
gender-inclusive workforce is a natural result of this outlook,
Covid-19.

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LTI Delivery Centre, Warsaw, Poland

which is deeply woven into its ways of working. This year, behavioural and leadership skills. It provides access to a
LTI has become a signatory to the United Nations Women’s wide range of courses from the best content and learning
Empowerment Principles (WEPs). Programmes such as providers in the world. Participants are able to track, share,
‘Revive with LTI’ for women, networks such as ‘Women for curate and measure their learning from any source, such
Women’ and zero tolerance for harassment corroborate the as live and online courses, articles, blogs, videos, podcasts,
commitment to diversity. work experience, skills, and events.

LTI’s workforce also includes employees from several In the area of succession planning, LTI developed a job
nationalities, spread across the globe. To further strengthen family articulation strategy, which defines the entire lifecycle
this, an initiative ‘Project Plus’ has been put in place and of an employee’s career progression. For leadership roles, LTI
is aimed at increasing the proportion of local talent in launched programmes that cater to mentoring and talent
the workforce. As part of this project, students from local identification across multiple levels. These individuals attend
academic institutions are recruited. This helps LTI to foster guided sessions to expedite their transition into senior
a more diverse workforce that is not only competent, but leadership roles. There is an exclusive mentoring programme
also well-versed with the markets in which the business under the guidance of the respective CXOs, which follows
operates. a three-pronged approach based on the expansion of role,
leadership behaviours and perspectives about the macro
LTI did not delay the joining of any new hires, including and micro areas of business. These initiatives strengthen the
trainees, and addressed all their queries and concerns succession pipeline, while also creating an opportunity to
through correspondence and specific induction calls. To fulfil leadership requirements from within the business units,
better prepare the new workforce to manage their tasks thus supporting employees in pursuing their desired career
efficiently in these times, a ‘Remote Working Module’ was paths.
incorporated in the curriculum.
Risks and Concerns
During the year, LTI launched LTI Shoshin School whose
Client relationships are at the core of the business. The
overall framework is centred around creating an ecosystem
Company enjoys a history of high client retention and
that brings multiple learning content together and provides
continues to derive a significant proportion of revenue from
a standardised learning experience, thereby promoting
repeat business built on the successful execution of prior
a culture of continuous learning. This platform offers a
engagements. Also, efforts are on to expand the client
single window of learning options for technical, functional,

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Mindtree West Campus, Bengaluru

base and geographies, as well as increase the value-add of Outlook

deliverables. According to NASSCOM’s CEO survey 2021, about 71%
chief executives expect global tech spend to grow over 4%.
The major risks faced by the business include failure to The survey also said the recovery in global tech spending
align the services portfolio with newer and in-demand will be led by the digital segment. For the calendar year
technologies. A technology architecture group has been 2021, core tech spending growth will include increased
created to ensure continuous skill alignment with market digital adoption and ‘work-from-anywhere’ enablement.
needs. Evolving geo-political and economic conditions may
affect the client’s business, which is regularly monitored. Cyber Security Risk has emerged as a top risk across
industries. LTI has leveraged leading industry standards
Due to mobility and travel restrictions during the pandemic, to develop appropriate cyber security frameworks.
onsite resource posting has been a challenge. This has been Multiple Cyber Security controls are introduced to manage
mitigated by greater acceptance from clients on offshoring. these risks. There are also massive opportunities on
improving resilience, changes related to new operating
The business carries translation and transaction foreign models, direct-to-consumer interactions and workplace
exchange risks, as a majority of the revenue is denominated modernisation. Based on the strength of client relationships,
in foreign currency. However, expenses in respective value propositions to customers and ability to innovate, the
currencies provide a natural hedge, and coupled with a business remains committed to deliver top quartile growth
proper hedge strategy, help mitigate the risk. in FY22 as well.
Being an IT company, employees remain the prime asset.
The ability of an organisation to attract and retain skilled MINDTREE
employees is critical. Attrition of experienced and talented
employees impacts organisational knowledge and client
relationships. LTI has a framework in place to reward Overview:
high-potential employees and has launched innovative Mindtree is a global technology consulting and services
programmes for employee engagement, which helps the company, helping enterprises marry scale with agility to
organisation to contain attrition. achieve a competitive advantage. ‘Born digital’ in 1999,
Mindtree applies its deep domain knowledge to break
down silos, make sense of digital complexity and bring

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MANAGEMENT DISCUSSION AND ANALYSIS    IT & TECHNOLOGY SERVICES    ANNUAL REPORT 2020-21

The Sundial at Mindtree Kalinga – Bhubaneswar

new initiatives to market, faster. Mindtree enables IT business brings together emerging technologies with
to move at the speed of business, leveraging emerging legacy, Mindtree continues to expand horizons and
technologies and the efficiencies of Continuous Delivery create new possibilities for its clients.
to spur business innovation. Operating in 24 countries
Core modernisation & cloud migration: Businesses
worldwide, Mindtree is consistently regarded as one
have learnt the significance of being lean and nimble.
of the best places to work, embodied every day by its
Mindtree’s approach to deliver value on clients’ cloud
winning culture made up of over 23,000 entrepreneurial,
investments are focused on delivering value across
collaborative and dedicated ‘Mindtree Minds’.
the cloud lifecycle from consulting to migration and
Mindtree works with its customers in driving their operations. Mindtree’s investment in Next-generation
transformation through Digital Engineering Services, platforms brings in modernisation and efficiency to its
enabling a shift from Enterprise IT to Product IT delivery.
Operating Model. The business brings together a
Pervasive AI and Applied Intelligence: Customers
unique integrated approach across Agile, DevSecOps,
continue to invest in digital transformation, along with
Automation and Programme management to deliver
capturing, organising and gaining intelligence from
success for its clients. Mindtree’s work includes enabling
data. The ubiquitous availability of networking and data
comprehensive change for customers across organisation
has fueled augmented and automated decision-making
structure, culture and ways of working that value
using advanced Machine Learning (ML) and Artificial
customer obsession, agility and a growth mindset, above
Intelligence (AI) models with a focus towards process
all else.
re-imagination.
Digital Engineering: Mindtree works with its
Automation: In the pursuit of making automation
customers in driving transformation through Digital
all-pervasive across the organisation, Mindtree has
Engineering Services. This approach brings together a
implemented the practice of automation maturity model
unique integrated approach across Agile, DevSecOps,
assessments for all its clients’ projects. In the process,
Automation and Programme management to deliver
Mindtree is establishing a standard for automation
success for its clients.
maturity assessment in the industry and has defined a
Immersive experiences: Mindtree has always been at five-point scale to assess the maturity level spanning
the forefront of digital transformation for its customers from task-level automation at the initial level and taking
and, with the launch of ‘Immersive Aurora’, where the it to the level of predictive and adaptive automation.

232
Mindtree, Minneapolis

Alliances and Partnerships • Google

Mindtree works in an inherently competitive market that Mindtree is a Premier Google Partner for Google
is evolving at an unprecedented rate due to advances Cloud Platform (GCP) and offers its clients a complete
in technology and customer demands. At Mindtree, spectrum of Google cloud services that include big
the idea of collaboration and partnership is to deliver data services, cloud migration and transformation,
appropriate technology solutions to new and existing application development, data science, artificial
clients that result in better business outputs and intelligence, and machine learning services.
outcomes.
• SAP
Mindtree’s key partner relationships are: Mindtree and SAP have been strategic partners since
2008. Today, the relationship is even stronger due
• Microsoft to Mindtree’s 2015 acquisition of Bluefin Solutions,
Mindtree has been recognised as a Microsoft Azure a Gold Partner and considered one of SAP’s go-to
Expert Managed Service Provider (MSP), signifying HANA innovation partners. Mindtree’s Bluefin deploys
its expertise in cloud services, assuring Microsoft cutting-edge enterprise solutions around the world.
customers they are working with a trusted partner for
the support of Azure implementations. • ServiceNow
Mindtree’s strategic partnership with ServiceNow spans
• Amazon Web Services (AWS) programmes such as Sales, Services, Service Provider
Mindtree is an Advanced Consulting Partner in the and Technology Partner Programme. Other than ITSM,
Amazon Partner Network (APN) for Amazon Web ServiceNow Practice will focus on other platform
Services. Together, the businesses have helped several capabilities such as ITOM, IRM, SecOps, ITBM, HRSD,
enterprises to successfully migrate to the cloud. CSM and custom application development.

• Adobe • Salesforce
As a Platinum-level Business Partner, Mindtree brings As a Salesforce Platinum partner, Mindtree taps into
domain experience, expertise in Adobe experience the transformational potential of Salesforce to change
cloud and capability to scale globally. the way the business runs through Magnet360.

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Mindtree Digital Pumpkin, London

Business Environment • Re-defining business to grow revenue, introduce new

The coronavirus pandemic has continued to wreak havoc business models, increase wallet share and achieve faster
on world economies through 2020. With the launch of time-to-market.
vaccinations across the globe, the outlook appeared to be • Re-imagining business by focusing on customer
picking up, which again is expected to be marred slightly retention and revenue sustenance by focusing on value-
by the emergence of more virulent strains of the virus. led engagement through enhanced experiences.
Through the struggle, technology has turned out to be a
lifeline, changing the way individuals work, learn, shop, and Key Initiatives
entertain themselves.
During the year, Mindtree looked at the buying patterns
It has spurred game-changing digital shifts. Governments of its clients and accordingly created the nomenclature
moved quickly, using mobile solutions to provide cash and realigned its focus areas into the ‘4x4x4’ – 4 Industry
assistance, financial technology has helped the survival, Groups, 4 Service Lines and 4 Geography Clusters. This
and in some cases, growth, of small and medium-sized helps sharpen focus, capabilities and solution offerings,
businesses. and create a differentiated value proposition. It also helps
clients consume services seamlessly and provides Mindtree
The Indian IT industry made up 18.5% of the total global opportunities to cross-sell and up-sell more effectively.
IT spend in year 2020. For FY 2020-21, India’s technology
industry is expected to record a positive growth of 2.3% Major Achievements
to touch $194 billion (excl. ecommerce). Indian tech
contributed ~8% relative share to the national GDP, with Key Deal Wins
52% relative share in services exports. Mindtree is seeing very good traction with the deals and has
been winning annuity and multi-year large-deals across all 4
As the events of last year unfolded amidst significant verticals. A few of them are given below:
uncertainty, businesses have learnt the significance of
being lean and nimble, while also prepared to seize growth • A leading global wind turbine manufacturer has
opportunities quickly. concluded a five-year deal to drive its digital
transformation journey. Mindtree will simplify, modernise,
In this journey, core modernisation and cloud play and transform the entire IT landscape of the client
foundation roles. Businesses are adopting cloud to fulfil the globally, while providing scalability to support the
following objectives: company’s growth plans.

234
Immersive Aurora, Mindtree East Campus, Bengaluru

• Mindtree partnered with a large global airline, as a • ASSOCHAM Foundation – Diversity and Inclusion
strategic technology partner, to enhance consumer Excellence Awards 2020
experience on mobile digital platforms.
• AHA 2020 – Young HR Professional Award, AHA 2020 –
• A world-leading sportswear brand selected Mindtree as a Leading Change, AHA 2020 - Making a Difference
strategic partner for a multi-year engagement to provide
application development services to accelerate their • National HRD Network – People First Ace Awards 2020 –
journey towards a product-led and outcome-oriented Workforce Planning and Staffing Solutions, National HRD
organisation. Network - People First Ace Awards 2020 – Organisation
Design
• Mindtree has been selected by a US-based diverse
insurance and reinsurance provider to provide end-to- Environment, Health and Safety
end IT Infrastructure Management and cloud services,
Over the last few months, everyone has had to adjust to the
resulting in enhanced efficiency and speed of business
‘new normal’ due to the outbreak of Covid-19. Measures
standardisation.
taken for the safety of Mindtree’s employees include:

Awards • Exclusive tie-ups with hospitals and lodges – arranging

Mindtree has been conferred the second runner-up position ambulances, ventilators, Covid beds, online doctor
in the ‘Best Employer for Women’ (large) category by consultation, Covid super top-up insurance covering
the Associated Chambers of Commerce and Industry of home quarantine expenses, counselling session for
India (ASSOCHAM) at its Diversity & Inclusion Excellence employees and dependents.
Awards and Conclave, 2020. Mindtree has also received
Business World’s 5th HR Excellence and the Award 2020 for • Social distancing and other strict hygiene / disinfectant
excellence in Diversity & Inclusion. / fumigation norms have been implemented across all
campuses.
Other noteworthy mentions are:
• 1-to-1 help programme provides counselors and
• Rotary Karnataka CSR and NGO Award professionals that employees can reach out to for 24/7
support anonymously. The Company partnered with an
• SHRM Showcase Award 2020 – Excellence in HR Analytics
external vendor for extensive support during Covid-19,

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Phase 5, Mindtree West Campus, Bengaluru

and was also able to make forums available to employees 4575 new joinees were virtually on-boarded globally,
for any assistance, such as wellness coaching, webinars, including subcontractors.
1-to-1 counselling, self-help library, eWorkshops, online
chat and assessment tools. • Mindtree’s diversity and inclusivity charter focuses on four
pillars which is EDGES – Ethnicity / Nationality, Disability,
Human Resources Gender and Sexual Orientation. At Mindtree Inclusion is
Respect | Belongingness | Empowerment | Progress.
Mindtree has a proud and unique culture and people
practices. The business seeks to bring together people
• At Mindtree, the women composition ratio has steadily
with different views, skills, and backgrounds. The business
increased and has doubled in last 15 years. Mindtree’s
recognises people as its greatest assets. Over the last few
vision of 40x30 is to have 40% of women representation
months, everyone has had to adjust to the ‘new normal’
by the year 2030. Further Mindtree has 44 people with
due to the outbreak of Covid-19. At Mindtree, the
disabilities who contribute to its success and employees
immediate task at hand was to ensure that all processes
from 86 nationalities coming together to deliver customer
continue smoothly. Prominent measures are below:
success.
• Crisis Management Teams were set up to support
• Mindtree launched ‘The Crucibles of Leadership’
Mindtree’s employees and projects. Remote support BCP
responsible to drive competency development for senior
was enabled immediately for all. The Work From Office
leadership.
approval process and self-declaration form (SDF) process
was automated.
Risks and Concerns
• A virtual Leadership Connect called ‘All Minds Meet’ Mindtree has put in place a robust enterprise-wide risk
was set up on a quarterly basis across geographies. This management framework that enables the identification,
hour-long session included updates from the CEO, COO assessment, treatment, monitoring and reporting of
and CPO, followed by a Q&A round. potential internal and external risks while pursuing business
objectives.
• This year, Mindtree took several steps to strengthen the
campus intake process. 1250 on-campus hires from 25 The advent of Covid-19 has led to several immediate shifts
colleges were hired. Arboretum, an onboarding platform, as well as global mega trends that offer new opportunities
turned fully digital aligning to the Covid-19 situation. and challenges. New delivery models, the workforce of

236
Design Thinking Workshop, Mindtree Digital Pumpkin, New Jersey

the future and emerging ecosystems are themes which There is a risk of non-compliance in the geographies
will affect the industry in a big way and will require where Mindtree operates, due to changing regulations.
development of new strategies and insights to identify Additionally, data privacy laws across the globe are evolving.
opportunities and address the risks. Mindtree’s strong client Mindtree has a dedicated in-house compliance team that
and technology focus ensures that its operating models manages compliance globally and it engages with specialist
are future-ready. Governance mechanisms are in place to consultants across the globe, who support in adhering to
track deliverables, and customer feedback is rigorously country-specific compliance and regulatory requirements.
monitored.
Cyber risk has emerged as a top risk across industries
Mindtree faces the risk of revenue concentration with its with threats of hacking, ransomware, social engineering
top customer. Mindtree is strengthening the connect with and other cyber-attacks. To mitigate this, controls are
the next set of top customers to achieve broad-based implemented in Mindtree to secure IT infrastructure, viz.
growth. intrusion-prevention systems, firewalls, anti-malware
software, content filtering gateways, data encryption, data
In the knowledge industry, talent attraction and retention leakage protection systems and 24/7 monitoring.
risks are imperative for long-term success. Employee-friendly
policies, learning & development plans and career growth Outlook
options have ensured that attrition remains at tolerable
The 2021 forecast reflects the expectations of a vaccine-
limits. In addition, succession planning for key personnel
powered strengthening of activity and additional policy
ensures that attrition does not impact operations.
support in a few large economies. However, surging
infections recently in the form of a second wave (including
Legislation impacting availability of work permits or
new variants of the virus), renewed lockdowns and
imposing excessive costs for the same could lead to material
logistical problems with vaccine distribution are important
impact on deliverables to clients. A major portion of
counterpoints to the favorable view.
revenues are in foreign currencies and a significant portion
of expenses are in Indian Rupees. Judicious hedging against
According to the Congressional Budget Office, the US GDP
adverse foreign exchange exposures helps the business to
is expected to grow 3.7% in 2021 after a de-growth of
minimise the impact of exchange volatility.
2.5% in 2020. According to the European Commission
Winter 2021 economic forecast, the Euro economy is
expected to grow by 3.8% in both 2021 and 2022. With

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MANAGEMENT DISCUSSION AND ANALYSIS    IT & TECHNOLOGY SERVICES    ANNUAL REPORT 2020-21

Headquartered at Knowledge City, Vadodara, L&T Technology Services helps clients gain the competitive edge by building smart products, enabling smart
manufacturing and offering smart services

containment measures still in place, Euro area economies allocation towards value capture, including Mergers and
are expected to contract in the first quarter of 2021. The Acquisitions that will provide access to niche capabilities,
UK is expected to grow 4.5% in 2021, after contracting by enable specific geo-penetration, talent and service its clients
10% in 2020. Emerging market and developing economies by broadening offerings. Mindtree’s 3 strategic pillars,
are also projected to trace diverging recovery paths. namely Simplify, Differentiate and Change, coupled with
creation of 4x4x4 focus areas across 4 Industry Groups, 4
The Indian economy is showing early signs of a recovery, Service Lines and 4 Geographies, will drive a differentiated-
owing to the large public stimulus spends, revival of value proposition and unmatched services to its clients.
consumer confidence, robust financial markets and an
uptick in manufacturing activity. However, given the
resurgence of Covid-19 infections affecting many states in
L&T TECHNOLOGY SERVICES
the form of a second wave, the economic recovery would
entirely depend upon how the country is able to control the Overview:
pandemic and also on successful vaccination efforts.
L&T Technology Services Limited (LTTS) is a leading
global pure-play Engineering Research and Development
Interestingly, as the industry looks forward at leaner
(ER&D) services company. It offers consultancy, design,
structures with more flexibility and faster adoption of
development and testing services across the product and
cloud-based products and services in 2021, 60% of the
process development life cycle.
industry CEOs expect larger digitisation deals in 2021,
with investments likely to recover in core sectors, including
LTTS provides services and solutions in the areas of
BFSI, Retail and Manufacturing. 67% of CEOs polled
mechanical and manufacturing engineering, embedded
in a NASSCOM 2021 CEO Survey expect global India’s
systems, engineering analytics and plant engineering.
technology sector to grow significantly higher in 2021 as
LTTS’ customer base includes 69 Fortune 500 companies
compared to 2020.
and 53 of the world’s top ER&D companies active across
industrial products, transportation, telecom & hi-tech,
Mindtree’s commitment to deliver superior client satisfaction
medical devices and plant engineering. Its technologists
as well as consistent and competitive profitable growth
work with global firms to offer smart solutions and
remains stronger than ever. The competitive situation today
services that help accelerate new product development,
dictates investing is imperative to be future-ready as part of
facilitate remote asset management and enable virtual
a growth strategy. The business will ensure optimal capital
product design and prototyping.

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LTTS’ Creative Think Studio showcases design aspects of the product to create delightful customer experiences

The key differentiators for LTTS’ business are its engineering and digital solutions help Aerospace OEMs
value-maximising customer-centric innovations, domain and Tier1 manufacturers maximise ROI, meet compliance
expertise and a multi-vertical presence spanning major standards, increase quality and stay competitive in an
industry segments: extremely dynamic ecosystem.

Transportation: LTTS’ Transportation engineering Industrial Products: LTTS supports global customers
services are enabling OEMs worldwide build innovative across building automation, home and office products,
next-generation vehicles and aircraft and achieve a energy, process control and machinery with its
faster time to market by leveraging cutting-edge digital deep domain expertise across software, electronics,
technologies and solutions. connectivity, mechanical engineering, industrial
networking protocols, User Interface / User Experience
In the automotive sector, LTTS helps its customers (UI/UX), test frameworks and enterprise control
through robust and reliable platforms and solutions in solutions. LTTS is working with customers in this space
rapidly emerging areas such as Electrical Vehicles (EV) on important initiatives such as energy sustainability to
technologies, Advanced Driver Assistance System (ADAS) help them achieve net carbon-zero status. LTTS is also
and Autonomous Drive (AD). LTTS’ expertise also covers involved in supply chain optimisation and standardisation
telematics and connectivity, infotainment, powertrain as customers look for alternative sourcing and is active
and end-to-end design and development of automotive in the digital manufacturing space for delivering smarter
components. and innovative ways of production.

LTTS has over a decade of domain expertise in the Trucks Telecom & Hi-tech: LTTS’ Telecom and Hi-tech vertical
and Off-highway segment, and offers services across provides engineering services and solutions that cater
industries such as construction and mining, cranes and to five key domains: Telecom, Consumer Electronics,
material handlers, commercial vehicles, agricultural and Semiconductor, ISV, and Media & Entertainment.
gardening equipment, powersports and polymer.
For the Semiconductors industry, LTTS’ futureproof
In the Aerospace sector, LTTS’ offerings encompass a solutions and IC designs deliver cutting-edge VLSI IPs for
wide spectrum, including aero engines, aero structures camera, storage, display and interface solutions and also
and systems, avionics, air traffic management systems provides hardware system design, platform software,
and new-age digital transformation solutions. LTTS’ modem services, verification and validation, multimedia,

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MANAGEMENT DISCUSSION AND ANALYSIS    IT & TECHNOLOGY SERVICES    ANNUAL REPORT 2020-21

LTTS’ Motor Dyne system conducts troubleshooting of power electronics

connectivity, storage, mechanical engineering, and acceleration of product development cycle, reduction of
customer engineering support. For the consumer time-to-market, value engineering, and product launches
electronics segment, LTTS provides services in the areas in various geographies in compliance with the regional
of product conceptualisation, design and development, regulatory requirements. LTTS works with global medical
platform software, testing and certification, device manufacturers and healthcare companies to
manufacturing support, product maintenance, and offer solutions around remote medical care, regulatory
product launch support. For the Media & Entertainment compliances and approvals, in-vitro diagnostics, patient
industry, LTTS provides services in product engineering, mobility solutions, surgical services, home healthcare
product conceptualisation, design and development, and the medical Internet of Things. LTTS also provides
testing and certification, manufacturing support, product pre-compliance testing and validation support,
maintenance, and value engineering. With Independent including product / compliance remediation, complaint
Software Vendors (ISV), LTTS undertakes application management, and regulatory documentation support.
engineering, VLSI, cloud engineering, product uplift,
platform development & migration, product support, Business Environment
testing and certification.
According to NASSCOM, ER&D companies worldwide have
struggled to bear the brunt of the Covid-19 pandemic,
Plant Engineering: LTTS provides end-to-end solutions
with almost all key verticals registering a de-growth
in the areas of design, engineering, project management,
pattern. Global ER&D spend in 2020 stood at ~$1.2
and handover operation and maintenance and delivers
trillion, representing a 6% decline over 2019, the first year
custom digital solutions over the plant lifecycle. As
of decline since 2012, underscoring the deep impact on
an Engineering, Procurement, and Construction
automotive, aerospace, energy and industrials.
Management (EPCM) services specialist, LTTS supports
every phase of a plant’s lifecycle from conceptualisation
While the manufacturing verticals bore the brunt of the
to commissioning. LTTS’ digital solutions further enable
pandemic, hi-tech and services-led verticals have stayed
manufacturers to upgrade and integrate their legacy
resilient and further accelerated investments in R&D
systems to smart platforms that drive state-of-the-art
initiatives to drive the digitisation journeys of their end
connectivity and synergy.
customers. The Everest Group states that while there will
be significant variations in the recovery trajectories, global
Medical Devices: LTTS helps medical device OEMs
ER&D spending will reach pre-Covid-19 levels by the end of
address various industry challenges, including the
2021.

240
At LTTS’ Imaging Lab, engineers develop various Innovative AI-based imaging solutions

Digital engineering is seeing significant traction (~20% of automotive technology and set up a CoE for the
growth) with Industry 4.0, digital thread / digital twins and development and sustenance of legacy engineering
cloud engineering services and solutions driving the growth software applications.
trajectory. LTTS benefits from having a set of well-defined
offerings in the ER&D sector. With established credentials Industrial Products
as innovation providers and leveraging its cross-industry
• Schindler selected LTTS as its key partner to provide
experience, LTTS is poised to continue providing a unique
innovative digital engineering capabilities. LTTS is
proposition to clients across industries.
providing product development, innovation and
engineering services and solutions to enable Schindler
LTTS’ strength in Engineering and Technology is underscored
accelerate its digitisation and connectivity initiatives.
by the various ratings by key industry experts such as
Zinnov, Everest, ISG, ARC, IDC and NelsonHall, who have
• LTTS has won an Engineering Application Modernisation
consistently rated LTTS as a leader across various categories.
programme from a diversified American conglomerate
to support the client’s software-driven modernisation
Major Achievements initiative. LTTS engineers will maintain and upgrade the
Despite the challenging period due to the Covid-19 company’s existing suite of applications to make them
pandemic, LTTS has had major deal wins across all the mobile and cloud-enabled
verticals. Large deal bookings were also high, helped by a
marquee $100mn plus deal in the oil & gas sector. Telecom and Hi-Tech
• LTTS was selected as a strategic technology partner by
Order Wins one of the world’s leading technology companies to carry
Transportation out platform validation for its high-performance data
centres as part of a joint CoE set-up.
• LTTS has entered into a new area of telematics with a
leading European automotive OEM, covering testing of
• A global telecommunications company has selected LTTS
the automobile maker’s next generation of telematics
as its engineering services partner to perform an end-
units and setting up a new laboratory in Munich.
to-end systems integration and offer allied engineering
services for its global operations.
• LTTS was awarded a product engineering services deal
to develop autonomous solutions for a global provider

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MANAGEMENT DISCUSSION AND ANALYSIS    IT & TECHNOLOGY SERVICES    ANNUAL REPORT 2020-21

The IoT Innovation Hub in Bengaluru is where IoT solutions come to life – from connected workers to smart fuel dispensers

Medical Devices Awards and Recognition

• A leader in healthcare devices and homecare has selected • Two of LTTS’ digital solutions – Chest rAITM and i-BEMSTM
LTTS as a strategic global engineering supplier to assist – have been recognised with the 2021 BIG Innovation
in transforming its product portfolio. LTTS will bring Awards in the ‘Product’ category presented by the
its deep engineering domain expertise to support the Business Intelligence Group, USA.
customer on work streams for lifecycle management, new
product development, digital engineering and quality and • The Everest Group has positioned LTTS as a Leader in the
regulatory compliances. Development, Verification & Validation, Deployment and
System Integration Industry 4.0 Services PEAK Matrix®
Plant Engineering Assessment 2020.
• LTTS won a deal with a TCV of $100 million plus from
a global oil & gas major to be the primary engineering • Zinnov Zones rated LTTS as ‘Leader’ across Digital
partner in supporting two of the customer’s integrated Engineering, IoT, AI and Digital Thread’, and also
refining and chemicals manufacturing facilities in the named LTTS as Leader in 6 major verticals for the fourth
USA. consecutive year.

• One of the world’s top plastics, chemicals and refining • LTTS’ i-BEMSTM solution was the recipient of Frost &
manufacturers has awarded LTTS a multi-year plant Sullivan’s Customer Value Leadership Award for Global
engineering engagement to implement digital twin Smart Building Optimisation & Experience Management.
modelling for its capital projects spread across 20+ sites in
North America. • LTTS registered wins across multiple categories in the 17th
Stevie® International Business Awards including the most
• LTTS has been chosen as strategic partner by a world ‘Innovative Tech Company’ of the year.
leading engineering and construction oilfield services
company to carry out multi-disciplinary engineering Significant Initiatives
activities for its capex and opex projects globally. LTTS has invested significant time and effort in strategic
initiatives that will propel its technology footprint,
engineering infrastructure and human resources, with the

242
By leveraging AR/VR technologies, LTTS empowers manufacturers to gain insights into plant models by enabling review of plant design and layout

end goal of providing a differentiated experience to its creation of a sustainable world by minimising environmental
customers. impact, maximising social outreach and offering sustainable
solutions. As part of this roadmap, LTTS is constantly
• Amazon selected LTTS as a consulting and professional undertaking various initiatives in the areas of water and
services provider to support Alexa integration in various energy conservation as well as efforts to reduce its carbon
connected devices spanning multiple domains and footprint.
industries.
From water-cooled chillers, occupancy sensors, LED lighting,
• LTTS, in association with Tenneco’s DRiV™ Ride and elevator operation optimisation to pressmatic taps,
Performance Division, inaugurated the DRiV HUB wastewater treatment and leveraging technology to reduce
Development Centre at LTTS’ Bengaluru delivery centre. travel and logistics requirements, LTTS ensures optimal
LTTS is creating engineering tools to support DRiV in measures to safeguard the environment. LTTS also follows
developing intelligent suspension technologies to build and implements all the industry standards, protocols and
next-generation ride-control solutions. best practices to ensure health, safety and well-being of its
workforce of over 16,000 employees.
• LTTS set up a dedicated Skywise center for Airbus after
the global aerospace manufacturer selected LTTS to Human Resources
provide technology and digital engineering solutions for
LTTS’ robust HR policies helped enable Work from Home
its Skywise platform. The center will develop cutting-edge
(WFH) for 90% of its employees within a week of lockdown
digital transformation solutions for aviation industry.
restrictions being announced. With WFH taking precedence,
HR introduced many programmes across regions for
• LTTS set up and virtually launched a state-of-the-art
employees to help cope with the stressful lifestyle changes.
Electric Vehicle (EV) Lab at its Bengaluru design centre
to help customers across the globe evaluate and verify
• LTTS launched the weCare App to track and monitor
the performance, endurance and electromagnetic
the safety and health of employees and their immediate
compatibility of EVs.
family members, while ensuring employee data safety.

Environment, Health and Safety • LTTS launched Omni Opus™ WFX Certified Professional –
LTTS has aligned its sustainability goals with that of its a customised certification programme to enable managers
parent, L&T, with the objective of contributing to the to not only manage projects remotely, but also manage

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MANAGEMENT DISCUSSION AND ANALYSIS    IT & TECHNOLOGY SERVICES    ANNUAL REPORT 2020-21

LTTS’ holistic and solutions-led digital framework empowers manufacturers to tackle various challenges in the new normal

their team members and their aspirations through the to customers. Exchange rate fluctuations could further
digital mode. materially impact the results of operations.

Global Engineering Academy (GEA) was started to impart Outlook

technology education and competency development to the
Engineering and Technology is LTTS’ heritage, and LTTS will
employees, which would be aligned to the business needs
further strengthen this by leveraging key technology trends
of LTTS. The platform offering training across 16 technology
to stay relevant in the marketplace for the coming years.
tracks will help engineers to re-skill and re-orient themselves
LTTS has identified six focus areas that will determine the
to keep pace with rapid technology changes and help
scale of operations across industries over the next five years.
advance their careers.
These include:
LTTS conducted the 4th edition of its annual open 1. Electric, Autonomous and Connected Vehicles
innovation challenge for engineering students TECHgium®: 2. 5G
The first-ever virtual TECHgium® saw a record-breaking
participation this year, with over 22,500 engineering 3. Digital Healthcare
students and 2,362 faculty members from 354 reputed 4. Industry 4.0
institutes.
5. AI/ML driven Smart Offerings

Risks and Concerns 6. Sustainability

The economic slowdown in key geographies or cyclical The Everest Group states that the global spending on
downturns in key segments could materially affect digital engineering is expected to grow at a 12% CAGR
revenue growth and profitability. The inability to innovate over 2021-25 and cross $400bn in 2025. Further, Digital
and develop new services and solutions to keep up with engineering is expected to constitute over a third of the
customer expectations and evolving technologies could global ER&D spend by 2025.
result in lower growth traction. Cybersecurity risks could
lead to data leakage, malware or ransomware attacks and Expertise in digital manufacturing and in digital products
loss of Intellectual Property. Changing immigration laws and services enables LTTS to roll out end-to-end solutions
and policies can impact LTTS’ ability to provide services for enterprises enabling faster time-to-market using

244
With the help of simulation and Digital Twins, LTTS supports manufacturers to infuse smartness in their critical day-to-day operations

accelerators such as machine learning and automation. needs of doing more with less, delivering services remotely
These enable clients to move beyond the pilot stage to the through data and cloud platforms, reducing design
entire offering lifecycle, spanning ideation, design, supply timelines and increasing production throughput.
chain and aftermarket services.
LTTS aims to be the partner who can engineer the digital
Investment in key technology capabilities and partnerships transformation for the customers, making them ready for
and an innovation culture makes it possible for LTTS to the future.
collaborate with manufacturers and address their current

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MANAGEMENT DISCUSSION AND ANALYSIS    FINANCIAL SERVICES BUSINESS    ANNUAL REPORT 2020-21

FINANCIAL Farm Equipment Finance

SERVICES • Infrastructure Finance

BUSINESS • Investment Management

In continuation of the strategy of simplification of

corporate structure, during the year, the wholly owned
lending entities L&T Infrastructure Finance Company Ltd.
and L&T Housing Finance Ltd. were merged with L&T
Finance Ltd.

Business Environment
The unprecedented Covid-19 pandemic and the resultant
Overview: nationwide lockdown brought economic activities to a
near standstill. After witnessing technical recession during
L&T Finance Holdings (LTFH) is the holding Company for
H1 FY21, the Indian economy showed partial recovery in
the financial services businesses of the Larsen & Toubro
Q3 FY21. With the adverse impact on the economy, the
Group. It is one of India’s most valued and diversified
investment rate fell to a decade’s low, primarily due to a
NBFCs having a strong presence across Lending and
drag in private investment. Consumer demand remained
Investment management businesses. Headquartered in
subdued, with severe stress on the household balance
Mumbai, LTFH has a strong network of branches and
sheets due to high unemployment. In order to mitigate
dealers across India catering to the business requirements
the short-term adversities that arose from the pandemic,
of a 121 Lakh+ customer base across core businesses as
Government spending was scaled up significantly.
given below:
On the sectoral front, the industrial and services sector
• Rural Finance (farm equipment finance, two-wheeler were severely affected due to the disruptions caused by
finance, micro loans and consumer loans) the lockdown. The agriculture and allied sector remained
resilient and emerged as a silver lining, supported by a
• Housing Finance (home loans, loans against property favourable monsoon in 2020. Robust kharif and rabi
and real estate finance) seasons, adequate reservoir levels, enhanced procurement
by the Government and rich fiscal spending on schemes

246
Housing Finance

such as MGNREGA and PM Kisan aided agricultural growth. created by the Covid-19 pandemic. The RBI had to step in
Conversely, despite a robust recovery witnessed in H2 FY21, with a special liquidity facility of R 500 billion for the mutual
the industrial sector is slated for a second successive fund industry to control the crisis.
annual contraction in FY21 dragged down by mining and
quarrying, manufacturing and construction. Agriculture and rural belts showed buoyancy in demand
throughout FY 2020-21 amid favourable weather conditions
To address the adversities arising from the pandemic-led and a record foodgrain production. The farm segment
economic disruptions, calibrated and prudent fiscal and remained relatively resilient to the impact of Covid-19 and
monetary support was extended by the policy-makers. started to gain back traction from June ’20 onwards.
The Central Government announced the ‘Atmanirbhar
Bharat’ package to support the most affected segments Two-wheeler (TW) demand was impacted to a greater
of the economy. The RBI provided monetary support by extent due to widespread Covid-19 cases and lockdowns
slashing the policy rates to its record low levels along in urban and semi-urban locations at the beginning of the
with both conventional and unconventional liquidity financial year. The momentum in TW demand was gradual
measures to support credit creation. As a part of the relief and picked-up from Q2 FY21 onwards with the rise in
package, it also allowed borrowers to halt repayment of demand for personal vehicles as an alternative to public
loans (moratorium) between March and August 2020, transport.
without impacting their credit history. In addition to the
The Micro Loans business was impacted the most due
stress in asset quality across most lenders (banks as well as
to Covid-19 considering the 100% moratorium given to
NBFCs), the moratorium also resulted in liquidity concerns
micro-loan customers till May ’20, which severely affected
for lenders, mostly for NBFCs. Well-governed NBFCs with
the loan origination and collections, especially during the
strong parentage remained resilient throughout FY 2020-21
first few months. Disbursements were almost Nil during
thanks to their strong capital buffers and also on the back
the first quarter and, with improvement in collections since
of timely policy moves in the form of targeted longer-term
Q2 FY21, disbursements resumed slowly, with focus on
refinancing operations (TLTRO) 2.0 and special liquidity
existing good customers.
scheme for NBFCs under the ‘Atmanirbhar Bharat’ package.
Home loan growth, which declined in H1 FY21 owing to
The financial markets faced another major setback on April
Covid-19, recovered towards the end of FY21 supported
24th 2020, when a certain mutual fund closed six of its
by the Government’s push for the sector and attractive
debt schemes citing a credit risk. The appetite for various
incentives given by the developers. LTFH restricted
debt securities further declined amid the thin volumes

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MANAGEMENT DISCUSSION AND ANALYSIS    FINANCIAL SERVICES BUSINESS    ANNUAL REPORT 2020-21

Real Estate Finance

disbursements in the Loan Against Property business and a) Capital Infusion: During the year, LTFH raised ~R 3,000
focused on existing projects for disbursements in the real crore in equity capital through issue of right shares
estate segment. which was oversubscribed by 15% and is well poised
to take advantage of growth from economic rebound
In the case of the renewables industry, overall energy expected over next few years. The Capital adequacy
consumption has turned positive since Q3 FY21, with ratio and Tier I Capital now stands at 23.80% and
renewables continuing to drive growth, helped by must-run 18.79% respectively and the Company maintains a Debt
status granted to operational renewable projects. Under / Equity ratio of less than 5x.
the Discom package, more than R 75,000 crore has
been disbursed to Discoms out of over R 1,36,000 crore Robust Liability Management: LTFH weathered
b)
sanctioned, which has improved the cashflows for these the market turbulence on the back of robust liability
entities. In terms of LTFH’s portfolio, operational projects management practices and continues to remain resilient.
are being paid on time and most of the Discoms have also At the onset of the pandemic, LTFH further shored up
remitted payments. its liquidity buffers and maintained enhanced levels of
liquid assets as a safeguard against any likely disruption
Significant Initiatives in funding due to moratorium and the stretched market
During FY 2020-21, LTFH focused on addressing the liquidity conditions in Q1 FY21.
challenges posed by the Covid-19 pandemic – with
With easing of market liquidity since Q2 FY21, the
enhanced focus on liquidity and liability management and
Company focused on long-term borrowings as well as
building a resilient balance sheet with focus on collections
reduction in cost of borrowings through prepayment
and building additional provisions on standard assets.
of high-cost borrowing and renegotiation of interest
Strong business fundamentals with businesses (Rural
rates leading to reduction in Weighted Average Cost
Finance, Housing Finance and Infrastructure Finance)
(WAC) for Q4 FY21 to 7.65% from 8.43% in Q4 FY20
aligned to sectors (agriculture and allied sector, construction
(lowest in past 5 years). During the year, the company
sector and infrastructure sector) which are the key growth
raised long-term funding of R 15,629 crore through
engines for the economy, have helped in strengthening
diversified sources such as Priority Sector Loans (PSL),
LTFH’s position and in facing the impact of the pandemic
Non-Convertible Debentures (NCD) through Private
and the lockdown. The specific focus for the year was on
Placement, Bank loans, ECBs, etc.
the following areas:

248
Infrastructure Finance

The regulatory framework saw the Liquidity Coverage Business Highlights

Ratio (LCR) guidelines come into effect from Dec ’20.
As of Mar ’21, the applicable LTFH lending subsidiaries
RURAL FINANCE
are compliant with LCR requirements. In order to Farm
strengthen the liquidity risk management at LTFH, early LTFH achieved No.1 position with increase in market share
warning indicators under the Contingency Funding to 15%, leveraging analytics to gain counter share with
Plan (CFP) were adopted, which helps in timely tapping identified dealers and data-analytics-driven geo-selection.
of resources during a liquidity crisis event. The early The collection efficiency of LTFH continues to remain the
warning indicators monitor critical parameters not only highest in the industry. Since Jul ’20, collection efficiency in
at Company level but also macro-economic indicators. FY 2020-21 is better than in every corresponding month of
previous year, and regular CE in Mar ’21 is at 91.5%.
Resilient balance sheet with focus on collections
c)
and macroprudential provisions: LTFH enhanced its
Two-wheelers
focus on collections by leveraging the strong digital and
analytics framework. Collection efficiencies reached LTFH improved ranking to amongst the top 3 financiers with
pre-Covid-19 levels across businesses by Q4 FY21. Asset increase in market share to 11% on the back of analytics
quality improved with reduction in Gross Stage III assets capturing higher counter shares, a strong dealer network
from 5.36% to 4.97% YoY (Provision Coverage Ratio up of 3700+ across India and an end-to-end digital proposition
from 59% to 69%). Net Stage III assets reduced from providing a best-in-class Turn Around Time (TAT) on Loan
2.28% to 1.57% YoY, which is the lowest level of Net Sanction of 45 seconds.
Stage III assets since FY16.
Micro Loans
Major Achievements Starting with nearly Nil disbursements in Q1 FY21 and a
‘AAA’ reaffirmed: Even under the stress scenario, LTFH moratorium till May, the Micro Loans business registered
maintained positive liquidity levels. LTFH’s AAA rating was its highest-ever quarterly disbursement in Q4 FY21, up
reaffirmed by all four rating agencies – CRISIL, ICRA, India 54% QoQ and 44% YoY. LTFH increased focus on retaining
Ratings and CARE post the onset of Covid-19, reflecting its customers with excellent repayment track record with
resilient balance sheet. a share of repeat customers at ~50% in Q4 FY21. LTFH
further strengthened the digital payment framework, such
as UPI, Wallet, NEFT, Direct Website, Payment Gateways, to
drive collections through the digital mode.

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MANAGEMENT DISCUSSION AND ANALYSIS    FINANCIAL SERVICES BUSINESS    ANNUAL REPORT 2020-21

Micro Loans

HOUSING FINANCE pre-payments to create opportunities for disbursements

without increasing capital allocation.
Home Loans
A digital lending model leading to the paperless sanction of INVESTMENT MANAGEMENT
home loans to salaried customers is a unique offering that
FY 2020-21 has been a moderate year for industry due to
has helped in quick turnaround of proposals. The model
significant outflows coupled with stringent SEBI regulations.
has also enabled LTFH to reduce face-to-face meetings and
On an overall basis, the equity segment has seen a rise in
frequent visits by customers to the branches. During the
redemptions on account of perceived higher valuations,
year, the contribution of Home Loans as a part of total retail
while there was an uptick in the inflows in the debt
housing disbursements has increased from 83% in H2 FY20
segments and ETF / index funds.
to 88% in H2 FY21.

LTFH continued to focus on increasing the share of its Digital Initiatives

salaried customer base. The contribution of salaried One of the biggest drivers of growth has been ‘technology
customers to the total HL disbursements has also increased as an enabler’ for LTFH. To ensure seamless customer
from 63% to 92% during the year. The share of salaried service, LTFH took proactive measures and encouraged
customers in the loan book has increased from ~38% in customers to prioritise the usage of digital facilities for
FY20 to ~43% in FY21. services, payments and inquiry, and leveraged web portal
and mobile app channels to establish direct connect with
Real Estate customers. LTFH focused on capacitating call centers for
LTFH continued its strategy of focus on project completion calling debtor customers for digital payments to strengthen
by lending only to existing projects. LTFH plans to start new the collection strategy. In the project finance business, LTFH
underwriting in FY22. also leveraged digital technology for real-time monitoring of
infrastructure and real estate financed assets.
INFRASTRUCTURE FINANCE
The Company looks to continue leveraging the power
LTFH continues to be one of the leading players in the of data analytics, build strategic competitive advantage,
Infrastructure Finance business, with disbursements improve productivity and enhance performance with its
assisted by the continued momentum in sell-down. LTFH end-to-end digital proposition.
continues to focus on projects with strong sponsors and
off-takers. LTFH enhanced its focus towards sell-down and

250
Mutual Funds

LTFH’s flagship CSR programme, ‘Digital Sakhi’ (peer The structure has in place a Sewage Treatment Plant
educators), focuses on financial literacy by cultivating and that allows the usage of wastewater for gardening and
adopting digital modes of payments. The programme is air-conditioning.
currently being implemented in five states – Maharashtra,
Madhya Pradesh, Tamil Nadu, Odisha and West Bengal, in a The nature of LTFH’s business, which serves the rural
total of about 395 villages. populace and the base of the pyramid, as well as financing
renewable energy projects, along with various sustainability
In FY 2020-21, LTFH’s Digital Sakhis disseminated digital initiatives, has enabled LTFH receive positive ratings on some
finance sessions to 8.70 lakh+ community members of the global ESG indices such as FTSE4Good, Sustainalytics
through door-to-door visits across the 5 states. and MSCI.

The flagship programme won the prestigious FICCI CSR Human Resources
awards in the category of women’s empowerment and
As a financial services provider, people are one of LTFH’s
Business Standard’s Social Excellence Award 2019 for the
core strengths. LTFH is committed to the well-being and
Most Socially Aware Corporate of the Year. In order to
development of each of its employees and adapts its human
contain the spread of coronavirus in rural geographies, LTFH
resource practices to the changing needs and dynamics.
launched various awareness initiatives through Digital Sakhis
With over 75% of people in frontline roles who are required
reaching out to over 4.80 lakh community members.
to be out in the field for regular work, the focus on health
and safety has been paramount, especially in a year such as
Environment, Health and Safety this one.
LTFH embarked upon the sustainability journey 3 years
ago, and has taken various initiatives to steer ‘Financing Enablement of WFH during lockdown, initiatives
1.
Sustainable Future’ and for ‘Growing Better Together’. taken for safety of staff at workplace, travel etc.
Work from Home was immediately put into effect in
• LTFH introduced several technological solutions to save
the organisation as per the Government guidelines. To
electricity and increase efficiency. LTFH complies with the
ensure a smooth transition, initiatives such as sanitising
E-Waste Management and Handling Rules and recycles
all branches and offices and connecting with employees
100% of generated e-waste through registered recyclers.
daily to check on their health as well as the health
• LTFH’s corporate headquarters in Mumbai has earned of their families were introduced. In addition to the
the recognition of being a LEED Gold-certified building. existing Mediclaim, Term Life and Personal Accident

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MANAGEMENT DISCUSSION AND ANALYSIS    FINANCIAL SERVICES BUSINESS    ANNUAL REPORT 2020-21

Two-Wheeler Finance

policies, LTFH also launched a Covid-19 Domiciliary LTFH has a practice of periodic Town Halls conducted
Policy for employees and their families for coverage of by senior business leaders. The frequency of these was
Covid-19 treatment expenses and an Online Health Care ramped up in the past year, keeping in mind the need to
Facility (Doctor on Call Service, an app-based medical have people aligned to organisation priorities as well as
consultation) in association with Practo, for the safety connected with their teams.
and wellbeing of the employees and their families.
3. Initiatives towards building future leaders,
A daily tracker was instituted to check on the health succession planning: Succession planning is an
of the employees who tested positive for Covid-19 to important part of talent strategy, to de-risk any ‘vacancy
ensure that the necessary support is provided to them at risk’ associated with critical roles, for ensuring business
the right time. continuity.

2. Policies and programmes for employee growth From a high-potential talent pool, LTFH has identified
and development, appreciation and satisfaction successors to be developed in order to take up
capability building: LTFH’s talent strategy is leadership roles in the future.
performance-oriented and in alignment with its
organisational goals. LTFH encourages employees who Risks and Concerns
have demonstrated the right capability, attitude and the Despite the optimism surrounding the ongoing vaccination
desire to ‘step up’. As a part of its strategy to groom drive, the recent resurgence in Covid-19 infections across
future-ready talent, LTFH encourages cross-functional the states has raised the spectre of fresh pandemic
movements and up-skills them through ‘education, restrictions and thus poses a threat for smooth economic
exposure and experience’. recovery.
To felicitate top performers, LTFH has established STAR On the fiscal front, both the Centre and the State
Awards, one of the biggest annual recognition platforms Governments are expected to run higher fiscal deficits
which propagates its values and recognises those who to fuel the economic recovery. In the absence of the
live by it. Additionally, in recognition of the outstanding imposition of fresh taxes by the Government, the revenue
and exceptional contributions of the employees inflows will depend on an uptick in economic activities. A
throughout the year, an online ‘Wall of Fame’, a reward deluge of market borrowings by the Government could
and recognition platform, was instituted across the push up the cost of borrowing as well as impact the
organisation. sovereign credit rating outlook, if growth does not pan out

252
as expected. The business remains prepared to manage the Retail inflation may be rearing its ugly head again in the
concerns with help of strengths in market positioning, agile coming months. Although the food inflation is likely to be
execution capabilities, robust early warning systems and the moderate with expectations of bumper harvest, the core
extensive use of analytics for risk mitigation and resource inflation has remained stubbornly elevated for the past
allocation. few months. Recently, the commodity prices have started
rising at a faster pace across the globe in response to the
Outlook normalisation of economic activities. Broad-based escalation
Around the globe, the support from the Governments and in cost-push pressures in services and manufacturing prices
the central banks in the form of lowering of key policy could further impart upward pressure. Expectations of
rates, quantitative easing measures, loan guarantees and demand normalisation, production cut by the OPEC+ and
fiscal stimuli have brightened the global growth outlook allies as well as higher taxes on petroleum products are
for FY 2021-22. Various multilateral organisations and likely to further exert an upward pressure on the fuel prices.
rating agencies have projected that the Indian economy
On the positive side, the Government has remained
will grow at a double-digit pace in FY 2021-22. With
committed to providing further impetus to the
massive vaccination drives underway, risks to the recovery
economy through the Union Budget 2021. The Budget
may abate and economic activity is expected to gain
is expansionary with a focus on Health, Rural and
momentum in the second half of FY 2021-22. However, the
Infrastructure related capex. The Budget has placed special
emergence of newer variants of the virus has created some
emphasis on monetising operational public infrastructure
uncertainty.
assets, foreign participation through the InvITs and REITs
The RBI expects gross NPAs of scheduled commercial banks route, and has proposed a sharp increase in capital
to rise to 13.5% under the baseline stress scenario and expenditure of R 5.54 trillion.
further escalate to 14.8% under a severe stress scenario by
In FY 2021-22, supplemented by the capital raised,
September 2021. The banks will, thus, need to make higher
LTFH plans to build upon its strengths and learnings of
provisions to cover the stressed assets, which could impair
FY 2020-21, to maintain leadership position in the focused
the credit available for investment spending. Similarly, the
segments – Rural, Housing & Infrastructure lending. It
RBI expects asset quality of NBFCs to deteriorate further
will continue tracking the developing macro conditions to
due to the disruption of business operations caused by the
manage risks while taking advantage of market growth
pandemic.
opportunities.

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MANAGEMENT DISCUSSION AND ANALYSIS    DEVELOPMENT PROJECTS BUSINESS    ANNUAL REPORT 2020-21

DEVELOPMENT Major junction at Sambalpur-Rourkela Tollway Limited

PROJECTS L&T INFRASTRUCTURE

BUSINESS DEVELOPMENT PROJECTS LTD
(L&T IDPL)

Overview:
L&T Infrastructure Development Projects Limited (L&T
IDPL) is a pioneer of the Public-Private-Partnership
(PPP) model of development in India, which involves
the development of infrastructure projects by private
sector players in partnership with the Union and State
The Development Projects business segment comprises: Governments. Since its inception in 2001, the company
has completed landmark infrastructure projects across
a) Infrastructure projects executed through its joint venture key sectors such as roads, bridges, transmission lines,
company, L&T Infrastructure Development Projects ports, airports, water supply, renewable energy and
Limited and its subsidiaries and associates (the L&T IDPL urban infrastructure. It is one of India’s largest road
Group) developers as measured by lane kilometres under
concession agreements signed with Union and State
b) The Hyderabad Metro Rail project, executed through its Government authorities.
subsidiary, L&T Metro Rail Hyderabad Limited
Currently its portfolio includes 16 owned and operated
c) Power development projects executed through its assets. This includes 10 highways of 4,434 lane km and
subsidiary L&T Power Development Limited and its a transmission line from Kudgi to Bidadi in Karnataka
subsidiaries (the L&T PDL Group) covering 490 km. It also manages 5 operational road
assets covering 2,748 lane km transferred to Indinfravit
Trust, an InvIT that the company sponsored and launched
in May 2018 as the first privately-placed InvIT in India,
with 77% holding from an international pension fund
and insurance investors.

254
Toll plaza at Vadodara-Bharuch Tollway Limited

Two decades of extensive experience in working with In order to mitigate the lower toll collection impact of the
governments, multi-lateral agencies, international and pandemic, in line with the provisions of the Concession
domestic financial institutions and corporate entities has Agreement, NHAI would grant extension of the concession
helped the company to develop proven competencies period, while the case of state-sponsored road projects is
in Viability Assessment, Financial Closure, Project still under discussion with the state authorities. In certain
Management, Operations & Maintenance and Portfolio projects, moratorium facility granted by RBI was availed.
Management of Infrastructure Assets across various
sectors. As FASTag (Electronic Toll Collection) has been made
mandatory with effect from 15th February 2021 for all the
The Canada Pension Plan Investment Board (CPPIB) vehicles plying on NHAI roads, Electronic Toll collections
made substantial financial investments in L&T IDPL, with as a proportion of total toll collections went up from 73%
the current holding being 49%. This was the first direct in March 2020 to 96% in March 2021. This digitalisation
private investment by the largest Canadian pension fund would result in reduced cash-handling issues and costs
in an Indian Infrastructure Development company. associated with it.

Business Environment In the Transmission Line sector, many greenfield projects

are being set up. Under the Green Energy Corridor (GEC)
During the year, tolling started from 20th April ’20. Barring
Phase II, a total of 12 bids have been finalised by the
the impact of the farmer agitation in the National Capital
central empowered committee, where the company intends
Region and the surrounding areas, economic activities have
participating in at least two of the tenders.
largely been functioning smoothly for the road sector for
most part of the year and toll collections have witnessed a
marked improvement, even surpassing the pre-Covid levels. Major Achievements
The fear of Covid-19, along with limited availability of The National Highways Authority of India (NHAI) released
public transport, has led to a steady and significant increase its first-ever national highways rankings during FY 2020-21.
in passenger vehicular movement on roads. In addition, Krishnagiri Walajahpet Tollways Limited (KWTL), one of the
the sharp pick-up in the manufacturing and construction highways maintained by IDPL, ranked 6th among the top 10
sectors contributed to a healthy rise in commercial vehicular highways across the country.
movement.
The Ministry of Road Transport and Highways (MoRTH)
confers National Highways Excellence Awards every year.

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MANAGEMENT DISCUSSION AND ANALYSIS    DEVELOPMENT PROJECTS BUSINESS    ANNUAL REPORT 2020-21

Bridge, Sambalpur-Rourkela Tollway Limited

For the year 2020-21, two of the assets operated by IDPL map-based server). The mobile app has revolutionised the
received these awards, viz. Deccan Tollways Limited (DTL) way incidents are monitored and assets are managed.
received the Gold award for Excellence in Toll Management The salient features include capturing GPS coordinates,
and Devihalli Hassan Tollways Limited (DHTL) received the working in off-line mode, capturing A/V and pictures, map
Silver award for innovation in pavement maintenance. navigation, various measurements readings, preventive and
corrective maintenance and consumption of spares for asset
During the year, Kudgi Transmission achieved an availability repairs.
of 99.99%. This being above the 98% qualifying level,
made KTL eligible to receive incentives over and above the With the successful launch of Project Fusion, the business
transmission tariff. was recognised by AWS (Amazon Web Services) as a unique
project (hosted on cloud) in India, and the business had the
Significant Initiatives privilege to be the sole customer selected to represent India
at the ‘AWS Voice of Customer’ event.
The enterprise-wide digitisation drive to integrate all
operations across functions built on four pillars, viz. process
The business is developing a custom-built intelligent
automation, transparency, efficiency and real-time data,
Highway Management System, christened iHAMS, which
were undertaken during the year.
is a video-based AI/ML (Artificial Intelligence/Machine
Learning) application. This tool captures missing assets and
Under Project Fusion, the business undertook massive ERP
damaged assets automatically using a DashCam, without
implementation covering all the 14 entities and all the
human intervention.
processes in an integrated manner. The business went live
with SAP S4 HANA 1909 (greenfield implementation) on
9th October, 2020. Environment, Health and Safety
The business continued to function without disruptions,
The business also implemented an exclusive vendor despite the Covid-19 pandemic. Employees’ health and
portal integrated with ERP, including right from vendor safety remained the focus all through the year. The business
on-boarding to vendor reconciliation, etc. continually made improvements and quickly adapted to
the dynamically changing environment, which not only
The business also launched a dedicated mobile app for helped the business to keep the Covid-19 positive cases at
O&M of the roads and power transmission line business, a significantly low level but also earned respect from local
which is integrated with ERP and ArcGIS Online (ESRI, a authorities, including the clients.

256
Power Transmission Tower at Kudgi Transmission Limited

Also, the business initiated an innovative industry-first Employee engagement activities, including panel discussions
accident reduction measure by adopting Behavioural on subject matters, were also extensively resorted to in a
Science approach solutions, which aim at studying the driver virtual way. Regular hygiene-awareness communications on
behaviour and design solutions to bring about behavioural Covid-19 were sent to all employees. For office-based staff,
changes. The business was able to implement this at the alternate group weekly working was introduced.
Sambalpur-Rourkela and Krishnagiri-Thoppurghat projects
under Phase-I and reduce accidents by 40%, with 80% As a business continuity plan, on a monthly basis, a virtual
reduction in fatalities. It intends to roll out the initiative at all coffee-connect of top talent with leadership is being
its road projects under Phase-II in FY 2021-22. conducted. The top talent gets the opportunity to work
with senior management as a grooming process in major
Human Resources assignments.
Talent management is the key focus at L&T IDPL. A
minimum of 4-man days training across all career levels Risks and Concerns
as a learning investment for every employee is a thrust In its ongoing businesses of roads and transmission lines,
area in employee development. Future leaders and high there are 2 annuity assets which are not dependent on
potentials are put into a different rigour, viz. specifically traffic flow. However, the remaining highway assets
identified technical development and executive coaching. are based on traffic volumes and toll collections. The
Achievements are appreciated through organisation-wide coronavirus impact on toll collections could be a risk,
broadcasts by HR. This is complemented by specific rewards which would be mitigated under provisions of Concession
and recognition programmes for outstanding achievers. HR Agreements. Force majeure claims were submitted for a
and individual functional heads address specific functional toll suspension period and a partial toll collection period.
members every month. Feedback is sought through an Concession agreement provides for extension of concession
anonymous online system to know and understand the period in case of drop in toll revenue below 90% and
satisfaction levels of employees. reimbursement of costs in case of a force majeure political
event.
During the pandemic, communication and virtual reach-out
was the key focus area with meetings being organised Since annual toll revisions are based on the wholesale price
virtually. A site-based-employee one-time recognition award index, lower inflation would lead to lower growth in toll
was given for their contribution during the lockdown. collections.

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MANAGEMENT DISCUSSION AND ANALYSIS    DEVELOPMENT PROJECTS BUSINESS    ANNUAL REPORT 2020-21

Going the distance – connecting destinations

Outlook through the BOT model. IDPL would continue to evaluate

The Union Budget 2021 has given topmost importance the upcoming opportunities that would provide adequate
to infrastructure development in India. In line with growth and returns.
expectations to address issues of sustainable long-term
financing for infrastructure sector, the Development Finance L&T METRO RAIL (HYDERABAD)
Institution (DFI) would be set up. The DFI is a professionally
managed body with a budgetary allocation of R 20,000 LIMITED (L&TMRHL)
crore for funding infrastructure projects. It aims to have a
lending portfolio of R 5 lakh crore in a timeframe of 3 years.
Overview:
The proposed DFI will address the financial needs of the L&T Metro Rail (Hyderabad) Limited (L&TMRHL) is a
infrastructure sector; especially associate and fund in special purpose vehicle to undertake the business of
difficult projects through which the infrastructure companies constructing, operating and maintaining the Metro Rail
can resolve their debt-related issues. This move will help System including Transit Oriented Development (TOD) in
infrastructure players like IDPL in a big way in developing Hyderabad under the Public Private Partnership model
new projects. on Design, Build, Finance, Operate and Transfer (DBFOT)
basis.
NHAI has awarded around ~ 3500 – 4500 kms of highways
during the FY 2020-21. The majority of these projects were As per the Concession Agreement with the state
awarded through the EPC mode and the remaining through government, the Metro Rail system was required to be
the Hybrid Annuity Mode (HAM). Lately, NHAI is focused on constructed on three elevated corridors from Miyapur to
the Asset Recycle programme that would fund NHAI’s rising L.B. Nagar, Jubilee Bus Station to Falaknuma and from
debt and reduce dependence on budgetary allocations. In Nagole to Shilparamam, in aggregate covering a distance
this fiscal, NHAI has awarded two bundles on Toll Operate of 71.16 km.
Transfer (TOT) mode and it would award more such projects
on the same route in the upcoming years. Additionally, The project was commissioned in February 2020 and
NHAI is also planning to launch its own InvIT that would is now operational, excluding a portion of 5.5 km for
fetch around R 4,000-5,000 crore for NHAI. NHAI is also which the Right of Way could not be provided by the
planning to award about ~5000 kms of new projects for the Government and which the Government has been
upcoming fiscal, of which about 20% would be awarded requested to descope. The concession period of the

258
The Hyderabad Metro adds efficiency to city mobility

project is 35 years, including the initial construction In the case of lease rentals, footfalls in malls were below
period of 5 years, which is extendable for a further pre-Covid level, and hence most of the lessees adopted
period of 25 years subject to fulfilment of certain revenue-sharing models.
conditions by the Company, as set out in the Concession
Agreement. Advertisement revenue was impacted pending renewal of
advertisement contracts for pillars. Further since the trains
The Concession Agreement also included rights for were not running, there was lower advertisement revenue
real estate development of 18.5 mn. sq.ft. out of for broadcasting in the trains. Despite this, the entity was
which 1.28 mn sq.ft. of Transit Oriented Development able to book various advertisement media, including digital
(TOD) consisting of 4 malls and an office block have advertisements, apart from various physical media like piers,
commenced commercial operations. Construction portals, station facades, etc.
work of 0.5 mn sq.ft. of office space at Raidurg site is
currently underway. The entity is chalking out plans for In order to combat the financial and profitability pressure,
monetisation of the TOD development rights in a phased the business used the moratorium extended by banks and
manner. has also applied for force majeure under the concession
agreement, which provides for extension of the concession
Business Environment period for the force majeure period.
At the start of the year, the Government of Telangana had
imposed a lockdown and allowed the metro operations Significant Initiatives
to resume only from 7th September 2020, with social • L&TMRHL has finalised the open loop ticketing system
distancing norms. With increased awareness, high recovery which is expected to be commissioned in FY 2021-22
rates and the optimistic environment of vaccine availability and will make travel easy, contactless and trouble-free.
boosting positive sentiments of commuters, ridership L&TMRHL has tied up with ticketing partners, such as
gradually increased. However, average ridership remained Goibibo, MakeMyTrip, Phonepe and Paytm, and has
below pre-Covid levels, mainly on account of (a) caution launched the Mobile Ticketing (QR Code generation)
amongst the passengers, (b) social distancing restrictions solution for metro commuters. This is making travel
and (c) majority of corporates’ advisory on continuing WFH. contactless, easy and trouble-free.

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MANAGEMENT DISCUSSION AND ANALYSIS    DEVELOPMENT PROJECTS BUSINESS    ANNUAL REPORT 2020-21

Going digital with Mobile QR Tickets

• L&TMRHL is tying up initiatives, such as shuttle services, • 50 Marketing Marvels 2020 under the category Best
to create robust and affordable last- mile connectivity to Marketing and Communications Professionals
enhance ridership.
• ABCI Annual Awards 2020 under the category Web
• L&TMRHL is exploring various non-fare revenue- Communication – Online Campaign and internal broad
generating options, viz. leasing out space for erecting cast
mobile towers, optical fibre, royalty from QR ticketing
/ open loop ticketing partners, consultancy services to • PRSI National Award 2020 under the category of Social
other metros, etc. Media for PR and Branding

• L&TMRHL has tied up with a solar power developer L&TMRHL facilitated transportation of a live heart for
to generate captive solar power at a very competitive transplantation through a special Metro Rail Green Channel,
price with the view of reducing operational expenses. contributing to a social cause.
Considering future mobility, L&TMRHL has tied up with
partners and set up Electric Vehicle charging points at Human Resources
different metro stations. A total of 50 charging points
During the year, the focus of HR shifted towards the
have been made available across Hyderabad Metro
well-being and care for the employees, associated staff and
stations.
their families in view of the pandemic. Various initiatives
and actions were taken to safeguard employees and their
• Driving towards digitalisation, L&TMRHL has started
families viz. tie-ups with hospitals for round-the-clock
using Business Intelligence IT tools such as Alteryx and
support, dedicated ambulances, special Covid-19 insurance,
Tableau for both business and passenger data analysis /
etc. Further, training programmes and webinars were
interpretation.
organised.

Awards and Recognition Environment, Health and Safety

• IGBC Performance Challenge 2020 for Green Built
The metro helps shift the commuting masses from
environment under the category Transit Buildings – Metro
traditional air-polluting modes of transport. Further, it
reduces sound pollution due to the efficiency of the coaches
• Top 100 Influential Game Changers, 2020 under the
and the advanced engineering that has been used for
category PR and Corporate Communications
building the track, viaduct as well as the metro coaches.

260
Ready to serve the metropolis

L&TMRHL has installed solar power plants of 8 MW closure of schools / colleges, etc., and reduced ridership due
capacity over the rooftops of the metro stations and in to fear of spread of virus among the passengers.
the depot areas to partly meet the power requirements,
thereby reducing dependency on the grid power. As a To mitigate this, the business adopted best practices from
sustainability initiative, rainwater harvesting pits are created metros across the world and upgraded standard operating
at stations and depots and about 65 million litres of water procedures with a focus on cleaning and sanitisation of
are harvested per year. Further, smart cards and mobile QR metro systems. These include:
ticketing options have reduced paper consumption.
• Regular audits by a team pertaining to the disaster
The Hyderabad Metro rail is run on the Automatic Train management plan
Operation (ATO) mode which is the normal mode of
operation of trains. The Automatic Train Protection (ATP) • More focus on contactless travel by promoting Mobile
System continuously monitors safe train operations. All ticketing (QR Codes), etc.
vital train-borne equipment are highly safe and redundant
to avoid any unwanted interruption of train service. The • Implementing wellness and sanitisation measures
station equipment, e.g. Computer based inter-locking in the TOD facilities, aligning to the newer business
(CBI), wayside ATP, etc. are vital signalling equipment and requirements
redundantly arranged to ensure safe and uninterrupted train
operation. Passenger Emergency Stop Plungers are provided • Being a public transport system, the operations risk in
on each platform and in the station control room (SCR) to terms of passengers safety and assets is major. To mitigate
stop a train immediately in case of emergency. this, L&TMRHL has a robust in-house team to check the
safety measures. Keolis, a reputed French company, is the
Risks and Concerns O&M operator and has experience in providing solutions
for the safety of the commuters, systems and assets of
The business has a robust Risk Management Process, having
the metro rail
identified risks and categorised them as Major, Moderate
and Minor and embarked upon a regular risk monitoring
The company is currently running sub-optimal and has also
and control process.
the additional pressure of debt servicing. The Company
and its parent, L&T, are exploring various options, such as
The pandemic continues to pose a major risk considering
state government assistance, additional equity support, part
the restrictions, WFH being continued by major corporates,

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MANAGEMENT DISCUSSION AND ANALYSIS    DEVELOPMENT PROJECTS BUSINESS    ANNUAL REPORT 2020-21

2x700 MW Supercritical Technology based Thermal Power Plant at Rajpura

conversion of debt into equity, TOD monetisation efforts, GoTS has plans to implement Phase II of the metro
etc., to reduce the interest / debt burden. project covering 85 km, including an airport link. This will
significantly enhance the average ridership of the metro
Outlook system, with improved connectivity.
With the continuing risk of the pandemic, the upcoming
transport scenario will be highlighted by social distancing, L&T POWER DEVELOPMENT
the continued practice of WFH-reduced travel and reduced
travel by senior citizen and increased use of self-owned GROUP
modes of transport. The on-going vaccination drive for
Covid-19 should build confidence amongst the common L&T Power Development Limited, a wholly-owned
people and drive them to use public transportation, such as subsidiary of L&T, is engaged in developing, operating
the metro rail. and maintaining power generation assets. The portfolio
currently comprises two project, one each in thermal and
The telecom sector (optical fiber & tower) is a major hydel sector and aggregating to 1499 MW. In the thermal
contributor to non-fare revenue and, with current pandemic sector, Nabha Power Limited owns and operates a 2 X 700
situation (increased demand for bandwidth for remote MW supercritical thermal power plant at Rajpura, Punjab.
working), it gives L&TMRHL the opportunity to expand In the hydel sector, L&T Uttaranchal Hydropower Limited is
it further and enhance non-fare revenue significantly. operating a 3 x 33 MW Singoli-Bhatwari Hydro-Electric Plant
Non-fare revenue generation through cross-selling of in Uttarakhand which came into full commercial operation
products to commuters is being increasingly explored, which from January 2021.
will be further strengthened by metro expansion, resulting
in higher ridership.
NABHA POWER LIMITED (NPL)
Training and consultancy to other metros is a great Overview:
opportunity that the entity would target in a big way, given Nabha Power Limited (NPL) owns and operates a 2X700
the many upcoming metro projects in the country and MW supercritical thermal power plant at Rajpura, Punjab.
abroad. The entire power generated from this plant is sold to
Punjab State Power Corporation Limited (PSPCL) under
The optimisation of revenues from development rights,
including monetisation, is a focus area.

262
Rajpura project at the cusp of completion in December 2013

a 25-year Power Purchase Agreement (PPA). The plant is the average for the year 3% higher (6705 MW) compared
built on supercritical technology from Mitsubishi, Japan. to last year (6490 MW). Punjab witnessed a net capacity
addition of 156 MW during FY 2020-21, all of which was
The plant sources its fuel from South Eastern Coalfields contributed by renewables.
Ltd. (a subsidiary of Coal India Limited) under a Fuel
Supply Agreement (FSA). NPL has also secured approvals Further, in the second half of the year, NPL faced challenges
to arrange for coal from alternative sources to make up due to the Rail Roko agitation (farmer protest) and was
for any shortfall in the supply of coal under the FSA. forced to shut down both units for 34 station days due to
The Bhakra-Nangal distributary is the perennial source depletion of coal stocks. Upon lifting of the rail blockade,
of water for the plant, under an allocation by the State coal rake movement resumed and NPL quickly built up its
Government. The plant is operated by an in-house plant stocks.
team of experienced operations and maintenance
As per its notification dated May 21, 2020, the Ministry
professionals.
of Environment Forest Climate Change (MoEFCC) has
removed the restrictions of ash % while transporting coal
The power plant has been running successfully for over
to thermal power plants located beyond 1000 km from the
seven years, with an availability of over 85% since 2014.
mine source. During the year, NPL was able to maximise the
The plant has been the most reliable source of power for
availability of domestic coal from various CIL subsidiaries,
the state of Punjab and has supported its requirements
such as ECL, NCL and CCL, in order to ensure that the
with uninterrupted supply during peak seasons. NPL
adequate quality and quantity are available at the plant.
also happens to be the lowest cost coal-based power
producer within Punjab, with the best operational
efficiency. Major Achievements
• Highest continuous operating station days achieved: 119
Business Environment days (Previous best: 76 days)
The Covid-19 lockdown marginally impacted India’s average • First ever Unit 1 Capital overhaul completed
electricity demand by 0.99% in FY 2020-21. During the
months of April - June 2020, Punjab also witnessed a • Sustained Operational Performance - Annual PLF: 65% v/s
significant drop in demand from ~5100 MW to 3200 All-India thermal average of 54%
MW due to Covid-19. However, as the restrictions were
gradually lifted, the demand picked up significantly, taking • Ensured domestic coal adequacy for FY 2020-21

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MANAGEMENT DISCUSSION AND ANALYSIS    DEVELOPMENT PROJECTS BUSINESS    ANNUAL REPORT 2020-21

Aerial view of cooling towers, Rajpura Thermal Power Plant

• Significant collection of receivables from PSPCL pursuant Environment, Health and Safety
to a favourable order from the Hon’ble Supreme Court NPL is committed to generating reliable and environment-
friendly power under safe working conditions. A policy
• Commencement of construction of Flue Gas on Quality, Environment, Health and Safety has been put
Desulphurisation (FGD) Project in place. Emphasis is laid on continual improvement of its
processes and practices to achieve improved environmental,
• During the year, NPL received the following awards: health and safety performance. Training on HSE for
employees and stake-holders is undertaken on a regular
n Certificateof Merit, National Energy Conservation basis to foster a culture of health and safety.
Award 2020, MoP
During the lockdown, NPL, being a provider of essential
n Twin awards from CII service, maintained business continuity, while ensuring the
health and safety of all its employees and workers. Various
u ‘National Energy Leader’ for its progressive steps were undertaken, including all Covid-19 protocols
performance for the second consecutive year in and Standard Operating Procedures (SOPs). Vigorous efforts
Energy Management (2nd time in a row) were made to ensure the safe movement of employees and
workers during the lockdown.
u ‘Excellent Energy Efficiency Unit’ award for
outstanding achievements in Energy Efficiency (4th Human Resources
time in a row)
NPL has built a committed team of 288 professionals
experienced in the field of operations and maintenance
n ‘Independent Power Producer of the Year 2020 – India’
of power plants. Special emphasis is laid on training
at the Asian Power Awards 2020
and development of the workforce through various
training programmes. In addition to competency building
n Finalist at S&P Global Platts Global Energy Awards –
programmes, NPL also focusses on soft skills and leadership
2020 under the category ‘Award of Excellence-Power’,
development.
second time in a row
Risks and Concerns
n Gold Recognition at CII’s Outstanding Managers
Competition As a private power producer, NPL’s major risk is financial,
mainly being (a) delay in collections from PSPCL, the

264
Barrage for Singoli-Bhatwari Hydro Electric Power Project (3x33 MW), Uttarakhand

state-owned Discom due to its poor financial health and The major focus areas for NPL during FY 2021-22 would
(b) interest rate risk on the NPL’s borrowings. Further it be maximising plant availability, improving operational
also has exposure to regulatory risks in terms of changes efficiency, securing adequate quality and quantity of
in environmental rules, delays in clearances, changes in coal, implementation of FGD, and resolution of pending
government policies, etc. Operational risks pertain mainly litigations.
to availability and quality of coal, availability of rakes,
disruptions in the supply chain, local disturbances, etc. L&T UTTARANCHAL HYDROPOWER LIMITED
The Risk Management Policy of NPL provides for a Overview:
robust risk management framework which involves risk L&T Uttaranchal Hydropower Limited (L&T UHL)’s 3 x
identification, assessment, evaluation, strategy, mitigation, 33 MW run-of-the-river Singoli-Bhatwari Hydro-Electric
monitoring and review mechanisms. NPL has implemented Plant in Uttarakhand came into full commercial operation
multiple measures in each of the risk areas to ensure a from January 2021. The project is located on Mandakini
proactive approach and timely mitigation. River, the right bank tributary of Alaknanda River, in the
Garhwal region in Rudraprayag district in Uttarakhand,
Outlook India.
In FY 2021-22, the average demand in the state is likely to
remain ~7000 MW (peak 14000 MW) and, as a result, NPL The plant is connected to the Northern Regional Grid
is expected to be scheduled at a high Plant Load Factor (PLF) through a 220 kV double-circuit transmission line up to
of 80% being at the top of merit order among the thermal Srinagar (Garhwal) sub-station and has been registered
power producers within the state. as Regional Entity with Northern Regional Load Dispatch
Center (NRLDC), Delhi. Power generated from the plant
The per capita consumption continues to promise robust is currently being sold in Indian Energy Exchange (IEX)
long-term demand. On the fuel side, coal supply continues through PTC. Efforts are on to execute a long-term PPA
to be challenging. with state-owned distribution companies.
Variable scheduling by Discoms due to flexibilisation is
The plant will cater to daily peak demand loads of 2½
likely to worsen, with rapid integration of renewables for
hours each, morning and evening during non–monsoon
balancing demand due to the variability, intermittent nature
months, and will continuously run with full capacity
and geographically confined concentration of renewable
during the monsoon season.
energy.

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MANAGEMENT DISCUSSION AND ANALYSIS    DEVELOPMENT PROJECTS BUSINESS    ANNUAL REPORT 2020-21

Major Achievements initiatives. These include programmes on relevant technical

• Even in the stage of lockdown due to the Covid-19 skills, EHS, communication skills, personal effectiveness and
pandemic, L&T UHL successfully commissioned all three leadership skills.
units, including 220 kV switchyards, while ensuring the
health and safety of all its employees, contract staff and Risks and Concerns
contractor staff • The project was challenged during construction &
• Plant Availability Factor is at 99.9% commissioning by the rough terrain, dense forests and
a small working window because of the extremely cold
• Generated energy with minimal deviation of committed weather, landslides and monsoon floods.
schedule
• Zero fatalities, zero reportable accidents in FY 2020-21 • The project is located in Seismic Zone V; however no
major earthquakes have been reported in this region to
Environment, Health and Safety date.
• To combat the impact of Covid-19, many steps were • Power generation is dependent on the flows in the river.
taken, including social distancing and safety practices.
Effective Standard Operating Procedures (SOPs) were • Revenue is linked with variation in prices in IEX, which is
implemented for people coming from outside for dynamic in nature.
commissioning of individual systems to achieve the
targets • Forced outages due to faults in the equipment may lead
to generation loss.
• Implementation of proper PPEs for staff and employees
• Training for employees and workmen undertaken on • Tripping of transmission lines could affect power
regular basis evacuation, especially during the monsoons.

• Installation and operation of the waste oil treatment • High sediment concentration of the river during the
system in order to avoid spillage of oil in the river monsoon will be a challenge.
• Emergency response plan prepared for safe running of
the plant Outlook
The L&T UHL team is geared to deliver the best to achieve
Human Resources maximum generation and will put in full efforts to maintain
L&T UHL is being operated by a team of professionals, plant availability by minimising forced outages through
which includes people from operations, maintenance, proper preventive maintenance. Thus, the Singoli-Bhatwari
water management, finance, commercial, HR & general Hydro Power Plant is contributing to the nation’s focus on
administration. L&T UHL focusses on overall development renewable energy, and is also helping the grid to meet peak
of its people, using the support of Learning & Development load demand.

266
Artist’s Impression

L&T Innovative Campus, Chennai

OTHERS in key metro cities, viz. Mumbai, Bengaluru and Chennai.

L&T Realty is focused on delivering higher value to its
customers through efficient designs, latest technologies
and superior project management skills. The business
model also includes development in partnership with
owners of large land banks, other developers and sale /
lease of commercial spaces.

Residential Segment
Emerald Isle (Mumbai)
This flagship residential project, the finest gated
community at a premium location, is part of a prime real
‘Others’ business comprises: estate development in Powai, spanning over 90 acres.
Phase I is complete and is now occupied by over 780
a. Realty Business resident families. The development of further phases of
the project is in progress.
b. L&T Valves Limited
c. Construction Equipment & Others Crescent Bay (Mumbai)
Situated at a sought-after location – Parel, with the
d. Smart World & Communication
Arabian Sea as the backdrop – Crescent Bay is a
e. Digital Businesses residential complex with the perfect setting for an
exclusive lifestyle. Crescent Bay raises urban living to
top-notch quality, with a sky deck and lifestyle amenities
REALTY BUSINESS on level 21. It is currently occupied by 1000+ resident
families and the last tower is being built.
Overview: Raintree Boulevard (Bengaluru)
L&T Realty is positioned amongst the top real estate Conceptualised on the live-work-play theme, Raintree
developers in India, with a total portfolio of over 70 mn. Boulevard is a 65-acre mixed-use project located in the
sq. ft. across residential, commercial and retail segments high-growth micro-market of Hebbal. The project offers

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MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Artist’s Impression

Seawoods Grand Central, Navi Mumbai

premium flats with elegant and majestic layouts, along Technology Centre (Mumbai)
with the leisure of fine-living and best-in-class amenities. Designed to provide superior workspaces, it is a
The project also includes fully furnished studio units, a thoughtfully designed and LEED-Rated Gold Building. It
dire need of young IT professionals in Bengaluru. 250+ is a part of a larger integrated development promoting
happy families have already moved in. walking to work. It is one of the coveted corporate
addresses in Powai, Mumbai, with proximity to excellent
Seawoods Residences (Navi Mumbai)
social infrastructure. Much of this development is already
Seawoods Residences is part of India’s first Transit- completed and some has been effectively divested.
Oriented Development, which is spread across 40
acres. The project offers unmatched connectivity and
Technology Park (Bengaluru)
is surrounded by breath-taking views. It has been a
successful launch, with over 90% units sold out. Located in the rapidly growing micro-market of Hebbal,
the project has the potential for development of
Rejuve 360 (Mumbai) commercial office spaces of 3.3 mn. sq. ft., which is
Designed on the wellness thought, this residential being taken up in phases. With unmatched connectivity
complex is focused on the rejuvenation of mind, and well-designed spaces, it is set to become the most
body and soul. Conveniently located in the bustling favoured address for many technology companies.
neighbourhood of Mulund, Mumbai, Rejuve 360 has
sustained its position among most premium products in L&T Innovation Campus (Chennai)
the micro-market. Coming up on a 40-acre plot in the IT hub of Chennai,
the 6.5 mn. sq. ft. L&T Innovation Campus project
Commercial Segment will be developed in phases. It will bring together a
Seawoods Grand Central (Navi Mumbai) world-class innovation business / IT hub, and an eclectic
India’s first Transit-Oriented Development (TOD), mix of leisure and lifestyle amenities, with a lush central
Seawoods Grand Central is spread across 40 acres. It parkland at its core. The development offers the walk-to-
offers 2.6 mn. sq. ft. of Grade A development with a work convenience.
unique combination of commercial and retail business
spaces coupled with the captive local train station. Business Environment
The office space here is spacious, well-planned and The Covid-19 pandemic impacted the economy adversely,
customisable. including the real estate sector. The year bestowed

268
Artist’s Impression

Raintree Boulevard, Hebbal, Bengaluru

opportunities for businesses to re-align and create FY 2020-21 paved the way to an encouraging outlook for
propositions that will have a long-lasting impact on the the Real Estate Investment Trust (REIT), which is aimed at
economic landscape. While businesses traversed through a attracting private investments. Despite the pandemic, during
tough and uncertain year, the Government was supportive the year, the two REITs listed received an overwhelming
and took several measures to keep the economy buoyant. response, proving the market and investor confidence for
the long-term in the real estate sector.
The residential segment witnessed a dip of 40% in
new launches and sales during FY 2020-21. The sales The Government on its part, has introduced various fiscal
momentum resumed from the third quarter with historically measures and policy reforms for the early recovery of the
low home-loan rates, signs of the economy recovering sector. Out of the total private equity investment in India,
faster, and steps taken by the Government, such as stamp- real estate attracted USD 4.2 Bn this year. In the face of
duty waiver in Maharashtra. Sales sharply recovered in the the unprecedented pandemic crisis, the real estate sector,
last quarter, exceeding the last year’s bookings. especially the residential segment, has displayed remarkable
resilience. As the unlocking process was initiated in the
The office space segment has been severely impacted, as second quarter of FY21, both the residential and office
leasing has dipped by over 40% over the previous year, with markets started showing promising signs of revival.
leasing in the top 7 cities being only 26 mn. sq. ft. vis-à-vis
46 mn. sq. ft. in the previous year. Adoption of Work from The pandemic has further worsened the financial position
Home by most companies coupled with the deferment of most real estate developers. This, coupled with customers
of large leasing decisions by international and domestic now preferring reputed corporate brands, offers a better
clients weakened the sentiment towards this segment. competitive positioning for L&T Realty.
The commercial office space segment is expected to take a
longer time to recover. Major Achievements
1. Launched new phase at Seawoods Residences in
The retail segment was the worst hit on account of the
November ’20 and sold over 80% of the inventory.
lockdown and the inability of tenants to pay-out leases.
Apprehension regarding the recovery of this segment has
2. As workplace merges with home, large-size units gained
led to renegotiation of leasing contracts into the revenue
momentum. Traction is seen in large format premium
share model.
units in Crescent Bay, Parel, placing the business.

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MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Artist’s Impression

L&T Tech Park, Bengaluru

amongst the most-sold projects in the premium South Significant Initiatives

Mumbai market.
Digitalisation
3. Completion of an iconic digitally advanced office space In digital, the business focuses on further improvement
tower. of Safety, Quality and customer experience. The ‘SHIELD’
app was launched to report unsafe conditions, issue of
4. Completed sale of commercial space through work permits, etc. A mobile-based quality inspection app
transactions with Blackstone Group and Max Life. under the ‘SQAD’ initiative has been implemented to
digitally monitor checklists and drive more accountability. To
Awards and Recognition provide a better customer experience at every touchpoint,
The business has been conferred many national and the salesforce ecosystem for Digital Marketing, Sales
international awards for the brand as well as for individual and Customer Relationship Management (CRM) has
projects during the year. A few of them are listed below: been implemented and is complemented by deploying
augmented reality solutions and digital flipbooks. The
• Winner of ‘Swatch Bharat Mission’ by Navi Mumbai adoption and implementation of remote working during
Municipal Corporation for Seawoods Residences pandemic time was crucial for the business and many
aspects of digital infrastructure were already in place.
• Royal Society for the Prevention of Accidents (ROSPA) Critical measures were taken to further strengthen the
Gold award for Emerald Isle, Powai and AM Naik Tower security infrastructure as data flow increased online.

• Acknowledging the continuous effort towards safety, Innovation

British Safety Council, UK, awarded the Realty business
the Sword of Honour The business strives for innovation and engineering
excellence in every project. Emerald Isle features the first
• Appreciation certificate from National Safety Council residential building in Mumbai executed with pre-fabricated
on-demand concepts, leading to reduction in finishing time
• Appreciation certificate from Construction Industry as well as delivery of a customised quality product.
Development Council, Vishwakarma Awards
Human Resources
• Recognised by Economic Times as one of the ‘Best Realty Appropriate measures were taken during business
Brands 2020-21’ resumption to ensure employees’ health and safety

270
Artist’s Impression

Seawoods Residences, Navi Mumbai

within the site and at the office premises. The business Outlook
makes every effort to generate a never-ending desire to Real estate is currently ~6.3% of GDP and is projected to
collaborate, learn and build a talent pool to stay relevant to touch 12% by 2030, making it USD 1 Tn in market size.
customers’ needs at all times. The business is focused on In the longer run, the demographic shifts and demand in
creating a young and vibrant organisation. With emphasis the upper mid- and high-income households will increase
on gender diversity, L&T Realty has one of the highest many-fold.
percentage of women employees in the Indian real estate
sector. The residential segment, which constitutes 80% of the
sector in India, bottomed out in 2020, but is now ready to
The company has been providing avenues for capability embark on a new growth journey. Despite the launches
building and continuous learning, and this year the business and sales being short of last year, the trend of sales
clocked 7,552 man-hours of dedicated personnel training. outnumbering the launches eventually pulled down the
unsold inventory pan-India. The Mumbai Metropolitan
Risks and Concerns Region recorded the highest year-on-year decline of unsold
The real estate sector had just begun to recover from the inventory by 8% in the last seven years. The low mortgage
after-effects of Covid-19, with business activities gaining rates have improved the affordability index in key cities,
pace and the Indian economy expected to rebound bringing back customer confidence. The pandemic has also
considerably in FY 2021-22. However, the second wave of fuelled the trend of owning a bigger home and living in a
the pandemic is likely to delay recovery. The intermittent gated development with adequate amenities.
lockdowns will impact demand. The short-term waivers
and relaxations offered by the Government have been In pre-Covid times, the commercial segment was largely
discontinued, despite the lingering threat of the pandemic. dependent on foreign corporations for the annual
The delivery timelines may also get affected with another absorption of a large part of the office space. Many of
phase of workforce reverse-migration and the ensuing the large corporates adopted Work from Home, putting
delayed construction schedules. Large investment decisions a hold on their expansion or office consolidation plans.
for office space had started to return, but increasing spread With employee fatigue due to Work from Home and with
of the virus has led to increased preference for Work offices adopting alternative strategies, viz. satellite offices,
from Home, resulting in major corporates postponing the consolidation in peripheral parts of cities etc., commercial
decisions on expansion plans and capital expenditures. office leasing and sales is slowly gathering pace.

271
MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

HIPPS (High Integrity Pressure Protection System) prevents catastrophic over-pressurisation and release of toxic flammable fluids

In the post-Covid-19 business scenario, the reputation and Business Environment

execution capability of the developer will become even The business environment was affected due to the Covid-19
more important. Prominent organised developers, such as pandemic. The operations were impacted in the first quarter
L&T Realty, who adopted a customer-centric approach, will and were restored to normalcy in Kancheepuram from
emerge stronger, and another wave of consolidation will 6th May ’20 and in Coimbatore, from 1st June ’20.
gather pace.
The business uncertainty due to the pandemic led to delays
L&T VALVES LIMITED and deferments in investment decisions, affecting the order
inflow. There was also deferment of maintenance and repair
activities in the oil & gas sector as major customers had
Overview: implemented workplace restrictions.
L&T Valves (LTVL) is a leading manufacturer of industrial
valves and has a global customer base. The business Though capacity addition in thermal power remains muted,
leverages sixty years of manufacturing excellence to capex in the areas of emission control is a primary focus.
serve key sectors, such as oil & gas, defence, nuclear & The second half of the financial year hinted at an economic
aerospace, power, petrochemicals, chemicals, water, and recovery. Liquid fuel demand is on a recovery path and is
pharmaceuticals, across the globe. LTVL manufactures inching towards pre-Covid levels.
a wide range of products such as gate, globe, check,
ball, butterfly and plug valves and automation solutions. LTVL has been able to mitigate the effects of the pandemic
With a large installed base across countries, L&T Valves with its wide customer portfolio spanning across industries
also runs a robust after-market business to support its and geographies. The entity has been able to leverage its
customers in their service and spares needs. large distribution network in these unprecedented times.

The business has a global manufacturing presence, Major Achievements

with two state-of-the-art facilities in Tamil Nadu, India
Major Orders Received:
and two facilities set up in the USA and Saudi Arabia.
LTVL products deliver safety, reliability, and quality for The business made focused efforts to build its order book
industries across the world. during the pandemic year. Focus on delivery and increased

272
Range of actuated Ball and Butterfly Valves for process as well as aerospace applications

customer engagement have helped the business to maintain Major Product Developments:
customer confidence. The major orders include valves for: To serve the arising market requirements in the areas of
safety and emission standards in energy, the business made
• Kuwait Oil Company’s 11 pattern project from SHBC
following product developments:
• Mabrouk North East Development Project from Petrofac
• Bolted bonnet gate valves with Inconel 625 overlay on
• Kandla Gorakhpur Pipeline Project from IHB (JV of IOCL, body internals for sour service applications
HPCL and BPCL)
• Forged steel small-bore globe and check valves for
• Remotely-operated shut-off valves, tank farm terminals, cryogenic service
IOCL
• Low-emission ball valves with special seals for propylene
• Hawiyah Unayzah Gas Reservoir Storage Project from service
ARAMCO
• High Integrity Pressure Protection System (HIPPS) with
pneumatic actuated trunnion- mounted ball valve,
Major Product Milestones: pressure transmitter manifold and solid-state logic solver
During the year, the business, through its technical
expertise, made the following higher size and class product • Hull ventilation valves
achievements to meet customer requirements:
• Large-size high-pressure butterfly valves for wind-tunnel
• 80” and 56” PN25 butterfly-type shut-off valve application

• 52” Class 300 CF8M triple offset butterfly valve Approval / Certifications:
• 34” Class 600 damper check valve The business made significant efforts to improve its
approvals and certifications and gained fresh approvals
• 12” Class 2500 WC6 gate valve

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MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Large-size Butterfly Valves for aerospace and hydrocarbon applications

in the following areas to enhance its market area and • Vendor development for special castings and gear box to
customer base: realise cost benefits

• CE-PED certification for API 603 and API 6D top entry • Geographical diversification of supply chain with focus on
design for Kancheepuram and Coimbatore facilities cost and quality
• Certification from M/s Thermax Babcock & Wilcox for
Coimbatore facility Digitalisation
During FY 2020-21, a dedicated digitalisation team was
• ARAMCO additional approval for cryogenic ball valves for formed with a focus on exploring usage of advanced
Kancheepuram Facility digitalisation technologies for the effectiveness and
efficiency of existing processes such as:
• API 609 & API 594 monogram certification for
Coimbatore facility • Tracking of raw materials with Global Navigation Satellite
System (GNSS)
Significant Initiatives
LTVL made significant efforts to improve its internal • Datasheet decoding using Natural Language Processing
processes and working efficiency to improve working (NLP)
capital, customer satisfaction and lead time. Key efforts
include: • Monitoring of machine’s Overall Equipment Effectiveness
(OEE) using the Internet of Things (IoT) to identify areas of
• Taskforce formed for liquidation of overdue orders and improvement and improve OEE
improved on-time delivery
Environment, Health and Safety
• Introduction of lean concepts to improve machine Environment, Health and Safety (EHS) are at the core of
utilisation and productivity operations and LTVL remains committed to achieving EHS
excellence at its workplaces. The business has successfully
• Vendor consolidation in casting supplies to implement implemented initiatives in health, safety and environment,
kitting strategy plan continuing to achieve a ‘zero man-days lost’ record during
the year.

274
Setting new benchmarks in size, pressure rating and customer satisfaction. 72” Gate Valve and #2500 Ball Valve

• Tree plantation drive at Coimbatore plant and 100 trees direct and distribution customers and a pipeline of new
planted in the plant area. business prospects, is confident of improving its order book.

• Reduction of water consumption in the plant by utilising While manufacturers are trying to improve their order
biologically-treated domestic waste-water for gardening. book, customers are trying to save costs due to reduced
maintenance spend. This has resulted in price pressure in
Human Resources the market during the pandemic year. The revival of the
automobile, construction and retail sectors in India and the
Special emphasis has been laid on employee health, well-
change in market dynamics in the international steel market
being and safety, in addition to training and development
have led to an increase in steel prices, and added to the
during this year. The business has evolved its competency
cost pressures of the business. Though this is expected to
building programmes and focused on soft skills and
hurt margins, the Company aims to reduce this margin risk
leadership development.
through its geographical, channel and product expansion
strategies.
Various engagement initiatives were undertaken during
the lockdown to motivate the employees and maintain
The Company has high dependency on the oil & gas
a healthy work-life balance when they were in remote
segment for its order inflow. The organisation plans
working mode. The change- management flagship
to mitigate the risk by increasing its focus on growing
programme ‘DISHA’ strives to make the organisation a
segments such as water, LNG and in other cryogenic
better place to work in and improve the effectiveness of
application segments.
the employees at the workplace. Developmental initiatives
through training, mentoring and coaching programmes
LTVL has a robust risk management framework in place and
were organised to upskill high-potential employees.
has taken several initiatives to mitigate the risk, viz.

Risks and Concerns • Global supply chain

The market remains highly fragmented and has become • Consolidating after-market presence
more competitive with the changing market dynamics.
Though delayed project awards to EPCs have hurt the order • Market share gain strategies through geographical,
book of the industry, the Company, with a good mix of product and channel expansions

275
MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Komatsu PC210-10M0 Hydraulic Excavator – the truly efficient and fastest KSM 403 Surface Miner – indigenously designed and manufactured by
selling equipment in the construction segment in India L&T for eco-friendly and sustainable mining in open cast projects.

• Refining its product mix with focus on standard products and focused actions taken by LTVL, the outlook of the
business remains positive.
• Global manufacturing presence
• Enhanced contract manufacturing capacity
CONSTRUCTION EQUIPMENT &
OTHERS
Outlook
The business is closely monitoring key demand indicators
such as crude oil prices, capacity additions, liquidity, project Overview:
capex spending and GDP trends in the relevant geographies. The Construction Equipment & Others (CE&O) business
With vaccination drives across the globe and revival of includes manufacture and marketing of construction
industrial activity, the business expects demand indicators equipment, mining equipment and equipment for the
to revive. However, a potential second wave of Covid-19 tyre industry, broadly segregated into Construction
and lockdowns will have an impact on immediate business & Mining Machinery (CMM) and Rubber Processing
prospects. Machinery (RPM). CMM further comprises the
Construction & Mining Equipment business unit (CMB)
The business has also taken stock of advancements in the and L&T Construction Equipment Limited (LTCEL), a
renewable and the energy sector in general. The diverse wholly owned subsidiary of L&T.
portfolio in terms of geography and industries is expected
to be an advantage for the business in the years to come. The CMB division focuses on the distribution and
after-sales service of hydraulic excavators and dump
The market share gain through streamlined product-basket trucks manufactured by Komatsu India Private Limited
building, initiatives in geographical expansion, resilient (KIPL) and other mining and construction equipment
supply chain, digitisation and a strengthened after-market manufactured by Komatsu worldwide. It is also
team would help the business build a strong order book in responsible for the distribution and providing of after-
the coming year and deliver the highest level of customer sales support for a range of construction equipment
satisfaction. including wheel loaders, compactors and hydraulic
excavators manufactured by LTCEL and mining tipper
With the revival of the oil prices, buoyancy in the non-oil trucks manufactured by Scania India. In addition, the
sectors such as water, pharma, power, post-Covid recovery division handles distribution and after-sales support for

276
L&T 1190 Soil Compactor gives reliable and efficient performance L&T 9020 Wheel Loader deployed by Border Roads Organization to construct
and upkeep strategic roads and border infrastructure

the equipment, viz. sand plants, surface miners, mobile contract-awarding activity improved during the year.
crushers and apron feeders manufactured by L&T’s However, the prolonged slowdown in real estate projects
Metallurgical & Material Handling business (MMH), continues to weigh on the business.
Kansbahal, Odisha.
In the mining sector, while coal production registered a
LTCEL, located in Doddaballapura, near Bengaluru, degrowth of ~7% over the previous year, relaxations have
manufactures vibratory compactors, wheel loaders, been brought in the coal sector, such as the option of
hydraulic excavators, asphalt paver finishers, pneumatic gasification of coal, captive use and sale in open market.
tyred rollers, skid steer loaders, hydraulic power packs, This is in addition to the Government’s approval for
cylinders, pumps and other components. commercial coal mining as well as removing restrictions
on end-use. These initiatives are likely to increase the coal
The RPM division, located in Kancheepuram near
mining activity in the coming years, which augurs well for
Chennai, manufactures and markets rubber processing
the business.
machinery, i.e. mechanical and hydraulic tyre-curing
presses, tyre-building machines, conveyor systems and
The liquidity shortage, coupled with stiff competition from
tyre automation systems for the tyre industry globally.
domestic and Chinese mining equipment manufacturers,
The Product Development Centre (PDC), based has impacted growth opportunities to some extent.
at Coimbatore, renders engineering and product
development support for the businesses under CMM and Rubber Processing Machinery Business (RPM)
RPM. The demand for the machinery manufactured by this unit
depends on tyre demand and is, in turn, linked to the
Business Environment fortunes of the automobile, agricultural and mining sectors.
Construction & Mining Machinery Business Automobile Industry: Until September 2020, the
(CMM) automobile industry witnessed one of its sharpest declines
The investment in the construction and mining sectors is in domestic sales due to subdued demand and consumer
one of the key demand drivers of the CMM business. sentiments. Post- September 2020, the industry has
witnessed sequential monthly growth in both 2-wheeler and
During the year, highway construction activity increased passenger car segments.
as compared to the previous year, as the overall

277
MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

L&T 2490 Pneumatic Tyred Roller is increasingly preferred by contractors to L&T ushered in mega mining with supply and commissioning of PC3000,
seal surfaces and achieve a smooth finish Komatsu’s first 300-ton Electrical Shovel in India, at South Eastern Coalfields
Limited, Gevra Mines

Automobile Industry Global: 2020 was a year of pick-up, Indian industry has announced its clear intention
downward growth for global auto markets. The global to go ahead with the stalled investments across all sectors,
automobile industry is expected to see a rebound in 2021, barring PCR, which witnessed lower investment until
driven by the higher sales of electric vehicles. end-2020.

The agriculture and mining sectors were not impacted As in the case of tractor and mining equipment, the off-the-
much during FY 2020-21. These two sectors saw significant road tyre category saw consistent growth throughout the FY
month-on-month growth aided by a good monsoon and and did not experience a major impact post-lockdown.
Government policies.
Major Achievements
Tyre Industry: In line with the drop in automobile sales,
the OEM tyre market also came down sharply by over 4% Construction & Mining Machinery Business
in 2020. The replacement tyre demand continued to be (CMM)
mostly flat and stable in some geographies, such as China, • 4 units of the 250 tonne 16 CuM largest Komatsu Electric
due to preference for personal mobility after the Covid-19 Shovel PC3000 commissioned in India at SECL site
lockdown.
• Timely supply and erection and commissioning of 43
However, the global tyre industry investments were machines at various Coal India subsidiaries during the
tepid in 2020, as most of the tyre majors had declared pandemic
an investment holiday. The business unit is likely to see
lower sales for machinery in the exports market, while the • Komatsu PC210-M0 excavator became the fastest model
domestic sales is likely to be more robust in FY 2021-22. in the industry to reach 1000 nos. of sale in a period of
13 months
The Indian tyre industry saw a capacity utilisation of near
about 65% until September 2020. Due to the Government • 1st HD785 dump truck deployed at Tata Steel crossed
policy on restricted tyre imports from China and pick-up in 60,000 hours of usage with 94% availability
demand for tyres, Q3 FY21 results of tyre companies were
very encouraging, leading to a double-digit revenue growth • Major single order won from Tata Steel for indirect supply
compared to the many previous quarters. With demand of dump trucks with maintenance contract

278
Scania G500 Mining Tipper is the new model introduced by L&T in India 62” Truck bus radial hydraulic tyre-curing press
for transportation of overburden

Significant Initiatives product improvements for the tyre industry. 20 such

initiatives were launched during the year.
Construction & Mining Machinery Business
(CMM) • A B2B commerce platform ‘e-RPM’ implemented to
During FY 2020-21, CMB introduced a slew of initiatives, handle customer enquiries and offers on-line.
keeping the customers’ interests in mind. Innovative
initiatives were launched during the year under Machine • Induction-type platen heating system developed in tyre-
Care Programme (MCP) covering value-added services curing presses towards commitment to the environment,
and extended power train warranty for various models. which is likely to see good customer acceptance.
New machine attachments – such as super-long front arm
with reach up to 21M, tunnelling attachment, pile driving RPM is supportive of the National Employability
attachment, breaker booms, mining breakers etc. – were Enhancement Scheme, a pioneering initiative of the
also introduced. By ensuring availability of spares at Government, wherein it provides an opportunity for
customer sites, the availability guarantee of the machines learning various skills on the job to many students
has been maintained at the present levels of ~90%, thereby immediately after the completion of their curriculum. This
retaining customer confidence and increasing spares’ sales. helps the nation at large in developing employable skilled
workforce. RPM provided such opportunities of on-the-job
CMB is collaborating with Komatsu to increase the local training to more than 100 students during the year.
content in their 60T and 100T dump trucks for increased
participation in government tenders. Talks are on with
Digitalisation
Komatsu to introduce machines with an electric drive. CMB
has been educating customers on evaluating their purchases The ‘EQUIPCARE’ app, implemented to serve the customers’
of equipment on the basis of lower life-cycle costs, quick post-sales service requirements has helped in achieving a
serviceability, etc. This will help retain customers and Suraksha coverage ratio of above 90% since 2019. This app
overcome the competition. enables customers to access service information pertaining
to their machines on their mobile devices.
Rubber Processing Machinery Business (RPM)
A cloud-based CRM solution to offer end-to end-
Initiatives introduced by the business include:
digitalisation of the sales process has been introduced
• A ‘Technology Centre initiatives’ cell is set up to discuss during the year. Under this system the entire activity of
and initiate actions towards cost reduction, process and sales, right from customer enquiry till sales collection, is

279
MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Motorcycle radial tyre-building machine

captured for each order. The complete history of customer • Absenteeism also being monitored closely for Covid-
visits, orders finalised and orders lost is captured and related assistance
tracked through this system. Dealer sales are captured
through the DeManS application developed by CMB. During • Immunity-booster made available to everyone as part of
the year, the DeManS system was migrated to the latest the regular food
user-interface technology, leading to increased speed and
offering more user-friendly features. • Do’s and Don’ts were communicated constantly to all
employees
Environment, Health and Safety
• The units conducted a fire safety audit and obtained the
Safety audits are conducted regularly to ensure that the
renewed license from Fire Department
safety practices are in place and are being followed.
• Conducted training for drivers on road safety and safe
The manufacturing unit of RPM is certified in OHSAS under
driving practices, and first-aid training to employees
Integrated Management Systems. LTCEL has been certified
for its Integrated Management System (Environmental
Management systems as per ISO 14001:2004 and Human Resources
OHSAS 18001:2007 for Occupational Health and Safety The business has progressively built a team of committed
Management systems). professionals across its manufacturing plants and
corporate offices. Emphasis on training and development
Some good practices followed by the businesses are: of the workforce has been the focus area. Additionally,
competency building programmes for leadership
• The units took utmost care and all precautionary development and various engagement initiatives have
measures to contain the Covid-19 situation while been undertaken to sustain the employees’ motivation and
resuming operations by: maintain a harmonious workplace.

• Disinfecting the facility completely and periodically, RPM has been consciously working towards gender diversity
including all the vehicles while entering by engaging female staff in the shop floor. RPM provided
support to its employees and their families by supplying
• All the employees were subjected to health screening at essential items during the Covid-19 pandemic. The
the time of resuming plant operations beneficiaries were about 400 in number.

280
New-generation floor-mounted PCR hydraulic tyre-curing press New-generation PCR hydraulic tyre-curing press

The industrial relations scenario has remained cordial at on Railways. With the above budget proposals, construction
the manufacturing units. There were no cases of violations activity is expected to pick up pace during the coming year.
during the year under the whistle-blower policy or the policy
on ‘Protection of Women’s Rights at Workplace’. Government initiatives in infrastructure development in
roads, railways, irrigation, ports, urban and rural infra,
Risks and Concerns affordable housing, etc., are expected to drive demand in
the cement and metal sectors, which, in turn, will boost
Increased market competition and macro-economic volatility
demand for excavators, dump trucks, dozers and other
are continuing concerns for the business. High diesel prices
road construction and mining equipment. With ~60% of
could dampen the demand for construction equipment.
demand for mining equipment coming from coal PSUs,
CMB is planning to target selective tenders along with
The increase in commodity prices has impacted the product
Komatsu.
cost. In the present market scenario, recovery from the
customers on account of increase in commodity prices is
In the parts and services segment, CMB plans to introduce
challenging.
newer and more innovative, user-friendly spares. Sales
promotional schemes are being devised for motivating
The business has been taking appropriate measures to
dealer engineers to enhance the parts business.
de-risk / minimise the risk by hedging, increased value
proposition being offered to customers, including in pricing,
etc. Rubber Processing Machinery Business (RPM)
As an aftermath of the Covid-19 pandemic, people may
Outlook continue to observe social distancing norms even after the
crisis has subsided, and that will change the way people
Construction & Mining Machinery Business commute. Daily commuters may prefer avoiding public
(CMM) transport and shared mobility might take a short-term
CMB plans to strengthen its position in the premium hit. As a result, the demand for entry-level cars and
segment by increasing its focus on large contractors, large two-wheelers might increase. However economic / market
irrigation projects and coal OB (over burden) removal sentiments, consumer purchasing power and the willingness
contractors. The Union budget FY 2021-22 proposes to for spending could influence demand.
invest about R 1,110 Bn on road construction and R 670 Bn

281
MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Integrated Command Control Centre, Jhansi

Further to the outbreak of the second wave of Covid-19, and digital interventions. The business, as a Master
it is anticipated that there will be continued limitations for System integrator, provides technical solutions and
global travel, at least in the immediate future. Also, some services in the areas of Safe, Smart, Communication
tyre companies may prefer to source locally. Global tyre and Digital Solutions. The business leverages its
demand is also likely to remain low and tyre companies may technical prowess to solve problems through smart,
not make any major fresh investments. scalable solutions for security, urban services, traffic,
transportation, utilities and digital connectivity.
The domestic market is very buoyant, especially in sectors
such as agri and mining, while a slow pick-up is expected The business has a diversified team of more than 800
in the commercial truck segment. The division has a great IoT engineers, data scientists, domain experts, cyber
advantage as compared to its European competitors due security experts, project management and operations
to its vast product range across all segments and its being professionals who have successfully implemented
a global market leader in machinery in the off-the-road various smart solutions and are maintaining operations
tyre segment in the agri and mining sectors. However, in more than 25 cities in the country. The business has
there is a tremendous price pressure due to competition digitally enabled 13 states through various Government
and commodity prices. The division will continue to programmes and is focusing on further enhancing its
focus on spare parts and retrofit kits which will increase services and solutions offerings.
productivity to its customers at a minimal cost. Further, the
The business has 3 major segments:
joint development of machines by RPM with their clients,
combined with service opportunities, is also being explored. 1. Safe and Smart Cities: Smart Cities, Smart Utilities,
Public Safety, Critical Infra Security, Intelligent Traffic
SMART WORLD & Management

COMMUNICATION 2. Communication & Telecom Infrastructure:

Wired & Wireless, i.e IP/MPLS backbones, DWDM
(Dense wavelength division multiplexing), Wi-Fi,
Overview: Radio communication like APCO, TETRA, Metro
L&T Smart World & Communication (SW&C) is Communications, Early Warning Dissemination
committed to making the world a ‘smarter’ place to live System, Next Gen Data Centres and Security
in and to enhance the quality of life through technology Operation Centres

282
Integrated Command Control Centre for NDMC

3. Military Communication: Satcom System, Tactical The first half of the year saw migrant resources returning
Communication System, Network Management to their states during the Covid-19 lockdown. Despite
System, Secure Handsets this, the business was able to maintain continuity, and
the technicians deployed at the project sites operated the
The business is further empowered by its Centre systems without any interruption. Their skills were upgraded
of Excellence and Solution Development Centre in with continuous training and ensured compliance with the
Hyderabad, Technology Innovation Centre in Chennai, SLAs.
Smart City Skill Development Centres in Hyderabad
and Kancheepuram and R&D Centre for Military Smart AMI metering projects continue to be a focus area.
Communication at Bengaluru. During the lockdown, technology became very relevant to
ensure that Discoms continue to get remote meter readings
Continuing its pursuit of technology and solutions, the and raise the electricity bills without the need for any person
business is working with global partners and is creating to individually visit households.
competencies to cater to opportunities in the areas of
Energy Analytics, Edge- based Video Solution as Services The business has taken a selective bidding approach and
and 5G and Cyber Security. is focussing more on solution-centric projects. This change
in strategy is to bring focus on the more profitable and
Business Environment sustainable opportunity landscape and rise up the value
chain. With a focus on innovation and the ability to adapt
Citizen safety remains a major concern for the Government.
to the dynamic business scenario, the business has been
Specific allocations for citizen safety under different State
able to retain its position as the market leader.
and Central Government programmes have presented an
increase in the opportunity landscape for the business.
While smart and safe cities and digital programmes Major Achievements
continue to get focus from the Central and State Key orders received during the year include:
Governments, the year saw slow progress in key project
decisions and implementation, and many of the key projects • BharatNet Phase- II Active Electronics in Tamil Nadu,
were postponed or deferred due to Covid-19. The on-field Package-C project through TANFINET
progress of AMI roll-out and other projects were slow
• Real Time Information System through Centre for Railway
overall, due to the Covid-19 related restrictions through the
Information System for Indian Railways
year.

283
MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Public Safety - Integrated Operations Centre, Cyberabad, and covers Hyderabad and Rachakonda as well.

Projects Completed • Recognition for Exemplary Application of Technology

• Telecom System for the 1 Section of Bengaluru Metro,
st by Private Sector was conferred for the Smart Solutions
Phase 1 Extension Deployed in Cities by CII

• The state-of-the-art Command and Control Centre for • Two RoSPA Gold Awards for Telecommunication Systems
Jhansi Smart City Project for Gujarat Metro Rail Corporation Limited and Allahabad
Smart City
• Integrated Command & Control Centre of NDMC Smart
City Significant Initiatives
The business successfully launched its own Solution Platform
• Successfully commissioned GSAT 20, GSAT 29 and GSAT ‘L&T Fusion’ – an augmented Intelligence platform aimed
11 Satcom Projects for ISRO at solving the problems of cities, law enforcement agencies
and critical infra. This will help the business to transform
• Telangana State Police Public Safety Integrated Operations into a thought partner for cities and law enforcement
Centre located at Cyberabad agencies through continuous problem-solving and
leveraging IoT, AI and mobility technologies. L&T Fusion was
Awards and Recognition successfully tested, deployed and commissioned for Nagpur
The business won various prestigious awards, including: Smart City and Raipur Smart City Projects.

• The Golden Peacock Award 2020 for Innovation in The business, in collaboration with DRDO, developed
recognition of the Artificial Intelligence based Crowd an indigenous Mission Command & Control Software
Management solution implemented in Prayagraj Smart (In-House) for perimeter security. The business has also
City signed a strategic Transfer of Technology (ToT) with Centre
for Development of Advanced Computing (CDAC) for
• FICCI Smart Urban Innovation Award, bagged by Nagpur TETRA technology.
Smart City Communications Technologies and Physical
Security The Technology Innovation Centre at Chennai, with a fully
operational Command and Control Centre and a dedicated
Data Centre was instrumental in breakthrough solutions
which were deployed across the country.

284
Surveillance Camera Installed at Prayagraj

During the year, the business developed a strong cyber iv. Mask-detection application: Based on AI, helping
security resource pool to secure the cyber-physical to track and enforce wearing of face masks while
connected ecosystem. The team has gained significant monitoring social distancing.
competence and provides services in areas of cyber defence,
industrial & smart infra cyber security, cyber risk consulting, v. Mobile-based app for the issue of a chatbot-based
digital forensics and security operation centre. e-passes.

The business has set up a state-of-the-art Tactical vi. Crowd analytics across commissionerates to generate
Communication Laboratory in Bengaluru where pioneering alerts on overcrowding.
development in high-capacity radio relay, software defined
radio, NMS, TETRA, IP-based intercom system and TCS vii. m-governance app, developed for Vizag Smart City,
projects are underway. This facility is also being used as empowered health workers to carry out house surveys.
proof-of-concept for various applications.
viii. In Tamil Nadu, the business is entrusted with hosting
Enabling Technology to counter Covid-19 e-governance of 190 critical government applications.
In these critical times, with the entire nation locked-down
due to the pandemic, the business has been aiding the Environment, Health and Safety
Government through its smart technological and innovative The business conducted approx. 200 EHS campaigns to
solutions across 20 cities, some of which are below: raise awareness and to engage staff and workmen. These
campaigns include various celebrations (Safety Month,
i. City Operations Centres (COCs) across all the smart Safety Day, etc.), competitions (quiz, poster, slogan,
cities were working as war rooms during the entire etc.), blood donations, tree plantations, etc. 19 external
duration of the pandemic. trainings were conducted through experts and health
care professionals to educate on Covid-19, mental stress,
ii. Variable Message Displays (VMDs), Public Address personal hygiene, etc. The business completed 4.26
Systems (PAs), were efficiently used to spread awareness million safe man-hours during the year. 952 trainings were
messages. conducted, clocking over 17,159 training man-hours.

iii. AI-based system monitored vehicle movement through The inhouse digital application ‘VIEW EHS’ was effectively
cameras. utilised to monitor, track and analyse EHS observations, safe

285
MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Command & Control Centre, Prayagraj

execution cards, trainings, audits, inspections, forms and of development plans, over 150 employees achieved
other activities, resulting in an incident free year. technical certifications in areas such as Cyber Security,
Cloud Computing, Networking, Data Science, Project
Human Resources Management, etc. Leadership mentors helped shape careers
and provide developmental opportunities for high-potential
The business continues to attract expert technical talent
talent.
and industry leaders in the areas of Safe, Smart and
Communication domains.
Risks and Concerns
As an employer of choice, the business has inducted young Despite projects being adequately funded through Union
technical talent from leading campuses, such as IITs and and State Budget allocations, the cash crunch at the state
NITs. ‘Udaan’ – the entry-level training and mentoring level due to Covid-19 relief measures may result in delays in
programme, has played a pivotal role in getting fresh receivable realisation. As deferred payment contracts result
graduate engineers ready to perform in diverse functional in increase in working capital requirements, the business has
roles – design, project management and client-facing been relentlessly following up with Government authorities
responsibilities. for better payment terms and has been successful in the
majority of cases.
The Covid-19 pandemic called for tremendous energy,
innovation and resilience from project managers and site With most projects now successfully completed and in
engineers. The ‘Covid Heroes’ programme showcased some the operation and maintenance phase, ensuring optimal
of the star employees whose stellar contributions supported performance as per the contractual norms is crucial to avoid
local and state governments in monitoring and managing penalties. Fully digitised centralised and dedicated support
the Covid-19 crisis, while ensuring the safety and well-being for all the operational projects for maintenance of SLAs with
of staff. contractual tie-ups with the OEMs has been established.

Digitalisation provided an excellent opportunity, during The uncertainties and delays expected in global sourcing
the lockdown period, for employees to invest in their due to the Covid-19 lockdowns may affect project
skill development. Experts across the Company shared implementation schedules. The team has taken proactive
their expertise through daily technical webinars on topics steps in terms of engagement with its wide-ranging vendor
such as Cloud, Data Centre, Surveillance, Cyber, Network ecosystem to mitigate the risks.
Security, GIS, Broadband, TETRA, Platform, etc. As part

286
GSAT11 & GSAT20 Ground Stations, Ahmedabad

The operational risk of skilled resource shortage due to opportunities in Industrial / Enterprise IoT Cyber Security
reverse migration is mitigated through the deployment of and Cyber Defense are expected to emerge over the coming
trained technicians from the dedicated Skill Development years.
Centre and Centralised Operation & Maintenance structure.
The Government is continuously investing in overall safe
The business continues to face diversified competition and smart urban infrastructure, focussing on surveillance,
mostly due to the varied portfolio across domains. In ITMS, ICCC and e-governance related applications. The
some cases, new entrants are creating market disruptions. funds allocated for the modernisation of the police force
Another challenge being faced by the business is that of and the Nirbhaya Funds will increase opportunities in the
Government flagship projects being awarded to PSUs or safe city segment.
going with limited tenders amongst PSUs. As part of Go-To-
Market, strategic partnerships are being pursued. Integrated Command Control Centres (ICCC) have
significantly contributed during the Covid-19 situation,
The business has robust Enterprise Risk Management in through unique solutions, in managing city operations, and
place, with a dedicated expert team. The Risk Management the need of them has been acknowledged and appreciated
Policy is periodically updated, and training is provided by various Government bodies. Another 25 cities are
to project teams on capturing and monitoring the planning for ICCCs, thus creating opportunities in this area.
implementation risks involved.
The successful deployment of the in-house solution platform
Outlook ‘L&T-Fusion’, with its pre-canned domain-use cases, has
created the gateway to a new opportunity landscape in
With the scope of the Bharatnet programme to cover 2.20
the areas of Video Solutions and Edge-based Analytics. The
lakh gram panchayats with high-speed broadband through
solution suite will help the business tap into enterprise and
optical fibre / radio / satellite, the scope for electronics for
global opportunities in the areas of public safety, smart
this programme provides good opportunity. Further, due
cities and mobility.
to the increase in the data usage and requirement of data
localisation / hosting, and with the adoption of digital
During the lockdown, the Smart AMI ensured that Discoms
platforms and the work-from-home scenario, Data Centre
get remote meter readings and raise the electricity bills
opportunities are expected to increase. As a consequence,
without the need for any person to individually visit
the need to have a robust cyber-security system to manage
households, additionally reducing the AT&C loses. The
and mitigate threats also increases. The associated

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MANAGEMENT DISCUSSION AND ANALYSIS    OTHERS    ANNUAL REPORT 2020-21

Smart Worker Solution

Smart Meter Programme has a layout of 1.5 lakh crore for and the invaluable learning from the digital transformation
the next 5 years. of their own diverse businesses to deliver disruptive digital
outcomes for its global customers.
The increase in allocation for space technology and space
applications which will expand business prospects of L&T-NxT offers products, solutions and platforms leveraging
ISRO-led opportunities are being pursued by the Military new-age and emerging digital technologies like Artificial
Communication segment. Intelligence, Machine Learning, Industrial IoT, Augmented
& Virtual Reality, Geospatial Engineering Services and Edge
Robust communication systems to strengthen the defence
Cybersecurity. Services range from technology solution
sector is another focus area for the Government. Specific
architecture design, systems integration, end-to-end
allocation has been made towards establishing a dedicated
platforms and managed services for core industries, such
countrywide secure multi-service and multi-protocol
as Energy & Utilities, Transportation & Logistics, Process &
converged next-generation network for the defence
Discrete Manufacturing and Engineering & Construction.
services. Combined with the Government’s thrust on ‘Make
in India’, these areas provide significant opportunities over
During the year, L&T-NxT focused on building the
the coming years.
organisational structure and the strategies for reaching out
to market and also for productising the digital solutions.
DIGITAL BUSINESSES Building capabilities and transition of the L&T Digital team
to orient to a market-focused sales organisation has been
the key focus area. However, business development efforts
‘Others’ business also includes the new digital businesses
and reach-out to potential customers, especially in the US
incubated by the Company, as below. These ventures are
and Europe, were hampered due to the pandemic.
part of L&T’s plan to adopt digital technologies to future-
proof its businesses and to tap future growth opportunities.
These are being nurtured ground-up and are expected to EduTech
become highly value accretive for L&T when they get into With a strong pedigree of skilling and learning and
commercialisation and scale up in a couple of years. development programmes, L&T is poised to expand its
skilling initiatives targeting a larger audience, especially the
L&T NxT youth, to offer an integrated platform spanning skilling
to recruitment, leveraging L&T’s inherent expertise and
L&T-NxT leverages the Group’s deep industry domain
strengths in core engineering, manufacturing, technology
expertise, leading-edge information technology capabilities

288
and its pioneering efforts in digitalisation. L&T EduTech is a strength of its relationships with suppliers, SMEs and the
business formed to develop the EdTech Platform and offer supply chain ecosystem at large.
EdTech products and solutions to educational institutions,
skilling bodies, working professionals, students and learners SuFin is a B2B industrials ecosystem which will provide
across segments. a platform for SME buyers and sellers (mainly focused
on construction and industrial products and services) to
The platform is at the incubation stage, and involves connect in an efficient manner, thereby enabling sellers to
developing an integrated online portal to cover business expand their sales reach, and for buyers to find the optimal
offerings, viz. industry-led application-oriented courses products and services at optimal cost and quality. The
for engineering students to improve their employability, logistics partners on the platform would enable efficient
vocational courses, national certification for engineers and delivery and fulfilment in a timely, cost-effective manner
assessment of skills for future employability. The business with strong SLA compliance. In this B2B marketplace
completed the work on the first Minimum Viable Product initiative, financial services companies will also participate
(MVP) phase with the content creation for reinforced on the platform and will provide attractive financing options
learning, vocational courses, development of assessments to the platform users.
and development of platform to support all these activities.
The commercial launch of the platform is expected next During the year, key activities, viz. platform development
year. with various features / sub-features, on-boarding sales,
marketing and operations teams, creating SOPs, KYC checks
SuFin of the participants, catalogue uploading, partnerships for
logistics, payment gateway and other preparatory work has
Leveraging its strong brand salience and leadership, L&T is
been undertaken. The commercial launch of the platform is
well-placed to enter the e-commerce marketplace on the
expected in the ensuing financial year.

289
MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

Financial Review 2020-21 a global GDP growth of ~6% in 2021. However, this
rebound in global activity has been uneven mainly due
I. L&T CONSOLIDATED
to the Covid-19 second-wave infections across some
A. PERFORMANCE REVIEW geographies.
FY 2020-21 was a year that changed everything. The sheer
scale of suffering that Covid-19 created for humanity, the Global financial conditions have remained accommodative
adverse impact that it had on economies and the positive as governments and central banks have adopted monetary
fallout of the scale of innovation that it helped create are easing and expansionist fiscal policies to counter the
telling evidence of the scale of change. It started with pandemic. However, the sharp economic recovery
nation-wide lockdowns implemented to control the ‘once- expected could trigger inflation, resulting in higher
in-a-century’ pandemic which put severe pressure on interest rates’ adversely impacting the capital flows to the
people, employment, health-care systems, organisations emerging markets. Higher commodity prices are expected
and governments. Bereft of a cure or a vaccine, public to have a positive outcome in terms of greenfield /
health policy became central to tackling this all-pervasive brownfield expansions foreseen in certain industries.
crisis. Governments and central banks across the A silver lining of the Covid-19 situation has been the
world deployed a range of policy tools to support their fast adoption of digital technologies which ensured
economies, such as lowering key policy rates, quantitative that economies did not get completely stalled due to
easing measures, loan guarantees, cash transfers and fiscal lockdowns and other strictures. Another positive fall-out
stimulus measures. of the pandemic has been an increased awareness
Post the phased lifting of the lockdowns, the Indian of sustainability and a more stringent emphasis on
economy started witnessing growth across most sectors, environment protection, social responsibility and
as evidenced by way of significant increases in high- governance frameworks. With countries signing up
frequency indicators, such as power demand, E-way bills, for a time-bound zero-carbon-emission targets, newer
GST collections, cement / steel consumption, etc. These business opportunities are expected in areas such as green
not only touched the pre-pandemic levels, but, in some hydrogen, renewables, water management, etc.
cases, also surpassed the previous year’s levels as well. Against the backdrop of such an evolving environment,
Despite the buoyancy in agriculture, construction, high the Group, with an avowed dictum of health and safety
commodity prices and improved consumption expenditure, first, registered a reasonable financial performance
India’s GDP contracted by 7.3% in FY 2020-21 mainly due during FY 2020-21. Lockdown-related disruptions, social
to the lockdown-led sharp decline in the first half of the distancing norms and quarantine requirements to counter
year. the pandemic, impacted the growth plans of the company
In India, the government, while pursuing all efforts to for FY 2020-21. The Group recovered much of the lost
control the Covid-19 pandemic, has emphasised on the ground in the second half of the year and, particularly
need to kick-start economic growth. The Union Budget during the last quarter of FY 2020-21, managed to even
2021 has detailed out a plan for large outlays of spend on surpass the pre-Covid-19 volumes of the quarter of the
infrastructure, and with other initiatives like Atmanirbhar previous year across many of its businesses.
Bharat / Production Linked Incentives, etc., expects During the year, the Company concluded the divestment
growth rebound coming through higher private sector of its Electrical & Automation (E&A) business, including
investment as well. The outlook for FY 2021-22 is one the sale of the integrated marine automation solutions
of cautious optimism, with the country’s GDP attaining company, Servowatch Systems Limited. L&T Uttaranchal
positive territory and maintaining inflation within the Hydropower Limited, a subsidiary, successfully
target. The current resurgence of a more serious second commissioned the 99 MW Singoli-Bhatwari Hydel Power
wave of Covid-19 may adversely impact the first half of FY Plant in the state of Uttarakhand.
2021-22, but post the vaccination efforts and improved
adherence to Covid-19 protocols, the second half should As at March 31, 2021, the L&T Group comprises 102
witness a strong revival of the economy. subsidiaries, 6 associate companies, 25 joint ventures and
35 jointly held operations. Most of the group companies
The global economy, which was already on a weak are strategic extensions of the core business of L&T. The
growth momentum owing to various factors such as trade majority of the subsidiaries support L&T’s core businesses
tensions, political instability, Brexit, low crude prices, etc., of EPC Contracts and Hi-Tech Manufacturing by enabling
got further accentuated with the Covid-19 pandemic’s access to new geographies and business segments.
affecting many countries. With most developed nations Certain distinct service businesses, such as Information
implementing large-scale vaccination and enforcing Technology, Technology Services, and Financial
strict protocols, economic activity has revived, with high Services, are housed in separate listed subsidiaries. The
consumption-led demand. Recent forecasts point out

290
Development Projects / Concessions business are run in The year witnessed the receipt of India’s largest ever
separate subsidiaries and joint venture companies. infrastructure order, the C4/C6 packages of the Mumbai
– Ahmedabad high-speed rail, coupled with some
The Company continues to focus on shareholder value
noteworthy order wins in rural water supply projects, a
creation by divesting non-core assets capturing cost
special bridge project across the river Brahmaputra, a
efficiencies and leveraging technology for productivity
transmission line project in Bangladesh and a solar project
gains. The Company’s efficient execution of its large Order
in Saudi, the setting up of a dual feed cracker unit in
Book, strong Balance Sheet, and committed work force
Rajasthan in the Onshore business of Hydrocarbon and the
is helping it to successfully transition into a more digitally
largest order for supply of equipment and spares in the
evolved work environment that will enable the business
Construction Equipment business.
to thrive and grow, once the current pandemic challenge
eases.
Order Book
Order Inflow and Order Book R crore
7.7%
400000 –
Order Inflow 327354
R crore 320000 – 303857
(5.8%) 68773 21%
250000 –
240000 – 25% 75038
200000 – 186356
175497
160000 –
60094 47951 27% 258581 79%
150000 – 32% 75% 228819
80000 –
100000 –
127546 73% 0–
68% 126262

–
As at 31-03-2020 As at 31-03-2021
50000 –
Domestic   International
0–
–

2019-20 2020-21
Domestic   International
Order Book Composition
Order Inflow Composition R crore 13505
R crore 5554 Infrastructure 4%, (5%) Infrastructure
3621 44179
2%, (3%) 3%, (5%) Power 14%, (15%) Power
13404 102702 Defence Engineering Defence Engineering
8%, (8%) 59%, (53%) Heavy Engineering 4372
1%, (1%) Heavy Engineering
Hydrocarbon
25463 Hydrocarbon
14%, (12%) IT & Technology 7889
Services 2%, (3%) Others
Financial Services
17729 Development projects 12844
10%, (11%) 4%, (5%)
Others 244565
3574 75%, (71%)
2%, (1%) 2468 982
1%, (1%) 1%, (6%) Total Order Book: R 327354 crore as at March 31, 2021
Total Order Inflow: R 175497 crore during the year 2020-21 [Figures in brackets relate to previous year]
[Figures in brackets relate to previous year]

The L&T Group achieved order inflows of R 175497 crore As on March 31, 2021, the order book is at R 327354
during FY 2020-21, registering a decline of 5.8% over the crore providing a multi-year revenue visibility to the
previous year. Despite the Covid-19 led disruption, the Company. The Infrastructure segment has a 75% share of
order inflow was facilitated by the thrust being given by the consolidated order book.
the Government to the infrastructure sector to expedite The order book registered a growth of 7.7%, mainly due
the normalisation of economy impacted by the pandemic. to receipt of some mega orders during the year. Around
With the increased share in infrastructure capex, coupled 25% of the order book comprises orders received from
with lower opportunities in the Hydrocarbon and Thermal various State Governments, including local authorities.
Power sectors, the contribution of the Infrastructure With some of the large orders received during FY 2020-21
segment in overall order inflow increased to 59%, from coming from Public Sector Undertakings, the share of this
53% in previous year. Also, with the current year order segment rose to 51% as against 44% for the previous
inflow being mainly domestic, the share of international in year. The proportion of orders funded by multi-lateral
order inflow dropped to 27% from 32% in previous year. agencies increased to 35% of the domestic order book,
attributed to the high-speed rail orders.

291
MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

International Order Book Composition Segment-wise Gross Revenue*

2% 8% Saudi R crore 3621 6093 Infrastructure
(2%) (10%) Qatar 3%, (3%) 4%, (5%)
1% Power
UAE 13404
(2%) 33% Defence Engineering
(28%) Oman 10%, (9%)
Kuwait Heavy Engineering
21% Bangladesh Hydrocarbon
(24%) Africa 25619 IT & Technology
America 19%, (15%) Services
Europe 61962
7% 45%, (49%) Financial Services
(5%) 9% ROW
(7%) 16964 Development projects
5% 5% 12%, (12%) 3018 3193 Others
(7%) 9% (7%) 2%, (2%) 3410 2%, (2%)
(8%) 3%, (3%)
Total International Order Book: R 68773 crore as at March 31, 2021 * includes inter segment revenue R 1304 crore for FY 21 and R 1590 crore for FY 20
[Figures in brackets relate to previous year] [Figures in brackets relate to previous year]

The FY 2020-21 order inflow growth being driven by During the year, most of the businesses registered a
domestic business resulted in decline in the share of the decline over the previous year. The revenues from the
international order book, from 25% to 21%. The share IT&TS segment demonstrated satisfactory growth, in
of Saudi Arabia in the overall international order book tandem with the growth opportunities witnessed in their
increased to 33%, mainly with some large-value orders respective customer domains.
received by the Infrastructure segment, while the share of Operating Expenses and PBDIT
Africa declined to 21%.
Consolidated Revenue from Operations Operating Expenses and PBDIT
2020-21
[% to revenue]
Gross Revenue from Operations
R crore (6.5%) 11.5%
(11.2%)
200000 – Mfg., Construction &
6.5% Operating Expenses
(5.9%)
150000 – 145452 135979 Staff Expenses
33% 48467 50463 37% Sales, Administration &
100000 – 18.2%
(15.9%) Other Expenses

50000 – 67% 96985 85516 63% 63.8% Operating Profit (PBDIT)

(66.9%)
0–
–

2019-20 2020-21
[Figures in brackets relate to previous year]
Domestic   International
Manufacturing, Construction and Operating (MCO)
The L&T Group recorded revenue of R 135979 crore during expenses for FY 2020-21 at R 86701 crore decreased
FY 2020-21, registering a decline of 6.5%. The decline by 11% over the previous year. These expenses mainly
was mainly due to the slowdown of project execution and comprise cost of construction material, raw materials and
manufacturing activity, affected due to lockdown-related components, subcontracting expenses and interest costs
disruptions in the first quarter of the year, partially in Financial Services business. This represents 63.8% of
compensated to a more normalised level of operations revenue, a decrease by 310 bps, mainly due to change
witnessed during the second half of FY 2020-21. The new in job mix, slowdown in the construction activity at sites
norms of social distancing, quarantine procedures and during the first quarter of FY 2020-21 and increased share
safety protocols, coupled with supply chain disruptions, of IT&TS segment.
continued to impact the project performance throughout
the year. The composition of international revenue at the Staff expenses for FY 2020-21 at R 24762 crore increased
Group level increased to 37% in FY 2020-21 compared to by 7.1% over the previous year and as a percentage
33% in the previous year, with the increased contribution to revenue increased by 230 bps, reflecting manpower
of revenues from the Hydrocarbon and IT&TS segments. ramp-up in IT&TS segment. The Group continues to

292
focus on productivity improvements, digitalisation and treasury investments, other income at R 3429 crore, grew
manpower optimisation across most of its businesses. by 45.3% over R 2361 crore in the previous year.
Sales and administration expenses increased by 2.8% Finance cost
y-o-y to R 8892 crore. The increase is primarily in Financial The interest expenses for FY 2020-21 at R 3913 crore were
Services due to higher credit cost reflecting the effect higher by 39.9% over R 2797 crore for the previous year.
of the pandemic, partly offset by savings in travelling The increase was mainly attributable to the higher interest
expenses and advertisement / publicity and lower cost in the Hyderabad Metro upon commencement of full
donations. operations and higher borrowings in the parent entity,
The Group’s operating profit at R 15624 crore for retained as a buffer to address uncertainties emanating
FY 2020-21 registered a decline of 4.3% y-o-y, largely from the pandemic. The average borrowing cost for FY
due to lower revenue volumes. The PBDIT margins for 2020-21 decreased to 7.7% p.a. from 8.1% p.a. in the
the year improved by 30 bps at 11.5%. Cost savings, previous year.
sale of commercial property in the Realty business, claim Tax Expense
settlements mainly in the Infrastructure business supported
Income Tax charge for FY 2020-21 (excluding tax charge
by operational excellence measures in L&T Infotech
on discontinued operations) increased to R 4011 crore
and Mindtree Limited aided the margin improvement.
compared to R 3263 crore in the previous year on higher
However, cost overruns encountered in some projects
effective tax rate caused by additional disallowances
coupled with unabsorbed overheads during the lockdown,
such as withdrawal of depreciation on goodwill etc. and
the higher provision in Financial Service business and
non-creation of deferred tax asset for the losses incurred
lower passenger ridership of Metro services in Hyderabad
by the Hyderabad Metro.
were the margin headwinds.
Exceptional Items
Depreciation and Amortisation charge
Exceptional items during the year comprise (a) impairment
Depreciation and Amortisation charge for FY 2020-21
of funded exposure in the heavy forgings facility
increased by 17.9% to R 2904 crore, compared to R 2462
joint venture, (b) impairment of assets in the power
crore in the previous year. The increase is largely due to
development business and partly offset by way of (c) gain
full operationalisation of the Hyderabad Metro Rail and
on the divestment of wealth management business in
the impact of the consolidation of Mindtree for the full
Financial Service.
year.
Profit from Discontinued Operations
Profit Before Interest and Tax
Profit from Discontinued Operations includes gain from
Segment-wise composition of PBIT for FY 2020-21 is
divestment of Electrical & Automation and Servowatch
represented below:
business of R 8186 crore and profit from operations of
the divested business up to the date of transfer / sale,
Segment-wise PBIT Composition R 52 crore.
R crore -197 1123 Infrastructure
-1%, (2%) 8%, (7%) Consolidated Profit after Tax and EPS
Power
1286 Defence Engineering Consolidated Profit after Tax (PAT) at R 11583 crore for
9%, (17%)
4522
Heavy Engineering FY 2020-21 rose by 21.3% over the previous year at
31%, (32%) Hydrocarbon R 9549 crore.
IT & Technology
111 Services Consolidated Basic Earnings per Share (EPS) from
1%, (1%) Financial Services continuing operations and discontinued operations for
4823 617
34%, (23%) Development projects FY 2020-21 at R 82.49 registered growth over previous
4%, (3%)
Others
1568 488 year at R 68.04.
11%, (11%) 3%, (4%)
Return on Consolidated Net Worth
[Figures in brackets relate to previous year]
The Net Worth, as on March 31, 2021, at R 75869
crore, reflects net increase of R 9145 crore, as compared
Other Income
to the position as on March 31, 2020. Return on Net
Aided by higher investible surplus with cash generated Worth (RONW) for the year 2020-21 was higher at
from the divestment of the Electrical & Automation 16.2%, compared to 14.8% in the previous year. The
business, the interest income increased. Further with profit improvement was primarily on account of divestment
on sale of liquid investments, and dividend income from gains, offset by impairment of investments / assets and

293
MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

Covid-19 related additional provisions in the financial changes i.e. change of 25% or more as compared to the
services business. immediately previous financial year:
Liquidity & Gearing Sr. Particulars 2019-20 2020-21 % Growth
No.
Cash flow from operations (including change in loans
and advances towards financing activities) increased to (i) Gross Debt Equity Ratio 1.85 1.51 18.4%
R 22844 crore as compared to R 6694 crore in the previous (ii) PBDIT as % of net revenue 11.2% 11.5% 2.4%
year due to better operational efficiencies and the thrust
on collections and receipt of customer advances from new (iii) Net Working Capital % of
orders. During the year, additional funds were generated Sales (Excluding Financial
mainly from the divestment of the Electrical & Automation Services & Corporate) 23.7% 22.3% 5.9%
business, treasury and dividend income. (iv) Interest Coverage Ratio*
(Interest cost excludes
Funds were utilised mainly for purchase of investment
Financial Services and
R 17560 crore and repayment of borrowings (incl.
Finance Lease Activity) 5.80 4.13 -28.9%
repayment of lease liability) R 9047 crore. Further, the
Group incurred capital expenditure of R 922 crore. Funds * The significant change in the Interest Coverage Ratio for
were also utilised for payment of dividend R 3651 crore. FY 2020-21 has been due to full commissioning of the L&T
The cash outflow also included net interest expense of Hyderabad Metro Rail leading to cessation of capitalisation
R 3388 crore during FY 2020-21. of interest on borrowing done hitherto coupled with
Consequently, there was a net increase of R 2141 crore in under-utilisation of the metro services.
the cash balances as at March 31, 2021 as compared to B. SEGMENT-WISE PERFORMANCE (GROUP)
the beginning of the year. 1. Infrastructure Segment
Consolidated Fund Flow Statement v crore
Order Inflow
Particulars FY 20-21 FY 19-20
R crore
Operating activities 22844 6694 3.9%
Net divestment / (investment) 11574 (9802) 140000 –
Treasury and dividend income 1479 952 120000 –
102702
100000 – 98832
Receipt from / (Payment to) minority 19641 19%
interest (net) 796 (60) 80000 – 30% 29509

ESOP Proceeds (net) 16 18 60000 –

40000 – 83061 81%
Sources of Funds 36709 (2198) 70% 69323
20000 –
Capital expenditure (net) 922 3299
0–
Repayment of Borrowings / (Additional
–

–
2019-20 2020-21
Borrowings) 9047 (13867)
Domestic   International
Purchase / (Sale) of investments 17560 (3893)
Dividend paid 3651 4551 Effective from April 1, 2020, the Smart World and
Increase / (Decrease) in cash balance 2141 4809 Communication business, which was previously reported
Interest paid 3388 2903 under the Infrastructure segment, has been reclassified to
Utilisation of Funds 36709 (2198) the ‘Others’ Segment to reflect the revised organisation
The total borrowings as at March 31, 2021 were lower structure, change in business model and management of
at R 132605 crore as compared to R 141007 crore as at financial performance. Accordingly, the previous year’s
March 31, 2020. The major decrease is in borrowings of figures have been regrouped, wherever necessary.
Financial Services. The gross debt equity ratio decreased The Infrastructure segment won orders worth R 102702
to 1.51:1 as at March 31, 2021 from 1.85:1 as at March crore, higher by 3.9% over the previous year, mainly
31, 2020. The net debt equity ratio improved to 1:1 as at due to the large-value high-speed rail orders. The Heavy
March 31, 2021 from 1.53:1 as at March 31, 2020. Civil Infrastructure segment also received some marquee
Details of significant changes in key financial ratios orders in the Special Bridges, Metros and Hydel and Tunnel
along with explanation business, aiding growth.
In compliance with the requirement of listing regulations, Though the Power Transmission & Distribution business
the key financial ratios of the Group have been provided registered a decline, it received some large value
hereunder along with the explanation for the significant international orders, notably the order to establish

294
one of the world’s largest solar PV plants in Saudi 2. Power Segment
Arabia. The Buildings & Factories and Water & Effluent
Treatment businesses had lower orders in FY 2020-21, Order Inflow
due to deferral of targeted prospects. The decline seen in R crore
15000 – (91.8%)
Metallurgical and Material Handling business orders was
mainly due to large-value gold beneficiation plant order 12048
12000 – 2%
and railway freight facility package orders booked in the 264
MENA region during FY 2019-20. 9000 –

6000 – 98% 11784

The share of international order inflow for the 982
Infrastructure segment decreased to 19%, from 30% 3000 – 49 5%
in previous year, with international order wins being 933 95%
0–
predominantly booked in the Power Transmission &

–
2019-20 2020-21
Distribution business. Domestic   International

The Power segment recorded an order inflow of R 982

Gross Revenue from Operations crore for the year ending March 31, 2021, significantly
lower by 91.8% as compared to the previous year,
R crore
(14.8%) attributed to the absence of greenfield thermal power
100000 – project opportunities, while the previous year included
80000 –
a large domestic order for an ultra-supercritical thermal
72682
61962 power project and an order for a comprehensive boiler
60000 – 25% 17898 island package in the Boiler JV. Further with the extension
15709 25%
of the deadline to meet the emission norms, the tendering
40000 – 8.5%
75% 54784
of FGD orders also got deferred.
20000 – 46253 75%
8.2% Gross Revenue from Operations
0–
–

2019-20 2020-21 R crore 37.7%

6000 –
Domestic   International OPM %
5000 –
3193
4000 –
The Infrastructure segment clocked a gross revenue of 148
5%
3000 – 2318
R 61962 crore for FY 2020-21 registering a decline of
2000 – 17% 386 3045 95%
14.8% over the previous year. Revenue was impacted due
to lockdown-related disruption during the first quarter 1000 – 12.0% 4.6%
83% 1932
and a slower progress of construction activity post the 0–
–

–
2019-20 2020-21
lockdown due to social distancing norms and mandated
safety protocols impacting site productivity. Revenue Domestic   International OPM %
from international operations constituted 25% of the The segment’s revenue improved y-o-y by 37.7% to
total revenues of the segment during the year, same as R 3193 crore, with a higher execution momentum aided
that of FY 2019-20, with some large-value orders being by a higher opening order book. The composition of
completed substantially. revenue from international projects decreased to 5% of
The Infrastructure segment posted an operating profit of the total revenue for the segment, from 17% in previous
R 5227 crore. There was an improvement in margins from year with the Bangladesh gas-fired power project orders
8.2% to 8.5% mainly due to claim settlements in a few nearing completion.
domestic projects, reduced ECL provisions and tapering of The segment operating profit has declined from R 274
stressed projects. crore in the previous year to R 147 crore in FY 2020-21
The funds employed by the segment at R 25170 crore as and the margin decreased to 4.6% from 12%, as the
at March 31, 2021 registered a decline of 7.4% vis-à-vis previous year’s profits included receipt of a favourable
March 31, 2020, with higher collections, especially from arbitration award. The current year’s margin was also
the government / PSU customers, reduction in contract impacted with the stage of projects in the job mix.
asset, receipt of advances in large-value projects, partly The funds employed by the segment at R 2022 crore as
offset by higher vendor payouts to support vendors / at March 31, 2021 registered an increase of 15.9% over
sub-contractors during these challenging times. the previous year, mainly due to delay in collection of

295
MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

retention amount in jobs nearing completion, coupled 4. Defence Engineering Segment

with the build-up in contract assets with pick-up in
execution momentum. Order Inflow
R crore
3. Heavy Engineering Segment 5000 – 21.9%

Order Inflow 4000 –

R crore 2468
51.4% 3000 –
6000 – 2024 8 0%
5000 – 2000 – 23% 460
2460 100%
4000 – 3574 1000 – 1564
77%
3000 – 2361 1234 35% 0–

–
2019-20 2020-21
2000 – 1343
57% Domestic   International
1000 – 2340 65%
43% 1018
0– The Military Communications business, which was
–

–
2019-20 2020-21 reported under the Defence Engineering segment till
Domestic   International FY 2019-20, has now been made part of the Smart World
and Communications business which is now reclassified
The Heavy Engineering segment recorded an order inflow to the ‘Others’ Segment. Accordingly, the previous year’s
of R 3574 crore for the year ending March 31, 2021, figures are regrouped wherever necessary.
higher by 51.4% as compared to the previous year, mainly
due to a large order in the Nuclear Equipment system The Defence Engineering segment recorded an order
business, resulting in drop in share of international orders inflow of R 2468 crore for the year ending March 31,
from 57% in the previous year to 35% in FY 2020-21. 2021, higher by 21.9% over the previous year with the
receipt of an order from the Ministry of Defence. There
Gross Revenue from Operations were no major international orders in FY 2020-21.
R crore
(5.8%)
4000 – Gross Revenue from Operations
3500 – 3205 3018 R crore
(7.8%)
3000 – 6000 –
2500 – 45% 1428 1492
2000 –
49% 5000 –
21.5%
1500 – 4000 – 3699
19.7% 3410
9% 342
1000 – 55% 1777 3000 – 823 24%
500 – 1526 51%
2000 – 91% 3357
0– 22.2%
–

2019-20 2020-21 1000 – 18.6% 2587 76%

Domestic   International OPM % 0–
–

–
2019-20 2020-21
The segment’s gross revenue of R 3018 crore registered Domestic   International OPM %
a decline of 5.8% compared to the previous year, which
had a higher composition of revenue from refinery orders The segment’s gross revenue of R 3410 crore declined by
coupled with a lower opening order book for FY 2020-21 7.8% compared to the previous year. The decline was
in the fertiliser and petrochemical business. Revenue from mainly due to the tapering of the K9 Vajra order. This was
international operations constituted 49% of the total partially offset by increase in the Shipbuilding business,
revenue for the segment. on the sale of two commercial vessels and progress being
The segment operating profit for the year decreased to achieved on an international order, with which the share
R 536 crore, registering a margin decline, from 21.5% to of international revenues increased to 24% from 9% in
19.7%, mainly due to a one-time settlement reached with previous year.
an international client with respect to a warranty claim. The segment recorded an increase in the operating
Funds employed by the segment as on March 31, 2021 at profit for the year at R 754 crore. The operating margin
R 1740 crore, lower by 40.1% over the previous year, are improved from 18.6% in the previous year to 22.2% in
attributed to the writing down of funded exposure in the FY 2020-21 mainly due to cost savings and release of
heavy forgings facility joint venture. project contingencies.

296
Funds employed by the segment as on March 31, 2021 The segment’s operating profit for the year declined to
at R 2090 crore decreased by 29.9% y-o-y, on account of R 1748 crore. The operating margin reduced by 60 bps
collections against deliveries of the K9 Vajra order. from 10.9% to 10.3%, reflecting under recoveries during
the lockdown.
5. Hydrocarbon Segment
The funds employed by the segment as on March 31,
Order Inflow 2021 at R 3029 crore increased by 5.2% as compared
R crore to March 31, 2020, despite liquidation of current
30000 – (15.4%) customer receivables. The increase is mainly due to higher
investment of surplus funds.
25000 –
20964
20000 – 17729
6. IT & Technology Services (IT & TS) Segment
36% 7641
15000 – 2944 17% As Mindtree Limited was consolidated from the second
10000 – quarter of FY 2019-20, the previous year includes only
64% 13323 14785 83% nine months’ performance of Mindtree Limited. Hence the
5000 –
current period is not comparable with the previous period
0– on a like-to-like basis.
–

–
2019-20 2020-21
Domestic   International
Gross Revenue and OPM%
The Hydrocarbon segment achieved order inflows of 14.7%
R 17729 crore, registering a decline of 15.4% with R crore
respect to the previous year. The segment witnessed many
28000 –
deferments of project opportunities due to the Covid-19 25619
pandemic and some targeted prospects being lost to 24000 – 22335
the competition. The segment managed to successfully 20000 –
23.5%
procure some prestigious domestic orders in the 16000 –
petrochemical space. With most of the countries within 12000 – 20.9%
the MENA deferring the investment in the hydrocarbon
8000 –
sector, the share of international orders dropped to 17%
4000 –
in FY 2020-21 from 36% in the previous year.
0–
–

–
2019-20 2020-21
Gross Revenue from Operations
Revenue   OPM %
R crore (2.8%)
25000 – The IT&TS segment comprises the listed companies and
the entities under their respective control, viz., (a) L&T
20000 – 17445
16964 Infotech Limited (LTI), (b) L&T Technology Services Limited
15000 –
7552
(LTTS) and (c) Mindtree Limited. The segment recorded a
43% 8019 47% gross revenue of R 25619 crore for the year ended March
10000 –
10.9% 31, 2021, registering a growth of 14.7% over the previous
8945 53%
5000 – 57% 9893 year. On a like-to-like basis, the growth would have been
10.3% 6%. International revenue constitutes a steady 92% of the
0–
–

2019-20 2020-21 total revenue of the segment.

Domestic   International OPM %
The segment’s operating profit was at R 5986 crore for FY
Segment revenue at R 16964 crore for the year declined 2020-21 as compared to R 4635 crore in the previous year.
by 2.8% y-o-y, due to the slowdown in the execution The operating margin improved by 260 bps, mainly on
activities of key projects impacted by the lockdown. The improved resource utilisation, higher offshore volume and
share of international revenue in FY 2020-21 was higher savings in other operational cost.
at 47% of the total revenue of the segment as compared The funds employed by the segment as on March 31,
to 43% in the previous year, essentially a function of the 2021 at R 23442 crore increased by 19.4% compared to
stage of execution of orders and access to sites during the March 31, 2020 mainly due to higher investible surpluses.
pandemic year.

297
MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

7. Financial Services (FS) Segment The Gross Non-Performing Assets (GNPA) ratio improved
The Financial Services segment comprises Rural, to 4.97% as at March 31, 2021 from 5.36% as at March
Infrastructure and Housing Finance and Asset 31, 2020. Net NPA ratio has also reduced to 1.57% as at
Management. March 31, 2021 against 2.28% as on March 31, 2020.
Average Assets Under Management (AAUM) in the
Gross Revenue Investment Management business at R 72728 crore as at
March 31, 2021 has marginally improved, despite volatile
R crore (3.0%) capital markets and stress in the debt market funds caused
20000 – by yield corrections.
The Financial Services business has completed its
15000 – 13822
13404 divestment of Wealth Management business to IIFL Wealth
during the year and has also completed the merger of L&T
10000 –
Housing Finance Limited and L&T Infrastructure Finance
Company Limited into L&T Finance Limited as a part of
5000 –
business restructuring and simplification.

0– 8. Developmental Projects (DP) Segment

–

–
2019-20 2020-21
The Developmental Projects segment comprises
concessions acquired through a competitive bidding
This segment was adversely affected by the Covid-19
process for the development of Power projects, Roads,
pandemic by way of extension of moratorium to
Bridges, Hyderabad Metro Rail and a Power Transmission
customers through RBI directives, additional statutory
Line project. The total portfolio of the Developmental
provisioning requirements on account of such moratorium
Projects Group consists of 2 power projects (1 thermal and
and slowdown of disbursements. The segment’s revenue
1 hydel), 10 roads and bridges projects, 1 transmission
declined by 3% y-o-y at R 13404 crore for FY 2020-21
line project and 1 metro rail project. The metro rail project
reflecting unconducive business environment.
has been executed under L&T Metro Rail (Hyderabad)
Limited (L&T MRHL) which is a 100% subsidiary of the
Loan Book and NIM + Fees % parent entity. The power assets are developed in SPVs
held through L&T Power Development Limited, a 100%
R crore
subsidiary, and other projects are developed through SPVs
100000 –
98384 held by L&T Infrastructure Development Projects Limited,
96000 –
a joint venture in which the Company owns 51%. During
94013 the year, Company successfully commissioned its hydel
92000 – power plant project in the state of Uttarakhand, and with
7.15 completion of the hydel project, all the projects which
6.95
88000 – were under construction have been commissioned by
March 31, 2021.
84000 –
Gross Revenue and EBITDA
80000 –
–

2019-20 2020-21 (25.3%)

R crore
Loan Book   NIM + Fees % 6000 –

5000 – 4850
Disbursal of fresh Loans and Advances of R 28324 crore
during the year ended March 31, 2021 reflects a decline 4000 – 3621
of 24% y-o-y, due to Covid-19 impacted slowdown across 3000 –
539
all segments. The Loan Book stood at R 94013 crore as at
2000 –
March 31, 2021, a marginal decline over previous year.
Though, the Net Interest Margins (NIM) improved by 10 1000 –
194
bps on reduced cost of borrowings, the NIM, including 0–
–

fee income, declined from 7.15% to 6.95% mainly due to 2019-20 2020-21
lower fee income. Gross Revenue   EBITDA

298
The segment recorded revenue of R 3621 crore for the II. L&T STANDALONE
year ended March 31, 2021, lower by 25.3% over the PERFORMANCE REVIEW
previous year. The decline in revenue is mainly due to the
L&T’s standalone financials reflect the performance
suspension of metro services in Hyderabad during the
of Infrastructure, Power, Heavy Engineering, Defence
first half of the year due to the Covid-19 lockdown and
Engineering, and Others. The Others segment comprises
later due to lower ridership. Further, the lower Plant Load
non-novated projects in Kuwait in the Hydrocarbon
Factor (PLF) in Nabha Power Ltd., due to lower power
business, Realty, Construction & Mining Machinery,
demand in the state of Punjab post the lockdown in Q1 FY
Rubber Processing Machinery and Smart World and
2020-21 and non-availability of coal due to the ‘Rail-Roko’
Communications.
agitation by farmers in Q3 FY 2020-21, had an adverse
impact on revenues for the segment. L&T standalone continues to be the major contributor to
revenue and profits of the Group’s performance.
The segment clocked an operating profit of R 194 crore
for FY 2020-21, far lower than R 539 crore earned in FY Order Inflow and Order Book
2019-20, mainly due to under-utilisation of metro services.
Order Inflow
The funds employed by the segment as on March 31,
2021 at R 21403 crore were lower by 12.3% compared to R crore (3.7%)
March 31, 2020 mainly due to impairment of assets in the 150000 –
power development business.
125000 – 114825
110622
9. Others Segment 100000 – 24% 27887 17837 16%
75000 –
Gross Revenue and OPM%
R crore 50000 – 76% 86938 92785 84%
8000 – (8.8%)
25000 –
7000 – 6684
6093 0–
–

–
6000 – 2019-20 2020-21
2214 1174
5000 – Domestic   International
4000 – 21.0%
3095 The order inflow during FY 2020-21 declined by 3.7%
3000 – 3169
17.6% at R 110622 crore as compared to R 114825 crore in the
2000 –
previous year. The Infrastructure segment contributed
1000 – 1375 1750 90% of the total order inflow during the year on receipt
0– of the prestigious high-speed rail packages and orders
–

2019-20 2020-21
from Hydel and Tunnel, Special Bridges, Rural water supply
Realty Industrial Machinery, Products & Others SWC OPM% and a few international orders.
The international order inflow decreased to 16% of the
The Others segment covers (a) Realty, (b) Industrial
total order inflow for FY 2020-21 as compared to 24% in
Machinery, Products & Others comprising Construction
the previous year.
& Mining Equipment, Rubber Processing Machinery,
Industrial Valves and (c) Smart World & Communication
businesses. Revenue for the segment registered a decline Order Book
by 8.8% from R 6684 crore in FY 2019-20 to R 6093
R crore 8.9%
crore in FY 2020-21. The revenue decline was mainly
in the Realty business, whereas as the other businesses 320000 –
grew marginally with improved conversion cycle time and 272366
250151
resumption of the supply chain. Growth was registered 240000 – 47971 18%
20% 49875
by the Smart World and Communication business on
better execution of existing orders. The operating margin 160000 –
improved over the previous year, due to the sale of 80% 200276 224395 82%
80000 –
commercial property in the Realty business.
The funds employed by the segment as on March 31, 0–
–

As at 31-03-2020 As at 31-03-2021
2021 at R 7653 crore decreased by 7.3% compared to
March 31, 2020 mainly due to the sale of commercial Domestic   International
property.

299
MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

Operating Expenses and PBDIT

Order Book Composition
R crore Operating Expenses and PBDIT
2020-21
4521 10880 [% to revenue]
1%, (2%) 4%, (5%) Infrastructure
7646 9.9%
3%, (4%) Power (8.3%)
Defence Engineering Mfg., Construction &
3.1%
10658 Heavy Engineering (3.3%) Operating Expenses
4%, (5%) Others
Staff Expenses
7.5%
(7.2%) Sales, Administration &
238661 Other Expenses
88%, (84%)
79.5% Operating Profit (PBDIT)
Total Order Book: R 272366 crore as at March 31, 2021 (81.2%)
[Figures in brackets relate to previous year]
[Figures in brackets relate to previous year]
The Order Book as at March 31, 2021 stood at R 272366
crore, 88% of which is contributed by the Infrastructure Manufacturing, Construction and Operating (MCO)
segment. International orders constituted 18% of the expenses, comprising cost of construction material, raw
current Order Book. L&T continues to carry a healthy order materials, components and subcontracting expenses,
book-to-revenue ratio at 3.71, providing better visibility of amounted to R 58290 crore, which is 79.5% of revenue,
revenue over the medium term. and improved over previous year on subdued execution of
projects in Q1 FY 2020-21 due to the lockdown.
Revenue from Operations
Staff expenses for the year at R 5485 crore decreased
Gross Revenue from Operations by 7.9% y-o-y mainly due to reduction in staff welfare
expense and reduction in provision for leave encashment
R crore
on change in leave encashment policy. Staff Cost as a
(11.0%) percentage of revenue increased from 7.2% to 7.5%
120000 –
reflecting under-utilisation of resources during the
82384 lockdown.
80000 – 73316
22% 18122
16885 23% Sales and administration expenses for the year at R 2274
crore decreased by 16.0% y-o-y, mainly due to lower
40000 –
78% 64262 56431 77% professional fees, donation, reduced travelling cost partly
offset by higher ECL provisions on financial and contract
0– assets.
–

2019-20 2020-21
Profit before depreciation, interest and tax excluding other
Domestic   International income (PBDIT) was R 7266 crore for the year, higher
by 6.3% over the previous year. The 160 bps growth in
The parent standalone entity reported a revenue of PBDIT at 9.9% of sales is mainly due to gain on sale of a
R 73316 crore during FY 2020-21, a decline of 11% over commercial property in the Realty business, cost savings
the previous year, mainly in the Infrastructure segment in Defence Engineering and release of contingencies
with several execution impediments due to the Covid-19 along with some large-value orders crossing the margin
lockdown and preventive measures adopted to counter threshold in the Infrastructure business. This was partly
the pandemic. offset by higher ECL provisions and cost overruns in some
The above shortfall was partly mitigated by growth projects in the Infrastructure segment.
in the Power segment on picking up of the execution Depreciation and Amortisation charge
momentum of jobs in hand, in the Realty business on the
sale of a commercial property, and in the Smart World and Depreciation and Amortisation charge for FY 2020-21 at
Communication and Hydrocarbon businesses on better R 1026 crore is almost in line with the previous year at
execution of projects. R 1021 crore mainly on account of lower capex spend.

300
Other Income Return on Net Worth
Other income mainly comprises income from treasury The Net Worth of the standalone parent entity as on
operations, dividend and income from Group companies. March 31, 2021 at R 60414 crore increased by R 8238
Other income for FY 2020-21 at R 3435 crore, increased crore as compared to March 31, 2020.
as compared to R 2808 crore for the previous year mainly
Return on Net worth (RONW) including Exceptional Items
due to higher earnings on a larger corpus of investible
and profit from discontinued operations for FY 2020-21
surplus.
at 20.1% is higher as compared to 13.1% in the previous
Finance cost year, largely due to profit on divestment of the Electrical &
The interest expenses for FY 2020-21 at R 2420 crore Automation business.
were higher by 6.7% vis-à-vis R 2267 crore for the Liquidity & Gearing
previous year. The increase is mainly attributable to higher
Business operations generated cash flows of R 8351 crore
borrowings retained during the year to ensure liquidity
during the year as compared to outflow of R 121 crore
in challenging times. The average borrowing cost for FY
in the previous year. The increase is mainly attributable
2020-21 was at 6.4% p.a., lower from the 7.4% p.a. in
to higher customer collections and receipt of customer
the previous year, reflecting the lower interest regime.
advance on new orders. The cash generated through
Exceptional Items the divestment of the Electrical & Automation business
Exceptional Items of R 2819 (net of tax) crore for FY at R 10846 crore, treasury income of R 818 crore and
2020-21 represents impairment of funded exposure in the dividend income from S&A companies at R 1244 crore
heavy forgings facility joint venture and carrying value of has been utilised towards repayment of borrowings (incl.
investment in the power development business while the repayment of lease liability) of R 2263 crore, investment
previous year included gain on dilution of stake in L&T in S&A companies at R 2433 crore and towards purchase
Technology Services. of other short term investments of R 10972 crore, in
addition to dividend payment R 3651 crore (comprising
Profit from Discontinued Operations of final dividend of FY 2019-20 R 1123 crore and special
Profit from Discontinued Operations R 8650 crore includes dividend R 2528 crore) and interest payment R 1954 crore
gain from divestment of Electrical & Automation to respectively.
Schneider Electric SE and operational profit till the date of
There was a net decrease of R 93 crore in the cash
divestment, 31st August 2020.
balances as at March 31, 2021 as compared to the
Profit after Tax and EPS beginning of the year.
Profit after Tax (PAT), including exceptional items Fund flow statement v crore
(continuing operation), for FY 2020-21 at R 2686 crore,
Particulars FY 20-21 FY 19-20
registered a decrease of 55% as compared to R 6025 crore
Operating activities 8351 (121)
in the previous year mainly due to impairments of R 2819
Net divestment/(investment) 8413 (10890)
crore and higher tax expense. With gain on divestment of
Treasury and dividend income 2062 1902
R 8557 crore from discontinued operations for sale of the
(Increase)/decrease in cash balance 93 (464)
Electrical & Automation business to Schneider Electric SE,
ESOP Proceeds (net of buyback expenses) 16 18
overall PAT has improved to R 11337 crore from R 6679
Sources of Funds 18935 (9555)
crore in previous year.
Capital expenditure (net) 95 1309
The Basic Earnings per Share (EPS) from continuing Repayment of Borrowings/(Additional
operations & discontinued operations for FY 2020-21 at Borrowings) 2263 (13453)
R 80.74 has improved compared to R 47.59 in the previous Purchase / (Sale) of Other investments 10972 (3463)
year. Dividend paid 3651 4159
Other Comprehensive Income (OCI) Interest paid 1954 1893
Utilisation of Funds 18935 (9555)
Other Comprehensive income during year reflected a
profit of R 492 crore, vis-à-vis loss of R 519 crore in the Total borrowings as at March 31, 2021 were lower
previous year, mainly due to mark-to-market gain on at R 23809 crore as compared to R 25785 crore in
hedging instruments while the previous year was impacted the previous year. The loan portfolio of the Company
by a fair valuation of investment in Mindtree prior to comprises a mix of Rupee and suitably hedged foreign
acquiring controlling stake. currency loans. The gross debt-equity ratio reduced to
0.39:1 as at March 31, 2021 from 0.49:1 as at March 31,
2020. The net debt-equity ratio was nominal at 0.04:1 as
at March 31, 2021 from 0.31:1 as at March 31, 2020.  

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MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

III. S
TRATEGY, BUSINESS MODEL AND RESOURCE ALLOCATION
Strategy Formulation
Business strategy formulation seeks to set long-term goals and plans that help the Company in exploiting its strengths,
identifying improvements, building new capabilities and realising new opportunities. This is enabled through a three-
pronged approach, plans with time horizons ranging from the long-term Perspective (7-10 years) to medium-term Lakshya
(5 years) and to short-term Budget (yearly). Each plan dovetails into the next.
The Company had earlier undertaken the development of a ‘Perspective Plan’ focussing on a long-term view (7-10 years)
of the Group’s various businesses which helped identify the megatrends, potential disruptions and future directions for
the current businesses. Further, the exercise helped in identifying new business opportunities (L&T NxT, SuFin, EduTech)
which are now in the incubation phase and are expected to bring significant benefits in the coming years. The exercise
also led to setting up of an Innovation Fund focussing on identifying and investing in start-ups which help consolidate the
market position for the core business. The insights garnered from the Perspective Plan exercise would also be inputs for
developing the next 5-year strategic plan i.e. ‘Lakshya-26’.
The strategic plan ‘Lakshya’, which runs for a period of 5 years, is developed through a collaborative and consultative
process across the organisation. Formulating the plan helps in deciding the strategic directions for the businesses as well
as setting the year-wise performance targets along with supporting initiatives. FY 2020-21 is the terminal year of the
current 5-year strategic plan, ‘Lakshya 21’.
The pandemic in 2020, the year of the formulation of next 5-year plan ‘Lakshya-26’, has resulted in delay in formulation
and at the same time, it has provided an opportunity to address new dynamics in certain businesses. The Company has
now initiated the formulation of ‘Lakshya-26’ plan and aims to complete the process by September 2021.
While the 5-year business outlook and broad financial goals are embedded as an overarching strategic plan, the annual
operating plan is formulated before the commencement of every financial year. This helps provide flexibility in tailoring
the annual operating and financial budgets to changing circumstances while keeping the 5-year strategic plan in view.
Strategy Formulation Schematic:
Strategy Formulation Schematic:

Perspective Plan 5 Year Strategic Plan Annual Plan

Objective • Long Term Business Vision • Assessment of Macro

• Assessing Global Megatrends Environment and Mid-Long term • Strategy for Key Account
Business Outlook Management, Bid Management
• Assessment Of Emerging
• Strategic Priorities for Profitable and Prospects Pipeline
Technologies & New Growth
Opportunities growth of Businesses • Resource Plan
• Identifying Relevant Growth • Strategic Initiatives • Sustainability Plan
Initiatives • Sustainability Roadmap

Timelines 7-10 years 5 year 1 year

• 5 Year Business Plan • Annual Budget

• Business Portfolio • Market Outlook • Financial KPIs and Operational
• Geographical Business Strategy • ESG Risks & Opportunities KPIs
• Investment In New Businesses • Talent Management and • Capex And Liquidity Plan
• Leadership Pipeline Leadership Development • Resource Allocation for Order
• Long Term Capex Outlay • Resource Allocation Book Execution
Scope • Portfolio Assessment • ESG Risks & Opportunities

Sensitivity : This Document is Classified as "LNT Internal Use".

302
Business Model
Value creation by the Group is enabled through leveraging its business models:

EPC Contracts Hi-Tech Manufacturing

The Group will continue to focus on its proven core Hi-Tech Manufacturing is mainly concentrated on heavy
competencies of conceptualising, executing, and custom-built equipment catering to process industries,
commissioning large, complex infrastructure projects in the material handling equipment, and industrial products and
areas of roads, bridges and tunnels, power transmission machinery and defence engineering including shipbuilding.
and distribution, thermal / hydel / solar / nuclear power The Company has large manufacturing facilities at Hazira,
plants, water and irrigation infrastructure, residential, Vadodara, Talegaon, Chennai, Coimbatore and Kattupalli
commercial, institutional and factory buildings, airports, in India and Oman in international geographies.
high-speed, metro, and conventional railways, onshore
and offshore hydrocarbon facilities, renewables, energy
and metallurgical projects.

Services / Allied Development Projects

The services and allied businesses cater to sectors of IT While the Company has also undertaken major
(through LTI and Mindtree), Engineering & Technology development projects such as the Hyderabad Metro,
services (through LTTS, Smart World and Communication road operations and tolling (through L&T Infrastructure
and L&T NxT), Real Estate and Financial services (through Development Projects Limited), Nabha Power and
LTFHL). Uttaranchal Hydel Power in the past, the focus going
forward would be to unlock the value embedded in the
business portfolio.

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MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

Our businesses and offerings are closely linked to global Megatrends

Our businesses and offerings are closely linked to global Megatrends
Urbanisation
High-rise buildings for better utilisation of land space (B&F)

Underground multi-level car parks (Geo)

Redesigned utility networks (PT&D, WET)

Safe and Smart cities (SWC) Climate

Increasing population pressures
in cities leading to various Renewables – Solar, Energy Storage
challenges e.g. congestion and (PT&D, HC)
call for better solutions

Green buildings (B&F)

Water Recycling and Reuse

solutions (WET)
Climate change and resource
scarcity driving need for
solutions to balance growing
Energy Efficient Electricity
needs with environment
systems (PT&D)
Mass Rapid Transit Systems (TI, HC)

Mobility
World class airports (B&F, TI)

Sustainability
EV and Autonomous systems (LTTS)

Water Treatment and

Demographic
sewage systems (WET)
Expressways & Rail Networks (TI)

Safe, fast, affordable and Affordable & Mass Housing (B&F)

environment friendly solutions
for movement of people and
goods
Electricity distribution and
microgrids (PT&D)

Financial services (LTFS) Universal coverage for basic

Digitalisation Big Data, AI / ML in BFSI, Retail
and Media (LTI, LTTS, MT)
amenities, keeping up with
growing demands for global
population
Automation, IoT in Manufacturing, Hi-Tech, Industrial
Products, Medical devices (LTTS, L&T NxT) B&F Buildings & Factories
TI Transportation Infra
Cloud, Cybersecurity (LTI, MT) HC Heavy Civil
WET Water & Effluent Treatment
PT&D Power Transmission & Distribution
Mobile, Drones, AR/VR/MR (LTI, LTTS, MT) Geo L&T Geostructure
LTI L&T Infotech
Platforms (SuFin, Edutech-skilling) LTTS L&T Technology Services
Technology and services offerings
to aid new-age businesses across MT Mindtree
various domains LTI: L&T Infotech SWC Smart World & Communications
LTTS: L&T Technology Services
MT: Mindtree
SWC: Smart World & Communications
304
The Covid-19 pandemic has influenced some of the global megatrends. While it has negatively impacted some, such
as reduced mobility due to travel restrictions, it has also accelerated the push towards digitalisation, climate issues,
renewables, and health & well-being. The businesses linked to digitalisation i.e. LTI, LTTS and Mindtree, have seen
increased business traction and are expected to benefit from this tailwind in the coming years. The push towards
environment-friendly solutions is expected to benefit some of our infrastructure businesses, e.g. Renewables (PT&D) and
WET. The de-risking of supply chains via increased localisation / near-shoring and Government incentives for increasing
local manufacturing are also expected to drive investments in new factories and capacity expansion in India.
The oil & gas industry was already undergoing transformation and the pandemic has only accelerated the shift. This could
have some impact on Hydrocarbon’s future offerings. Negatively impacted sectors due to the pandemic are airports,
public places (stadiums), new office buildings, etc. which are likely to face short-term challenges; however it is expected
that these will pick up sometime in the near future, given their long-term uptrend.
Portfolio Strategy
The portfolio strategy aims to create a ‘sustainable’ business model that results in improved returns and benefits to all the
stakeholders, and this strategy focuses on:
• Complementing the mature businesses with growth-stage businesses, with a focus on asset-light and
high-margin businesses. The Group is also trying to reduce exposure to asset-heavy businesses. Businesses with
growth potential yet requiring periodic capital infusion such as Financial Services will be reassessed from time to time
in the context of their emerging strategic significance and the capital allocation plans.
• Well-balanced and geographically diversified businesses across domestic and international markets.
India will continue to be the focus geography for infrastructure businesses over next 5 years. In addition to India,
infrastructure business would focus on international markets, i.e. select countries in the Middle East and Africa
region. For the IT businesses, the Americas and Europe would continue to be the focus geographies. To further
de-risk the geographical concentration and pursue new growth opportunities, a few more high-potential countries in
Africa and ASEAN region have been identified for detailed evaluation of opportunities.
• Balancing the cyclical nature of the EPC business through a portfolio of services businesses. The ‘Services’
businesses has grown by 6% over the previous year, partly compensating for the decline of 11% arising out of
the EPC business. With the aim of better profitability and a stable revenue profile, the Group intends to increase
the share of services business while pursuing growth in the traditional EPC Contracts and Hi-Tech Manufacturing
businesses.
• Supplementing the standalone offerings with partnerships. For the traditional businesses, the Company
has partnered with several large global process and technology licensors, and for the IT and Technology Services
businesses, the Group has extensive partnerships with established global software product and technology
companies. These engagements enable the Group to offer a bouquet of value-added services to customers in
different businesses.

305
MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

Strategic Thrust & Direction

The focus of the Group’s strategy is to create value for its shareholders, investors, clients, employees and other societal
stakeholders through economic benefits, fulfilment of social obligations and ecological sustainability while protecting and
promoting the L&T brand.
Thisthe
Riding value creation
Future: is drivenfor
Solutions through Strategic Objectives of the company, which are:
Megatrends

SO-1 SO-2
Pursue Value Accretive growth of
current businesses with focus on Incubate new businesses to tap
driving growth of services business future growth opportunities
and green offerings

SO-3
RoE SO-4

Enable business sustainability through

high focus on Environment, Social and
Growth Optimise the mix of businesses (EPC,
manufacturing, services) and
Governance (ESG) parameters such as geographies (India, international) to de-
Climate Stewardship, Circular Economy, risk the portfolio
Green Businesses, Green Supply Chain,
Employee and Social Welfare, Board
Engagement, etc.

SO-5
Identify and Implement
sustainable solutions for non-
core businesses and assets
earning sub-par returns
• B&F: Building & Factories
• TI: Transportation Infra
• HC: Heavy Civil
These Strategic Objectives are supported through Strategic Enablers which are:
Sensitivity : This Document is Classified as "LNT Internal Use".
•
•
WET: Water & Effluent Treatment
PT&D: Power Transmission &
Distribution

SE-1 SE-2 SE-3 SE-4 SE-5

Financial
Industry leading
resources to
capabilities in
Operational enable growth of Talent and Capability
digital
Excellence for the businesses leadership development
technologies and
leadership in cost- and strong pipeline to enable through R&D,
analytics for
competitiveness financial health to growth and absorption of new
productivity, ESG
and world class facilitate access to business technologies and
effectiveness and
execution capital markets, continuity partnerships
strengthening
as and when
revenue streams
required

Sensitivity : This Document is Classified as "LNT Internal Use".

306
IV. R
isk Management
The L&T Board has formed a Risk Management Committee to oversee the implementation and effectiveness of the risk
management framework as required by SEBI LODR. The framework was earlier overseen by the Audit Committee.
The Company has institutionalised an Enterprise Risk Management Framework, which is continuously reviewed and
benchmarked with industry best practices. The Risk Management Committee, on a periodic basis, evaluates and monitors
the key risks at the Company level, viz., the impact due to the slowdown in the economy, geopolitical issues, risks relating
to reputation and brand, competition, counterparty, foreign exchange & commodity prices, interest rates, cyber security
and Environmental, Social, and Governance (ESG) related issues etc.
The Risk Management Committee periodically reviews the robustness and defensibility of the systems in place and
suggests mitigation plans accordingly. The Audit Committee, in compliance with Companies Act and SEBI LODR, oversees
the financial risk framework of the Company and reviews the corporate risk management framework once a year.
The aforesaid risk management processes are assisted by an Enterprise Risk Management System that facilitates
monitoring risks across projects in various geographies of operation, provides a risk-weighted portfolio view of businesses
and shares learnings across the organisation. An integrated Knowledge Centre portal is also available that provides a
platform for assessment of financials of counterparty, geo-political and macro risks to support informed and fact-based
decision-making.
The Company has a Chief Information Security Officer (CISO) in place who is responsible for forming and assuring
implementation of IT security policies, frameworks to manage cybersecurity risk, and controls across the organisation.
Also, the Company has rolled out Mission Zero Harm Plan targeting proper implementation of safety procedures,
programmes, and practices.
The top enterprise-wide risks for the Company and their mitigation measures are summarised below:

Risk Mitigation
Pandemic The pandemic has been one of the key risks The Company has quickly responded by
impacting the operations of the Company. implementing safety measures such as
Project activity at worksites had slowed down temperature screening, sanitising, and enforcing
during the period starting from March till May safe distancing norms and mandatory masks
2020 as Governments across the globe resorted in private offices and project sites to ensure
to a range of measures, such as complete resumption of work. The Company also stepped
lockdown, night curfews and partial lockdowns up its employee health welfare initiatives and
to curb the spread of the coronavirus. established well-equipped quarantine facilities to
take care of the sickness / recovery process.
The impact on economic and financial condition
of counterparties in India or elsewhere may lead The Company took steps to ensure liquidity
to delays in booking new orders or timely release was preserved to withstand any adverse
of funds for the projects under execution. developments.
Credit-worthiness of counterparties is being
continuously monitored to lessen the impact of
adverse working capital resulting from customer
delays in settlement of receivables.
Execution The Company faces inherent risks throughout Projects are put through Execution Risk reviews
Challenges the execution phase of the project. Project utilising the recently implemented Enterprise Risk
challenges include employee / workmen safety, Management (ERM) System. Each risk identified
working in difficult / harsh weather conditions, through the ERM system is classified into Generic
unavailability of work front, land acquisition and and Specific Risks based on a comprehensive
Right-of-Way (ROW), environmental clearances, risk register. These risks are monitored at regular
visa issues, etc. intervals for resolution / mitigation. Projects are
closely reviewed via a quality and EHS audit,
There have been additional challenges due to
ensuring employee safety, regulatory, and
the pandemic, such as labour availability and
environmental compliance.
mobilisation, supply chain disruptions, and some
of the projects getting delayed / slowed down at
the customer’s behest.

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MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

Risk Mitigation
Practices like working in multiple shifts, providing
a safe and healthy working environment, and
arranging for workmen boarding with required
facilities, are being implemented in projects.
Sourcing from alternative channels has ensured
minimum supply chain disruptions. Contractual
remedial measures are being enforced with more
rigour to mitigate the monetary impact arising
out of project delays.
Under- Sectors such as Power, Nuclear and Defence - Divestment of certain non-core business lines
performance in Shipbuilding, continued to show slow growth and proactive liquidity boosting have given the
key sectors and under-utilisation of their capacities. These Company the financial flexibility to meet project
businesses are facing structural challenges, milestones while investing in high growth areas.
such as high receivables from Discoms, shift The Company works on sector-specific solutions
towards green projects, delays in environmental to improve the performance of the business
clearances, etc. units.
Further, the Metro and Financial Services sectors
have been adversely impacted by the onset of
the pandemic.
Geopolitical Risk The Company operates in numerous geographies The Company has in place mitigation strategies,
and faces risks on account of protectionist such as country-clearance procedures,
policies, political dynamics, trade barriers, monitoring geopolitical conflicts, actively
sanctions, and geopolitical conflicts. monitoring changes in sanctions regimes along
with identification of alternative strategic
The ongoing geopolitical situation also impacts
sourcing options.
the supply chain, and hence could have a
schedule and cost impact on projects.
Inequitable Terms The Company partners with multiple The Company relies on its leadership position
of Trade stakeholders in executing projects and the in the businesses it operates, strong internal
terms agreed upon with these parties have processes, back-to-back arrangements with
become more stringent over the years. Joint vendors / subcontractors, project & business level
and several liability, long tenor of defect liability working capital monitoring policies, and pre-bid
periods, cost overruns, back-ended payment reviews as appropriate risk mitigation strategies.
structure, working capital challenges and claim Project teams also maintain the required
management challenges will have an effect on documentation and follow redressal mechanisms
the performance and cash flows. with clients / vendors / subcontractors to address
terms and disputes on a case-by-case basis.
Cyber Security The Company is undergoing digital The Company has a Chief Information Security
transformation and cybersecurity has become Officer in place, who, under the guidance
a key concern for the continuity of business. of the risk management committee oversees
Vulnerabilities such as targeted attacks, the implementation of strong enterprise wide
ransomware threats, and phishing have raised cybersecurity practices. These practices are
the importance of protecting the information grouped into people, process and technology
technology infrastructure and data of the control areas under the Company-wide Cyber
Company. Security Assurance Framework. Employee
awareness on cybersecurity is being enhanced
through initiatives such as awareness courses,
information security day, quizzes, and the
creation of infotoons. Maturity of security
controls is continually being measured to ensure
they maintain the desired benchmarks.

308
FINANCIAL RISKS focussed on collection of receivables, making good
Economic growth has remained a challenge on account progress, and also stepped up its support to the vendors
of the unforeseen disruption of economic activity due during the crisis period. This has led to a decrease in the
to the Covid-19 pandemic. Post the complete disruption absolute level of working capital.
of the logistics and supply chain as well as the reverse Capital structure, liquidity and interest rate risks
migration of the labour force, Q1 FY 2020-21 saw the
The start of FY 2020-21 saw the Company facing huge
India GDP slip by ~24%. With the phased easing of
uncertainty in terms of liquidity as the duration of the
lockdown restrictions during Q2, Q3 and Q4 witnessing a
lockdown and disruption of work at sites as well as at the
return to near normalcy, the India GDP decline for FY21
client offices was uncertain. This meant uncertainty of
at 7.3%. However, concerns on the second wave of the
cash inflows while the Company had its short term and
Covid-19 pandemic and the slow pace of the vaccination
long-term debt repayments, vendor payments and other
drive have again given rise to concerns on resumption
fixed costs to provide for. To mitigate these, the Company
of lockdown-like measures that will once again result in
raised a significant amount of long-term liquidity at the
consumption slowdown causing, again, a spectre of asset
beginning of the year through debt capital markets.
quality challenges for the financial sector. Inflation in India
rose sharply in the first 9 months of FY 2020-21 mainly on The Company also concluded the divestment of its
account of higher food prices led by supply-side disruption Electrical & Automation business and used its proceeds
in the lockdown phase. to reduce its gearing, thereby maintaining a conservative
capital structure. The proceeds were also used for
The global economy shrank by 3.3% in 2020. Amid the
investing R 1900 crore in the form of rights issuance of its
various waves of Covid-19 stretching across different
subsidiary L&T Finance Holdings and about R 1000 crore to
geographies, there was a broad-based contraction
support its subsidiary L&T Metro Rail Hyderabad Ltd. (L&T
of various large economies, with the exception of
MRHL) whose operations were impacted severely due to
China. Global trade has declined and there has been a
the pandemic.
marked slow-down in services activities, even though
the manufacturing sector activity has gradually picked With the business conditions improving progressively in
up. Governments across the globe responded with the 2nd half of FY 2020-21, till the onset of the second
unprecedented fiscal stimulus to avert this crisis. wave, the Company ended the year with significant
Further, central banks eased monetary policy and also liquidity on the balance sheet, aided by the divestment
provided liquidity to levels not seen since the global and lower working capital. Low gearing levels and high
financial crisis of 2008. As a result, the asset prices have cash balances will equip the Company to deal with
recovered after the initial Covid-19 fears-led fall, and business uncertainty in the face of the ongoing second
have remained buoyant since. The pandemic has led to wave of Covid-19. The Company plans to maintain the
an uneven recovery and many sectors are still struggling higher liquidity buffer on the balance sheet to deal with
to reach the performance seen before the onset of the the lingering pandemic crisis and possible downturn in
pandemic. Fragility in the financial sector in a number of economic conditions. With the Large Exposure Framework
economies continues to remain a concern, though with guideline of RBI implemented from April 1, 2019, the
stimulus and liquidity pumped in by Governments, led Company has been focusing on ensuring sufficient
to higher consumption of goods (in lieu of services) by available limits to retain the ability to bid for large-value
people. A combination of higher consumption of goods, projects, though currently it has adequate banking
infrastructure build-up expenditure driven by fiscal boosts facilities to cater to the business requirements. The
and catch-up on lost time being attempted by various Government’s initiative to reduce the performance bank
industries upon reopening of the economies led to a guarantee requirement in projects from 10% to 3% has
boost in the demand for raw materials such as steel, also enabled the Company to retain adequate headroom
cement, base metals, semi-conductors, etc. The supply in its non-funded facilities.
of raw material could not be increased at the same pace
The Company judiciously deploys its surplus funds in
due to the spread of the pandemic in regions where the
short-term investments in line with the Corporate Treasury
ores are mined, restricted supply chains, etc. This created
policy. It constantly monitors the liquidity levels, economic
a demand / supply gap leading to a sharp increase in
and capital market conditions and maintains access to the
commodity prices in the second half of FY 2020-21.
lowest cost means of sourcing liquidity through banking
With the execution progress being impacted in the first lines, trade finance and capital markets. The Company
quarter of FY 2020-21 due to the pandemic, the Company managed its higher-than-usual treasury investments during

309
MANAGEMENT DISCUSSION AND ANALYSIS    Financial Review    ANNUAL REPORT 2020-21

the year to generate investment return to neutralise the price variation clauses, while the foreign exchange risks
higher interest cost due to extra borrowings raised in the and residual commodity price risks are managed by
beginning of the year. Given the extra liquidity buffer appropriate hedging products.
planned to be kept on the balance sheet due to the
The disclosure of commodity exposures as required under
ongoing Covid-19 situation and long-term debt raised,
clause 9(n) of Part C of Schedule V of the SEBI (Listing
both the debt and investments on the balance sheet
Obligations and Disclosure Requirements) Regulations,
are likely to remain elevated in FY 2021-22 as well. The
2015 in the format specified vide SEBI Circular dated 15th
Company dynamically manages interest rate risks through
November, 2018 is given below.
a mix of fund-raising products, investment products and
derivative products across maturity profiles and currencies Financial risk management is governed by the Risk
within a robust risk management framework. Management framework and policy approved by the
Audit Committee and authorised by the Board. The
Foreign Exchange and Commodity Price Risks
financial risks in each business portfolio are measured and
The businesses of the Company are exposed to managed by Corporate Treasury.
fluctuations in foreign exchange rates and commodity
prices. Additionally, it has exposures to foreign currency Despite a sharp rally in commodity prices during the
denominated financial assets and liabilities. The business- year, the Company’s robust financial risk management
related financial risks, especially involving commodity processes ensured that input costs impact on Company’s
prices, by and large, are managed contractually through profits remained under control.

Disclosure of commodity exposures as required under clause 9(n) of Part C of Schedule V of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015

Sr Commodity Name Exposure in Exposure in % of such exposure hedged through

No INR towards Quantity terms commodity derivatives
the particular towards the
commodity particular Domestic market International market Total
(R crore) commodity (Tn)
OTC Exchange OTC Exchange

1 Silver (Buy) 35 7 – – – – –

2 Copper (Buy) 1264 21,255 – – 59.31 – 59.31

3 Copper (Sell) (639) (9,957) – – 100 100.00

4 Steel (Buy) 11679 23,90,829 – – – – –

5 Aluminium (Buy) 1143 72,758 – – 29.15 – 29.15

6 Aluminium (Sell) (179) (11,000) – – 56.24 – 56.24

7 Iron Ore (Buy) 50 93,169 – – 78.64 – 78.64

8 Coking Coal (Buy) 32 38,364 – – 30.11 – 30.11

9 Zinc (Buy) 140 7,070 – – 100.00 – 100.00

10 Lead (Buy) 70 5,091 – – 100.00 – 100.00

11 Cement (Buy) 2776 48,82,763 – – – – –

12 Nickel (Buy) 22 208 – – – – –

310
V. Internal Controls and Safeguards foundation for sound internal controls. The internal
The Company maintains adequate internal controls, control teams at the corporate and business levels assist
appropriate to the nature and size of the business, and the executive management, who are responsible for
commensurate with the scale and complexity of its establishing, operating and upgrading the internal controls
operations. The Company has implemented robust policies system. The corporate team shares best practices across
and procedures, which inter alia, ensure integrity in the organisation, reviews and assesses the processes,
conducting its business, safeguarding of its assets, timely formulates and updates the policies, guidance notes and
preparation of reliable financial information, accuracy advisories.
and completeness in maintaining accounting records and The Audit Committee of the Board reviews the annual
prevention and detection of frauds and errors. The efficacy internal audit plan prepared by the Corporate Audit
of the various policies is evaluated for the dynamic and Services department, covering core business operations,
ever-evolving business environment. corporate departments as well as support functions.
The Board of Directors and management at all levels of the Corporate Audit Services conducts independent internal
Company demonstrate through their directives, actions audits and the significant audit observations are presented
and behaviours the importance of integrity and ethical to the Audit Committee every quarter along with update
values to support the functioning of the system of internal on implementation of recommended remedial measures
control. The ‘Code of Conduct’ and the ‘Whistle-blower and agreed actions by the management.
/ Vigil Mechanism’ policies form an integral component The effectiveness of internal controls was tested during
of the internal control system. The Code of Conduct the year by the Statutory Auditors as well as by the
compliance is mandatory for employees and vendors and Corporate Audit Services team and no reportable material
the Whistle-blower / Vigil Mechanism policies enables weaknesses either in their design or operations were
employees and vendors to raise genuine concerns about observed. The evaluation included documentation review,
any actual or suspected ethical / legal violations or enquiries, testing and other procedures considered to be
misconduct or fraud, with adequate safeguards against appropriate in the circumstances.
victimisation, fear of punishment or unfair treatment.
The Company also has an institutionalised mechanism of
The internal financial controls operate at the entity and dealing with complaints of sexual harassment through a
process levels, and are aligned with the requirements formal committee constituted in line with the Company’s
of the Companies Act, 2013 and the globally accepted Policy on the ‘Protection of Women’s Rights at Workplace’
framework issued by the Committee of Sponsoring under relevant statutory guidelines. This policy has
Organizations (COSO) of the Treadway Commission. been widely disseminated across the Company and all
The Corporate Policy on internal controls serves as the complaints are addressed in a time-bound manner.

311
DELOITTE HASKINS & SELLS LLP
Chartered Accountants
One International Center, Tower 3
27th – 32nd Floor,
Senapati Bapat Marg
Elphinstone Road (West)
Mumbai 400013.

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF LARSEN & TOUBRO LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Larsen & Toubro Limited (the “Company”), which comprise the
Balance Sheet as at 31 March 2021, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of
Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other
explanatory information, which includes 31 joint operations accounted on proportionate basis.

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of
report of the other auditor on separate financial statements of the joint operation referred to in the Other Matters section below, the
aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so
required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read
with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”), and other accounting principles generally
accepted in India, of the state of affairs of the Company as at 31 March 2021, and its profit, total comprehensive income, its cash flows
and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (“SA”s) specified under
section 143(10) of the Companies Act, 2013 (the “Act”). Our responsibilities under those Standards are further described in the Auditor’s
Responsibility for the Audit of the Standalone Financial Statements section of our report.

We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India
(“ICAI”) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions
of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors
in terms of their reports referred to in the Other Matters section below, is sufficient and appropriate to provide a basis for our audit
opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial
statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the
matters described below to be the key audit matters to be communicated in our report.

Revenue recognition – accounting for construction contracts

Key audit matter As described in Note No. 1(ii)(e) of the standalone financial statements, the Company recognises revenue from
description contracts with customers when it satisfies its performance obligations.
There are significant accounting judgements in estimating revenue to be recognised on contracts with
customers, including estimation of costs to complete and determining the timing of revenue recognition.
The Company recognises revenue on the basis of stage of completion in proportion of the contract costs
incurred at balance sheet date, relative to the total estimated costs of the contract at completion. The
recognition of revenue is therefore dependent on estimates in relation to total estimated costs of each such
contract.
Significant judgements are also involved in determining the expected losses, when such losses become
probable based on the expected total contract cost.

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INDEPENDENT AUDITORS’ REPORT    ANNUAL REPORT 2020-21

Revenue recognition – accounting for construction contracts

Cost contingencies are included in these estimates to take into account specific risks of uncertainties or
disputed claims against the Company, arising within each contract. These contingencies are reviewed by the
Management on a regular basis throughout the life of the contract and adjusted where appropriate.
The revenue on contracts may also include variable consideration (variations and claims). Variable
consideration is recognised when the recovery of such consideration is highly probable.
Principal Audit Our audit procedures related to the (1) identification of distinct performance obligations, (2) evaluation of the
Procedures process for estimation of costs to complete (3) evaluation of implications of change orders on costs estimates
of costs to complete and revenue and (4) evaluation of any variable consideration included the following,
amongst others:
1. We tested the effectiveness of controls relating to the (a) evaluation of performance obligations and
identification of those that are distinct; (b) estimation of costs to complete each of the performance
obligations including the contingencies in respect thereof, as work progresses and the impact thereon as
a consequence of change orders; (c) the impact of change orders on the transaction price of the related
contracts; and (d) evaluation of the impact of variable consideration on the transaction price.
2. We selected a sample of contracts with customers and performed the following procedures:
a. Obtained and read contract documents for each selection, change orders, and other documents that
were part of the agreement.
b. Identified significant terms and deliverables in the contract to assess management’s conclusions
regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete
as work progresses and as a consequence of change orders; (iii) the impact of change orders on the
transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of
variable consideration.
c. Compared costs incurred with Company’s estimates of costs incurred to date to identify significant
variations and evaluated whether those variations have been considered appropriately in estimating
the remaining costs to complete the contract.

d. Tested the estimate for consistency with the status of delivery of milestones and customer
acceptance to identify possible delays in achieving milestones, which require changes in estimated
costs or efforts to complete the remaining performance obligation.
Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices.
Key audit matter The Company, in its contract with customers, promises to transfer distinct services to its customers, which may
description be rendered in the form of engineering, procurement, and construction (EPC) services through design-build
contracts, and other forms of construction contracts. The recognition of revenue is based on contractual
terms, which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting date,
revenue is accrued for costs incurred against work performed that may not have been invoiced.
Identifying whether the Company’s performance has resulted in a service that would be billable and collectable
where the works carried out have not been acknowledged by customers as of the reporting date, or in the
case of certain defence contracts, where the evidence of work carried out and cost incurred are covered by
confidentiality arrangements, involves a significant amount of judgement.
Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against
invoices raised which have remained unsettled for a significantly long period after the end of the contractual
credit period also involves a significant amount of judgement.
Refer to Note Nos. 1(ii)(e) and 1(ii)(m) to the standalone financial statements.
Principal Audit Our audit procedures related to the (1) evaluation of evidence supporting the execution of work; (2) evaluation
Procedures of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (3)
assessment of adjusting events after the reporting date i.e. March 31, 2021 and the date when the financial
statements are approved by the Parent’s Board of Directors included the following amongst others:
1. We tested the effectiveness of controls relating to the (a) gathering and evaluation of evidence
supporting the execution of work; (b) evaluation of recoverability of the overdue amounts including the
impact on the expected credit loss allowance; and (c) assessment of adjusting events after the reporting
date i.e. March 31, 2021 and the date when the financial statements are approved by the Board of
Directors and the impact thereof on the carrying amount of the related contract assets.

314
Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices.
2. We selected a sample of contracts assets with corresponding trade receivables that were overdue and
evaluated the basis for management’s conclusions regarding the (1) evidence supporting the execution
of work for which the contract assets were recognised; (2) reasons for the delays in recovery of invoices
and the basis on which recoverability of the contract assets was assessed; (3) impact on the allowance
for expected credit losses; and (4) adjusting events after the reporting date i.e. March 31, 2021 and the
date when the financial statements are approved by the Board of Directors and the impact thereof on the
carrying amount of the related contract assets.
3. We compared previous estimates relating to recoverability of contract assets and compared it with actual
collections during the year.
Information Other than the Financial Statements and Auditor’s Report Thereon
The respective Board of Directors of the Company and its Joint Operations are responsible for the preparation of other information. The
other information comprise the information included in the Management Discussion and Analysis, Board’s Report including Annexures
to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the
standalone financial statements and our report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained
during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the “Act”) with
respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial
performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS
and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for
safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Company’s Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the
audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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INDEPENDENT AUDITORS’ REPORT    ANNUAL REPORT 2020-21

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and
whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its joint operations to express
an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit
of the financial statements of such entities included in the standalone financial statements of which we are the independent
auditors. For the other entities included in the standalone financial statements, which have been audited by the other auditors,
such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain
solely responsible for our audit opinion.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.

Other Matter
(a) We did not audit the financial information of 30 joint operations included in the standalone financial statements, whose financial
information reflect total assets of R 3839.10 crore as at 31st March, 2021, total revenues of R 3129.20 crore, total net loss after
tax (net) of R 287.32 crore, total comprehensive loss (net) of R 287.32 crore and net cash inflows (net) of R 71.01 crore for the year
ended 31st March, 2021, respectively, as considered in the standalone financial statements. The financial information of these joint
operations have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates
to the amounts and disclosures included in respect of these joint operations, is based solely on the reports of such other auditors
and the procedures performed by us as stated under Auditor’s Responsibilities section above.

Our report on the standalone financial statements is not modified in respect of the above matters with respect to our reliance on
the work done and the reports of the other auditors.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

a. We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were
necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books and the reports of the other auditors.

c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and
Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

316
e. On the basis of the written representations received from the directors as on 31st March, 2021 taken on record by the Board
of Directors, none of the directors is disqualified as on 31st March, 2021 from being appointed as a director in terms of Section
164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section
197(16) of the Act, as amended,

h. In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the
Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

i. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations
given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial
statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable
losses, if any, on long-term contracts including derivative contracts; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Company.

2. As required by the Companies (Auditor’s Report) Order, 2016 (the “Order”) issued by the Central Government in terms of Section
143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells LLP

Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)

Sanjiv V. Pilgaonkar
Partner
(Membership No. 39826)
UDIN: 21039826AAAAEI1765

Place: Mumbai
Date: May 14, 2021

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INDEPENDENT AUDITORS’ REPORT    ANNUAL REPORT 2020-21

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(f) under “Report on Other Legal and Regulatory Requirements” section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (the “Act”)
We have audited the internal financial controls over financial reporting of Larsen and Toubro Limited (the “Company”) as of March 31,
2021 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date which
includes internal financial controls over financial reporting of one of the Company’s 31 joint operations which is a company incorporated
in India.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over
financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”).
These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company’s policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the Company and its
joint operations company incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI and the Standards on Auditing
(“SA”s) prescribed under Section 143(10) of the Companies Act, 2013 (the “Act”), to the extent applicable to an audit of internal
financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over
financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining
an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor of the joint operations
which is a company incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and
appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

318
Opinion
In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the
reports of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other
Matters paragraph below, the Company has, in all material respects, an adequate internal financial controls system over financial
reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2021, based on the
criteria for internal financial control over financial reporting established by the respective Company considering the essential components
of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.

Other Matters
Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over
financial reporting insofar as it relates to one joint operation which is a company incorporated in India, is based on the corresponding
reports of the other auditor of such company incorporated in India.

Our opinion is not modified in respect of this matter.

For Deloitte Haskins & Sells LLP

Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)

Sanjiv V. Pilgaonkar
Partner
(Membership No. 39826)
UDIN: 21039826AAAAEI1765

Place: Mumbai
Date: May 14, 2021

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INDEPENDENT AUDITORS’ REPORT    ANNUAL REPORT 2020-21

ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of Larsen
& Toubro Limited of even date)

(i) In respect of the Company’s property, plant and equipment:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property,
plant and equipment.
(b) The Company has a program of physical verification of its property, plant and equipment to cover all the items of property,
plant and equipment in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its property, plant and equipment. Pursuant to the program, certain property, plant and
equipment were physically verified by the Management during the year. According to the information and explanations given
to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of
the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the
immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet
date, except the following:
v crore
Type of asset Total no. of Leasehold/ Gross block as at Net block as at Remarks
cases Freehold March 31, 2021 March 31, 2021
Land 2 Freehold 1.14 1.14 Conveyance deed pending
for execution as the matter
Building 1 Freehold 0.15 0.12
is sub judice.
In respect of immovable properties of land and buildings that have been taken on lease and disclosed as property, plant and
equipment in the financial statements, the lease agreements are in the name of the Company, where the Company is the
lessee in the agreement.

(ii) As explained to us, the inventories were physically verified during the year by the Management, at reasonable intervals, and no
material discrepancies were noticed on physical verification between the physical stock and the books of accounts.

(iii) According to the information and explanations given to us, during the year ended March 31, 2021 the Company has not
granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register
maintained under section 189 of the Companies Act, 2013 (the “Act”).

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions
of Sections 185 and 186 of the Act, to the extent applicable, in respect of grant of loans, making investments and providing
guarantees and securities during the year, as applicable.

(v) The Company has not accepted any deposits during the year ended March 31, 2021 and does not have any unclaimed deposits as
of that date. Therefore, reporting under clause 3(v) of the Order is not applicable.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly
reviewed the cost records maintained during the year by the Company pursuant to the Companies (Cost Records and Audit) Rules,
2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the
opinion that, prima facie, the prescribed cost records have been made and maintained by the company. We have, however, not
made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’
State Insurance, Income-tax, Goods and Service Tax, Customs Duty and corresponding cess and other material statutory dues
applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Goods and
Service Tax, Customs Duty, cess and other material statutory dues in arrears as at March 31, 2021 for a period of more than six
months from the date they became payable.

320
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Goods and Service Tax and Value Added Tax
which have not been deposited as on March 31, 2021 on account of disputes are given below:

Name of Nature of Dues Forum where Period to which Amount Amount

Statute Dispute is amount relates Involved Unpaid
Pending (R crore) (R crore)
The Central Dispute regarding questions of law, High Court 1999-00 to 2012-13 105.27 103.53
Excise classification dispute and other
Act,1944, matters
Service Tax Disallowance of CENVAT credit, CESTAT 1991-92, 2001-02 to 326.67 320.54
under Finance short payment of service tax, 2016-17
Act, 1994 and Valuation disputes, dispute
Customs Act, regarding classification of services/
1962 goods, disallowances of excise duty
exemption, Non Maintenance of
Separate Books of Accounts, Export
rebate disallowance, and other
matters.
Disallowance of CENVAT credit, short Commissioner 2006-07, 2008-09 to 3.46 3.34
payment of service tax, pending (Appeal) 2011-12, 2014-15 to
forms, service tax rate dispute, 2017-18
valuation dispute and other matters
Disallowance of CENVAT credit, short Deputy 2014-15 to 2017-18 0.25 0.25
payment of service tax, pending Commissioner
forms, service tax rate dispute,
valuation dispute and other matters
Differential Custom Duty DGFT 2016-17 1.05 0.79
The Central Taxability of sub- contractor turnover, Supreme 2000-01 to 2006-07, 503.40 494.36
Sales Tax rate of tax for declared goods, Court 2009-10 to 2012-13
Act, Entry disallowance of labour turnover and
tax, Local non- submission of forms
Sales Tax Dispute regarding questions of law, High Court 1986-87, 1987-88, 61.58 55.40
Act, Works classification dispute, local VAT and 1993-94, 1994-95,
Contract Works contract disputes. 1997-98 to 2008-09,
Tax Act and 2010-11 to 2012-13,
Goods & and 2015-16
Services Tax Non submission of Forms, Sales Tax/VAT 1989-90, 1991-92 529.58 446.25
Act classification disputes, inter-state Tribunal 1994-2018,
sale turnover, Rate of tax of
declared goods, Labour & service
charges disallowed, Disallowance of
exemptions claimed for imports &
Sales in transit, Sale mismatch & levy
of tax on import of goods through
Way bill, Road permit issue and other
Dispute regarding questions of law, Commissioner 1996-97, 1999-00 to 3,101.69 3,000.83
classification dispute, sales in transit, (Appeal) 2017-18
high sea sales, non-submission of C
forms & E1 forms, disallowance of ITC,
valuation of goods and other matters

321
INDEPENDENT AUDITORS’ REPORT    ANNUAL REPORT 2020-21

Name of Nature of Dues Forum where Period to which Amount Amount

Statute Dispute is amount relates Involved Unpaid
Pending (R crore) (R crore)
The Central Dispute regarding questions of law, Commissioner 2004-05 to 2016-17 3.38 3.37
Sales Tax classification dispute, sales in transit, Additional 2007-2008, 2010-11 to 3.56 3.56
Act, Entry high sea sales, non-submission of C Commissioner 2017-18
tax, Local forms & E1 forms, disallowance of ITC, (Appeal)
Sales Tax valuation of goods and other matters Additional 1999-00 and 2001-02 0.10 0.10
Act, Works Commissioner
Contract
Joint 2007-08, 2008-09 1.08 1.08
Tax Act and
Commissioner
Goods &
Services Tax Joint 1995-96 to 2016-17 260.06 198.86
Act Commissioner
(Appeal)
Additional 2012-13 0.50 0.34
Deputy
Commissioner
(Appeals)
Deputy 2012-13 7.17 3.82
Commissioner
Deputy 2006-07, 2008-09 to 18.71 16.66
Commissioner 2017-18
(Appeals)
Assistant 1996-97 to 1998-99, 1.17 1.10
Commissioner 2001-02, to 2004-05,
2007-08 to 2009-10,
2015-16 to 2017-18
Assistant 2010-11 to 2017-18 388.25 361.79
Commissioner
(Appeal)
Deputy Excise 2012-13 to 2013-14 69.28 56.92
& Taxation
Commissioner
Special 2012-13 to 2015-16 0.58 0.56
Objection
Hearing
Authority
State Revenue 2011-2012 2.02 0.68
Board
Assessing 2001-02 to 2003-04, 7.75 7.03
Officer 2005-06, 2007-08 to
2010-11, 2012-13 to
2017-18
Goods and Disallowance of credits claimed in Assistant Joint 2017-18 16.25 14.86
Services Tax Tran-1 Commissioner
Act Disallowance of Input Tax Credit Commissioner 2018-19 0.08 0.07
(Appeals)

Income Tax Demand arising out of Regular ITAT 2004-05 & 2009-10 to 719.86 256.16
Act, 1961 assessment/Reassessment 2012-2013
Demand arising out of Regular CIT(A) 2014-15 to 2016-17 1,248.37 1,124.16
Assessment/Reassessment
(viii) In our opinion and according to the information and explanations given to us, during the year, the Company has not defaulted
in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders. The Company has not
borrowed any funds from the government during the year.

322
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans.
Therefore, reporting under paragraph 3(ix) of the Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company
and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, during the year, the Company has paid / provided
managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule
V to the Act.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Therefore, reporting under
paragraph 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and
188 of the Act, where applicable, for all transactions with related parties undertaken during the year and the details of such related
party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us, during the year, the Company has not made any preferential allotment
or private placement of shares or fully or partly convertible debentures. Therefore, reporting under paragraph 3 (xiv) of the Order is
not applicable to the Company.

(xv) According to the information and explanations given to us, during the year ended March 31, 2021 the Company has not entered
into any non-cash transactions with its directors or persons connected with any of them.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under
section 45-IA of the Reserve Bank of India Act, 1934.

For Deloitte Haskins & Sells LLP

Chartered Accountants
(Firm’s Registration No.117366W/W-100018)

Sanjiv V. Pilgaonkar
(Partner)
(Membership No. 39826)
UDIN: 21039826AAAAEI1765

Place: Mumbai
Date: May 14, 2021

323
Balance Sheet    ANNUAL REPORT 2020-21

Balance Sheet as at March 31, 2021

As at 31-3-2021 As at 31-3-2020
Note v crore v crore v crore v crore
ASSETS:
Non-current assets
Property, plant and equipment 2 7462.21 6853.43
Capital work-in-progress 2 236.12 796.55
Investment property 3 421.61 490.40
Intangible assets 4 55.39 83.72
Intangible assets under development 4 48.01 0.66
Right-of-use assets 54 (b) 417.37 412.82
Financial assets
Investments 5 28569.12 27975.28
Loans 6 2567.05 3507.00
Other financial assets 7 403.84 304.48
31540.01 31786.76
Deferred tax assets (net) 44 (e) 494.00 1428.20
Other non-current assets 8 3646.05 4068.94
Current assets
Inventories 9 2858.56 2769.90
Financials assets
Investments 10 18454.40 6059.15
Trade receivables 11 29948.24 27912.96
Cash and cash equivalents 12 3112.69 3262.83
Other bank balances 13 650.59 675.56
Loans 14 434.91 515.14
Other financial assets 15 1693.05 1997.59
54293.88 40423.23
Other current assets 16 46479.35 49661.61
Group(s) of assets classified as held for sale 39 – 2780.37
TOTAL ASSETS 147952.56 141556.59

324
Balance Sheet as at March 31, 2021 (contd.)
As at 31-3-2021 As at 31-3-2020
Note v crore v crore v crore v crore
EQUITY AND LIABILITIES:
Equity
Equity share capital 17 280.91 280.78
Other equity 18 60132.63 51894.57
Total equity 60413.54 52175.35
Liabilities
Non-current liabilities
Financial liabilities
Borrowings 19 15868.21 7185.71
Lease liability 59.99 24.18
Other financial liabilities 20 82.63 179.62
16010.83 7389.51
Provisions 21 639.02 611.23
Other non-current liabilities 22 – 0.22
Current liabilities
Financial liabilities
Borrowings 23 6940.94 15044.11
Current maturities of long-term borrowings 24 999.56 3555.48
Lease liability 104.18 132.27
Trade payables:
Due to micro enterprises and small enterprises 351.47 379.88
Due to others 25 37118.33 36249.51
Other financial liabilities 26 2159.41 1709.09
47673.89 57070.34
Other current liabilities 27 21499.49 20758.05
Provisions 28 1320.01 1555.39
Current tax liabilities(net) 395.78 628.92
Liabilities associated with the group(s) of assets classified as held for sale 39 – 1367.58
TOTAL EQUITY AND LIABILITIES 147952.56 141556.59

CONTINGENT LIABILITIES 29
COMMITMENTS (capital and others ) 30
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 63

In terms of our report attached

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants S. N. SUBRAHMANYAN
Firm’s Registration No.117366W/W-100018 Chief Executive Officer & Managing Director
by the hand of (DIN 02255382)
Mumbai
SANJIV V. PILGAONKAR
Partner R. SHANKAR RAMAN M. M. CHITALE
Membership No. 39826 Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)
Mumbai Mumbai

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939
Mumbai

Mumbai, May 14, 2021

325
Statement of Profit and Loss    ANNUAL REPORT 2020-21

Statement of Profit and Loss for the year ended March 31, 2021
2020-21 2019-20

Note v crore v crore v crore v crore

Continuing operations
INCOME:
Revenue from operations 31 73315.59 82383.65
Other income (net) 32 3435.44 2807.87
Total Income 76751.03 85191.52
EXPENSES:
Manufacturing, construction and operating expenses 33
Cost of raw materials components consumed 5693.94 5486.99
Construction materials consumed 22426.38 28632.03
Purchase of stock-in-trade 1226.68 855.63
Stores, spares and tools consumed 1418.59 1520.47
Sub-contracting charges 19625.19 22488.74
Changes in inventories of finished goods, stock-in-trade and
work-in-progress 342.53 (64.01)
Other manufacturing, construction and operating expenses 7556.80 7962.36
58290.11 66882.21
Employee benefits expense 34 5485.38 5955.98
Sales, administration and other expenses 35 2273.95 2707.34
Finance costs 36 2419.55 2266.56
Depreciation, amortisation, impairment and obsolescence 1025.62 1020.51
Total Expenses 69494.61 78832.60
Profit before exceptional items and tax 7256.42 6358.92
Tax expenses 44 (a)
Current tax 1434.27 1508.92
Deferred tax 317.01 (564.45)
1751.28 944.47
Net profit after tax (before exceptional items) from continuing
operations 5505.14 5414.45
Exceptional items before tax 59 (2818.65) 626.99
Deferred tax 44 (a) – 16.68
Exceptional items (net of tax) (2818.65) 610.31
Net profit after tax from continuing operations 2686.49 6024.76
Discontinued operations
Profit before tax from discontinued operations 39(a)(i) 11199.23 865.38
Tax expense of discontinued operations 44(a) 2548.75 210.93
Net profit after tax from discontinued operations 8650.48 654.45
Net profit after tax from continuing operations & discontinued
operations 11336.97 6679.21
Other comprehensive income
A Items that will not be reclassified to Profit or Loss :
Equity instruments through other comprehensive income – (382.17)
Gain/(loss) on remeasurement of the net defined benefits plan 42.82 (174.60)
Income tax (expenses)/income on remeasurment of the defined
benefits plan (10.78) 43.81
32.04 (130.79)
Carried forward - other comprehensive income 32.04 (512.96)

326
Statement of Profit and Loss for the year ended March 31, 2021 (contd.)
2020-21 2019-20

Note v crore v crore v crore v crore

Brought forward - other comprehensive income 32.04 (512.96)
B Items that will be reclassified to Profit and Loss
Debt instruments through other comprehensive income 239.46 157.07
Income tax (expenses)/income on debt instruments through
other comprehensive income (54.79) (34.28)
184.67 122.79
Exchange differences in translating the financial statements of foreign
operations 17.56 (14.28)
Income tax (expenses)/income on exchange differences in translating
the financial statements of foreign operations (4.42) 4.45
13.14 (9.83)
Effective portion of gains/(losses) on hedging instruments in a cash
flow hedge 355.91 (147.87)
Income tax (expenses)/income on effective portion of gains/(losses) on
hedging instruments in a cash flow hedge (104.34) 47.60
251.57 (100.27)
Cost of hedging reserve 13.54 (25.76)
Income tax (expenses)/income on cost of hedging reserve (3.41) 7.11
10.13 (18.65)
Other comprehensive income for the year [net of tax ] 491.55 (518.92)
Total comprehensive income for the year 11828.52 6160.29

Earnings per share (EPS) of R 2 each from continuing operations :

Basic earnings per equity share (R) 49 19.13 42.93
Diluted earnings per equity share (R) 49 19.11 42.87
Earnings per share (EPS) of R 2 each from discontinued operations :
Basic earnings per equity share (R) 49 61.61 4.66
Diluted earnings per equity share (R) 49 61.54 4.66
Earnings per share (EPS) of R 2 each from continuing operations &
discontinued operations:
Basic earnings per equity share (R) 49 80.74 47.59
Diluted earnings per equity share (R) 49 80.65 47.53
Face value per equity share (R) 2.00 2.00
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 63

In terms of our report attached

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants S. N. SUBRAHMANYAN
Firm’s Registration No.117366W/W-100018 Chief Executive Officer & Managing Director
by the hand of (DIN 02255382)
Mumbai
SANJIV V. PILGAONKAR
Partner R. SHANKAR RAMAN M. M. CHITALE
Membership No. 39826 Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)
Mumbai Mumbai

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939
Mumbai

Mumbai, May 14, 2021

327
Statement of changes in Equity    ANNUAL REPORT 2020-21

Statement of changes in Equity for the year ended March 31, 2021
A. Equity share capital
2020-21 2019-20
Particulars Number of v crore Number of v crore
shares shares
Issued, subscribed and fully paid up equity share outstanding at the beginning of the year 1,40,38,92,022 280.78 1,40,27,29,385 280.55
Add: Shares issued on exercise of employee stock options during the year 6,63,275 0.13 7,83,249 0.16
Add: Shares issued on conversion of foreign currency convertible bonds during the year – – 3,79,388 0.07

Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,45,55,297 280.91 1,40,38,92,022 280.78

B. Other equity
(v crore)
Reserves and surplus Items of other comprehensive income
Equity
component Debt Equity
of foreign Capital Employee Foreign instruments instruments Total Other
Particulars Debenture
currency Capital reserve on Securities share General Retained currency Hedging through through equity
redemption other
convertible reserve business premium options reserve earnings translation reserve other
reserve
bonds combination (net) reserve comprehen- comprehen-
sive income sive income
Balance as at 31-3-2019 153.20 10.52 (25.77) 8471.99 106.91 440.26 25507.91 15046.99 5.69 57.41 (7.24) – 49767.87
Change in accounting policy [Ind AS 116] – – – – – – – (3.97) – – – – (3.97)
Restated balance at 1-4-2019 153.20 10.52 (25.77) 8471.99 106.91 440.26 25507.91 15043.02 5.69 57.41 (7.24) – 49763.90
Profit for the year (a) – – – – – – – 6679.21 – – – – 6679.21
Other comprehensive income (b) – – – – – – – (130.79) (9.83) (118.92) 122.79 (382.17) (518.92)
Total comprehensive income for the year
(a+b) – – – – – – – 6548.42 (9.83) (118.92) 122.79 (382.17) 6160.29
Issue of equity shares – – – 127.61 – – – – – – – – 127.61
Settlement of foreign currency convertible bonds (153.20) – – – – – 153.20 – – – – – –
Transfer to non- financial assets/liability – – – – – – – – – 0.20 – – 0.20
Transfer from/(to) general reserve/retained
earnings during the year – – – – (8.39) 93.27 8.39 (475.44) – – – 382.17 –
Employee share options (net) – – – – 1.40 – – – – – – – 1.40
Interim equity dividend – – – – – – – (1403.89) – – – – (1403.89)
Dividend paid for previous year – – – – – – – (2525.72) – – – – (2525.72)
Dividend distribution tax paid for previous year – – – – – – – (229.22) – – – – (229.22)
Balance as at 31-3-2020 – 10.52 (25.77) 8599.60 99.92 533.53 25669.50 16957.17 (4.14) (61.31) 115.55 – 51894.57

328
Statement of changes in Equity for the year ended March 31, 2021 (contd.)
(v crore)
Reserves and surplus Items of other comprehensive income
Equity
component Debt Equity
of foreign Capital Employee Foreign instruments instruments Total Other
Particulars Debenture
currency Capital reserve on Securities share General Retained currency Hedging through through equity
redemption
convertible reserve business premium options reserve earnings translation reserve other other
reserve
bonds combination (net) reserve comprehen- comprehen-
sive income sive income
Balance as at 1-4-2020 – 10.52 (25.77) 8599.60 99.92 533.53 25669.50 16957.17 (4.14) (61.31) 115.55 – 51894.57
Profit for the year (c) – – – – – – – 11336.97 – – – – 11336.97
Other comprehensive income (d) – – – – – – – 32.04 13.14 261.70 184.67 – 491.55

Total comprehensive income for the year

(c+d) – – – – – – – 11369.01 13.14 261.70 184.67 – 11828.52

Issue of equity shares – – – 68.05 – – – – – – – – 68.05

Transfer to non- financial assets/liability – – – – – – – – – (1.86) – – (1.86)
Transfer from/(to) general reserve/retained
earnings during the year – – – (6.54) (394.88) 401.42 – – – – – –
Employee share options (net) – – – – (5.76) – – – – – – – (5.76)
Special dividend – – – – – – – (2527.66) – – – – (2527.66)
Dividend paid for previous year – – – – – – – (1123.23) – – – – (1123.23)

Balance as at 31-3-2021 – 10.52 (25.77) 8667.65 87.62 138.65 26070.92 24675.29 9.00 198.53 300.22 – 60132.63

In terms of our report attached

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants S. N. SUBRAHMANYAN
Firm’s Registration No.117366W/W-100018 Chief Executive Officer & Managing Director
by the hand of (DIN 02255382)
Mumbai
SANJIV V. PILGAONKAR
Partner R. SHANKAR RAMAN M. M. CHITALE
Membership No. 39826 Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)
Mumbai Mumbai

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939
Mumbai

Mumbai, May 14, 2021

329
Statement of Cash Flows    ANNUAL REPORT 2020-21

Statement of Cash Flows for the year ended March 31, 2021
2020-21 2019-20
v crore v crore
A. Cash flow from operating activities:
Profit before tax (excluding exceptional items) from:
Continuing operations 7256.42 6358.92
Discontinued operations 11199.23 865.38
Profit before tax including discontinued operations (excluding exceptional items) 18455.65 7224.30
Adjustments for:
Gain on transfer of discontinued operations (11078.33) –
Dividend received (1261.42) (1387.29)
Depreciation, amortisation, impairment and obsolescence (net) 1025.62 1020.51
Exchange difference on items grouped under financing/investing activities (46.47) (39.14)
Effect of exchange rate changes on cash and cash equivalents 51.27 (46.52)
Interest expense 2419.55 2266.56
Interest income (912.27) (561.48)
(Profit)/loss on sale of fixed assets (net) (474.91) 30.92
(Profit)/loss on sale of investments (net) (including fair valuation) (956.72) (503.71)
Impairment of investments 0.01 100.00
Employee stock option-discount forming part of employee benefits expense 40.31 47.40
Non-cash items related to discontinued operations 2.83 45.85
Operating profit before working capital changes 7265.12 8197.40
Adjustments for:
(Increase)/decrease in trade and other receivables 1448.02 (6572.53)
(Increase)/decrease in inventories 30.09 (183.14)
Increase/(decrease) in trade payables and customer advances 1205.73 173.27
Cash (used in)/generated from operations 9948.96 1615.00
Direct taxes refund/(paid) [net] (1598.17) (1736.30)
Net cash (used in)/from operating activities 8350.79 (121.30)
B. Cash flow from investing activities:
Purchase of fixed assets (720.26) (1370.51)
Sale of fixed assets (including advance received) 625.33 61.50
Investment in subsidiaries, associates and joint venture companies (2272.05) (10231.82)
Divestment of stake in subsidiaries, associates and joint venture companies 260.00 734.53
Sale of non-current investments – 24.46
Net proceeds from transfer of discontinued operations (net of tax) 10845.76 –
(Purchase)/sale of current investments (net) (10987.27) (788.79)
Change in other bank balance and cash not availabe for immediate use 14.89 4226.96
Long-term deposits/loans (given) - subsidiaries, associates, joint venture companies and third
parties (1632.26) (8802.99)
Long-term deposits/loans repaid - subsidiaries, associates, joint venture companies and third
parties 1052.90 7452.98
Short-term deposits/loans (given)/repaid (net) - subsidiaries, associates, joint venture companies
and third parties 158.58 (41.97)
Interest received 804.10 516.20
Dividend received from subsidiaries and joint venture companies 1244.15 1383.95
Dividend received from other investments 14.24 1.76
Net cash (used in)/from investing activities (591.89) (6833.74)

330
Statement of Cash Flows for the year ended March 31, 2021 (contd.)
2020-21 2019-20
v crore v crore
C. Cash flow from financing activities:
Proceeds from fresh issue of share capital (including share application money)[net] 15.85 17.56
Proceeds from non-current borrowings [refer Note 43] 9117.73 6617.46
Repayment of non-current borrowings [refer Note 43] (3396.88) (4209.10)
(Repayments)/proceeds from other borrowings (net) [refer Note 43] (7959.32) 10804.33
Settlement of derivative contracts related to borrowings 66.73 308.29
Interest paid on lease liability (11.32) (12.65)
Principal repayment on lease liability [refer Note 43] (91.45) (67.95)
Dividends paid (3650.89) (3929.61)
Additional tax on dividend – (229.22)
Interest paid (including cash flows from interest rate swaps) (1942.22) (1880.49)
Net cash (used in)/from financing activities (7851.77) 7418.62
Net (decrease)/increase in cash and cash equivalents (A + B + C) (92.87) 463.58
Cash and cash equivalents at beginning of the year 3187.28 2723.77
Cash and cash equivalents for discontinued operations (asset held for sale) – (0.07)
Cash and cash equivalents at end of the year 3094.41 3187.28

Notes:
1. Statement of Cash Flows has been prepared under the indirect method as set out in the Ind AS 7 “Statement of Cash Flows” as prescribed
in the Companies (Indian Accounting Standards) Rules, 2015.
2. Fixed assets include property, plant and equipment, investment property and intangible assets adjusted for movement of (a) Capital
work-in-progress for property, plant and equipment and investment property and (b) Intangible assets under development during the year.
3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following :
2020-21 2019-20
v crore v crore
(a) Cash and cash equivalents disclosed under current assets [refer Note 12] 3112.69 3262.83
(b) Other bank balances disclosed under current assets [refer Note 13] 650.59 675.56
(c) Cash and bank balance disclosed under non-current assets [refer Note 7] 283.85 273.76
Total Cash and cash equivalents as per Balance Sheet 4047.13 4212.15
Add: U nrealised exchange (gain)/loss on cash and cash equivalents (reflected in Statement of
Profit and Loss) 12.39 (38.88)
Add: Unrealised exchange (gain)/loss on cash and cash equivalents (reflected in other
comprehensive income) (30.67) (36.67)
Less: Other bank balances disclosed under current assets [refer Note 13] 650.59 675.56
Less: Cash and bank balance disclosed under non-current assets [refer Note 7] 283.85 273.76
Total Cash and cash equivalents as per Statement of Cash Flows 3094.41 3187.28

4. Previous year’s figures have been regrouped/reclassified wherever applicable.

In terms of our report attached
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants S. N. SUBRAHMANYAN
Firm’s Registration No.117366W/W-100018 Chief Executive Officer & Managing Director
by the hand of (DIN 02255382)
Mumbai
SANJIV V. PILGAONKAR
Partner R. SHANKAR RAMAN M. M. CHITALE
Membership No. 39826 Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)
Mumbai Mumbai

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939
Mumbai
Mumbai, May 14, 2021

331
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements

NOTE [1](i)
Company overview
Larsen & Toubro Limited (“the Company”) is a major technology, engineering, construction, manufacturing and financial services
conglomerate, with global operations. The Company addresses critical needs in key sectors - Hydrocarbon, Infrastructure, Power, Process
Industries and Defence - for customers in over 50 countries around the world.

The Company is engaged in core, high impact sectors of the economy and its integrated capabilities span the entire spectrum of ‘design
to deliver’. With 8 decades of a strong, customer focused approach and a continuous quest for world-class quality, it has unmatched
expertise across Technology, Engineering, Construction, Infrastructure Projects and Manufacturing, and maintains a leadership in all its
major lines of business. Every aspect of the Company’s businesses is characterised by professionalism and high standards of corporate
governance. Sustainability is embedded into its long-term strategy for growth.

The Company’s manufacturing footprint extends across eight countries in addition to India. The Company has several international
offices and a supply chain that extends around the globe.

NOTE [1](ii)
Significant Accounting Policies
(a) Statement of compliance
The Company’s financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the
Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments
thereto issued by Ministry of Corporate Affairs under section 133 of the Companies Act, 2013. In addition, the guidance notes/
announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with
other statutory promulgations require a different treatment. These financial statements have been approved for issue by the Board
of Directors at its meeting held on May 14, 2021.

(b) Basis of accounting

The Company maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities
that are measured at fair value in accordance with Ind AS.
Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety:
(i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at
measurement date;
(ii) Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either
directly or indirectly; and
(iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities.

Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value
hierarchy unless the circumstances change warranting such transfer.

(c) Presentation of financial statements

The Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity are prepared and presented in the
format prescribed in the Schedule III to the Companies Act, 2013 (“the Act”). The Statement of Cash Flows has been prepared and
presented in accordance with Ind AS 7 “Statement of Cash Flows”. The disclosures with respect to items in the Balance Sheet and
Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial
statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 as amended.

Amounts in the financial statements are presented in Indian Rupee in crore [1 crore = 10 million] rounded off to two decimal places
as permitted by Schedule III to the Act. Per share data are presented in Indian Rupee to two decimals places.

(d) Operating cycle for current and non-current classification

Operating cycle for the business activities of the Company covers the duration of the specific project or contract or product line or
service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention
monies) within the agreed credit period normally applicable to the respective lines of business.

332
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(e) Revenue recognition
Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or
services to a customer.
For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete
satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the
total estimated cost attributable to the performance obligation.
The Company transfers control of a good or service over time and therefore satisfies a performance obligation and recognises
revenue over a period of time if one of the following criteria is met:
(i) the customer simultaneously consumes the benefit of Company’s performance or
(ii) the customer controls the asset as it is being created/enhanced by the Company’s performance or
(iii) there is no alternative use of the asset and the Company has either explicit or implicit right of payment considering legal
precedents.
In all other cases, performance obligation is considered as satisfied at a point in time.
The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price
is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a
customer excluding amounts collected on behalf of a third party. The Company includes variable consideration as part of transaction
price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a
significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration
is resolved. Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given
circumstance. Payment terms agreed with a customer are as per business practice and the financing component, if significant, is
separated from the transaction price and accounted as interest income.
Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in statement of
profit and loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and
costs incurred to fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured
in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation.
Significant judgments are used in:
1. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time; revenue
recognition is done by measuring the progress towards complete satisfaction of performance obligation.
2. Determining the expected losses, which are recognised in the period in which such losses become probable based on the
expected total contract cost as at the reporting date.
3. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price.
(i) Revenue from operations
Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other
claims, which are not ascertainable/acknowledged by customers are not taken into account.
A. Revenue from sale of manufactured and traded goods including contracts for supply/commissioning of complex plant and
equipment is recognised as follows:
Revenue is recognised when the control of the same is transferred to the customer and it is probable that the Company
will collect the consideration to which it is entitled for the exchanged goods. Revenue from commissioning of complex
plant and equipment is recognised either ‘over time’ or ‘in time’ based on an assessment of the transfer of control as per
the terms of the contract.
B. Revenue from construction/project related activity is recognised as follows:
1. Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference
to the extent performance obligations have been satisfied. The amount of transaction price allocated to the
performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as
agreed with the customer.

333
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
2. Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and
control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents
the cost of work performed on the contract plus proportionate margin, using the percentage of completion method.
Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs.

For contracts where the aggregate of contract cost incurred to-date plus recognised profits (or minus recognised losses
as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as “Due from
customers”. For contracts where progress billing exceeds the aggregate of contract costs incurred to-date plus recognised
profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as “Due to
customers”. Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability
and termed as “Advances from customer”. The amounts billed on customer for work performed and are unconditionally
due for payment i.e. only passage of time is required before payment falls due, are disclosed in the Balance Sheet as
trade receivables. The amount of retention money held by the customers pending completion of performance milestone is
disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment.

Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in the Statement of
Profit and Loss to the extent the carrying amount of the contract asset exceeds the remaining amount of consideration
that the Company expects to receive towards remaining performance obligations (after deducting the costs that relate
directly to fulfill such remaining performance obligations). The Company recognises impairment loss (termed as provision
for expected credit loss on contract assets in the financial statements) on account of credit risk in respect of a contract
asset using expected credit loss model on similar basis as applicable to trade receivables.

C. Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains
control of the property transferred and a reasonable expectation of collection of the sale consideration from the customer
exists.

D. Revenue from rendering of services is recognised over time as the customer receives the benefit of the Company’s
performance and the Company has an enforceable right to payment for services transferred.

Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.

E. Revenue from contracts for rendering of engineering design services and other services which are directly related to the
construction of an asset is recognised on the same basis as stated in (B) supra.

F. Commission income is recognised as the terms of the contract are fulfilled.

G. Other operational revenue represents income earned from the activities incidental to the business and is recognised when
the performance obligation is satisfied and right to receive the income is established as per the terms of the contract.

(ii) Other income

A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the
effective interest rate including interest on investments classified as fair value through profit or loss or fair value through
other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and
Loss on accrual basis provided there is no uncertainty of realisation.

B. Dividend income is accounted in the period in which the right to receive the same is established.

C. Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the
Company, are recognised as other income/reduced from underlying expenses in the Statement of Profit and Loss in the
period in which such costs are incurred. Government grant receivable in the form duty credit scrips is recognised as other
income in the Statement of Profit and Loss in the period in which the application is made to the government authorities
and to the extent there is no uncertainty towards its receipt.

D. Other items of income are accounted as and when the right to receive such income arises and it is probable that the
economic benefits will flow to the Company and the amount of income can be measured reliably.

334
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(f) Exceptional items
An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the
performance of the Company is treated as an exceptional item and disclosed as such in the financial statements.

(g) Property, plant and equipment (PPE)

PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any less accumulated
depreciation and cumulative impairment, if any. All directly attributable costs related to the acquisition of PPE and, borrowing costs
in case of qualifying assets are capitalised in accordance with the Company’s accounting policy.

Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general
overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition
are allocated and capitalised as a part of the cost of the PPE.

Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably.

PPE not ready for the intended use on the date of the Balance Sheet are disclosed as “capital work-in-progress”. (Also refer to the
policies on leases, borrowing costs, impairment of assets and foreign currency transactions infra).

Depreciation is recognised using straight line method so as to write off the cost of the assets (other than freehold land and capital
work-in-progress) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case
of assets where the useful life was determined by technical evaluation, over the useful life so determined.

Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset
is allocated over its remaining useful life.

Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic
benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the
effect of any change in the estimates of useful life/residual value is accounted on prospective basis.

Where cost of a part of the asset (“asset component”) is significant to total cost of the asset and useful life of that part is different
from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is
depreciated over its separate useful life.

Depreciation on additions to/deductions from, owned assets is calculated pro rata to the period of use.

PPE is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss
arising on derecognition is recognised in the Statement of Profit and Loss in the same period.
(h) Investment property
Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as investment property
and are measured and reported at cost, including transaction costs and borrowing costs capitalised for qualifying assets, in
accordance with the Company’s accounting policy. Policies with respect to depreciation, useful life and derecognition are followed
on the same basis as stated for PPE supra.

(i) Intangible assets

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to
the Company and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits
availed, if any, less accumulated amortisation and cumulative impairment. All directly attributable costs and other administrative and
other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as
a part of the cost of the intangible assets.

Research and development expenditure on new products:

(i) Expenditure on research is expensed under respective heads of account in the period in which it is incurred.

(ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:

A. the technical feasibility of completing the intangible asset so that it will be available for use or sale;

335
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
B. the Company has intention to complete the intangible asset and use or sell it;

C. the Company has ability to use or sell the intangible asset;

D. the manner in which the probable future economic benefits will be generated including the existence of a market for
output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets;

E. the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and

F. the Company has ability to reliably measure the expenditure attributable to the intangible asset during its development.
Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred.

Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “Intangible assets under
development”.

Intangible assets are amortised on straight line basis over the estimated useful life. The method of amortisation and useful life are
reviewed at the end of each financial year with the effect of any changes in the estimate being accounted for on a prospective
basis.

Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the
asset’s revised carrying amount over its remaining useful life.

(j) Impairment of assets

As at the end of each financial year, the carrying amounts of PPE, investment property, intangible assets and investments in
subsidiary, associate and joint venture companies are reviewed to determine whether there is any indication that those assets have
suffered an impairment loss. If such indication exists, PPE, investment property and intangible assets are tested for impairment so as
to determine the impairment loss, if any. Intangible assets with indefinite life are tested for impairment each year.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is
determined:

(i) in the case of an individual asset, at the higher of the fair value less costs to sell and the value in use; and

(ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the
higher of the cash generating unit’s fair value less costs to sell and the value in use.

The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an
asset, which may vary based on the future performance of the Company and from its disposal at the end of its useful life. For this
purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted
for risks specified to the estimated cash flows of the asset.
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is
recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash
generating unit) is reduced to its recoverable amount.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the
revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in the Statement of Profit and Loss.

(k) Employee Benefits

(i) Short-term employee benefits:
Employee benefits such as salaries, wages, short-term compensated absences, bonus, ex-gratia and performance-linked
rewards falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are
expensed in the period in which the employee renders the service.

(ii) Post-employment benefits:

A. Defined contribution plans: The Company’s superannuation scheme, state governed provident fund scheme, employee
state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable
under the schemes is recognised during the period in which the employee renders the service.

336
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
B. Defined benefit plans: The employees’ gratuity fund schemes and employee provident fund schemes managed by board
of trustees established by the Company, the post-retirement medical care plan and the company pension plan represent
defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial
valuation using the Projected Unit Credit Method.

The obligation towards defined benefit plans is measured at the present value of the estimated future cash flows using a
discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average
maturity profile of the defined benefit obligations at the Balance Sheet date.

Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest
on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other
comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss.

Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised
in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is
recognised in the Statement of Profit and Loss under finance costs. Gains or losses on settlement of any defined benefit plan
are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or
curtailment and when the Company recognises related restructuring costs or termination benefits.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans
to recognise the obligation on a net basis.

(iii) Long-term employee benefits:

The obligation recognised in respect of long-term benefits such as compensated absences, long service award etc. is measured
at present value of estimated future cash flows expected to be made by the Company and is recognised in a similar manner as
in the case of defined benefit plans vide (ii)(B) supra.

Long-term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements,
re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit
expenses. Interest cost implicit in long-term employee benefit cost is recognised in the Statement of Profit and Loss under
finance costs.

(iv) Termination benefits:

Termination benefits such as compensation under employee separation schemes are recognised as expense when the
Company’s offer of the termination benefit can no longer be withdrawn or when the Company recognises the related
restructuring costs whichever is earlier.

(l) Leases
Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is recognised at the lease
commencement date.

Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the underlying asset or the site on which it is located, as reduced by any lease
incentives received.

The lease liability is initially measured at the present value of the lease payments, discounted using the Company’s incremental
borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or
a change in the estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-
of-use asset, or is recorded in the Statement of Profit and Loss if the carrying amount of the right-of-use asset has been reduced to
zero.

The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and
cumulative impairment, if any. The right-of-use asset is depreciated using the straight-line method from the commencement date to
the end of the lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased by
interest on lease liability and reduced by lease payments made.

337
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
Lease payments associated with following leases are recognised as expense on straight-line basis:

(i) Low value leases; and

(ii) Leases which are short-term.

Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset. Asset held under finance lease is initially
recognised in Balance Sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income is
recognised over the lease term, based on a pattern reflecting a constant periodic rate of return on Company’s net investment in the
lease. A lease which is not classified as a finance lease is an operating lease.

The Company recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The
Company presents underlying assets subject to operating lease in its Balance Sheet under the respective class of asset.

(Also refer to policy on depreciation, supra).

(m) Financial instruments

Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract embodying the related
financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction
values and where such values are different from fair value, at fair value. Transaction costs that are attributable to the acquisition
or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or
loss) are added to or deducted from as the case may be, the fair value of such financial assets or liabilities, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss
are recognised in profit or loss.

In case of funding to subsidiary companies in the form of interest free or concession loans and preference shares, the excess of the
actual amount of the funding over initially measured fair value is accounted as an equity investment.

A financial asset and a financial liability is offset and presented on net basis in the Balance Sheet when there is a current legally
enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle
the liability simultaneously.

(i) Financial assets:

A. All recognised financial assets are subsequently measured in their entirety either at amortised cost or at fair value as
follows:

1. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. Debt
instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or
loss.
2. Investments in debt instruments that meet the following conditions are subsequently measured at amortised cost
(unless the same designated as fair value through profit or loss):

• The asset is held within a business model whose objective is to hold assets in order to collect contractual cash
flows; and

• The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

3. Investment in debt instruments that meet the following conditions are subsequently measured at fair value through
other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss)

• The asset is held within a business model whose objective is achieved both by collecting contractual cash flows
and selling financial assets; and

• The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

4. Investment in equity instruments issued by subsidiary, associate and joint venture companies are measured at cost
less impairment.

338
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
5. Investment in preference shares of the subsidiary companies are treated as equity instruments if the same are
convertible into equity shares or are redeemable out of the proceeds of equity instruments issued for the purpose of
redemption of such investments. Investment in preference shares not meeting the aforesaid conditions are classified
as debt instruments at FVTPL.

6. Investments in equity instruments issued by other than subsidiaries are classified as at FVTPL, unless the related
instruments are not held for trading and the Company irrevocably elects on initial recognition to present subsequent
changes in fair value in other comprehensive income.

7. Trade receivables, security deposits, cash and cash equivalents, employee and other advances – at amortised cost

B. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and
exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on
account of above income or expense) are recognised in other comprehensive income and accumulated in other equity. On
disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified
to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss
on disposal of investments.

C. A financial asset is primarily derecognised when:

1. the right to receive cash flows from the asset has expired, or

2. the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a pass-through arrangement; and (a)
the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount at the date of
derecognition and the consideration received is recognised in profit or loss.

D. Impairment of financial assets: Impairment loss on trade receivables is recognised using expected credit loss model, which
involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS
109. Impairment loss on investments is recognised when the carrying amount exceeds its recoverable amount. For all
other financial assets, expected credit losses are measured at an amount equal to 12-month expected credit losses or at
an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased significantly since
initial recognition.

(ii) Financial liabilities:

A. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL
are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of
impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All
other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR)
method.

B. A financial liability is derecognised when the related obligation expires or is discharged or cancelled.

(iii) The Company designates certain hedging instruments, such as derivatives, embedded derivatives and in respect of foreign
currency risk, certain non-derivatives, as either fair value hedges, cash flow hedges or hedges of net investments in foreign
operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges.

A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are
recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no
longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from
the hedged risk is amortised to profit or loss from that date.

B. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated

339
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
in equity as hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or
loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective
portion, are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as
the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the
hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the
inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion.

In case of time period related hedges, the premium element and the spot element of a forward contract is separated and
only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly,
wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the
designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the
fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is
accumulated in a separate component of equity as cost of hedging reserve. The changes in the fair value of such premium
element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight-line basis
over the period of the forward contract or the financial instrument.

The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Where the hedged forecast
transaction results in the recognition of a non-financial asset, such gains/losses are transferred from hedge reserve (but not as
reclassification adjustment) and included in the initial measurement cost of the non-financial asset.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no
longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity
at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a
forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised in profit or loss.

(iv) Compound financial instruments issued by the Company which can be converted into fixed number of equity shares at the
option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the
liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability
that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair
value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable
transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised
cost using the effective interest method. The equity component of a compound financial instrument is not remeasured
subsequently.

(n) Inventories
Inventories are valued after providing for obsolescence, as under:

(i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net
realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used,
are expected to be sold at or above cost.

(ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some
cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of
qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs.

(iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable
value. Cost includes costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present
location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost.

(iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically
identifiable cost or net realisable value.

Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused
inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value
because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original
amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value.

340
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(o) Cash and bank balances
Cash and bank balances include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances
which have restrictions on repatriation. Short-term and liquid investments being subject to more than insignificant risk of change in
value, are not included as part of cash and cash equivalents.

(p) Securities premium

(i) Securities premium includes:

A. The difference between the face value of the equity shares and the consideration received in respect of shares issued.

B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock
Options Scheme.

(ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium.
(q) Borrowing Costs
Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired
on lease and exchange differences arising on foreign currency borrowings to the extent they are regarded as an adjustment to
finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and
are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortisation of premium element
of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument.

Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the
acquisition, construction or production of a qualifying asset are capitalised/inventorised as part of cost of such asset till such time
the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to
get ready for its intended use or sale. All other borrowing costs are recognised in the Statement of Profit and Loss in the period in
which they are incurred.

(r) Share-based payment arrangements

The stock options granted to employees in terms of the Company’s Stock Options Schemes, are measured at the fair value of the
options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over
the vesting period on a straight-line basis. The amount recognised as expense in each year is arrived at based on the number of
grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such
grant is transferred to the general reserve within equity.

The fair value of the stock options granted to employees of the Company by the Company’s subsidiaries is accounted as employee
compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated as
dividend declared by them. The share- based payment equivalent to the fair value as on the date of grant of employee stock options
granted to key managerial personnel is disclosed as a related party transaction in the year of grant.

(s) Foreign currencies

(i) The functional currency and presentation currency of the Company is Indian Rupee.

(ii) Transactions in currencies other than the Company’s functional currency are recorded on initial recognition using the exchange
rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate.
Non-monetary items that are measured in terms of historical cost in foreign currency are not translated. Exchange differences
that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot
rate are recognised in the Statement of Profit and Loss in the period in which they arise except for:
A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, are
included in the cost of those assets when such exchange differences are regarded as an adjustment to finance costs on
those foreign currency borrowings; and
B. exchange differences on transactions entered into to hedge certain foreign currency risks.

(iii) exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of
advance consideration is used for initial recognition of related asset, expense or income.

341
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
(iv) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian
Rupees as follows:
A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet;
B. income and expenses for each income statement are translated at average exchange rate for the reporting period; and
C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign
currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations.

(t) Accounting and reporting of information for Operating Segments

Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating
decision making body in the Company to make decisions for performance assessment and resource allocation.
The reporting of segment information is the same as provided to the management for the purpose of the performance assessment
and resource allocation to the segments.
Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting
policies have been followed for segment reporting:
i) Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including
inter segment revenue.
ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result.

iii) Most of the common costs are allocated to segments mainly on the basis of their respective expected segment revenue
estimated at the beginning of the reported period.
iv) Income which relates to the Company as a whole and not allocable to segments is included in “unallocable corporate income/
(expenditure)(net)”.
v) Segment result represents profit before interest and tax and includes margins on inter-segment capital jobs, which are reduced
in arriving at the profit before tax of the Company.
vi) Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in
“unallocable corporate income/(expenditure)(net)”.
vii) Segment results have not been adjusted for any exceptional item.

viii) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and
liabilities represent the assets and liabilities that relate to the Company as a whole.

ix) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is
accounted as employee compensation cost [refer Note 1(ii)(r) supra] and is allocated to the segment.
x) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which
are either determined to yield a desired margin or agreed on a negotiated basis.

(u) Taxes on income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act,1961 and using estimates and judgments based on the expected outcome of assessments/appeals
and the relevant rulings in the areas of allowances and disallowances.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company’s
financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates as per
laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated
with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits
will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is

342
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits
will be available to allow all or part of the asset to be recovered.

Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along
with the tax as applicable.

(v) Interests in joint operations

The Company as a joint operator recognises in relation to its interest in a joint operation, its share in the assets/liabilities held/
incurred jointly with the other parties of the joint arrangement. Revenue is recognised for its share of revenue from the sale of
output by the joint operation. Expenses are recognised for its share of expenses incurred jointly with other parties as part of the
joint arrangement.
Interests in joint operations are included in the segments to which they relate.

(w) Provisions, contingent liabilities and contingent assets

Provisions are recognised only when:

(i) the Company has a present obligation (legal or constructive) as a result of a past event; and

(ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(iii) a reliable estimate can be made of the amount of the obligation.

Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money
is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of
expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.
Contingent liability is disclosed in case of:

(i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the
obligation; and
(ii) a present obligation arising from past events, when no reliable estimate is possible. Contingent assets are disclosed where an
inflow of economic benefits is probable.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received
under such contract, the present obligation under the contract is recognised and measured as a provision.

(x) Commitments
Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:

(i) estimated amount of contracts remaining to be executed on capital account and not provided for;

(ii) uncalled liability on shares and other investments partly paid;

(iii) funding related commitment to subsidiary, associate and joint venture companies; and

(iv) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of
management.
Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive
details.

(y) Discontinued operations and non-current assets held for sale

Discontinued operation is a component of the Company that has been disposed of or classified as held for sale and represents a
major line of business.
Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally
through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present
condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly
probable and is expected to qualify for recognition as a completed sale within one year from the date of classification.

343
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less
costs to sell.

(z) Statement of Cash Flows

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from
operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of:

(i) changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;

(ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and

(iii) all other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available
for general use as at the date of Balance Sheet.

(aa) Key sources of estimation

The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates
and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and
liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying
assumptions made by management are explained under respective policies. Revisions to accounting estimates include useful
lives of property, plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of
retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value/recoverable amount
measurement, etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are
known.

(ab) Business Combination

Common control business combination is accounted using the pooling of interest method where the Company is transferee. Assets
and liabilities of the combining entities are reflected at their carrying amounts and no new asset or liability is recognised. Identity of
reserves of the transferor company is preserved by reflecting them in the same form in the Company’s financial statements in which
they appeared in the financial statement of the transferor company. The excess between the amount of consideration paid over the
share capital of the transferor company is recognised as a negative amount and the same is disclosed as capital reserve on business
combination.

The financial information in the financial statements in respect of prior periods is restated from the beginning of the preceding
period in the financial statements if the business combination date is prior to that date. However, if business combination date is
after that date, the financial information in the financial statements is restated from the date of business combination.

NOTE [1](iii)
Based on assessment of the impact of COVID-19 pandemic on the business/economic conditions, the Company expects to recover the
carrying value of its assets. The Company will continue to evaluate the pandemic-related uncertainty arising from the on-going second
wave and update its assessment.

344
Notes forming part of the Financial Statements (contd.)
Note [2]
Property, Plant and Equipment & Capital work-in-progress
v crore
Cost/Valuation Depreciation Impairment Book value
Trf (to)/ Trf (to)/
Class of assets Assets Foreign Foreign
As at Trf to ROU from As at Up to For the Assets held Trf to ROU from Up to As at Up to As at As at
Additions held for currency Deductions currency Deductions
1-4-2020 asset investment 31-3-2021 31-3-2020 year [1] for sale asset investment 31-3-2021 31-3-2021 31-3-2020 31-3-2021 31-3-2020
sale fluctuation fluctuation
property property
Land
Freehold 737.82 6.38 – – (12.20) – 3.49 728.51 – – – – – – – – – – 728.51 737.82
Leasehold 51.92 – – – – – 0.34 51.58 2.92 0.69 – – – – 0.02 3.59 – – 47.99 49.00
Sub total -Land 789.74 6.38 – – (12.20) – 3.83 780.09 2.92 0.69 – – – – 0.02 3.59 – – 776.50 786.82
Buildings 2511.48 587.18 – – (37.35) (2.29) 104.88 2954.14 484.36 84.38 – – (8.04) (2.29) 93.70 464.71 87.35 89.30 2402.08 1937.82
Plant &
equipment
Owned 5699.75 795.11 – – – (3.40) 135.94 6355.52 2859.89 590.65 – – – (3.16) 105.20 3342.18 15.02 15.05 2998.32 2824.81
Leased out 162.72 – – – – – – 162.72 153.23 4.00 – – – – – 157.23 – – 5.49 9.49
Sub total- Plant
& equipment 5862.47 795.11 – – – (3.40) 135.94 6518.24 3013.12 594.65 – – – (3.16) 105.20 3499.41 15.02 15.05 3003.81 2834.30
Computers 424.42 40.86 – – – (0.10) 31.10 434.08 286.65 63.42 – – – (0.09) 30.84 319.14 – – 114.94 137.77
Office equipment 208.11 48.91 – – – (0.30) 9.48 247.24 146.87 26.97 – – – (0.27) 8.94 164.63 0.01 0.01 82.60 61.23
Furniture &
fixtures 139.65 17.67 – – – (0.25) 16.11 140.96 90.44 12.90 – – – (0.23) 13.14 89.97 0.24 0.24 50.75 48.97
Vehicles 247.61 12.68 – – – (0.46) 23.24 236.59 118.94 28.96 – – – (0.40) 16.84 130.66 – – 105.93 128.67
Other assets
Ships 84.34 78.40 – – – – 0.18 162.56 26.89 8.44 – – – – 0.18 35.15 – – 127.41 57.45
Ship lift 693.25 0.02 – – – – 13.59 679.68 200.93 32.97 – – – – – 233.90 – – 445.78 492.32
Breakwater
Structures 226.18 – – – – – 0.18 226.00 26.42 5.01 – – – – – 31.43 – – 194.57 199.76
Aircraft 195.22 – – – – – – 195.22 26.90 10.48 – – – – – 37.38 – – 157.84 168.32
Sub total -
Other assets 1198.99 78.42 – – – – 13.95 1263.46 281.14 56.90 – – – – 0.18 337.86 – – 925.60 917.85
Total 11382.47 1587.21 – – (49.55) (6.80) 338.53 12574.80 4424.44 868.87 – – (8.04) (6.44) 268.86 5009.97 102.62 104.60 7462.21 6853.43
Previous year 12170.45 857.92 (1009.74) (282.10) 153.19 29.00 229.88 11382.47 4085.92 905.02 (414.82) (12.54) 0.12 22.56 161.57 4424.44 104.60 102.51
Add: Capital work-in-progress 236.12 796.55
[1]
R 0.04 crore (previous year: R 1.38 crore) pertains to foreign currency fluctuation 7698.33 7649.98

a) Cost of freehold land includes R 1.14 crore (previous year: R 1.14 crore) for which conveyance is yet to be completed.
b) Cost of buildings includes ownership accommodations:
(i) A. in various co-operative societies, shop-owners’ associations and non-trading corporations : R 68.26 crore, including 2615
shares of R 50 each, 75 shares of R 100 each. (previous year: in various co-operative societies, shop-owners’ associations
and non-trading corporations: R 68.26 crore, including 2615 shares of R 50 each, 75 shares of R 100 each).
B. in various apartments : R 8.82 crore. (previous year: R 9.42 crore).
C. in various co-operative societies : R 0.36 crore (previous year: R 0.36 crore) for which share certificates are yet to be
issued.
D. in proposed co-operative societies R 30.59 crore. (previous year: R 30.59 crore).
(ii) ownership accommodations of R 0.15 crore in respect of which the deed of conveyance is yet to be executed. (previous year:
R 0.29 crore).
(iii) ownership accommodations of R 11.75 crore representing undivided share in properties at various locations. (previous year:
R 11.75 crore).

345
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [2]
Property, Plant and Equipment & Capital work-in-progress (contd.)
c) Additions during the year and capital work-in-progress include R 27.75 crore (previous year: R 23.10 crore) being borrowing cost
capitalised in accordance with Ind AS 23 “Borrowing Costs”. Asset class wise break-up of borrowing costs capitalised during the
year is as follows:
v crore
Class of assets 2020-2021 2019-2020
Buildings 27.75 23.09
Plant and Equipment – 0.01
Total 27.75 23.10
d) The rate used to determine the amount of borrowing costs eligible for capitalisation is 5.83% (previous year: 6.24%).

e) Depreciation for the year includes R 6.95 crore (previous year: R 4.30 crore) on account of obsolescence.

f) Owned assets given on operating lease have been presented separately under respective class of assets as “Leased out” pursuant to
Ind AS 116 “Leases”.

g) Cost as at April 1, 2020 of individual assets has been reclassified wherever necessary.

h) Out of its leasehold land at Hazira, the Company has given certain portion of land for the use to its joint venture company and the
lease deed is under execution.

i) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the
consumption pattern of the assets and the past performance of similar assets.

a. Estimated useful life of the following assets is in line with useful life prescribed in schedule II of the Companies Act, 2013:
Sr. No Asset Class Minimum useful life (in years) Maximum useful life (in years)
1. Buildings 3 60
2. Plant & equipment 8 15
3. Computer 3 6
4. Office equipment 4 5
5. Furniture & fixture 10 10
6. Vehicles 8 10
7. Ships 14 14
b. Estimated useful life of following assets is different than useful life as prescribed in schedule II of the Companies Act, 2013.
Useful life as per Useful life
Sr. No Category of assets Sub-category of assets
Schedule II (in years) adopted (in years)
1. Aircrafts – 20 18
2. Vehicles Motor cars 8 7
A Assets used in Heavy Engineering Business:

Useful life as per Useful life adopted

Sr.
Category of assets Sub-category of assets Schedule II (in years)
No
(in years)
1. Plant & Equipment Boring/Rolling/Drilling/Milling machines 10-30
General Modular furnace 5-15
Other furnaces 5-30
Horizontal autoclaves 15 10-30
Load bearing structures 50
Flushing facility 3
Cranes 10-30
2. Roads Carpeted roads-other than RCC 5 5-15

346
Notes forming part of the Financial Statements (contd.)
Note [2]
Property, Plant and Equipment & Capital work-in-progress (contd.)
B Assets used in Shipbuilding Business:
Useful life as per Useful life adopted
Sr.
Category of Assets Sub-category of Assets Schedule II (in years)
No
(in years)
1. Breakwater Breakwater & Rock bund 30 [1] 50
structures
2. Ship lift Ship lift structures, Control system, Chiller 30 [1]
20
units, Condition monitoring system, Ship
position system, Ship transfer system, other
ship lift related structures
Land berth and piled platforms 30 [1] 40
Tower cranes 15 25
3. Plant and equipment Rails 15 20
Diesel Generator 15 12
Air-Conditioner & refrigeration equipment 15 12
4. Buildings Production shops 30 50
Internal roads 5 15
5. Vehicles Motor Cars 8 7
Represents licence period as per agreement executed with the Tamil Nadu Maritime Board.
[1]

C Assets used in Defence Business:

Sr. Useful life as per Useful life adopted

Category of assets Sub-category of assets
No Schedule II (in years) (in years)
1. Buildings Factory buildings 30 5 - 50
2. Buildings Non-factory buildings 3 - 60 2 - 60
3. Plant & equipment-general 8 - 15 1 - 30
4. Plant & equipment Canteen equipment 8 1-8
Photographic equipment 15 5-8
Laboratory equipment 10 1-8
Electrical installation 10 1 - 21
Air conditioning and refrigeration 12 1 - 12
equipment
5. Computer 3-6 1-8
6. Office equipment 4-5 1 - 15
7. Furniture & fixture 10 1 - 20

347
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [2]
Property, Plant and Equipment & Capital work-in-progress (contd.)
D Assets used in Construction business:

Sr. Useful life as per Useful life adopted

Category of Assets Sub-category of Assets
No Schedule II (in years) (in years)
1. Office equipment Assets deployed at project site 5 3
2. Air conditioning and Assets deployed at project site
15 3
refrigeration equipment
3. Canteen equipment Assets deployed at project site 15 3
4. Laboratory equipment Assets deployed at project site 10 3
5. Photographic equipment Assets deployed at project site 15 3
In addition to above, any assets purchased for project site with acquisition value less than R 50,000 for above 5 categories
of Asset, full cost is depreciated in the same financial year.

j) Carrying value of Property, plant and equipment hypothecated as collateral for certain borrowings and/or commitments as at March
31, 2021 - R 1476.49 crore (as at March 31, 2020: R 1718.30 crore)

Note [3]
Investment property v crore
Cost Depreciation Book Value
Class of assets Transferred Transferred
As at As at As at As at As at As at
Additions from PPE/(to) Deductions For the year from PPE/(to) Deductions
1-4-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2021 31-3-2020
inventories inventories
Land 53.95 – 12.20 18.47 47.68 – – – – – 47.68 53.95
Buildings 501.72 – 37.35 92.57 446.50 65.27 17.48 8.04 18.22 72.57 373.93 436.45
Total 555.67 – 49.55 111.04 494.18 65.27 17.48 8.04 18.22 72.57 421.61 490.40

Previous year 409.97 0.33 153.15 7.77 555.67 48.79 16.63 0.08 0.22 65.27
421.61 490.40

(a) Additions during the year and capital work-in-progress include NIL (previous year: R 0.33 crore) being borrowing cost capitalised
in accordance with Ind AS 23 “Borrowing Costs”. Asset class wise break-up of borrowing costs capitalised during the year is as
follows:

R crore

Class of assets 2020-2021 2019-2020

Buildings – 0.33
(b) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the
consumption pattern of the assets and the past performance of similar assets:

Minimum useful life Maximum useful life

Class of assets
(in years) (in years)
Buildings 3 60

348
Notes forming part of the Financial Statements (contd.)
Note [3]
Investment property (contd.)
(c) Disclosure pursuant to Ind AS 40 “Investment Property”
(i) Amount recognised in the Statement of Profit and Loss for investment property:
v crore
Sr. 2020-21 2019-20
Particulars
No
1 Rental income derived from investment property 124.40 137.81
2 Direct operating expenses pertaining to investment property that generated rental income 58.21 79.14
3 Direct operating expenses pertaining to investment property that did not generate rental
income 4.24 0.63
(ii) Fair value of investment property as at March 31, 2021 amounts to R 2082.07 crore (as at March 31, 2020 R 2644.31 crore).
(iii) The fair value of investment property has been determined by internal architectural department or independent valuer, as
appropriate. Fair value of properties that are evaluated by independent valuers as at March 31, 2021 amounts to R 1216.41
crore (as at March 31, 2020 R 1216.41 crore). Valuation is based on government rates, market research, market trend and
comparable values as considered appropriate.

Note [4]
Intangible assets & Intangible assets under development
v crore
Cost Amortisation Book value
Class of assets As at Assets held As at Up to For the Assets held Up to As at As at
Additions Deductions Deductions
1-4-2020 for sale 31-3-2021 31-3-2020 year for sale 31-3-2021 31-3-2021 31-3-2020

Specialised software 207.22 4.66 – 0.91 210.97 170.45 11.57 – 0.83 181.19 29.78 36.77
Technical knowhow 100.69 2.78 – 3.62 99.85 53.74 24.14 – 3.64 74.24 25.61 46.95
New product design and
development 6.26 – – – 6.26 6.26 – – – 6.26 – –
Total 314.17 7.44 – 4.53 317.08 230.45 35.71 – 4.47 261.69 55.39 83.72

Previous year 562.62 74.44 (322.88) – 314.17 333.90 45.63 (149.08) – 230.45
Add: Intangible assets under development 48.01 0.66
103.40 84.38

(a) Additions during the year

v crore
FY 2020-21 FY 2019-20
Class of assets Internal Acquired Total Internal Acquired Total
Development - External Development - External
Specialised software – 4.66 4.66 – 12.02 12.02
Technical knowhow – 2.78 2.78 8.34 – 8.34
New product design and development – – – 54.08 – 54.08
Total – 7.44 7.44 62.42 12.02 74.44
(b) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the
consumption pattern of the assets and the past performance of similar assets:
Minimum useful life Maximum useful life
Sr. No Class of assets
(in years) (in years)
1. Specialised software 1 10
2. Technical knowhow 1 10
3. New product design and development 1 6

349
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [5]
Non-current Assets: Financial Assets - Investments

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Investment in equity instruments
(a) Subsidiary companies 26954.57 26357.53
(b) Associate companies 4.42 4.42
(c) Joint venture companies 1539.91 1539.91
(d) Other companies 70.22 73.42
28569.12 27975.28

Details of Non-current Assets: Financial Assets - Investments

Number of units
Particulars Face value As at As at As at
per unit 31-3-2021 31-3-2021 31-3-2020
v v crore v crore
(A) Investments in fully paid equity instruments
(a) Subsidiary companies:
(i) Investments in fully paid equity instruments:
L&T Valves Limited 100 18,00,000 161.23 161.23
Bhilai Power Supply Company Limited 10 49,950 0.05 0.05
Hi-Tech Rock Products & Aggregates Limited 10 50,000 0.05 0.05
Kesun Iron & Steel Company Private Limited [Net of provision R 95,000 (previous
year: Nil)] 10 9,500 – 0.01
L&T Aviation Services Private Limited 10 4,56,00,000 45.60 45.60
L&T Capital Company Limited 10 50,000 0.05 0.05
L&T Cassidian Limited [previous year provision: R 0.05 crore] 10 – – –
L&T Finance Holdings Limited (quoted) 10 1,57,10,04,573 5375.82 3468.17
L&T Metro Rail (Hyderabad) Limited 10 2,43,89,99,999 2439.00 2439.00
L&T Power Development Limited [Net of provision R 829.00 crore (previous year: Nil)] 10 3,11,27,00,000 2283.70 3112.70
L&T Power Limited 10 51,157 0.05 0.05
L&T Realty Developers Limited [1] 10 16,71,60,700 107.72 107.72
L&T Seawoods Limited 10 1,65,45,50,000 1654.55 1654.55
Mindtree Limited (quoted) 10 10,05,27,734 9567.93 9567.93
L&T Electricals and Automation Limited 10 74,38,796 40.36 40.36
L&T Hydrocarbon Engineering Limited 10 1,00,00,50,000 1000.05 1000.05
L&T Technology Services Limited (quoted) 2 7,79,86,899 805.25 805.25
Larsen & Toubro Infotech Limited (quoted) 1 12,97,84,034 108.05 108.05
L&T Geostructure Private Limited 10 2,47,50,000 318.50 18.50
Larsen & Toubro Hydrocarbon International Limited LLC [previous year provision:
R 0.68 crore] SAR 1000 – – –
Larsen & Toubro LLC USD 1 50,000 0.23 0.23
L&T Construction Equipment Limited [1] 10 19,91,42,091 22.27 22.27
Larsen & Toubro (Saudi Arabia) LLC SAR 1000 625 1.05 1.05
L&T Infrastructure Engineering Limited 10 36,00,000 21.85 21.85
L&T Global Holdings Limited USD 100 80,000 53.16 53.16
24006.52 22627.88

350
Notes forming part of the Financial Statements (contd.)
Note [5]
Details of Non-current Assets: Financial Assets - Investments (contd.)
Number of units
Particulars Face value As at As at As at
per unit 31-3-2021 31-3-2021 31-3-2020
v v crore v crore
(ii) Preference share considered equity as per terms:
L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable
preference shares, March 30, 2022 2 82,60,00,000 826.00 826.00
L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable
preference shares, May 12, 2022 2 4,80,00,000 48.00 48.00
L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable
preference shares, July 14, 2022 2 4,22,50,000 42.25 42.25
L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable
preference shares, September 3, 2022 2 4,20,00,000 42.00 42.00
L&T Hydrocarbon Engineering Ltd -10% Non-cumulative, optionally convertible
redeemable at par preference shares, February 6, 2029 10 50,00,00,000 500.00 500.00
L&T Hydrocarbon Engineering Ltd -12% Non-cumulative, optionally convertible,
redeemable at par preference shares, October 19, 2030 10 – – 130.00
L&T Hydrocarbon Engineering Ltd -12% Non-cumulative,optionally convertible,
redeemable at par preference shares, March 30, 2031 10 – – 130.00
L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally
convertible redeemable preference shares, July 17, 2029 [Net of provision
R 586.00 crore (previous year: Nil)] 2 1,42,68,50,000 840.85 1362.45
L&T Realty Developers Limited - 12% Non-cumulative and optionally convertible
redeemable at par preference shares, May 26, 2025 [1] 10 64,83,00,000 648.30 648.30
2947.40 3729.00
(iii) Other equity investments:
L&T Aviation Services Private Limited 0.65 0.65
0.65 0.65
Total - (a) = (i)+(ii)+(iii) 26954.57 26357.53
(b) Associate companies:
Gujarat Leather Industries Limited [Net of provision R 0.56 crore (previous year R 0.56 10 7,35,000 – –
crore)]
Magtorq Private Limited 100 9,000 4.42 4.42
4.42 4.42
(c) Joint Venture companies:
(i) Investments in fully paid equity instruments:
Ahmedabad-Maliya Tollway Limited [R 1000 (previous year: R 1000)] 10 100 – –
L&T Chennai-TADA Tollway Limited [R 1000 (previous year: R 1000)] 10 100 – –
L&T Halol-Shamlaji Tollway Limited [R 1000 (previous year: R 1000)] 10 100 – –
L&T Howden Private Limited 10 1,50,30,000 15.03 15.03
L&T Infrastructure Development Projects Limited [Net of provision R 1723.00 10
crore (previous year: R 1723.00 crore)] 32,10,59,096 1021.48 1021.48
L&T - MHI Power Boilers Private Limited 10 11,93,91,000 119.39 119.39
L&T - MHI Power Turbine Generators Private Limited 10 36,24,06,000 362.41 362.41
L&T Rajkot-Vadinar Tollway Limited [R 1000 (previous year: R 1000)] 10 100 – –
L&T Samakhiali Gandhidham Tollway Limited 10 13,000 0.01 0.01
L&T Special Steels and Heavy Forgings Private Limited [Net of provision R 419.28
crore (previous year: R 419.28 crore)] 10 41,92,84,000 – –
L&T Transportation Infrastructure Limited 10 1,08,64,000 10.86 10.86
L&T-Sargent & Lundy Limited 10 27,82,736 0.82 0.82
PNG Tollway Limited [R 1000 (previous year: R 1000)] 10 100 – –
Raykal Aluminum Company Private Limited 10 37,750 0.04 0.04
L&T MBDA Missile Systems Limited 10 5,10,000 0.51 0.51
1530.55 1530.55

351
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [5]
Details of Non-current Assets: Financial Assets - Investments (contd.)
Number of units
Particulars Face value As at As at As at
per unit 31-3-2021 31-3-2021 31-3-2020
v v crore v crore
(ii) Other equity investments:
L&T - MHI Power Boilers Private Limited 2.24 2.24
L&T - MHI Power Turbine Generators Private Limited 7.13 7.13
9.36 9.36
(iii) Preference shares-(equity portion):
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-
convertible redeemable at par preference shares, December 8, 2024 [Net of
provision R 78.33 crore (previous year: R 78.33 crore)] 10 15,54,00,000 – –
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-
convertible redeemable at par preference shares, December 8, 2025 [Net of
provision R 97.91 crore (previous year: R 97.91 crore)] 10 17,76,00,000 – –
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-
convertible redeemable at par preference shares, December 8, 2026 [Net of
provision R 84.41 crore (previous year: R 84.41 crore)] 10 14,20,80,000 – –
– –
Total - (c) = (i)+(ii)+(iii) 1539.91 1539.91
(d) Other companies:
International Seaport Dredging Limited [Net of provision R 15.90 crore (previous year:
R 15.90 crore)] 10000 15,899 – –
BBT Elevated Road Private Limited 10 1,00,000 0.10 0.10
Utmal Multi Purpose Service Co-operative Society Limited (B Class) [R 30,000
(previous year: R 30,000)] 100 300 – –
Tidel Park Limited [refer Note 53(f)] 10 40,00,000 63.23 68.30
VP Global Fibre and Yarns Private Limited [R 22,900 (previous year: R 22,900)] 100 229 – –
New Vision Wind Power Private Limited [R 27,000 (previous year: R 27,000)] 10 2,700 – –
The New India Assurance Company Limited 10 4,45,803 6.88 5.01
Total - (d) 70.22 73.42
Total - (A) =(a)+(b)+(c)+(d) 28569.12 27975.28
(B) Investment in preference shares of Joint venture companies:
(Fair value debt portion):
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible
redeemable at par preference shares, December 8, 2024 [Net of provision R 77.77 crore
(previous year: R 77.77 crore)] 10 15,54,00,000 – –
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible
redeemable at par preference shares, December 8, 2025 [Net of provision R 79.12 crore
(previous year: R 79.12 crore)] 10 17,76,00,000 – –
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible
redeemable at par preference shares, December 8, 2026 [Net of provision R 56.28 crore
(previous year: R 56.28 crore)] 10 14,20,80,000 – –
Total - (B) – –
Total Non-current Investment =(A)+(B) 28569.12 27975.28

352
Notes forming part of the Financial Statements (contd.)
Note [5]
Details of Non-current Assets: Financial Assets - Investments (contd.)
Details of quoted/unquoted investments:

As at As at
Particulars
31-3-2021 31-3-2020
v crore v crore
(a) Aggregate amount of quoted investments and market value thereof;
Book Value 15874.88 13954.41
Market Value 109342.27 42534.94
(b) Aggregate amount of unquoted investments;
Book Value 12694.24 14020.87
(c) Aggregate amount of Impairment in value of investments 4047.57 2633.29
The composite scheme of amalgamation and arrangement between L&T Realty Limited and L&T Construction Equipment Limited and
[1]

L&T Construction Machinery Limited was approved by National Company Law Tribunal on April 23,2020 with appointed date as April 1,
2018. Pursuant to the scheme:

a. Pursuant to amalgamation of L&T Realty Limited with L&T Constructure Equipment Limited, L&T Construction Equipment Limited
issued 4,71,60,700 equity shares of R 10 each and 64,83,00,000, 12% non-cumulative redeemable preference shares of R 10 each
to Larsen & Toubro Limited as a consideration towards the transfer of all assets and liabilities by L&T Realty Limited. The cost of
acquisition of shares issued was deemed to be the cost at which Larsen & Toubro Limited acquired shares of L&T Realty Limited.
Accordingly, the value of investment in L&T Construction Equipment Limited was increased by R 47.16 crore towards equity shares
and R 648.30 crore towards preference shares w.e.f. April 1, 2018 and correspondingly investment in equity and preference shares
of L&T Realty Limited stood cancelled.

b. Pursuant to the approval of the Registrar of Companies, L&T Construction Equipment Limited is renamed as L&T Realty Developers
Limited and L&T Construction Machinery Limited is renamed as L&T Construction Equipment Limited.

c. Pursuant to demerger of Manufacturing business of L&T Construction Equipment Limited, L&T Construction Machinery Limited
issued 19,91,32,091 equity shares of R 10 each to Larsen & Toubro Limited as a consideration towards transfer of certain assets and
liabilities by L&T Construction Equipment Limited. The cost of acquisition of these shares issued was derived based on book value of
assets transferred to the total value of assets of L&T Construction Equipment Limited as at appointed date. Accordingly, the value
of investment in L&T Construction Machinery Limited was increased by R 22.26 crore and reduced in L&T Construction Equipment
Limited w.e.f. April 1, 2018.

353
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [6]
Non-current Assets: Financials Assets - Loans

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Unsecured security deposits, considered good : 155.45 152.45
Less: Allowance for expected credit loss 37.79 36.54
117.66 115.91
Unsecured loan and advances to related parties:
Subsidiary companies, considered good [refer Note 57& 58(A)] 2449.00 2074.59
Joint venture companies, considered good [refer Note 57& 58(A)] 1730.38 1578.79
Less: Allowance for expected credit loss 1730.38 263.00
– 1315.79
Unsecured other loans,considered good: 0.39 0.71
2567.05 3507.00

Note [7]
Non-current Assets: Financial Assets - Others

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Cash and bank balances not available for immediate use [refer Note 7(a)] 283.85 273.76
Forward contract receivables 108.52 19.87
Premium receivable on financial guarantee contracts 8.33 10.53
Fixed deposits with banks (maturity more than 12 months) 2.89 0.32
Other receivables 0.25 –

403.84 304.48

Note 7(a)
Particulars of cash and bank balances not available for immediate use
v crore
Sr. As at As at
Particulars
No. 31-3-2021 31-3-2020
1 Amount received (including interest accrued thereon) from customers of property development
business – to be handed over to housing society on its formation. 27.02 26.02
2 Contingency deposit (including interest accrued thereon) received from customers of property
development business towards their sales tax liability - to be refunded/adjusted depending on
the outcome of the legal case. 27.78 26.49
3 Other bank balances (including interest accrued thereon) not available for immediate use being
security offered for bids submitted, loans availed, acquisition etc. 616.43 575.28
Total 671.23 627.79
Less: Amount reflected under current assets [refer Note 13] 387.38 354.03
Amount reflected under other financial assets - non-current [refer Note 7] 283.85 273.76

354
Notes forming part of the Financial Statements (contd.)
Note [8]
Other non-current assets

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Capital advances:
Secured 0.61 0.15
Unsecured 31.02 237.94
Advance recoverable other than in cash 1646.37 1758.01
Current tax receivable (net) 1968.05 2072.84

3646.05 4068.94

Note [9]
Current Assets: Inventories

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Raw materials [includes goods-in-transit R 3.86 crore (previous year: R 1.12 crore)] 392.65 377.44
Components [includes goods-in-transit R 1.48 crore (previous year: R 10.58 crore)] 96.24 82.04
Construction materials [includes goods-in-transit R 39.17 crore (previous year:
R 17.11 crore)] 59.78 48.34
Manufacturing work-in-progress 212.23 367.48
Finished goods 3.57 18.12
Stock-in-trade [includes goods-in-transit R 44.34 crore (previous year: R 37.10
crore)] 361.31 308.36
Stores and spares [includes goods-in-transit R 4.60 crore (previous year: R 1.14
crore)] 148.31 133.60
Loose tools 2.71 2.96
Property development related work-in-progress 1567.90 1431.56
Property development project - completed property 13.86 –

2858.56 2769.90

Note: During the year R 5.19 crore (previous year: R 73.98 crore) was recognised as expense towards write-down of inventories (net).

355
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [10]
Current Assets: Financial Assets - Investments

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
(a) Government and trust securities 869.51 757.82
(b) Debentures and bonds
(i) Subsidiary companies 2659.72 331.40
(ii) Joint venture companies 884.37 836.53
(ii) Other debentures & bonds 5731.81 2132.58
9275.90 3300.51
(c) Mutual funds 8009.01 2000.82
(d) Collateral borrowing and lending obligation (CBLO) 299.98 –
18454.40 6059.15

Details of current investments in Subsidiary companies and Joint venture companies

Number of units
Particulars Face value As at As at As at
per unit 31-3-2021 31-3-2021 31-3-2020
v v crore v crore
Debentures and Bonds (quoted):
(i) Subsidiary companies:
9.10% L&T Finance Limited NCD April 13, 2022 1000 200,000 21.06 20.83
9.00% L&T Finance Limited NCD April 15, 2024 1000 153,800 18.15 –
8.92% L&T Finance Limited NCD October 6, 2021 1000000 50 5.34 –
7.65% L&T Finance Limited NCD November 13, 2020 – – – 20.81
7.75% L&T Finance Limited NCD July 10, 2025 1000000 1,450 162.02 –
8.93% L&T Finance Limited NCD August 8, 2022 1000000 250 26.84 –
8.25% L&T Finance Limited NCD June 24, 2023 1000000 250 27.03 –
8.50% L&T Finance Limited Sr.C NCD March 17, 2023 1000000 750 80.66 –
7.95% L&T Finance Limited NCD July 28, 2025 1000000 1,300 145.30 –
7.90% L&T Finance Limited NCD July 13, 2024 1000000 2,000 223.28 –
7.30% L&T Finance Limited NCD September 8, 2023 1000000 5,000 541.76 –
8.50% L&T Finance Limited NCD January 17, 2023 1000000 700 75.07 –
8.50% L&T Finance Limited NCD February 17, 2023 1000000 150 16.11 –
8.55% L&T Finance Limited NCD November 29 2022 1000000 1,000 108.92 –
7.15% L&T Finance Limited NCD September 16, 2024 1000000 1,000 107.25 –
6.75% L&T Finance Limited NCD November 3, 2024 1000000 2,000 205.27 –
7.85% L&T Finance Limited NCD July 9, 2025 1000000 900 100.36 –
6.55% L&T Finance Limited NCD November 3, 2028 1000000 3,000 304.15 –
9.81% L&T Metro Rail (Hyderabad) Limited June 18,2035 1000000 750 91.51 –
9.81% L&T Metro Rail (Hyderabad) Limited November 2, 2035 1000000 500 61.57 –
9.85% L&T Metro Rail (Hyderabad) Limited January 28, 2036 1000000 250 30.27 –
9.50% L&T Metro Rail (Hyderabad) Limited SR-F NCD November 26, 2030 1000000 1,500 183.50 172.96
9.55% L&T Metro Rail (Hyderabad) Limited SR-F NCD September 28, 2030 1000000 1,000 124.30 116.81
Total- (i) 2659.72 331.40

356
Notes forming part of the Financial Statements (contd.)
Note [10]
Details of current investments in Subsidiary companies and Joint venture companies (contd.)
Number of units
Particulars Face value As at As at As at
per unit 31-3-2021 31-3-2021 31-3-2020
v v crore v crore
(ii) Joint venture companies:
8.50% Kudgi Transmission Limited SR-D NCD April 25, 2021 1000000 140 15.16 –
8.50% Kudgi Transmission Limited SR-E NCD April 25, 2022 1000000 120 13.48 –
9.14% Kudgi Transmission Limited SR-K NCD April 25, 2028 1000000 230 28.39 27.20
9.14% Kudgi Transmission Limited SR-L NCD April 25, 2029 1000000 240 29.74 28.52
9.14% Kudgi Transmission Limited SR-M NCD April 25, 2030 1000000 270 33.61 32.01
9.14% Kudgi Transmission Limited SR-N NCD April 25, 2031 1000000 280 34.73 33.35
9.14% Kudgi Transmission Limited SR-O NCD April 25, 2032 1000000 290 35.21 34.50
9.50% Kudgi Transmission Limited SR-P NCD April 25, 2033 1000000 310 38.72 37.85
9.50% Kudgi Transmission Limited SR-Q NCD April 25, 2034 1000000 330 41.42 40.37
9.50% Kudgi Transmission Limited SR-R NCD April 25, 2035 1000000 360 45.12 43.90
9.50% Kudgi Transmission Limited SR-S NCD April 25, 2036 1000000 390 48.74 47.83
9.50% Kudgi Transmission Limited SR-T NCD April 25, 2037 1000000 410 51.33 50.56
9.50% Kudgi Transmission Limited SR-U NCD April 25, 2038 1000000 350 43.90 43.36
9.50% Kudgi Transmission Limited SR-V NCD April 25, 2039 1000000 960 120.67 119.34
9.50% Kudgi Transmission Limited SR-W NCD April 25, 2040 1000000 250 31.50 31.15
8.60% LTIDPL NCD December 26, 2026 1000000 2,500 272.65 266.60
Total- (ii) 884.37 836.53
Details of quoted/unquoted investments:

As at As at
Particulars
31-3-2021 31-3-2020
v crore v crore
(a) Aggregate amount of quoted current investments and market value thereof;
Book Value 10145.41 4058.33
Market Value 10145.41 4058.33
(b) Aggregate amount of unquoted current investments;
Book Value (Accounted based on NAV) 8009.01 2000.82
Book Value 299.98 -

Note [11]
Current Assets: Financial Assets - Trade receivables

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Unsecured,considered good 31629.67 29056.56
Less: Allowance for expected credit loss 1808.16 1313.12
29821.51 27743.44
Credit Impaired 797.55 1234.68
Less: Allowance for expected credit loss 670.82 1065.16
126.73 169.52
29948.24 27912.96

357
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [12]
Current Assets: Financials Assets - Cash and cash equivalents
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Balance with banks 2876.33 2130.13
Cheques and draft on hand 183.13 66.04
Cash on hand 3.21 4.16
Fixed deposits with banks (maturity less than 3 months) 50.02 1062.50

3112.69 3262.83

Note [13]
Current Assets: Financials Assets - Other bank balances
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Fixed deposits with banks 109.39 185.35
Earmarked balances with banks-unclaimed dividend 127.78 114.27
Earmarked balances with banks-Section4(2)(1)(D)RERA 3.46 0.15
Margin money deposits with banks 22.58 21.76
Cash and bank balances not available for immediate use [refer Note 7(a)] 387.38 354.03

650.59 675.56

Note [14]
Current Assets: Financials Assets - Loans

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Unsecured security deposits, considered good 347.81 312.81
Less: Allowance for expected credit loss 0.57 0.97
347.24 311.84
Unsecured loan and advances to related parties:
Subsidiary companies, considered good [refer Note 57&58(A)] 87.67 176.67
Joint venture companies, considered good [refer Note 57&58(A)] – 26.56
Other secured loans, considered good – 0.07
434.91 515.14

358
Notes forming part of the Financial Statements (contd.)
Note [15]
Current Assets: Financial Assets - Others

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Advances to related parties:
Subsidiary companies 513.78 642.18
Associate companies 1.63 0.93
Joint venture companies 33.92 48.25
549.33 691.36
Advances recoverable in cash 584.56 671.69
Premium receivable on financial guarantee contracts 10.91 12.51
Forward contract receivable 537.80 567.57
Embedded derivative receivable 10.45 54.46
Doubtful advances:
Deferred credit sale of ships 27.11 27.11
Other loans and advances 246.77 219.51
273.88 246.62
Less: Allowance for doubtful loans and advances 273.88 246.62
– –
1693.05 1997.59

Note [16]
Other current assets

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Contract Assets [refer Note 41(d)]
Due from customers (construction and project related activity) 28828.37 31750.52
Retention money including unbilled revenue 12840.17 13238.42
41668.54 44988.94
Advance recoverable other than in cash 4747.32 4601.02
Government grants receivable 63.49 71.65
Other loans and advances - Doubtful 11.72 7.00
Less: Provision for doubtful advances 11.72 7.00
– –
46479.35 49661.61

359
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [17]
Equity share capital
(a) Share capital authorised, issued, subscribed and paid up:

As at 31-3-2021 As at 31-3-2020
Particulars Number of v crore Number of v crore
shares shares
Authorised: [1]
Equity shares of R 2 each 25,12,50,00,000 5,025.00 25,12,50,00,000 5,025.00

Issued, subscribed and fully paid up:

Equity shares of R 2 each 1,40,45,55,297 280.91 1,40,38,92,022 280.78

Pursuant to the approval of the Scheme of Amalgamation of L&T Shipbuilding Limited with the Company, the authorised share
[1]

capital of L&T Shipbuilding Limited is added to the authorised share capital of the Company, w.e.f appointed date i.e. April 1, 2019.

(b) Reconciliation of the number of equity shares and share capital:

2020-21 2019-20
Particulars Number of v crore Number of v crore
shares shares
Issued, subscribed and fully paid up equity share outstanding at the beginning of
the year 1,40,38,92,022 280.78 1,40,27,29,385 280.55
Add: Shares issued on exercise of employee stock options during the year 6,63,275 0.13 7,83,249 0.16
Add: Shares issued on conversion of foreign currency convertible bonds during the
year – – 3,79,388 0.07
Issued, subscribed and fully paid up equity shares outstanding at the end of the
year 1,40,45,55,297 280.91 1,40,38,92,022 280.78
(c) Terms/rights attached to equity shares:
The Company has only one class of share capital, i.e., equity shares having face value of R 2 per share. Each holder of equity share is
entitled to one vote per share.

(d) Shareholder holding more than 5% of equity shares:

As at 31-3-2021 As at 31-3-2020
Name of the shareholders Number of Shareholding Number of Shareholding
shares % shares %
Life Insurance Corporation of India 19,24,67,386 13.70 20,91,83,856 14.90

L&T Employees Trust 19,25,58,158 13.71 18,55,24,682 13.22

(e) Shares reserved for issue under options outstanding on un-issued share capital:

As at 31-3-2021 As at 31-3-2020
Number of R crore (at Number of R crore (at
Particulars equity shares face value) equity shares face value)
to be issued to be issued as
as fully paid fully paid
Employee stock options granted and outstanding [1] 17,81,564 0.36 [2] 25,21,389 0.50 [2]

[1]
Note 17 (h) for terms of employee stock option schemes

[2]
The equity shares will be issued at a premium of R 42.74 crore (previous year: R 63.06 crore).

(f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended
March 31, 2021 are 46,67,64,755 (period of five years ended March 31, 2020: 46,67,64,755 shares).

360
Notes forming part of the Financial Statements (contd.)
Note [17]
Equity share capital (contd.)
(g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately
preceding five years ended on March 31, 2021 – Nil (period of five years ended March 31, 2020: Nil).

(h) Stock option schemes

i. Terms:

A. The grant of options to the employees under the stock option schemes is on the basis of their performance and other
eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to
the discretion of the management and fulfillment of certain conditions.

B. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue
of equity shares. Management has discretion to modify the exercise period.

ii. The details of the grants under the aforesaid schemes under various series are summarised below:

Sr. 2003(B) 2006(A)

Series reference
No. 2020-21 2019-20 2020-21 2019-20
1 Grant price - (R) 7.80 7.80 267.10 267.10
2 Grant dates 23-5-2003 onwards 1-7-2007 onwards
3 Vesting commences on 23-5-2004 onwards 1-7-2008 onwards
4 Options granted and outstanding at the beginning of the year 1,45,935 1,73,309 23,75,454 27,11,931
5 Options lapsed 4,875 13,837 1,75,675 2,64,380
6 Options granted 1,04,000 38,700 - 6,58,915
7 Options exercised 71,910 52,237 5,91,365 7,31,012
8 Options granted and outstanding at the end of the year, of which 1,73,150 1,45,935 16,08,414 23,75,454
Options vested 23,575 49,762 4,84,082 6,51,653
Options yet to vest 1,49,575 96,173 11,24,332 17,23,801
9 Weighted average remaining contractual life of options (in years) 5.74 4.63 4.23 4.61

iii. The number and weighted average exercise price of stock options are as follows:

2020-21 2019-20
Weighted Weighted
Particulars No. of stock average No. of stock average
options exercise price options exercise price
(R) (R)
(A) Options granted and outstanding at the beginning of the year 25,21,389 252.09 28,85,240 251.52
(B) Options granted 1,04,000 7.80 6,97,615 252.72
(C) Options allotted 6,63,275 238.99 7,83,249 249.81
(D) Options lapsed 1,80,550 260.10 2,78,217 254.20
(E) Options granted and outstanding at the end of the year 17,81,564 241.90 25,21,389 252.09
(F) Options exercisable at the end of the year out of (E) supra 5,07,657 255.06 7,01,415 248.70
iv. Weighted average share price at the date of exercise for stock options exercised during the year is R 1001.47 (previous year:
R 1065.30) per share.
v. A. In respect of stock options granted under the stock option scheme, the fair value of the options is treated as discount and
accounted as employee compensation over the vesting period.

361
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [17]
Equity share capital (contd.)
B. Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2020-21 is R 42.05
crore (previous year: R 49.44 crore) net of recoveries of R 0.40 crore (previous year: R 0.46 crore) from its group
companies towards the stock options granted to deputed employees, pursuant to the employee stock option schemes
(refer Note 40). The entire amount pertains to equity-settled employee share-based payment plans. [expense related to
discontinued operations R 2.14 crore (previous year: R 2.33 crore)]

vi. During the year, the Company has recovered R 4.82 crore (previous year: R 5.54 crore) from its subsidiary companies towards
the stock options granted to their employees, pursuant to the employee stock option schemes.

vii. Weighted average fair values of options granted during the year is R 834.24 (previous year: R 804.63) per option

viii. The fair value of the options granted during the year has been calculated as per the Black-Scholes Option Pricing Model using
the following significant assumptions and inputs:

Sr.
Particulars 2020-21 2019-20
No.
(i) Weighted average risk-free interest rate 4.81 % 6.23 %
(ii) Weighted average expected life of options 2.85 years 4.12 years
(iii) Weighted average expected volatility 35.39% 25.40%
(iv) Weighted average expected dividends over the life of the option R 51.22 per option R 74.07 per option
(v) Weighted average share price R 884.83 per option R 1056.34 per option
(vi) Weighted average exercise price R 7.80 per option R 252.72 per option
(vii) Method used to determine expected volatility Expected volatility is based on the historical volatility
of the Company’s share price applicable to the total
expected life of each option.
ix. The balance in share options (net) account as at March 31, 2021 is R 87.62 crore (previous year: R 99.92 crore), including
R 38.78 crore (previous year: R 47.54 crore) for which the options have been vested to employees as at March 31, 2021.

(i) Capital Management

The Company continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating
even amidst an adverse economic environment. Low gearing levels also enable the Company to navigate business stresses on one
hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially
important in times of global economic volatility. The gross debt equity ratio is 0.39:1 as at March 31, 2021 (as at March 31, 2020
0.49:1).
During the year ended March 31, 2021, the Company paid the final dividend of R 8 per equity share for the year ended March 31,
2020 amounting to R 1123.23 crore

During the year ended March 31, 2021, the Company paid special dividend of R 18 per equity share amounting to R 2527.66 crore.

The Board of Directors, at their meeting held on May 14, 2021 recommended a final dividend of R 18 per equity share for the year
ended March 31, 2021, subject to approval of shareholders. On approval, the dividend outgo is expected to be R 2528.20 crore
based on number of shares outstanding as at March 31, 2021.

362
Notes forming part of the Financial Statements (contd.)
Note [18]
Other equity

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Capital reserve [1] 10.52 10.52
Capital reserve on business combination [2] (25.77) (25.77)
Securities premium 8667.65 8599.60
Employee share options (net)
Employee share options outstanding 124.48 166.80
Deferred employee compensation expense (36.86) (66.88)
87.62 99.92
Debenture redemption reserve [3] 138.65 533.53
General reserve [4] 26070.92 25669.50
Retained earnings 24675.29 16957.17
Foreign currency translation reserve 9.00 (4.14)
Hedging reserve
Cash flow hedging reserve 202.87 (46.83)
Cost of hedging reserve (4.34) (14.48)
198.53 (61.31)
Debt instruments through other comprehensive income 300.22 115.55
60132.63 51894.57

[1]
Capital reserve: It represents the gains of capital nature which mainly include the excess of value of net assets acquired over
consideration paid by the Company for business amalgamation transactions in earlier years.
[2]
Capital reserve on business combination: It arises on transfer of business between entities under common control. It represents
the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other
assets and the amount of share capital of the transferor [refer Note 1(ii)(ab)].
[3]
Debenture redemption reserve (DRR): The Ministry of Corporate Affairs vide notification dated August 16, 2019, amended
the Companies (Share capital and Debenture) Rules, 2014 by which the Company is no longer required to create DRR towards the
debentures issued. Earlier to this amendment, the Company was required to maintain a DRR of 25% of the value of debentures
issued, either by a public issue or on a private placement basis and the amounts credited to the DRR was not to be utilised by the
Company except to redeem debentures. The above amount represents the DRR created out of profits of the Company prior to the
said notification.
[4]
General reserve: The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act,1956
where in certain percentage of profits were required to be transferred to General reserve before declaring dividends. As per the
Companies Act 2013, the requirements to transfer profits to General reserve is not mandatory. General reserve is a free reserve
available to the Company.

363
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [19]
Non-current liabilities: Financial Liabilities - Borrowings

As at 31-3-2021 As at 31-3-2020
Particulars Secured Unsecured Total Secured Unsecured Total
v crore v crore v crore v crore v crore v crore
Redeemable non-convertible fixed rate debentures [refer
Note 19(a)(i) & (ii)] 1328.48 13263.90 14592.38 1380.78 5034.13 6414.91
Redeemable non-convertible inflation linked debentures
[refer Note 19(a)(iii)] – 126.15 126.15 – 124.11 124.11
Term loan from banks [refer Note 19(b)] – 1149.68 1149.68 – 646.69 646.69
1328.48 14539.73 15868.21 1380.78 5804.93 7185.71

19(a) (i) Secured redeemable non-convertible fixed rate debentures (privately placed):

Sr. Face value per Date of As at As at Interest for Terms of repayment for debentures outstanding as at
No. debenture (R) allotment 31-3-2021 31-3-2020 the year 31-3-2021
R crore R crore 2020-21
1 10,00,000 October 25, 301.84 301.77 9.10% p.a. Redeemable at face value at the end of 15 years from the
2012 payable date of allotment or on exercise of call option.
annually The Company has call option to redeem debentures at the
end of 10th year from the date of allotment.
2 10,00,000 October 25, 269.69 269.67 9.10% Redeemable at face value at the end of 14 years from
2012 p.a. the date of allotment or on exercise of call option.
payable The Company has call option to redeem debentures at
annually the end of 10th year from the date of allotment.
3 10,00,000 October 25, 269.73 269.72 9.10% Redeemable at face value at the end of 13 years from
2012 p.a. the date of allotment or on exercise of call option.
payable The Company has call option to redeem debentures at
annually the end of 10th year from the date of allotment.
4 10,00,000 October 25, 269.79 269.78 9.10% Redeemable at face value at the end of 12 years from
2012 p.a. the date of allotment or on exercise of call option.
payable The Company has call option to redeem debentures at
annually the end of 10th year from the date of allotment.
5 10,00,000 October 25, 269.86 269.85 9.10% Redeemable at face value at the end of 11 years from
2012 p.a. the date of allotment or on exercise of call option.
payable The Company has call option to redeem debentures at
annually the end of 10th year from the date of allotment.
Total 1380.91 1380.78
Less: 52.43 – Current maturity of long-term borrowings [refer Note 24]
1328.48 1380.78 Borrowings non-current [refer Note 19]

Security
13,310 fully paid redeemable non-convertible debentures having face value of 10,00,000 /- each issued on private placement
basis are secured by :

(i) First pari-passu charge over the assets of the Company with an asset cover of 1.25 times; and

(ii) Charge on the designated account under the Debenture Trust Deed.

364
Notes forming part of the Financial Statements (contd.)
Note [19]
Non-current liabilities: Financial Liabilities - Borrowings (contd.)
19(a) (ii) Unsecured redeemable non-convertible fixed rate debentures (privately placed):

Sr. Face value per Date of As at As at Interest for the Terms of repayment for debentures outstanding as
No. debenture (R) allotment 31-3-2021 31-3-2020 year 2020-21 at 31-3-2021
R crore R crore
1 10,00,000 April 10, 273.49 273.69 9.75% p.a. payable Redeemable at face value at the end of 10th year
2012 annually from the date of allotment.
2 10,00,000 May 26, – 322.81
2011
3 10,00,000 May 11, – 324.35
2010
4 10,00,000 April 13, – 216.96
2010
5 10,00,000 September – 1043.66
24, 2015
6 10,00,000 April 18, 1612.04 1611.87 7.87% p.a. Redeemable at face value at the end of 3rd
2019 payable annually year from the date of allotment.
7 10,00,000 May 22, 2137.13 2136.82 8.02% p.a. Redeemable at face value at the end of 3rd
2019 payable annually year from the date of allotment.
8 10,00,000 August 19, – 1458.36
2019
9 10,00,000 January 24, 1062.47 1011.36 6.72% p.a. Redeemable at face value at the end of 3rd
2020 payable annually year from the date of allotment.
10 10,00,000 April 20, 1330.66 – 7.20% p.a. Redeemable at face value at the end of 3rd
2020 payable annually year from the date of allotment.
11 10,00,000 May 6, 1538.23 – 7.25% p.a. Redeemable at face value at the end of 4th
2020 payable annually year from the date of allotment.
12 10,00,000 April 28, 2661.09 – 7.70% p.a. Redeemable at face value at the end of 5th
2020 payable annually year from the date of allotment.
13 10,00,000 April 23, 477.91 – 6.60% p.a. Redeemable at face value at the end of 1st year
2020 payable annually from the date of allotment.
14 10,00,000 April 23, 479.55 – 7.00% p.a. Redeemable at face value at the end of 2nd
2020 payable annually year from the date of allotment.
15 10,00,000 April 23, 2611.51 – 7.25% p.a. Redeemable at face value at the end of 3rd
2020 payable annually year from the date of allotment.
16 10,00,000 April 23, 483.78 – 8.00% p.a. Partly paid Redeemable at face value at the end
2020 payable annually of 10th year from the date of allotment
Total 14667.86 8400.28
Less: 926.05 3366.15 Current maturities of long-term borrowings
[refer Note 24]
Less: 477.91 – Short-term Unsecured Debentures [refer Note 23]
13263.90 5034.13 Borrowings – non-current [refer Note 19]

365
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [19]
Non-current liabilities: Financial Liabilities - Borrowings (contd.)
19 (a) (iii) Unsecured redeemable non-convertible inflation linked debentures:

Face value per Date of As at As at Interest for the Terms of repayment for debentures
debenture (R) allotment 31-3-2021 31-3-2020 year 2020-21 outstanding as at 31-3-2021
R crore R crore

10,00,000 May 23,2013 127.75

(1)
124.11
(1)
1.65% p.a. Redeemable at the end of 10th year from
payable on the date of allotment. Redemption value
Inflation Adjusted calculated as [{Average Ref WPI (on Maturity
Principal as on the Date) / Average Ref WPI (on Issue Date)} x
date of coupon Face Value] with Floor Rate as 3 % and Cap
payment Rate as 12%. WPI here refers to Wholesale
Price Index

Less: 1.60 – Current Liabilities: Financial Liabilities-Current maturities of

Long-term borrowings [refer Note 24]

126.15 124.11 Non- current liabilities: Financial liabilities – Borrowings [refer Note 19]
(1) The principal amount has been calculated as [{Average Ref WPI as at reporting period/Average Ref WPI (as at 23/5/2013)} x
Face Value]

19(b) Details of term loans (unsecured):

Sr. As at As at Rate of Interest for the year 2020-21 Terms of repayment of term loan outstanding as at
No. 31-3-2021 31-3-2020 31-3-2021
R crore R crore
1 1087.56 556.02 USD LIBOR + Spread [1]
Repayable on April 14, 2025
2 52.99 58.88 9.00% p.a. payable monthly Repayable on October 19, 2023
3 28.61 31.79 8.40% p.a. payable monthly Repayable on May 7, 2023
4 730.86 – USD LIBOR + Spread [1]
Repayable on October 21, 2021
5 – 189.33 USD LIBOR + Spread [1]
Repaid on July 20, 2020
Total 1900.02 836.02
Less: 19.48 189.33 Current maturities of long-term borrowings [refer Note 24]
Less: 730.86 – Short-term Unsecured Loan [refer Note 23]
1149.68 646.69 Borrowings non-current [refer Note 19]
[1]
Represents unsecured term loans obtained in foreign currency.

19(c) Annual disclosure as Large Corporate pursuant to SEBI circular dated November 26, 2018.
Annexure A

Sr. No. Particulars Details

1 Name of the company Larsen & Toubro Limited
2 CIN L99999MH1946PLC004768
3 Outstanding borrowing of Company as on 31st March 2021, as
applicable in (in R crore) R 23808.71 crore
4 Highest Credit Rating During the previous financial year along
with name of the Credit Rating Agency CRISIL, ICRA & India Ratings AAA (Stable)
5 Name of Stock Exchange in which the fine shall be paid, in case
of shortfall in the required borrowing under the framework National Stock Exchange of India Limited

366
Notes forming part of the Financial Statements (contd.)
Note [19]
Non-current liabilities: Financial Liabilities - Borrowings (contd.)
Annexure B

Sr No. Particulars Amount R crore

1 Incremental borrowing done in financial year 2020-21(a) 8599.92 [1]

2 Mandatory borrowing to be done through issuance of debt securities (b) = (25% of a) 2149.98
3 Actual borrowings done through debt securities in financial year 2020-21(c) 8550.00
4 Shortfall in the mandatory borrowing through debt securities if any (d) = (b) - (c) NIL

{If the calculated value is zero or negative, the shortfall considered is “Nil”}
5 Reasons for short fall, if any, in mandatory borrowings through debt securities Not applicable

[1]
Incremental borrowing represents actual long-term borrowing raised by the Company during financial year 2020-21

Note [20]
Non current liabilities: Other financial liabilities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Forward contract payables 39.80 133.44
Financial guarantee contracts 8.45 10.98
Due to others 34.38 35.20

82.63 179.62

Note [21]
Non-current liabilities: Provisions

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Employee pension scheme 348.86 339.63
Post-retirement medical benefits plan 290.16 271.60

639.02 611.23

Note [22]
Other non-current liabilities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Other Payables (Deferred income on day one fair valuation of financial instrument) – 0.22

367
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [23]
Current liabilities: Financial Liabilities - Borrowings

As at 31-3-2021 As at 31-3-2020
Particulars Secured Unsecured Total Secured Unsecured Total
v crore v crore v crore v crore v crore v crore
Loans repayable on demand from banks 22.74 – 22.74 746.37 – 746.37
Short-term loan and advances from banks – 3376.32 3376.32 41.71 7697.54 7739.25
Short-term debentures [refer Note 19(a)(ii)] – 477.91 477.91 – – –
Commercial paper – 2737.40 2737.40 – 4702.36 4702.36
Loans from related parties:
Subsidiary companies – 235.66 235.66 – 1796.45 1796.45
Joint venture companies – 90.91 90.91 – 59.68 59.68
22.74 6918.20 6940.94 788.08 14256.03 15044.11

23(a) Loans guaranteed by directors R Nil (previous year: R Nil).

23(b) Loans repayable on demand from banks include fund based working capital facilities viz. cash credits and demand loans .

The secured portion of loans repayable on demand from banks, short-term loans and advances from the banks, working capital
facilities and other non-fund based facilities viz. bank guarantees and letter of credit, are secured by hypothecation of inventories
and trade receivables. Amount of inventories and trade receivables that are hypothecated as collateral: R 6932 crore as at March 31,
2021 (March 31,2020 : R 6041.61 crore).

Note [24]
Current liabilities: Financial liabilities - Current maturities of long-term borrowings

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Secured:
Redeemable non-convertible fixed rate debentures [refer Note 19(a)(i)] 52.43 –
Unsecured:
Redeemable non-convertible fixed rate debentures [refer Note 19(a)(ii)] 926.05 3366.15
Term loans from banks [refer Note 19(b)] 19.48 189.33
Redeemable non-convertible floating rate debentures [refer Note 19(a)(iii)] 1.60 –

999.56 3555.48

24(a) Loans guaraneed by directors R Nil (previous year: R Nil)

368
Notes forming part of the Financial Statements (contd.)
Note [25]
Current liabilities: Financial liabilities - Other trade payables

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Acceptances 345.23 243.50
Due to related parties:
Subsidiary companies 534.76 1071.65
Associate companies 13.97 13.04
Joint venture companies 1703.37 1183.55
2252.10 2268.24
Due to others 34521.00 33737.77
37118.33 36249.51

Note [26]
Current liabilities - Other financial liabilities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Unclaimed dividend 127.78 114.27
Forward contract payable 292.24 458.23
Embedded derivative payable 47.51 95.11
Financial guarantee contracts 11.24 12.99
Due to others [1]
1680.64 1028.49

2159.41 1709.09

[1]
Due to others include due to directors R 34.83 crore (previous year: R 29.13 crore)

Note [27]
Other current liabilities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Contract liabilities [refer Note 41(d)]
Due to customers (Construction and project related activity) 6692.39 6277.21
Advances from customers 13717.71 13780.04
20410.10 20057.25
Other payables 1089.39 700.80
21499.49 20758.05

369
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [28]
Current liabilities - provisions

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Provision for employee benefits:
Gratuity 80.04 87.01
Compensated absences 551.05 621.76
Employee pension scheme 25.17 25.64
Post-retirement medical benefits plan 13.22 13.01
669.48 747.42
Other provisions (Ind AS 37 related) [refer Note 50] 650.53 807.97
1320.01 1555.39

Note [29]
Contingent liabilities
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
(a) Claims against the Company not acknowledged as debts 2989.58 3005.42
(b) Sales tax/GST liability that may arise in respect of matters in appeal 289.43 186.16
(c) Excise duty/service tax/customs duty liability that may arise including those
in respect of matters in appeal/challenged by the Company in Writ 172.99 164.44
(d) Income tax liability that may arise in respect of which the Company is in
appeal 357.98 922.89
(e) Corporate and bank guarantees for debt given on behalf of subsidiary
companies/joint venture companies 6316.95 6130.39
(f) Corporate and bank guarantees for performance given on behalf of
subsidiary companies/joint venture companies 15230.24 27894.61
(g) Contingent liabilities, incurred in relation to interests in joint operations 7042.11 7460.44
(h) Share in contingent liabilities of joint operations for which the Company is
contingently liable 61.95 64.05
(i) Contingent liabilities in respect of liabilities of other joint operators of joint
operations 4875.31 5464.89
(j) Indemnities for performance given on behalf of third parties 479.43 –
Notes:
1. The Company does not expect any reimbursements in respect of the above contingent liabilities except in respect of matters at (j)
2. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of
the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above includes interest except in cases where the
Company has determined that the possibility of such levy is remote.
3. In respect of matters at (e), the cash outflows, if any, could generally occur up to ten years, being the period over which the validity
of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the
borrowing to which the guarantees relate.
4. In respect of matters at (f), the cash outflows, if any, could generally occur up to ten years, being the period over which the validity
of the guarantees extends.
5. In respect of matters at (g) to (i), the cash outflows, if any, could generally occur up to completion of projects undertaken by the
respective joint operations.
6. In respect of matters at (j), the cash outflows, if any, is fully reimbursable by the third parties under an agreement entered in to with
them.

370
Notes forming part of the Financial Statements (contd.)
Note [30]
Commitments

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
(a) Estimated amount of contracts remaining to be executed on capital account
(net of advances)
(i) Estimated amount of contracts remaining to be executed on
Property,plant & equitpment 1628.30 758.85
(ii) Estimated amount of contracts remaining to be executed on Intangible
assets – 1.79
1628.30 760.64
(b) Funding committed by way of equity/loans to subsidiary companies 14.00 93.00
Note [31]
Revenue from operations

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Sales and service:
Construction and project related activity 68101.14 78091.00
Manufacturing and trading activity 2637.64 2065.73
Property development activity 62.25 174.82
Engineering and service fees 81.03 46.87
Servicing 1037.87 1141.31
Commission 116.56 98.25
72036.49 81617.98
Other operational income:
Profit/(loss) on sale of investment properties 426.21 –
Lease rentals 78.36 78.70
Income from services to Group companies 73.82 62.61
Premium earned (net) on related forward exchange contracts 50.50 38.59
Miscellaneous Income 650.21 585.77
1279.10 765.67
73315.59 82383.65

371
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [32]
Other income

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Interest income:
Subsidiary, associate and joint venture companies 194.53 214.63
Others 719.72 405.07
914.25 619.70
Dividend income:
Subsidiary companies 1113.30 1373.00
Joint venture companies 133.88 12.53
Others 14.24 1.76
1261.42 1387.29
Net gain/(loss) on sale or fair valuation of investments 956.72 503.71
Net gain/(loss) on derivatives at fair value through profit or loss (52.11) –
Net gain/(loss) on sale of property, plant and equipment 48.70 (30.92)
Lease rentals 118.39 110.30
Miscellaneous income (net of expenses) 188.07 217.79
3435.44 2807.87

372
Notes forming part of the Financial Statements (contd.)
Note [33]
Manufacturing, construction and operating expenses

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Materials consumed:
Raw materials and components 5758.93 5537.59
Less: Scrap sales 64.99 50.60
5693.94 5486.99
Construction materials consumed 22426.38 28632.03
Purchase of stock-in-trade 1226.68 855.63
Stores, spares and tools consumed 1418.59 1520.47
Sub-contracting charges 19625.19 22488.74
Changes in inventories of finished goods,work-in-progress and stock-in-trade
and property development :
Closing stock:
Finished goods 3.57 18.12
Stock-in-trade 360.03 308.36
Work-in-progress 5198.49 5578.14
5562.09 5904.62
Less: Opening stock:
Finished goods 18.12 2.74
Stock-in-trade 308.36 291.28
Work-in-progress 5578.14 5546.59
5904.62 5840.61
342.53 (64.01)
Other manufacturing, construction and operating expenses:
Power and fuel 1338.83 1700.02
Royalty and technical know-how fees 57.44 119.51
Packing and forwarding 477.61 522.74
Rent and hire charges 1615.55 1948.27
Engineering, technical and consultancy fees 903.19 898.98
Insurance 360.41 244.33
Rates and taxes 551.31 568.57
Travelling and conveyance 613.49 744.57
Repairs to plant and equipment 56.69 67.48
Repairs to buildings 21.28 20.87
General repairs and maintenance 470.37 560.36
Bank guarantee charges 261.10 223.62
Provision/(reversal) for foreseeable losses on construction contracts 32.20 (14.50)
Other provisions 117.56 23.58
Miscellaneous expenses 679.77 333.96
7556.80 7962.36
58290.11 66882.21

373
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [34]
Employee benefits expense

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Salaries,wages and bonus 4989.16 5294.89
Contribution to and provision for :
Provident funds and pension fund 133.63 145.87
Superannuation/employee pension schemes 11.33 10.14
Gratuity funds 69.71 69.42
214.67 225.43
Expenses on employees stock option schemes 40.31 47.40
Insurance expenses - medical and others 90.43 100.10
Staff welfare expenses 458.00 584.16
Recoveries on account of deputation (307.19) (296.00)
5485.38 5955.98

Employee benefits expense includes remuneration paid to employees engaged in CSR activities R 11.32 crore (previsous year: R 16.52
crore). Refer Note 60 for details of CSR expenses.
Note [35]
Sales, administration and other expenses

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Power and fuel 42.18 55.50
Packing and forwarding 43.18 44.68
Professional fees 267.54 409.40
Audit fees 6.11 5.84
Insurance 56.91 51.15
Rent & Hire charges 101.96 128.59
Rates and taxes 77.93 117.64
Travelling and conveyance 123.94 225.97
Repairs to buildings 17.81 16.68
General repairs and maintenance 184.19 274.52
Directors’ fees 1.17 1.72
Telephone, postage and telegrams 86.44 93.05
Advertising and publicity 29.39 54.14
Stationery and printing 31.41 35.48
Commission :
Distributors and agents 16.95 20.67
Others 2.17 0.79
Bank charges 69.00 101.51
Miscellaneous expenses [1] 498.61 888.37
Bad debts and advances written off(net of written back) 387.70 (48.58)
Less: Allowance for expected credit loss written back 375.97 118.37
11.73 (166.95)
Allowance for expected credit loss (net) 653.55 597.58
Exchange (gain)/loss (net) 25.02 (175.72)
Other provisions 97.60 121.70
Recoveries from subsidiary and associates (170.84) (194.97)
2273.95 2707.34

[1]
Miscellaneous expenses include expenditure incurred on CSR activities R 137.13 crore (previous year: R 182.00 crore). Refer Note 60 for
details of CSR expenses.

374
Notes forming part of the Financial Statements (contd.)
Note [36]
Finance costs

2020-21 2019-20
Particulars
v crore v crore
Interest expenses 2414.82 2225.99
Other borrowing costs 0.10 7.30
Exchange loss 4.63 33.27

2419.55 2266.56

NOTE [37]
Aggregation of expenses disclosed vide Note 33 - Manufacturing, construction and operating expenses, Note 34 - Employee benefits
expense and Note 35 - Sales, administration and other expenses.

v crore
Sr. 2020-21 2019-20
Nature of expenses
No. Note 33 Note 34 Note 35 Total Note 33 Note 34 Note 35 Total
1 Power and fuel 1338.83 – 42.18 1381.01 1700.02 – 55.50 1755.52
2 Packing and forwarding 477.61 – 43.18 520.79 522.74 – 44.68 567.42
3 Insurance 360.41 90.43 56.91 507.75 244.33 100.10 51.15 395.58
4 Rent hire charges 1615.55 – 101.96 1717.51 1948.27 – 128.59 2076.86
5 Rates and taxes 551.31 – 77.93 629.24 568.57 – 117.64 686.21
6 Travelling and conveyance 613.49 – 123.94 737.43 744.57 – 225.97 970.54
7 Repairs to buildings 21.28 – 17.81 39.09 20.87 – 16.68 37.55
8 General repairs and
maintenance 470.37 – 184.19 654.56 560.36 – 274.52 834.88
9 Miscellaneous expenses 679.77 – 498.61 1178.38 333.96 – 888.37 1222.33
Note [38]
Disclosure pursuant to Ind AS 103 “Business Combinations”:
During the previous year, L&T Shipbuilding Limited (LTSB), a wholly owned subsidiary, was merged with the Company under a scheme of
amalgamation approved by National Company Law Tribunal, Chennai on March 10, 2020 and National Company Law Tribunal, Mumbai
on April 24, 2020. The merger was effective from the appointed date April 1, 2019. LTSB had a registered office in Chennai, India and
was engaged in the business of Shipbuilding and Ship related activities.

No fresh shares were issued to effect the merger as LTSB was a wholly owned subsidiary of the Company. Further the merger was
accounted using pooling of interest method, involving the following:

i. The assets and liabilities of LTSB were reflected at their carrying amounts. No adjustment was made to reflect the fair values, or
recognise any new asset or liability.

ii. The balance of the Retained earnings appearing in the financial statements of the LTSB was aggregated with the corresponding
balance appearing in the financial statements of the Company.

iii. The excess of amount of investment by the Company in LTSB over the share capital of LTSB was treated as Capital reserve in
Company’s financial statements and the same was presented separately from other capital reserves [refer Note 18].

iv. Restating the financials of the Company from April 1, 2018.

375
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [39]
Disclosure pursuant to Ind AS 105 “Non-current assets held for sale and discontinued operations”:

R crore
As at As at
Particulars
31-03-2021 31-03-2020
Group(s) of assets classified as held for sale – 2780.37
Liabilities associated with the group(s) of assets classified as held for sale – 1367.58
(a) On May 1, 2018, the Company signed, subject to regulatory approvals, definitive agreements with Schneider Electric India Private
Limited for transfer of its Electrical and Automation (E&A) business [refer Note 40 for description of E&A business]. The Competition
Commission of India (CCI) accorded on April 18, 2019 its approval (the detailed order was uploaded on its website on June 6,
2019) for acquisition of the Company’s Electrical & Automation (E&A) business by Schneider Electric India Private Limited subject to
fulfilment of certain conditions. The E&A business was classified as discontinued operations.
During the year 2020-21, the Company transferred the E&A business for a cash consideration of R 13300 crore. The operating profit
from E&A business upto the date of transfer and the gain on transfer have been shown below. The post closing adjustments are
under discussion.
i. Financial performance related to discontinued operations:

R crore
Particulars 2020-21 2019-20
(i) Revenue from operations 1262.74 4557.34
(ii) Total expense 1141.83 3691.96
(iii) Profit before tax (i)-(ii) 120.91 865.38
(iv) Tax expense 27.21 210.93
(v) Profit after tax (iii)-(iv) 93.70 654.45
(vi) Gain on transfer of E&A business before tax 11078.32 –
(vii) Tax on above (including related deferred tax reversal) (2521.54) –
(viii) Gain on transfer E&A business (net of tax) (vi)-(vii) 8556.78 –
ii. Major classes of assets and liabilities of Electrical & Automation business transferred:

R crore
As at date of
Particulars
sale
Group(s) of assets classified as held for sale:
Property, plant and equipment 655.04
Capital work-in-progress 11.22
Intangible assets 174.97
Intangible assets under development 130.46
Loans 2.03
Inventories 641.50
Trade receivables 701.11
Other assets 231.69
Total 2548.02
Liabilities related to group(s) of assets classified as held for sale:
Trade payables 591.74
Provisions 91.32
Other liabilities 347.67
Total 1030.73
Carrying amount of net assets sold 1517.29

376
Notes forming part of the Financial Statements (contd.)
Note [39]
Disclosure pursuant to Ind AS 105 “Non-current assets held for sale and discontinued operations” (contd.)
iii. Summarised Statement of Cash Flows of discontinued operations:

R crore
Particulars 2020-21 2019-20
Cash flow from operating activities (2.48) 560.79
Cash flow from investing activities[1] (60.37) (110.13)
Cash flow from financing activities – –
Activities related to borrowings and investments of surplus funds have been managed at Corporate and accordingly form part
of unallocable corporate assets/liabilities (refer Note 40). There are no borrowings or investments specifically allocable to EAIC
business.
[1] represents additions & deletions to property, plant and equipment and intangible assets adjusted for movement of (a) capital
work-in-progress for property, plant and equipment and investment property and (b) Intangible assets under development
during the year.

iv. Major classes of assets and liabilities classified as held for sale:

R crore
As at As at
Particulars
31-3-2021 31-3-2020
Group(s) of assets classified as held for sale:
Property, plant and equipment – 594.72
Capital work-in-progress – 21.79
Intangible assets – 173.80
Intangible assets under development – 122.25
Loans – 1.78
Inventories – 763.30
Trade receivables – 905.29
Cash and bank balances – 0.07
Other assets – 196.74
Total – 2779.74
Liabilities related to group(s) of assets classified as held for sale:
Trade payables – 937.95
Provisions – 126.53
Other liabilities – 303.10
Total – 1367.58
Amount recognised in OCI (cumulative) related to disposal group assets
Hedging Reserve (net of tax) [gain/(loss)] (1.08) 1.08
Gain/(loss) on remeasurement of the defined benefits plan (net of tax) (1.55) (6.18)
Above assets and liabilities form part “Electrical & Automation” segment [refer Note 40].

(b) Assets held for sale as of March 31, 2020 also included:

i. Plant & Equipment of R 0.20 crore situated at Hazira, Gujarat. The asset forms part of “Defence Engineering” Segment [refer
Note 40].

ii. Building of R 0.43 crore situated at Chennai, Tamil Nadu. The asset forms part of Realty business which is reported under
“Others” segment [refer Note 40].

377
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [40]
Disclosure pursuant to Ind AS 108 “Operating Segment”

(a) Information about reportable segment

v crore
For the year ended 31-3-2021 For the year ended 31-3-2020
Particulars
External Inter-segment Total External Inter-segment Total
Revenue
Infrastructure 58111.66 252.49 58364.15 68852.94 341.47 69194.41
Power 3177.24 15.40 3192.64 2300.06 18.40 2318.46
Heavy Engineering 3016.98 1.25 3018.23 3197.96 6.95 3204.91
Defence Engineering 3409.99 0.13 3410.12 3693.41 5.75 3699.16
Electrical & Automation (discontinued operations)
(refer Note 39(a)(i)) 1239.01 23.73 1262.74 4463.78 93.56 4557.34
Others 5599.72 61.14 5660.86 4339.28 27.87 4367.15
Sub-total 74554.60 354.14 74908.74 86847.43 494.00 87341.43
Less: Revenue of discontinued operations 1239.01 23.73 1262.74 4463.78 93.56 4557.34
Less: Inter-segment revenue – 330.41 330.41 – 400.44 400.44
Total 73315.59 – 73315.59 82383.65 – 82383.65
Segment result [Profit /(loss) before interest and tax]
Infrastructure 4274.16 4815.64
Power 111.42 235.68
Heavy Engineering 489.47 565.15
Defence Engineering 616.98 544.98
Electrical & Automation (discontinued operations)
(refer Note 39(a)(i)) 120.91 865.38
Others 773.64 436.52
Total 6386.58 7463.35
Result of discontinued operations (120.91) (865.38)
Inter-segment margins on capital jobs (11.11) (44.27)
Unallocable corporate income net of expenditure 3421.41 2071.78
Interest expense (2419.55) (2266.56)
Exceptional items [refer Note 59] (2818.65) 626.99
Profit before tax 4437.77 6985.91
Current tax (1434.27) (1525.60)
Deferred tax (317.01) 564.45
Net profit after tax from continuing operations 2686.49 6024.76
Profit before tax from discontinued operations 11199.23 865.38
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 &
discontinued operations 11336.97 6679.21
v crore
Segment assets Segment liabilities
Particulars As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020
Infrastructure 71165.62 72389.10 48169.76 47589.89
Power 5518.52 5000.45 4672.13 4381.75
Heavy Engineering 3165.37 3255.02 1430.07 1415.24
Defence Engineering 5843.61 7112.25 3766.93 4119.88
Electrical & Automation (discontinued operations)
(refer Note 39(a)(iv)) – 2779.74 – 1367.58
Others 6967.26 6493.24 4377.18 3105.39
Total 92660.38 97029.80 62416.07 61979.73
Unallocable corporate assets/liabilities 56162.14 45167.17 25992.91 28041.89
Inter- segment assets/liabilities (869.96) (640.38) (869.96) (640.38)
Total assets/liabilities 147952.56 141556.59 87539.02 89381.24

378
Notes forming part of the Financial Statements (contd.)
NOTE [40]
Disclosure pursuant to Ind AS 108 “Operating Segment” (contd.)
v crore
Depreciation, Other non-cash Finance cost included Interest income Additions to
amortisation, expenses included in in segment expense included in segment non-current assets
impairment & segment expense expense
obsolescence included
Particulars in segment expenses
For the For the For the For the For the For the For the For the For the For the
year year year year year year year year year year
ended ended ended ended ended ended ended ended ended ended
31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020
Infrastructure 667.67 652.91 33.53 39.76 276.08 379.58 6.02 20.08 1111.21 1234.84
Power 35.58 38.07 0.48 0.94 – – – 58.21 55.88 97.67
Heavy Engineering 47.21 46.29 0.82 1.18 – – – – 36.32 176.76
Defence Engineering 136.69 139.65 1.14 1.40 – – – – 56.83 157.72
Electrical & Automation
[Discontinued operations] 0.69 43.35 2.14 2.50 – – – – 66.58 201.05
Others 43.01 34.77 2.39 1.22 – – – – 600.10 379.37
Total 930.85 955.04 40.50 47.00 276.08 379.58 6.02 78.29 1926.92 2247.41
Unallocated corporate 95.46 108.82 1.95 2.90 (276.08) (379.58) (6.02) (78.29) 1809.22 852.08
Inter-segment – – – – – – – – (1020.78) (8.64)
Total 1026.31 1063.86 42.45 49.90 – – – – 2715.36 3090.85
Note : There is no impairment in non-financial assets of the segments. Unallocable corporate expenses include impairment loss of R 0.10 crore for the year
ended March 31,2021 (previous year: R 2.09 crore)

(b) Geographical information

v crore
Revenue by location of project
For the year For the year
Particulars
ended ended
31-3-2021 31-3-2020
India (i) 57501.79 68216.73
Foreign countries:
United Arab Emirates 1643.01 3073.72
Saudi Arabia 2723.65 1549.48
Qatar 1620.10 3559.21
Kuwait 2603.47 2327.60
Other countries 8462.58 8120.69
Total foreign countries (ii) 17052.81 18630.70
Total (i+ii) 74554.60 86847.43
Less: Discontinued operations 1239.01 4463.78
Total 73315.59 82383.65

v crore
Non-current assets
As at As at
Particulars
31-3-2021 31-3-2020
India (i) 12016.40 12402.07
Foreign countries (ii) 270.36 304.45
Total (i+ii) 12286.76 12706.52
(c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed
ten percent of the Company’s total revenue.

379
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [40]
Disclosure pursuant to Ind AS 108 “Operating Segment” (contd.)
(d) The Company’s reportable segments are organised based on the nature of products and services offered by these segments.

(e) Basis of identifying operating segments, reportable segments, segment profit and definition of each reportable segment:
(i) Basis of identifying Operating segments:
Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues
and incur expenses (including transactions with any of the Company’s other components); (b) whose operating results are
regularly reviewed by the Company’s executive management to make decisions about resource allocation and performance
assessment; and (c) for which discrete financial information is available.
The Company has five reportable segments as described under “Segment composition” below. The nature of products and
services offered by these businesses are different and are managed separately given the different sets of technology and
competency requirements.

ii) Reportable segments

An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute
amount of result or assets exceed 10% or more of the combined total of all the operating segments.

iii) Segment profit

Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal
management reports that are reviewed by the corporate executive management.

iv) Segment composition

• Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure,
heavy civil infrastructure, power transmission & distribution, water & effluent treatment and metallurgical & material
handling systems.

• Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power
generation equipment with associated systems and/or balance-of-plant packages.

• Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment &
systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas and Thermal & Nuclear Power.

• Defence engineering segment comprises (a) design, development, serial production and through life-support of
equipment, systems and platforms for Defence and Aerospace sectors and (b) design, construction, and repair/refit of
defence vessels.

• Electrical & Automation segment (disclosed as discontinued operation) comprises manufacture and sale of low and
medium voltage switchgear components, custom-built low and medium voltage switchboards, electronic energy meters/
protection (relays) systems and control & automation products [upto the date of transfer].

• Others segment includes realty, smart world & communication projects (including military communications),
hydrocarbon, marketing and servicing of construction & mining machinery and parts thereof and manufacture and sale of
rubber processing machinery.

380
Notes forming part of the Financial Statements (contd.)
Note [41]
Disclosure pursuant to Ind AS 115 “Revenue from Contracts with Customers”
(a) Disaggregation of revenue into Operating Segments and Geographical areas
i. For the year ended March 31, 2021:
v crore
Revenue as per Ind AS 115 Other Total as per Profit and
Segment
Domestic Foreign Total Revenue Loss/Segment reporting

Infrastructure 45169.72 12579.42 57749.14 362.52 58111.66

Power 3004.35 148.25 3152.60 24.64 3177.24
Heavy Engineering 1482.23 1491.86 2974.09 42.89 3016.98
Defence Engineering 2579.36 823.24 3402.60 7.39 3409.99
Electrical & Automation
(discontinued operations) 1071.33 158.23 1229.56 9.45 1239.01
Others 3333.41 1830.45 5163.86 435.86 5599.72
Total 56640.40 17031.45 73671.85 882.75 74554.60
Less: Electrical & Automation
(discontinued operations) 1071.33 158.23 1229.56 9.45 1239.01
Revenue for continuing operations 55569.07 16873.22 72442.29 873.30 73315.59

ii. For the year ended March 31, 2020:

v crore
Revenue as per Ind AS 115 Other Total as per Profit and
Segment
Domestic Foreign Total Revenue Loss/Segment reporting

Infrastructure 53817.17 14812.74 68629.91 223.03 68852.94

Power 1849.87 385.96 2235.83 64.23 2300.06
Heavy Engineering 1735.83 1428.48 3164.31 33.65 3197.96
Defence Engineering 3347.80 342.42 3690.22 3.19 3693.41
Electrical & Automation
(discontinued operations) 3963.15 493.46 4456.61 7.17 4463.78
Others 3165.93 1164.62 4330.55 8.73 4339.28
Total 67879.75 18627.68 86507.43 340.00 86847.43
Less: Electrical & Automation
(discontinued operations) 3963.15 493.46 4456.61 7.17 4463.78
Revenue for continuing operations 63916.60 18134.22 82050.82 332.83 82383.65

(b) Out of the total revenue recognised under Ind AS 115 during the year, R 68472.64 crore (previous year: R 78785.01 crore) is
recognised over a period of time and R 5199.21 crore (previous year: R 7722.42 crore) is recognised at a point in time.

381
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [41]
Disclosure pursuant to Ind AS 115 “Revenue from Contracts with Customers” (contd.)
(c) Movement in Expected Credit Loss during the year:

v crore
Provision on Trade Receivables Provision on Contract Assets
covered under Ind AS 115
Particulars 2020-21 2019-20 2020-21 2019-20
Balance as at April 1 2378.28 2270.62 765.39 639.20
Changes in loss allowance for expected credit loss:
Provision/(reversal) of allowance for expected credit loss 261.83 334.21 125.89 127.12
Additional provision (net) towards credit impaired receivables 206.47 32.69 19.45 –
Written off as bad debts (367.60) (157.19) – –
Less: Balance classified as held for sale – 102.05 – 0.93
Balance as at March 31 2478.98 2378.28 910.73 765.39
(d) Contract balances:
i. Movement in contract balances during the year.
v crore
2020-21 2019-20
Particulars Contract Contract Net contract Contract Contract Net contract
Assets Liabilities balances Assets Liabilities balances
Opening balance as at April 01 44988.94 20057.25 24931.69 40264.90 21272.46 18992.44
Closing balance as at March 31 41668.54 20410.10 21258.44 44988.94 20057.25 24931.69
Net Increase/(decrease) (3320.40) 352.85 (3673.25) 4724.04 (1215.21) 5939.25
Balances do not include balances classified as held for sale.

i. During the current year, decrease in net contract balances is primarily due to higher progress bills raised as compared to
revenue recognition.

During the previous year, increase in net contract balances is primarily due to higher revenue recognition as compared to
progress bills raised.

ii. Revenue recognised from opening balance of contract liabilities amounts to R 4270.78 crore (previous year: R 4689.36
crore).
iii. Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of
contract modifications) amounts to R 26.40 crore (previous year: R 19.25 crore).
(e) Cost to obtain the contract:

i. Amortisation in Statement of Profit and Loss: Nil (previous year: Nil)

ii. Recognised as contract assets at March 31, 2021: Nil (previous year: Nil)

382
Notes forming part of the Financial Statements (contd.)
Note [41]
Disclosure pursuant to Ind AS 115 “Revenue from Contracts with Customers” (contd.)
(f) Reconciliation of contracted price with revenue during the year:
v crore
Particulars 2020-21 2019-20
Opening contracted price of orders as at start of the year [1]
596908.10 541935.92
Add:
Fresh orders/change orders received (net) 116231.68 113725.79
Increase due to additional consideration recognised as per contractual terms/(decrease) due to
scope reduction-net (20645.59) (23309.98)
Increase/(decrease) due to exchange rate movements (net) (556.37) 3712.25
Less:
Orders completed during the year 65867.70 39155.88
On account of business transfer 2603.95 –
Closing contracted price of orders as at the end of the year [1]
623466.17 596908.10
Total Revenue recognised during the year: 73671.75 86507.43
a. Revenue out of orders completed during the year 5731.96 8236.06
b. Revenue out of orders under execution at the end of the year (I) 67939.79 78271.37
Revenue recognised upto previous year (from orders pending completion at the end of the year) (II) 283190.65 265885.42
Increase/(decrease) due to exchange rate movements (III) (321.75) 1260.01
Balance revenue to be recognised in future viz. Order book (IV) 272657.48 251491.30
Closing contracted price of orders as at the end of the year[1] (I+II+III+IV) 623466.17 596908.10
Closing contracted price of orders as at the end of the year - Continuing operations 623466.17 594723.33
Closing contracted price of orders as at the end of the year - Discontinued operations 2184.77
[1]
including full value of partially executed contracts.

(g) Outstanding performance and Time for its expected conversion to Revenue:
v crore
Outstanding performance Total Time for expected conversion to Revenue
Upto 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Beyond
1 Year 5 years
Continuing 272657.48 97046.33 89355.85 56865.02 16906.38 5676.23 6807.67
As at 31-3-2021
operations
Total 251491.30 89106.26 85065.38 52195.32 17343.83 3951.19 3829.32
Continuing
As at 31-3-2020 operations 250162.34 87947.19 85018.42 52165.14 17320.66 3933.74 3777.19
Discontinued
operations 1328.96 1159.07 46.96 30.18 23.17 17.45 52.13

383
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [42]
Disclosure pursuant to Ind AS 1 “Presentation of financial statements”:
a. Current assets expected to be recovered within twelve months and after twelve months from the reporting date:
v crore
As at 31-3-2021 As at 31-3-2020
Within After Within After
Particulars Note
twelve twelve Total twelve twelve Total
months months months months
Inventories 9 2188.28 670.28 2858.56 1521.49 1248.41 2769.90
Trade receivables 11 28919.84 1028.40 29948.24 27352.66 560.30 27912.96
Loans 14 433.69 1.22 434.91 515.13 0.01 515.14
Other financial assets 15 1693.04 0.01 1693.05 1997.58 0.01 1997.59
Other current assets 16 38638.76 7840.59 46479.35 41457.51 8204.10 49661.61
b. Current liabilities expected to be settled within twelve months and after twelve months from the reporting date:
v crore
As at 31-3-2021 As at 31-3-2020
Within After Within After
Particulars Note
twelve twelve Total twelve twelve Total
months months months months
Trade payables:
Due to micro enterprises and small
enterprises 278.34 73.13 351.47 323.62 56.26 379.88
Due to others 25 35643.99 1474.34 37118.33 34823.16 1426.35 36249.51
Lease liability 65.52 38.66 104.18 81.69 50.58 132.27
Other financial liabilities 26 2136.89 22.52 2159.41 1690.15 18.94 1709.09
Other current liabilities 27 16831.46 4668.03 21499.49 16060.48 4697.57 20758.05
Provisions 28 1128.45 191.56 1320.01 1375.38 180.01 1555.39
Note [43]
Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 “Statement of Cash Flows”:

v crore
Sr. Particulars Non-current Current Current Lease liability Total
No. borrowings borrowings maturities
(Note 19) (Note 23) of long-term
borrowings
(Note 24)
1 Balance as at 1-4-2019 3772.07 4086.16 4131.46 – 11989.69
2 Lease liability recognised on Ind AS 116
transition (0.07) – – 125.70 125.63
3 Additions to lease liability – – – 98.70 98.70
4 Changes from financing cash flows 6617.46 10804.33 (4209.10) (67.95) 13144.74
5 The effect of changes in foreign
exchange rates 22.52 137.79 130.00 – 290.31
7 Interest accrued 146.20 15.83 185.46 – 347.49
8 Other changes (transfer within
categories) (3372.47) – 3372.47 – –
9 Conversion into Equity – – (54.81) – (54.81)
10 Balance as at 31-3-2020 7185.71 15044.11 3555.48 156.45 25941.75

384
Notes forming part of the Financial Statements (contd.)
Note [43]
Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 “Statement of Cash Flows”: (contd.)
v crore
Sr. Particulars Non-current Current Current Lease liability Total
No. borrowings borrowings maturities
(Note 19) (Note 23) of long-term
borrowings
(Note 24)
11 Additions to lease liability – – – 109.15 109.15
12 Changes from financing cash flows 9117.73 (7959.32) (3396.88) (91.45) (2329.92)
13 Changes on account of lease termination/
lease concessions – – – (9.98) (9.98)
14 The effect of changes in foreign
exchange rates (37.43) (125.57) (1.31) – (164.31)
15 Interest accrued 610.77 (18.28) (166.30) – 426.19
16 Other changes (transfer within
categories) (1008.57) – 1008.57 – –
17 Balance as at 31-3-2021 15868.21 6940.94 999.56 164.17 23972.88

Amounts reported in the Statement of Cash Flows under financing activities:

v crore

Particulars 2020-21 2019-20

Proceeds from non-current borrowings 9117.73 6617.46
Repayment of non-current borrowings (3396.88) (4209.10)
(Repayments)/proceeds from other borrowings (net) (7959.32) 10804.33
Repayment of lease liability (91.45) (67.95)
Total changes from financing cash flows (refer to Sr.No 4 & 12 supra) (2329.92) 13144.74

385
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

[Note 44]
Disclosure pursuant to Ind AS 12 “Income Taxes”

(a) Major components of tax expense/(income):

v crore
Sr. 2020-21 2019-20
Particulars
No.
1. Profit or Loss section
(i) Current Income tax :
Current income tax expense 3604.55 1756.13
Tax expense of earlier years (68.95) (60.68)
(ii) Deferred Tax:
Tax expense on origination and reversal of temporary differences 764.43 (145.33)
Minimum alternate tax (MAT) credit – 230.23
Effect of previously unrecognised tax losses on which deferred tax benefit is recognised – (787.94)
Effect on deferred tax balances due to the change in income tax rate – 179.67
Income tax expense reported in Profit or Loss [(i)+(ii)] 4300.03 1172.08
Income tax expense is attributable to:
Profit from continuing operations (including exceptional items) 1751.28 961.15
Profit from discontinued operation 2548.75 210.93
4300.03 1172.08
2. Other comprehensive income (OCI) Section:
(i) Items not to be reclassified to Profit or Loss in subsequent periods:
Current tax expense/(income):
On remeasurement of defined benefit plans 10.78 (43.81)
10.78 (43.81)
(ii) Items to be reclassified to Profit or Loss in subsequent periods:
(A) Current tax expense/(income):
On gain/(loss) on cash flow hedges other than mark to market (2.45) 36.29
On foreign currency translation of joint operations – –
(2.45) 36.29
(B) Deferred Tax:
On mark to market gain/(loss) on cash flow hedges 106.79 (83.89)
Net gain/(loss) on cost of hedge reserve 3.41 (7.11)
On gain/(loss) fair value of debt securities 54.79 34.28
On foreign currency translation of joint operations 4.42 (4.45)
169.41 (61.17)
Income tax expense reported in the OCI section [(i)+(ii)] 177.74 (68.69)
3. Retained earnings:
Deferred Tax – (1.86)
Income tax expense/(income) reported in retained earnings – (1.86)

386
Notes forming part of the Financial Statements (contd.)
[Note 44]
Disclosure pursuant to Ind AS 12 “Income Taxes” (contd.)
(b) Reconciliation of tax expense and the accounting profit multiplied by domestic tax rate applicable in India:
v crore
Sr. 2020-21 2019-20
Particulars
No.
(1) Profit before tax from:
Continuing operations (including exceptional items) 4437.77 6985.91
Discontinued operations 11199.23 865.38
15637.00 7851.29
(2) Corporate tax rate as per Income Tax Act, 1961 25.17% 25.17%
(3) Tax on Accounting profit (3) = (1) * (2) 3935.52 1976.01
(4) (i) Tax on Income exempt from tax :
(A) Dividend Income – (347.18)
(B) Long-term capital gains exempt from tax – (121.27)
(C) Interest on tax free bonds – (1.04)
(ii) Tax on expenses not tax deductible:
(A) CSR expenses 36.63 36.57
(B) Expenses in relation to exempt income – 36.42
(C) Tax on employee perquisites borne by the Company 2.52 2.08
(iii) Effect of previously unrecognised tax losses used to reduce deferred tax expense – (787.94)
(iv) Tax effect on impairment recognised on which deferred tax asset is not recognised 725.44 –
(v) Effect on deferred tax balances due to the change in income tax rate – 179.67
(vi) Effect of current tax related to earlier years (68.95) (60.68)
(vii) Effect of lower tax rate on long-term capital gains (266.65) –
(viii) Tax effect of losses in joint operation of current year on which no deferred tax benefit
is recognised 6.95 3.87
(ix) Tax effect on various other items (71.43) 25.34
(x) Reversal of MAT credit entitlement – 230.23
Total effect of tax adjustments [(i) to (x)] 364.51 (803.93)
(5) Tax expense recognised during the year (5)=(3)+(4) 4300.03 1172.08
(6) Effective tax rate (6)=(5)/(1) 27.50% 14.93%

387
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

[Note 44]
Disclosure pursuant to Ind AS 12 “Income Taxes” (contd.)
(c) (i) Unused tax losses for which no deferred tax asset (DTA) is recognised in Balance Sheet:

As at 31-3-2021 As at 31-3-2020
Particulars Base Amount Deferred Tax Expiry date Base Amount Deferred Tax Expiry date
(v crore) (v crore) (v crore) (v crore)
Business loss and unabsorbed depreciation [1]
- Amount of losses having expiry – – – 2028.43 510.52 FY 2020-21 to
FY 2027-28
- Amount of losses having no expiry – – – 981.38 246.99
Total – – – 3009.81 757.51
All unused losses as at March 31, 2020 have been set off while filing the Return of Income during the year.
[1]

(ii) Unrecognised deductible temporary differences for which no deferred tax asset (DTA) is recognised in Balance Sheet
v crore

Sr. As at 31-3-2021 As at 31-3-2020

Particulars
No. Base Amount Deferred Tax Base Amount Deferred Tax
1. Deductible temporary differences towards provision for
diminution in value of investments on which DTA not created 5849.36 1379.88 2966.98 686.82
2. Temporary differences arising out of revaluation of tax base of
assets (on account of indexation benefit) 7429.85 1699.95 6541.94 1496.80
3. Other items giving rise to temporary differences – – 78.08 19.65
Total 13279.21 3079.83 9587.00 2203.27
(d) Components of deferred tax (assets) and liabilities recognised in the Balance Sheet and Statement of Profit and Loss
v crore
Balance Sheet Statement of Profit or Loss
Sr.
Particulars As at As at 2020-21 2019-20
No.
31-3-2021 31-3-2020
1. Disputed statutory liability claimed on payment basis u/s 43B of the
Income Tax Act, 1961 165.51 124.73 40.78 (30.84)
2. Items disallowed u/s 43B of Income Tax Act, 1961 (184.36) (243.05) 58.69 14.84
3. Provision for doubtful debt and advances (900.19) (877.60) (22.59) 170.65
4. Difference in book depreciation and income tax depreciation 288.14 406.52 (118.38) (101.23)
5. Gain/(Loss) on derivative transactions 65.60 (44.97) – –
6. Minimum alternate tax credit – – – 230.23
7. Deferred tax on capital losses – (787.94) 787.94 (787.94)
8. Other temporary differences 71.30 (5.89) 17.99 (19.08)
Deferred tax expense/(income) 764.43 (523.37)
Net deferred tax (assets)/liabilities (494.00) (1428.20)

388
Notes forming part of the Financial Statements (contd.)
[Note 44]
Disclosure pursuant to Ind AS 12 “Income Taxes” (contd.)
(e) Reconciliation of deferred tax (assets)/liabilities

v crore
Sr. 2020-21 2019-20
Particulars
No.
1. Balance as at April 1 (1428.20) (841.86)
2. Tax (income)/expense recognised in opening Retained earnings – (1.86)
3. Tax (income)/expense during the period recognised in:
(i) Statement of Profit and Loss in Profit or Loss section 764.43 (523.37)
(ii) Statement of Profit and Loss under OCI section 169.41 (61.17)
(iii) Hedge reserve (other than through OCI) 0.36 0.06
4. Balance as at March 31 (494.00) (1428.20)
Note [45]
Disclosure pursuant to Ind AS 19 “Employee Benefits”

i Defined contribution plans: [refer Note 1(ii)(k)(ii)(A)]: Amount of R 85.63 crore (previous year: R 81.68 crore) is recognised as an
expense. Out of which R 5.88 crore (previous year: R 6.54 crore) pertains to discontinued operations.

ii Defined benefit plans: [refer Note 1(ii)(k)(ii)(B)]:

a) The amount recognised in Balance Sheet are as follows:

v crore
Gratuity plan Post-retirement medical Company pension plan Trust-managed provident
benefit plan fund plan
Particulars
As at As at As at As at As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020
A) Present value of defined benefit obligation
-Wholly funded 574.00 618.49 – – – – 2980.28 2802.92
-Wholly unfunded 80.04 87.71 303.38 297.18 374.03 365.27 – –
654.04 706.20 303.38 297.18 374.03 365.27 2980.28 2802.92
Less: Fair value of plan assets 573.58 511.12 – – – – 3253.88 2968.51
Amount to be recognised as liability/(asset) 80.46 195.08 303.38 297.18 374.03 365.27 (273.60) (165.59)
B) Amounts reflected in the Balance Sheet
Liabilities 80.46 194.38 303.38 284.60 374.03 365.27 22.73 25.55
Assets – – – – – – – –
Net liability/(asset) 80.46 194.38 303.38 284.60 374.03 365.27 22.73 25.55
Net liability/(asset) - current 80.46 194.38 13.22 13.01 25.17 25.64 22.73
[1]
25.55
[1]

Net liability/(asset) - Non-current – – 290.16 271.60 348.86 339.63 – –

Net liability/(asset) classified as Held for sale – 0.70 – 12.57 – – – –
Employer’s and employee’s contribution due towards Provident Fund.
[1]

389
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [45]
Disclosure pursuant to Ind AS 19 “Employee Benefits” (contd.)
b) The amounts recognised in Statement of Profit and Loss are as follows:
v crore
Gratuity plan Post-retirement medical Company pension plan Trust-managed
Particulars benefit plan provident fund plan
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
1 Current service cost 71.91 73.66 11.57 10.87 3.91 3.42 70.43 71.76
2 Interest cost 35.44 34.39 18.76 14.45 23.37 23.98 236.27 215.97
3 Interest income on plan assets (32.82) (31.41) – – – – (236.27) (215.97)
4 Actuarial losses/(gains) - others (3.30) 79.87 0.25 86.60 5.56 27.25 – –
5 Actuarial losses/(gains) - difference
between actual return on plan assets and
interest income (45.32) (19.12) – – – – (94.28) (134.52)
6 Past service cost – 0.17 – – – – – –
7 Actuarial gain/(loss) not recognised in
books – – – – – – 94.28 134.52
8 Amount capitalised out of the above/
recovered from S&A (0.01) (0.10) (0.02) (0.03) – – – –
Total (1 to 8) 25.90 137.46 30.56 111.89 32.84 54.65 70.43 71.76
i Amount included in “Employee benefits
expense” 69.71 69.42 11.11 9.97 3.91 3.42 67.32 64.83
ii Amount included as part of “Finance
cost” 2.62 3.01 18.76 14.45 23.37 23.98 – –
iii Amount included as part of “Other
comprehensive income” (48.63) 60.75 0.25 86.60 5.56 27.25 – –
iv Amount included in “Profit from
discontinued operations” 2.20 4.28 0.44 0.87 – – 3.11 6.93
Total (i+ii+iii+iv) 25.90 137.46 30.56 111.89 32.84 54.65 70.43 71.76
Actual return on plan assets 78.14 50.48 – – – – 330.55 350.49
c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances
thereof are as follows:
v crore
Gratuity plan Post-retirement medical Company pension plan Trust-managed
benefit plan provident fund plan
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
Opening balance of the present value of defined
benefit obligation 706.20 600.40 297.18 197.10 365.27 332.88 2802.92 2503.86
Add: Current service cost 71.91 73.66 11.57 10.87 3.91 3.42 70.43 71.76
Add: Interest cost 35.44 34.39 18.76 14.45 23.37 23.98 236.27 215.97
Add: Contribution by plan participants
i) Employee – – – – – – 212.80 210.83
ii) Transfer-in/(out) (1.43) – – – – – 55.00 51.00
Add/(less): Actuarial losses/(gains) arising
from changes in:
i) demographic assumptions (1.18) (7.54) 6.67 6.11 – (0.04) – –
ii) financial assumptions 8.36 74.56 8.15 32.29 5.96 23.97 – –
iii) experience adjustments (10.48) 12.85 (14.57) 48.20 (0.40) 3.32 – –
Less: Benefits paid (151.59) (88.31) (24.38) (11.84) (24.08) (22.26) (397.14) (251.08)
Add: Past service cost – 0.17 – – – – – –
Less: Business transfer (0.70) – – – – – – –
Add/(less): Translation adjustments (2.49) 6.02 – – – – (0.001) 0.58
Closing balance of the present value of
defined benefit obligation 654.04 706.20 303.38 297.18 374.03 365.27 2980.28 2802.92

390
Notes forming part of the Financial Statements (contd.)
Note [45]
Disclosure pursuant to Ind AS 19 “Employee Benefits” (contd.)
d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:
v crore
Gratuity plan Trust-managed provident
Particulars fund plan
2020-21 2019-20 2020-21 2019-20
Opening balance of the fair value of the plan assets 511.12 433.39 2968.51 2516.99
Add: Interest income on plan assets[1] 32.82 31.41 236.27 215.97
Add/(less): Actuarial gains/(losses)
Difference between actual return on plan assets and interest income 45.32 19.12 94.28 134.52
Add: Contribution by the employer 103.34 62.22 71.49 76.99
Add/(less): Transfer in/(out) (0.82) 0.09 54.99 51.00
Add: Contribution by plan participants – – 225.48 224.11
Less: Benefits paid (118.20) (35.11) (397.14) (251.07)
Closing balance of the plan assets 573.58 511.12 3253.88 2968.51
[1] Basis used to determine interest income on plan assets: The Trust formed by the Company manages the investments of
provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan
assets by the discount rate determined at the start of the annual reporting period.

The Company expects to fund NIL (previous year: R 103.05 crore) towards its gratuity plan and R 81.06 crore (previous year:
R 79.24 crore) towards its trust-managed provident fund plan during the year 2021-22.
e) The fair value of major categories of plan assets are as follows:
v crore
Gratuity plan
Particulars As at 31-3-2021 As at 31-3-2020
Quoted Unquoted Total Quoted Unquoted Total
Cash and cash equivalents – 48.60 48.60 – 2.05 2.05
Equity instruments 19.98 – 19.98 10.24 – 10.24
Debt instruments - Corporate Bonds 246.65 0.31 246.96 229.45 – 229.45
Debt instruments - Central Government Bonds 166.67 – 166.67 140.89 – 140.89
Debt instruments - State Government Bonds 97.14 – 97.14 90.66 – 90.66
Debt instruments - PSU Bonds 21.64 – 21.64 8.74 – 8.74
Mutual funds – Equity 20.00 19.90 39.90 11.62 9.35 20.97
Mutual funds – Debt – 3.17 3.17 – – –
Mutual funds – Others – 2.89 2.89 0.25 2.62 2.87
Insurer managed funds – – – – 0.82 0.82
Fixed Deposits – 3.44 3.44 – 3.00 3.00
Special Deposit Scheme – 1.48 1.48 – 1.49 1.49
Other (payables)/receivables – (78.29) (78.29) – (0.06) (0.06)
Closing balance of the plan assets 572.08 1.50 573.58 491.85 19.27 511.12

391
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [45]
Disclosure pursuant to Ind AS 19 “Employee Benefits” (contd.)

v crore
Trust-managed provident fund plan
Particulars As at 31-3-2021 As at 31-3-2020
Quoted Unquoted Total Quoted Unquoted Total
Cash and cash equivalents – 31.22 31.22 – 17.12 17.12
Equity instruments 60.69 – 60.69 11.84 – 11.84
Debt instruments - Corporate Bonds 942.78 23.77 966.55 841.07 – 841.07
Debt instruments - Central Government Bonds 723.82 – 723.82 646.52 – 646.52
Debt instruments - State Government Bonds 724.52 – 724.52 717.25 – 717.25
Debt instruments - PSU Bonds 395.66 – 395.66 454.38 – 454.38
Mutual funds – Equity 67.82 86.63 154.45 44.77 40.64 85.41
Mutual funds – Debt – 15.17 15.17 – – –
Mutual funds – Others – – – 6.48 – 6.48
Special Deposit Scheme – 181.78 181.78 – 188.43 188.43
Other (payables)/receivables 0.03 (0.01) 0.02 0.01 – 0.01
Closing balance of the plan assets 2915.32 338.56 3253.88 2722.32 246.19 2968.51
f) The average duration of the defined benefit plan obligations at the end of the reporting period is as follows:
Plans As at 31-3-2021 As at 31-3-2020
1) Gratuity plan 7.77 7.24
2) Post-retirement medical benefit plan 14.24 13.88
3) Company pension plan 7.99 7.78
g) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages):
Particulars As at 31-3-2021 As at 31-3-2020
i) Discount rate:
a) Gratuity plan 6.44% 6.63%
b) Company pension plan 6.44% 6.63%
c) Post-retirement medical benefit plan 6.44% 6.63%
ii) Annual increase in healthcare costs (refer note vii infra) 5.00% 5.00%
iii) Salary growth rate:
a) Gratuity plan 6.00% 6.00%
b) Company pension plan 9.00% 8.00%
iv) Attrition Rate:

a) For gratuity plan the attrition rate varies from 1% to 11% (previous year: 1% to 11%) for various age groups.

b) For company pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%) for various age
groups.

c) For post-retirement medical benefit plan, the attrition rate varies from 1% to 11% (previous year: 1% to 11%) for
various age groups.

v) The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors, such as supply and demand in the employment market.

vi) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest
income on long-term investments of the fund. Any shortfall in the interest income over the interest obligation is
recognised immediately in the Statement of Profit and Loss.

vii) The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. At
present, healthcare cost, as indicated in the principal actuarial assumption given supra, has been assumed to increase at
5.00% p.a.

392
Notes forming part of the Financial Statements (contd.)
Note [45]
Disclosure pursuant to Ind AS 19 “Employee Benefits” (contd.)
viii) (A) One percentage point change in actuarial assumptions would have the following effects on the defined benefit
obligation of gratuity plan:
v crore
Effect of 1% increase Effect of 1% decrease
Particulars
2020-21 2019-20 2020-21 2019-20
Impact of change in salary growth rate 47.60 47.34 (42.20) (42.19)
Impact of change in discount rate (41.63) (41.58) 47.88 47.47
(B) A one percentage point change in actuarial assumptions would have the following effects on the defined benefit
obligation of Company pension plan:
v crore
Effect of 1% increase Effect of 1% decrease
Particular
2020-21 2019-20 2020-21 2019-20
Impact of change in discount rate (27.73) (27.14) 31.98 31.28
(C) A one percentage point change in actuarial assumptions would have the following effects on the defined benefit
obligation of post-retirement medical benefit plan:
v crore
Effect of 1% increase Effect of 1% decrease
Particulars
2020-21 2019-20 2020-21 2019-20
Impact of change in healthcare cost 21.30 20.59 (17.41) (16.91)
Impact of change in discount rate (39.10) (37.38) 49.78 47.25
h) Characteristics of defined benefit plans and associated risks:
1 Gratuity plan:
The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to
fifteen days last salary drawn for each completed year of service. The same is payable to vested employees at retirement,
death while in employment or on termination of employment. The benefit vests after five years of continuous service. The
Company’s scheme is more favorable as compared to the obligation under Payment of Gratuity Act, 1972.
The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally separate
from the Company. The trustees nominated by the Company are responsible for the administration of the plan. There
are no minimum funding requirements of these plans. The funding of these plans are based on gratuity fund’s actuarial
measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared
to the assumptions set out in (g) supra. Employees do not contribute to any of these plans.
Unfunded gratuity represents a small part of gratuity plan which is not material. Further, the unfunded portion includes
amounts payable in respect of the Company’s foreign operations which result in gratuity payable to employees engaged
as per local laws of the country of operation.

2 Post-retirement medical care plan:

The post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of
employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the
employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan.

3 Company’s pension plan:

In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement pension
scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre
of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan.

4 Trust managed provident fund plan:

The Company manages provident fund plan through a provident fund trust for its employees which is permitted under
the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer
at a fixed percentage of employee’s salary. Employees also contribute to the plan at a fixed percentage of their salary
as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by

393
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [45]
Disclosure pursuant to Ind AS 19 “Employee Benefits” (contd.)
Employees’ Provident Fund Organisation. The contribution by employer and employee together with interest are payable
at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on
rendering of service.

The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest
income on long-term investments of the fund. Any shortfall in the interest income over the interest obligation is
recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment
risk and actuarial risk associated with the plan is also recognized as expense or income in the period in which such loss/
gain occurs.

All the above defined benefit plans expose the Company to general actuarial risks such as interest rate risk and market
(investment) risk.
i) The Codes on Wages, 2019 and the Code on Social Security, 2020 have been enacted, however, the effective date from which
changes are applicable are yet to be notified. The impact of the same would be given in the financial statements in the period
in which the Codes become effective and the Rules/Schemes thereunder are notified.

Note [46]
Disclosure pursuant to Ind AS 20 “Accounting for Government Grants and Disclosure of Government Assistance”
The Company’s exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by
Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives and duty drawback amounts to
R 212.52 crore (previous year: R 119.68 crore).

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures”
(a) List of related parties over which control exist and status of transactions entered during the year:
Sr Name of the Subsidiary Company Nature of relationship Transaction entered
No. during the year
(Yes/No)
1 L&T Realty Developers Limited [1] Wholly Owned Subsidiary [WOS] Yes
2 L&T Construction Equipment Limited [1] WOS Yes
3 L&T Realty Limited [1] WOS Yes
4 Bhilai Power Supply Company Limited Subsidiary No
5 L&T Electricals and Automation Limited WOS Yes
6 Kesun Iron and Steel Company Private Limited Subsidiary Yes
7 L&T Power Limited Subsidiary Yes
8 L&T Aviation Services Private Limited WOS Yes
9 L&T Capital Company Limited WOS Yes
10 L&T Infra Contractors Private Limited WOS of L&T Capital Company Limited No
11 Larsen & Toubro International FZE WOS of L&T Global Holdings Limited Yes
12 Larsen & Toubro (East Asia) SDN. BHD. WOS of Larsen & Toubro International FZE Yes
13 L&T Global Holdings Limited WOS Yes
14 L&T Cassidian Limited [2] WOS No
15 Larsen & Toubro Heavy Engineering LLC Subsidiary of L&T Hydrocarbon Engineering Limited Yes
16 L&T Hydrocarbon Engineering Limited WOS Yes
17 Larsen & Toubro Hydrocarbon International Limited LLC [3] Subsidiary No
18 L&T Modular Fabrication Yard LLC Subsidiary of L&T Hydrocarbon Engineering Limited Yes
19 L&T Overseas Projects Nigeria Limited [4] WOS of Larsen & Toubro International FZE No
20 PT Larsen & Toubro Hydrocarbon Engineering Indonesia Subsidiary of L&T Hydrocarbon Engineering Limited No
21 Larsen & Toubro Kuwait Construction General Contracting WOS of L&T Hydrocarbon Engineering Limited Yes
Company WLL
22 Larsen Toubro Arabia LLC Subsidiary Yes
23 L&T Hydrocarbon Saudi Company WOS of L&T Hydrocarbon Engineering Limited Yes
24 Larsen & Toubro Electromech LLC Subsidiary of L&T Hydrocarbon Engineering Limited Yes

394
Notes forming part of the Financial Statements (contd.)
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)

Sr Name of the Subsidiary Company Nature of relationship Transaction entered

No. during the year
(Yes/No)
25 L&T Gulf Private Limited [5] WOS of L&T Hydrocarbon Engineering Limited Yes
26 Hi-Tech Rock Products and Aggregates Limited WOS Yes
27 L&T Geostructure Private Limited [6] Subsidiary Yes
28 L&T Geo – L&T JV for Maharatangarh project WOS of L&T Geostructure Private Limited No
29 L&T Geo – L&T UJV CMRL CS WOS of L&T Geostructure Private Limited No
30 L&T Infrastructure Engineering Limited WOS Yes
31 Larsen & Toubro (Oman) LLC Subsidiary of Larsen & Toubro International FZE Yes
32 Larsen & Toubro Qatar LLC [7] WOS of Larsen & Toubro International FZE Yes
33 Larsen & Toubro Saudi Arabia LLC Subsidiary Yes
34 Larsen & Toubro T&D SA (Proprietary) Limited Subsidiary of Larsen & Toubro International FZE No
35 L&T Seawoods Limited WOS Yes
36 L&T Asian Realty Project LLP WOS of L&T Seawoods Limited Yes
37 L&T Parel Project LLP WOS of L&T Seawoods Limited Yes
38 Chennai Vision Developers Private Limited WOS of L&T Realty Developers Limited Yes
39 L&T Vision Ventures Limited Subsidiary of L&T Realty Developers Limited Yes
40 L&T Westend project LLP Subsidiary of L&T Realty Developers Limited No
41 LTR SSM Private Limited [8] Subsidiary Yes
42 L&T Valves Limited WOS Yes
43 L&T Valves Arabia Manufacturing LLC [9] WOS of L&T Valves Limited No
44 L&T Valves USA LLC [10] WOS of L&T Valves Limited No
45 L&T Finance Holdings Limited Subsidiary Yes
46 L&T Finance Limited [30] WOS of L&T Finance Holdings Limited Yes
47 L&T Capital Markets Limited [11] WOS of L&T Finance Holdings Limited Yes
48 L&T Investment Management Limited WOS of L&T Finance Holdings Limited Yes
49 L&T Mutual Fund Trustee Limited WOS of L&T Finance Holdings Limited Yes
50 L&T Infra Debt Fund Limited WOS of L&T Finance Limited Yes
51 L&T Infra Investment Partners Advisory Private Limited WOS of L&T Finance Limited Yes
52 L&T Infra Investment Partners Trustee Private Limited WOS of L&T Finance Limited Yes
53 L&T Financial Consultants Limited WOS of L&T Finance Holdings Limited Yes
54 Mudit Cement Private Limited WOS of L&T Financial Consultants Limited Yes
55 L&T Infra Investment Partners Subsidiary of L&T Finance Limited No
56 L&T Capital Market (Middle East) Ltd [12] WOS of L&T Finance Holdings Limited No
57 Larsen & Toubro Infotech Limited Subsidiary Yes
58 L&T Technology Services Limited Subsidiary Yes
59 L&T Thales Technology Services Private Limited Subsidiary of L&T Technology Services Limited Yes
60 Esencia Technologies India Private Limited WOS of Esencia Technologies Inc. Yes
61 Syncordis Software Services India Private Limited WOS of Larsen & Toubro Infotech Limited Yes
62 Larsen & Toubro Infotech LLC WOS of Larsen & Toubro Infotech Limited No
63 Larsen & Toubro Infotech GmbH WOS of Larsen & Toubro Infotech Limited No
64 Larsen & Toubro Infotech Canada Limited WOS of Larsen & Toubro Infotech Limited No
65 Larsen & Toubro LLC Subsidiary No
66 L&T Infotech Financial Services Technologies Inc. WOS of Larsen & Toubro Infotech Limited No
67 Larsen & Toubro Infotech South Africa (Proprietary) Limited Subsidiary of Larsen & Toubro Infotech Limited No

395
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
Sr Name of the Subsidiary Company Nature of relationship Transaction entered
No. during the year
(Yes/No)
68 L&T Information Technology Services (Shanghai) Co. Limited WOS of Larsen & Toubro Infotech Limited No
69 L&T Technology Services LLC WOS of L&T Technology Services Limited Yes
70 L&T Information Technology Spain SL WOS of Larsen & Toubro Infotech Limited No
71 Esencia Technologies Inc. WOS of L&T Technology Services LLC No
72 L&T Infotech S. DE R.L. DE C.V. WOS of Larsen & Toubro Infotech Limited No
73 Larsen & Toubro Infotech Norge AS WOS of Larsen & Toubro Infotech Limited No
74 Syncordis S.A. WOS of Larsen & Toubro Infotech GmbH No
75 Syncordis SARL WOS of Syncordis S.A. No
76 Syncordis Limited WOS of Syncordis S.A. No
77 Syncordis PSF S.A. WOS of Syncordis S.A. No
78 Graphene Semiconductor Services Private Limited WOS of L&T Technology Services Limited Yes
79 Graphene Solutions PTE Ltd. WOS of Graphene Semiconductor Services Private Limited No
80 Graphene Solutions SDN. BHD. WOS of Graphene Semiconductor Services Private Limited No
81 Graphene Solutions Taiwan Limited WOS of Graphene Semiconductor Services Private Limited No
82 Seastar Labs Private Limited WOS of Graphene Semiconductor Services Private Limited Yes
83 Nielsen+Partners Germany WOS of Larsen & Toubro Infotech GmbH No
84 Nielsen+Partners Switzerland WOS of Nielsen+Partners Germany No
85 Nielsen+Partners Singapore WOS of Nielsen+Partners Germany No
86 Nielsen+Partners Luxembourg [13] WOS of Nielsen+Partners Germany No
87 Nielsen+Partners Thailand WOS of Nielsen+Partners Germany No
88 Nielsen+Partners Australia WOS of Nielsen+Partners Germany No
89 Ruletronics Limited WOS of Larsen & Toubro Infotech GmbH No
90 Ruletronics Systems Inc. WOS of Larsen & Toubro Infotech GmbH No
91 Ruletronics Systems Private Limited [9] WOS of Larsen & Toubro Infotech Limited Yes
92 Mindtree Limited [14] Subsidiary Yes
93 Mindtree Software (Shanghai) Co. Limited [15] WOS of Mindtree Limited No
94 Bluefin Solutions SDN. BHD. [15] WOS of Mindtree Limited No
95 Bluefin Solutions Pte Limited [16] WOS of Mindtree Limited No
96 Bluefin Solutions Inc. [17] WOS of Mindtree Limited No
97 Lymbyc Solutions Inc. [18] WOS of Lymbyc Solutions Private Limited No
98 Lymbyc Solutions Private Limited [18] WOS of Larsen & Toubro Infotech Limited Yes
99 Powerup Cloud Technologies Private Limited [19] WOS of Larsen & Toubro Infotech Limited Yes
100 L&T Technology Services (Shanghai) Co. Ltd [20] WOS of L&T Technology Services Limited No
101 L&T Technology Services (Canada) Ltd [21] WOS of L&T Technology Services LLC No
102 L&T Power Development Limited WOS Yes
103 L&T Uttaranchal Hydropower Limited WOS of L&T Power Development Limited Yes
104 L&T Arunachal Hydropower Limited WOS of L&T Power Development Limited Yes
105 L&T Himachal Hydropower Limited WOS of L&T Power Development Limited Yes
106 Nabha Power Limited WOS of L&T Power Development Limited Yes
107 L&T Metro Rail (Hyderabad) Limited WOS Yes
108 Sahibganj Ganges Bridge‐Company Private Limited [22] WOS of L&T Capital Company Limited Yes
109 Thalest Limited WOS of Larsen & Toubro International FZE No
110 Servowatch Systems Limited [23] WOS of Thalest Limited Yes
111 L&T Electricals & Automation Saudi Arabia Company LLC [24] WOS of Tamco Switchgear (Malaysia) SDN. BHD Yes

396
Notes forming part of the Financial Statements (contd.)
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
Sr Name of the Subsidiary Company Nature of relationship Transaction entered
No. during the year
(Yes/No)
112 Tamco Switchgear (Malaysia) SDN. BHD. [24] WOS of Larsen & Toubro International FZE Yes
113 Henikwon Corporation SDN. BHD. [24] WOS of Tamco Switchgear (Malaysia) SDN. BHD Yes
114 Tamco Electrical Industries Australia Pty Limited [24] WOS of Larsen & Toubro International FZE No
115 PT. Tamco Indonesia [24] WOS of Larsen & Toubro International FZE Yes
116 L&T Electrical & Automation FZE [24] WOS of Larsen & Toubro International FZE Yes
117 Kana Controls General Trading & Contracting Company WOS of L&T Electrical & Automation FZE Yes
W.L.L. [24]
118 L&T Hydrocarbon International FZE WOS of L&T Hydrocarbon Engineering Limited No
119 Larsen & Toubro Infotech Austria GmbH [25] WOS of Larsen & Toubro Infotech Limited No
120 L&T Realty FZE [26] WOS of L&T Realty Developers Limited No
121 Larsen & Toubro Infotech UK Limited [27] WOS of Larsen & Toubro Infotech Limited No
122 LTI Middle East FZ-LLC [28] WOS of Larsen & Toubro Infotech Limited No
123 Orchestra Technology, Inc. [29] WOS of L&T Technology Services LLC No
[1]
Refer to Note 5 [1]
[2]
Dissolved on January 28, 2021
[3]
Liquidated on May 16, 2020
[4]
Dissolved on January 21, 2021
[5]
Reclassified as subsidiary w.e.f. November 20, 2019 and merged with L&T Hydrocarbon Engineering Limited w.e.f. April 1, 2020
[6]
L&T Geostructure LLP renamed as L&T Geostructure Private Limited
[7]
In process of liquidation
[8]
In process of being struck off from the register of companies.
[9]
Incorporated on May 30, 2019
[10]
Incorporated on May 28, 2019
[11]
Divested on April 24, 2020
[12]
Liquidated on December 17, 2020
[13]
Merged with Syncordis PSF S.A. w.e.f. December 21, 2020
[14]
The Company has acquired stake on July 2, 2019
[15]
The Company through its subsidiary has acquired stake on July 2, 2019
[16]
Liquidated on March 20, 2020. The Company through its subsidiary had acquired stake on July 2, 2019
[17]
Liquidated on December 17, 2019. The Company through its subsidiary had acquired stake on July 2, 2019
[18]
The Company through its subsidiary has acquired stake on August 29, 2019
[19]
The Company through its subsidiary has acquired stake on October 25, 2019
[20]
Incorporated on August 6, 2019
[21]
Incorporated on August 20, 2019
[22]
Dissolved on March 30, 2021
[23]
Divested on December 1, 2020
[24]
Divested on August 31, 2020
[25]
Liquidated on August 20, 2019
[26]
Liquidated on January 27, 2020
[27]
Incorporated on August 17, 2020
[28]
Incorporated on November 25, 2020
[29]
The Company through its subsidiary has acquired stake on October 2, 2020
[30]
L&T Housing Finance Limited and L&T Infrastructure Finance Company Limited merged with L&T Finance Limited w.e.f. April 1, 2020.

397
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
(b) (i) Name of associates and joint ventures with whom transactions were carried out during the year:

Sr. No Associate Companies

1 L&T-Chiyoda Limited
2 Magtorq Private Limited
(ii) Names of joint ventures with whom transactions were carried out during the year:
Sr. No Joint Venture Companies Sr. No Joint Venture Companies
1 L&T - MHI Power Boilers Private Limited [1]
2 L&T Samakhiali Gandhidham Tollway Limited
3 L&T - MHI Power Turbine Generators Private Limited [2] 4 Kudgi Transmission Limited
5 L&T Howden Private Limited 6 L&T Sambalpur-Rourkela Tollway limited
7 L&T-Sargent & Lundy Limited 8 Panipat Elevated Corridor Limited
9 L&T Special Steels and Heavy Forgings Private Limited 10 Vadodara Bharuch Tollway Limited
11 L&T MBDA Missile Systems Limited 12 L&T Transportation Infrastructure Limited
13 L&T Sapura Offshore Private Limited 14 L&T Interstate Road Corridor Limited
15 L&T Sapura Shipping Private Limited 16 Ahmedabad-Maliya Tollway Limited
17 L&T-Gulf Private Limited [3]
18 L&T Halol-Shamlaji Tollway Limited
19 L&T Infrastructure Development Projects Limited 20 L&T Kobelco Machinery Private Limited [4]
21 L&T Rajkot-Vadinar Tollway Limited 22 Raykal Aluminium Company Private Limited
23 L&T Deccan Tollways Limited
[1] L&T-MHPS Boilers Private Limited renamed as L&T - MHI Power Boilers Private Limited
[2] L&T-MHPS Turbine Generators Private Limited renamed as L&T - MHI Power Turbine Generators Private Limited
[3] Re-classified as subsidiary w.e.f. November 20, 2019 due to purchase of additional stake
[4] The Company has sold its stake on April 17, 2019
(iii) Name of post-employment benefit plans with whom transactions were carried out during the year
Sr. No Provident Fund Trust
1 Larsen & Toubro Officers & Supervisory Staff Provident Fund
2 Larsen & Toubro Limited Provident Fund of 1952
3 Larsen & Toubro Limited Provident Fund
4 L&T Kansbahal Officers & Supervisory Provident Fund
5 L&T Kansbahal Staff & Workmen Provident Fund

Sr. No Gratuity Trust

1 Larsen & Toubro Officers & Supervisors Gratuity Fund
2 Larsen & Toubro Gratuity Fund
3 L&T Shibuilding Limited Employees Group Gratuity Assurance Scheme

Superannuation Trust
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme

398
Notes forming part of the Financial Statements (contd.)
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
(iv) Name of key management Personnel and their relatives with whom transactions were carried out during the year:
(i) Executive Directors

Sr. No. Sr. No.

1 Mr. S. N. Subrahmanyan (Chief Executive Officer & 2 Mr. R. Shankar Raman (Whole‐time Director &
Managing Director) Chief Financial Officer)
3 Mr. Shailendra Roy (Whole‐time Director) [1] 4 Mr. D. K. Sen (Whole‐time Director)
5 Mr. M. V. Satish (Whole‐time Director) 6 Mr. J. D. Patil (Whole-time Director)
7 Mr. Subramanian Sarma (Whole-time Director) [2] 8 Mr. S.V. Desai (Whole-time Director) [3]

9 Mr. T. Madhava Das (Whole-time Director) [3]

(ii) Non-executive/Independent Directors

Sr. No. Sr. No.
1 Mr. A.M. Naik (Group Chairman) 2 Mr. M. M. Chitale
3 Mr. Subodh Bhargava 4 Mr. M. Damodaran
5 Mr. Vikram Singh Mehta 6 Mr. Adil Zainulbhai
7 Mr. Akhilesh Krishna Gupta [4] 8 Ms. Sunita Sharma [5]
9 Mr. Thomas Mathew T [6] 10 Mr. Ajay Shankar [7]
11 Ms. Naina Lal Kidwai [8] 12 Mr. Sanjeev Aga
13 Mr. Narayanan Kumar 14 Mr. Arvind Gupta [9]
15 Mr. Hemant Bhargava 16 Ms. Preetha Reddy [10]
[1]
Ceased w.e.f. July 7, 2020 on account of superannuation [2]
ppointed as Whole-time Director w.e.f. August 19,
A
2020 (Non-executive Director till August 18, 2020)
[3]
Appointed w.e.f. July 11, 2020 [4]
Ceased w.e.f. September 8, 2019 on account of
completion of term
[5]
eased w.e.f. May 3, 2021 on account of withdrawal of
C [6]
Ceased w.e.f. April 2, 2020 on account of completion
nomination by Life Insurance Corporation of India of term
[7]
Ceased w.e.f. May 29, 2020 on account of completion of term [8]
Ceased w.e.f. February 28, 2021 on account of
completion of term
[9]
eased w.e.f. March 26, 2020 on account of withdrawal of
C [10]
Appointed w.e.f. March 1, 2021
nomination by Specified Undertaking of the Unit Trust of India
(c) Disclosure of related party transactions:
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
i. Purchase of goods & services (including commission paid)
Subsidiaries, including: 768.44 1210.51
L&T Geostructure Private Limited 241.33 364.58
Hi-Tech Rock Products and Aggregates Limited 124.03 410.75
L&T Construction Equipment Limited 78.96
Tamco Switchgear (Malaysia) SDN. BHD. 121.24
Joint ventures, including: 1152.75 729.26
L&T - MHI Power Boilers Private Limited 694.75 559.36
L&T Special Steels and Heavy Forgings Private Limited 75.58
L&T Howden Private Limited 116.77
L&T - MHI Power Turbine Generators Private Limited 248.52
Associate: 17.44 10.87
Magtorq Private Limited 17.44 10.47
Total 1938.63 1950.64

399
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
ii.(a) Sale of goods/contract revenue & services
Subsidiaries, including: 1108.55 1288.28
L&T Hydrocarbon Engineering Limited 370.77 543.87
Larsen & Toubro Saudi Arabia LLC 208.61
Larsen & Toubro (East Asia) SDN. BHD. 128.55 136.66
L&T Realty Developers Limited 135.93
L&T Metro Rail (Hyderabad) Limited 198.32
Joint ventures, including: 43.00 89.53
L&T - MHI Power Boilers Private Limited 40.53 85.90

Total 1151.55 1377.81

ii. (b) Reversal of sale of goods/contract revenue & services

Subsidiary: 14.54 –
L&T Parel Project LLP 14.54

Total 14.54 –

iii. Purchase/lease of property, plant and equipment

Subsidiaries, including: 2.08 14.33
Larsen & Toubro (Oman) LLC 2.06 10.74
Larsen & Toubro Infotech Limited 2.46
Joint venture: – 0.05
L&T - MHI Power Boilers Private Limited 0.05

Total 2.08 14.38

iv. Sale of property, plant and equipment

Subsidiaries: 4.24 3.96
L&T Geostructure Private Limited 3.74 3.95
L&T Hydrocarbon Engineering Limited 0.50
Joint venture: – 0.44
L&T - MHI Power Boilers Private Limited 0.44
Key management personnel: 0.61 –
Mr. Shailendra Roy 0.61

Total 4.85 4.39

400
Notes forming part of the Financial Statements (contd.)
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
v. Investments including subscription to equity and preference shares
(equity portion)
Subsidiaries, including: 2272.05 233.82
L&T Finance Holdings Limited 1907.65
Hi-Tech Rock Products and Aggregates Limited [1] 300.00
L&T Uttaranchal Hydropower Limited 222.00
Joint venture: – 0.33
L&T - MHI Power Turbine Generators Private Limited 0.33

Total 2272.05 234.15

vi. Subscription debentures/bonds net of redemption

Subsidiary: 2338.47 –
L&T Finance Limited 2338.47

Total 2338.47 –

vii. Sale /Redemption of investments in

Subsidiary: 260.00 –
L&T Hydrocarbon Engineering Limited 260.00
Joint venture: – 22.42
L&T Infrastructure Development Projects Limited 22.42

Total 260.00 22.42

viii. Net inter corporate deposits given/(repaid by)

Subsidiaries, including: 246.87 1276.77
L&T Metro Rail (Hyderabad) Limited 1019.20 1238.94
L&T Geostructure Private Limited 29.50
Hi-Tech Rock Products and Aggregates Limited (267.59)
Nabha Power Limited (375.49)
L&T Realty Developers Limited (158.75)
Joint venture: 151.59 115.21
L&T Special Steels and Heavy Forgings Private Limited 151.59 115.21

Total 398.46 1391.98

ix. Net inter corporate borrowing taken from /(repaid to)

Subsidiaries, including: (1553.45) 1756.61
L&T Seawoods Limited (517.33) 497.78
L&T Hydrocarbon Engineering Limited (1018.24) 1249.50
Joint venture: 32.00 57.50
L&T MBDA Missile Systems Limited 32.00 57.50

Total (1521.45) 1814.11

[1]
Represents the purchase of stake in L&T Geostructure Private Limited from Hi-Tech Rock Products and Aggregates Limited

401
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
x. Charges paid for miscellaneous services
Subsidiaries, including: 125.43 185.45
Larsen & Toubro Infotech Limited 86.22 135.26
L&T Aviation Services Private Limited 17.95 19.57
L&T Technology Services Limited 22.02
Joint ventures, including: 2.61 7.55
L&T Sargent & Lundy Limited 2.49 7.08

Total 128.04 193.00

xi. Rent paid, including lease rentals under leasing/hire purchase

arrangements
Subsidiaries, including: 2.53 1.30
L&T Hydrocarbon Saudi Company 1.84
L&T Electrical & Automation FZE 0.36 0.69
PT Tamco Indonesia 0.28
Joint ventures, including: 0.01 3.41
L&T - MHI Power Turbine Generators Private Limited 0.01
L&T Special Steels and Heavy Forgings Private Limited 3.20

Total 2.54 4.71

xii. Rent received, overheads recovered and miscellaneous income
Subsidiaries, including: 484.45 510.53
Larsen & Toubro Infotech Limited 92.08 84.95
L&T Technology Services Limited 53.60 54.02
L&T Hydrocarbon Engineering Limited 181.66 155.98
L&T Geostructure Private Limited 68.01 74.24
Joint ventures, including: 74.56 72.03
L&T - MHI Power Boilers Private Limited 31.77 28.30
L&T Sargent & Lundy Limited 11.55 11.38
L&T - MHI Power Turbine Generators Private Limited 8.65 8.31
L&T Infrastructure Development Projects Limited 7.93
Associate: 10.35 12.26
L&T- Chiyoda Limited 10.35 12.26
Total 569.36 594.82

xiii.(a) Charges incurred for deputation of employees from related parties

Subsidiaries, including: 7.39 12.94
L&T Electrical and Automation FZE 3.58 7.83
PT Tamco Indonesia 1.34
Kana Controls General Trading and Contracting Company WLL 1.57 1.52

Total 7.39 12.94

402
Notes forming part of the Financial Statements (contd.)
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
xiii.(b) Charges recovered for deputation of employees to related parties
Subsidiaries, including: 64.70 67.58
L&T Parel Project LLP 7.12 7.14
L&T Asian Realty Project LLP 6.79
L&T Realty Developers Limited 11.47
L&T Geostructure Private Limited 13.16 12.82
L&T Seawoods Limited 7.32 7.22
Joint ventures: 1.88 1.42
L&T Special Steels and Heavy Forgings Private Limited 0.73 0.77
L&T Infrastructure Development Projects Limited 1.15 0.66
Associate: 2.83 6.59
L&T- Chiyoda Limited 2.83 6.59

Total 69.41 75.59

xiv. Dividend received

Subsidiaries, including: 1113.30 1373.00
Larsen & Toubro Infotech Limited 396.34 364.48
L&T Technology Services Limited 164.01 164.27
L&T Finance Holdings Limited 242.73
L&T Hydrocarbon Engineering Limited 364.23 326.21
Mindtree Limited 175.92 269.06
Joint ventures, including: 133.88 12.53
L&T - MHI Power Boilers Private Limited 119.39 11.94

Total 1247.18 1385.53

xv. Commission received, including those under agency arrangements

Subsidiary: 7.77 7.63
L&T Construction Equipment Limited 7.77 7.63

Total 7.77 7.63

xvi. Guarantee charges recovered from

Subsidiaries, including: 47.83 62.32
Nabha Power Limited 12.86 9.25
L&T Hydrocarbon Engineering Limited 26.43 32.85
Larsen Toubro Arabia LLC 9.82
Joint venture: 0.47 0.55
L&T - MHI Power Turbine Generators Private Limited 0.47 0.55

Total 48.30 62.87

403
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
xvii. Interest paid to
Subsidiaries, including: 92.87 229.69
L&T Hydrocarbon Engineering Limited 61.46 201.68
L&T Seawoods Limited 13.47
Nabha Power Limited 11.78
Joint ventures: 13.64 4.16
L&T MBDA Missile Systems Limited 2.81 2.42
L&T - MHI Power Turbine Generators Private Limited 10.83 1.74

Total 106.51 233.85

xviii. Interest received from
Subsidiaries, including: 276.62 134.36
Nabha Power Limited 21.72
L&T Metro Rail (Hyderabad) Limited 132.95 59.16
Hi-Tech Rock Products and Aggregates Limited 24.80
L&T Finance Limited 78.78 16.86
Joint ventures, including: 201.90 128.49
L&T Special Steels and Heavy Forgings Private Limited 134.52 104.14
Kudgi Transmission Limited 45.93
L&T Infrastructure Development Projects Limited 21.44 21.56
Total 478.52 262.85
xix. Amount written off as bad debts
Subsidiary: – 0.08
Kesun Iron and Steel Company Private Limited 0.08

Total – 0.08
xx. Amount recognised/(reversed) in Profit and Loss as provision towards
bad and doubtful debts (including expected credit loss on account of
delay)
Subsidiaries, including: 4.23 13.02
L&T Metro Rail (Hyderabad) Limited 6.12 8.39
PT. Tamco Indonesia 2.28
L&T Hydrocarbon Engineering Limited (0.83)
L&T Parel Project LLP (0.43)
L&T Seawoods Limited 0.67
Larsen & Toubro Heavy Engineering LLC (0.80)
Joint ventures, including: 0.31 (0.33)
L&T Special Steels and Heavy Forgings Private Limited (0.09) 0.08
L&T - MHI Power Turbine Generators Private Limited 0.10
L&T Howden Private Limited (0.33)
L&T - MHI Power Boilers Private Limited 0.39 (0.37)
Total 4.54 12.69

404
Notes forming part of the Financial Statements (contd.)
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
xxi. Amount recognised in Profit and Loss on account of impairment loss
on investment and inter corporate deposit
Subsidiaries: 1415.00 –
L&T Power Development Limited 829.00
L&T Uttaranchal Hydropower Limited 586.00
Joint venture: 1467.38 –
L&T Special Steels and Heavy Forgings Private Limited 1467.38

Total 2882.38 –

xxii. Amount recognised in Profit and Loss on account of provision towards

constructive obligation
Joint venture: 14.84 –
L&T Special Steels and Heavy Forgings Private Limited 14.84

Total 14.84 –

xxiii. Guarantee given on behalf of

Subsidiaries, including: 1918.44 4739.58
Mindtree Limited 518.44
L&T Hydrocarbon Engineering Limited 1705.47
Nabha Power Limited 1400.00 2500.00

Total 1918.44 4739.58

xxiv. Contribution to post employment benefit plans

(a) Towards employer’s contribution to provident fund trusts, including: 98.86 78.63
Larsen & Toubro Officers & Supervisory Staff Provident Fund 88.53 67.79
Larsen & Toubro Limited Provident Fund of 1952 8.11

Total 98.86 78.63

(b) Towards employer’s contribution to gratuity fund trusts, including: 106.16 60.95
Larsen & Toubro Officers & Supervisors Gratuity Fund 86.47 55.65
Larsen & Toubro Gratuity Fund 16.54

Total 106.16 60.95

(c) Towards employer’s contribution to superannuation trust: 6.81 10.99

Larsen & Toubro Limited Senior Officers’ Superannuation Scheme 6.81 10.99

Total 6.81 10.99

“Major parties” denote entities accounting for 10% or more of the aggregate for that category of transaction during respective
year.

405
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
xxv. Compensation to Key Management Personnel (KMP):
v crore
2020-21 2019-20
Key Management Personnel Short-term Post- Other Short-term Post-
Share based
employee employment long-term Total employee employment Total
payment
benefits benefits benefit benefits benefits
Executive Directors:
(a) Mr. S.N.Subrahmanyan 11.26 2.97 – – 14.23 11.87 3.13 15.00
(b) Mr. R. Shankar Raman 7.50 1.98 – – 9.48 7.89 2.08 9.97
(c) Mr. Shailendra Roy 4.83 7.64 [1] 10.20 [2] – 22.67 5.26 1.37 6.63
(d) Mr. D. K. Sen 3.93 1.01 – – 4.94 3.56 0.91 4.47
(e) Mr. M. V. Satish 4.24 1.08 – – 5.32 4.60 1.18 5.78
(f) Mr. J.D. Patil 4.23 1.09 – – 5.32 4.04 1.04 5.08
(g) Mr. Subramanian Sarma 4.48 1.02 – 8.39 13.89 – – –
(h) Mr. S.V.Desai 2.83 0.64 – – 3.47 – – –
(i) Mr. T. Madhava Das 2.94 0.72 – – 3.66 – – –
Non-Executive/Independent Directors:
(a) Mr. A.M. Naik 3.21 3.00 [3]
– – 6.21 3.18 3.00 [3]
6.18
(b) Other Non-Executive/ Independent Directors 5.11 – – – 5.11 3.95 – 3.95
Total 54.56 21.15 10.20 8.39 94.30 44.35 12.71 57.06
[1] Post retirement benefits include gratuity R 6.60 crore
[2] Represents encashment of past service accumulated leave
[3] Represents pension
(d) Amount due to/from related parties:
v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/parties Amount Amounts for Amount Amounts for
No.
major parties major parties
i. Accounts receivable
Subsidiaries, including: 832.93 1064.16
L&T Metro Rail (Hyderabad) Limited 610.48 686.36
L&T Hydrocarbon Engineering Limited 133.70
Joint ventures, including: 131.70 111.32
L&T - MHI Power Boilers Private Limited 75.49 92.11
L&T MBDA Missile Systems Limited 12.00
L&T Deccan Tollways Limited 50.00
Total 964.63 1175.48

406
Notes forming part of the Financial Statements (contd.)
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/parties Amount Amounts for Amount Amounts for
No.
major parties major parties
ii. Accounts payables, including other payables
Subsidiaries, including: 537.76 1100.12
Tamco Switchgear (Malaysia) SDN. BHD. 119.21
L&T Geostructure Private Limited 221.22 440.76
Larsen and Toubro (Oman) LLC 80.75
Joint ventures, including: 1715.02 1184.92
L&T - MHI Power Boilers Private Limited 863.21 717.66
L&T - MHI Power Turbine Generators Private Limited 576.54 446.92
L&T Infrastructure Development Projects Limited 177.35
Associates, including: 13.97 13.04
Magtorq Private Limited 5.18
L&T Camp Facilities LLC 8.79 11.94
Total 2266.75 2298.08
iii. Investment in debt securities [including preference shares (debt
portion)]
Subsidiaries: 2659.72 331.40
L&T Metro Rail (Hyderabad) Limited 491.14 289.77
L&T Finance Limited 2168.58 41.64
Joint ventures: 1097.54 1049.70
L&T Special Steels and Heavy Forgings Private Limited 213.17 213.17
Kudgi Transmission Limited 611.72 569.93
L&T Infrastructure Development Private Limited 272.65 266.60
Total 3757.26 1381.10
iv Impairment loss on investment in debt securities
Joint venture: 213.17 213.17
L&T Special Steels and Heavy Forgings Private Limited 213.17 213.17
Total 213.17 213.17
v. Loans & advances recoverable
Subsidiaries, including: 3053.43 2895.19
Hi-Tech Rock Products and Aggregates Limited 342.39
L&T Metro Rail (Hyderabad) Limited 2481.56 1394.35
Nabha Power Limited 386.48
Joint ventures, including: 1980.83 1892.57
L&T Special Steels and Heavy Forgings Private Limited 1744.81 1635.62
Associates: 6.63 3.26
L&T-Chiyoda Limited 1.63 0.93
Magtorq Private Limited 5.00 2.34
Total 5040.89 4791.02

407
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/parties Amount Amounts for Amount Amounts for
No.
major parties major parties
vi. Impairment loss on loans & advances recoverable
Joint venture: 1730.38 263.00
L&T Special Steels and Heavy Forgings Private Limited 1730.38 263.00
Total 1730.38 263.00
vii. Provision towards constructive obligation
Joint venture: 14.84 -
L&T Special Steels and Heavy Forgings Private Limited 14.84
Total 14.84 -
viii. Unsecured loans (including lease finance)
Subsidiaries, including: 235.66 1796.45
L&T Hydrocarbon Engineering Limited 231.26 1249.50
L&T Seawoods Limited 524.65
Joint venture: 90.91 59.68
L&T MBDA Missile Systems Limited 90.91 59.68
Total 326.57 1856.13
ix. Advances received in the capacity of supplier of goods/services
classified as “advances from customers” in the Balance Sheet
Subsidiaries, including: 124.96 139.47
Nabha Power Limited 47.51
L&T Realty Developers Limited 56.64
L&T Hydrocarbon Engineering Limited 77.21
L&T Metro Rail (Hyderabad) Limited 13.99
L&T Construction Equipment Limited 46.59
Joint venture: 20.46 6.97
L&T - MHI Power Boilers Private Limited 20.46 6.97
Total 145.42 146.44
x. Due to directors [1]:
Key management personnel, including: 34.83 29.13
Mr. S. N. Subrahmanyan 8.40 9.01
Mr. R. Shankar Raman 5.49 5.88
Mr. Shailendra N. Roy 0.92 3.37
Mr. D. K. Sen 2.40 2.03
Mr. M. V. Satish 2.66 3.02
Mr. J.D. Patil 2.91 2.72
Mr. Subramanian Sarma 3.31
Mr. S.V.Desai 2.29
Mr. T. Madhava Das 2.43
Total 34.83 29.13

[1]
Includes commission due to non-executive directors R 4.03 crore (previous year: R 3.10 crore).

408
Notes forming part of the Financial Statements (contd.)
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/parties Amount Amounts for Amount Amounts for
No.
major parties major parties
xi. Post employment benefit plan
(a) Due to provident fund trusts, including: 27.59 29.26
Larsen & Toubro Officers & Supervisory Staff Provident Fund 24.79 24.81
Total 27.59 29.26
(b) Due to gratuity trusts, including: - 107.04
Larsen & Toubro Officers & Supervisors Gratuity Fund 94.08
Larsen & Toubro Gratuity Fund 8.92
Total - 107.04
(c) Due to superannuation trust: 4.48 3.91
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme 4.48 3.91
Total 4.48 3.91
xii.(a) Capital commitment given
Subsidiaries, including: 139.23 1.65
L&T Construction Equipment Limited 136.98
Larsen & Toubro (Oman) LLC 1.11
L&T Technology Services Limited 0.28
Total 139.23 1.65
xii.(b) Revenue commitment given
Subsidiaries, including: 530.41 1084.75
L&T Geostructure Private Limited 121.19 685.77
Larsen & Toubro (Oman) LLC 187.64
L&T Infrastructure Engineering Limited 55.00
Joint ventures, including: 2221.04 2311.24
L&T - MHI Power Boilers Private Limited 1643.73 1224.91
L&T - MHI Power Turbine Generators Private Limited 387.72 668.92
Associates, including: 35.60 25.49
Magtorq Private Limited 35.08 23.18
Total 2787.05 3421.48
xiii. Commitment to Fund [2]

Subsidiary: 14.00 93.00

L&T Uttaranchal Hydropower Limited 14.00 93.00
Total 14.00 93.00

[2]
The Company has provided a revolving line of credit facility of R 2000 crore to L&T Finance Limited as a stand-by liquidity
support arrangement (the “Facility”), renewable on a yearly basis. This Facility is in addition to the working capital lines that
L&T Finance Limited has with its consortium of lending banks. The Facility shall be exercised by L&T Finance Limited only after
exhausting all external bank funding lines. The utilisation against the Facility is NIL as at March 31, 2021.

409
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures” (contd.)
v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/parties Amount Amounts for Amount Amounts for
No.
major parties major parties
xiv. Revenue commitment received
Subsidiaries, including: 2306.87 3264.93
L&T Metro Rail (Hyderabad) Limited 457.82 587.50
Larsen & Toubro Infotech Limited 677.92
Nabha Power Limited 488.57 571.01
L&T Asian Realty Project LLP 815.00
L&T Construction Equipment Limited 357.55
L&T Hydrocarbon Engineering Limited 328.59
Joint ventures, including: 187.73 65.13
L&T - MHI Power Boilers Private Limited 158.78 21.28
L&T MBDA Missile Systems Limited 20.00 30.00
L&T - MHI Power Turbine Generators Private Limited 6.88
Total 2494.60 3330.06
xv. Guarantee given on behalf of
Subsidiaries, including: 21183.33 33510.25
L&T Hydrocarbon Engineering Limited 13356.69 19593.31
Larsen Toubro Arabia LLC 4285.17
Nabha Power Limited 4716.00 3916.00
Joint ventures, including: 363.85 514.74
L&T - MHI Power Turbine Generators Private Limited 312.67 394.94
L&T Special Steels and Heavy Forgings Private Limited 90.42
Total 21547.18 34024.99
xvi. Provision for doubtful debts related to the amount of outstanding
balances
Subsidiaries, including: 19.76 19.73
Nabha Power Limited 2.04 2.04
L&T Metro Rail (Hyderabad) Limited 14.51 8.39
L&T Seawoods Limited 2.00
PT. Tamco Indonesia 3.09
Joint ventures, including: 23.30 23.09
L&T - MHI Power Boilers Private Limited 23.28 23.00
Total 43.06 42.82

“Major parties” denote entities account for 10% or more of the aggregate for that category of transaction during respective year.
Note :
1. All the related party contracts / arrangements have been entered into on arms’ length basis.
2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash.

410
Notes forming part of the Financial Statements (contd.)
NOTE [48]
Disclosure pursuant to Ind AS 27 “Separate Financial Statements”

Investment in following subsidiaries, associates and joint ventures is accounted at cost.

Subsidiaries:

As at 31-3-2021 As at 31-3-2020
Principal Proportion Proportion Proportion Proportion Proportion Proportion
Sr. place of of direct of effective of effective of direct of effective of effective
Name of the subsidiary
No. business ownership ownership voting power ownership ownership voting power
(%) Interest (%) held (%) (%) Interest (%) held (%)
Indian subsidiaries
1 Bhilai Power Supply Company Limited India 99.90 99.90 99.90 99.90 99.90 99.90
2 L&T Electricals and Automation Limited India 100.00 100.00 100.00 100.00 100.00 100.00
3 Hi-Tech Rock Products & Aggregates Limited India 100.00 100.00 100.00 100.00 100.00 100.00
4 L&T Seawoods Limited India 100.00 100.00 100.00 100.00 100.00 100.00
5 Kesun Iron & Steel Company Private Limited India 95.00 95.00 95.00 95.00 95.00 95.00
6 L&T Geostructure Private Limited [1] India 99.00 100.00 100.00 74.00 100.00 100.00
7 L&T Valves Limited India 100.00 100.00 100.00 100.00 100.00 100.00
8 L&T Power Limited India 99.99 99.99 99.99 99.99 99.99 99.99
9 L&T Cassidian Limited [2] India – – – 100.00 100.00 100.00
10 L&T Aviation Services Private Limited India 100.00 100.00 100.00 100.00 100.00 100.00
11 Larsen & Toubro Infotech Limited India 74.27 74.27 74.27 74.53 74.53 74.53
12 L&T Finance Holdings Limited India 63.62 63.62 63.62 63.72 63.72 63.72
13 L&T Capital Company Limited India 100.00 100.00 100.00 100.00 100.00 100.00
14 L&T Power Development Limited India 100.00 100.00 100.00 100.00 100.00 100.00
15 L&T Metro Rail (Hyderabad) Limited [3] India 100.00 100.00 100.00 100.00 100.00 100.00
16 L&T Technology Services Limited India 74.24 74.24 74.24 74.62 74.62 74.62
17 L&T Construction Equipment Limited [4] India 100.00 100.00 100.00 100.00 100.00 100.00
18 L&T Infrastructure Engineering Limited India 100.00 100.00 100.00 100.00 100.00 100.00
19 L&T Hydrocarbon Engineering Limited India 100.00 100.00 100.00 100.00 100.00 100.00
20 L&T Construction Machinery Limited [4] India – – – 100.00 100.00 100.00
21 L&T Realty Developers Limited [4]
India 100.00 100.00 100.00 – – –
22 Mindtree Limited India 61.03 61.03 61.03 61.08 61.08 61.08
[1]
The Company became subsidiary on November 25,2020
[2]
Struck off on January 28,2021
[3]
Proportion of ownership is more than 99.99%
[4]
Refer to Note 5 [1]

411
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [48]
Disclosure pursuant to Ind AS 27 “Separate Financial Statements” (contd.)
Foreign subsidiaries :
As at 31-3-2021 As at 31-3-2020
Principal Proportion Proportion Proportion Proportion Proportion Proportion
Sr. place of of direct of effective of effective of direct of effective of effective
Name of subsidiary company
No. business ownership ownership voting power ownership ownership voting power
(%) Interest (%) held (%) (%) Interest (%) held (%)
1 Larsen & Toubro LLC USA 95.24 98.77 98.77 95.24 98.79 98.79
2 Larsen & Toubro Hydrocarbon International Kindgom of
Limited LLC [1] Saudi Arabia – – – 90.00 100.00 100.00
3 Larsen & Toubro (Saudi Arabia) LLC Kindgom of 4.35 100.00 100.00 4.35 100.00 100.00
Saudi Arabia
4 L&T Global Holdings Limited UAE 100.00 100.00 100.00 100.00 100.00 100.00
[1]
Liquidated on May 16, 2020

Associate companies :

As at 31-3-2021 As at 31-3-2020
Principal Proportion Proportion Proportion Proportion Proportion Proportion
Sr. place of of direct of effective of effective of direct of effective of effective
Name of associate
No. business ownership ownership voting power ownership ownership voting power
(%) Interest (%) held (%) (%) Interest (%) held (%)
1 Gujarat Leather Industries Limited [1] India 50.00 50.00 50.00 50.00 50.00 50.00
2 Magtorq Private Limited India 42.85 42.85 42.85 42.85 42.85 42.85
[1]
Under liquidation

Joint ventures:

As at 31-3-2021 As at 31-3-2020
Principal place Proportion of Proportion Proportion of Proportion
Sr. of business direct of effective direct of effective
Name of the joint venture
No. ownership (%) ownership ownership (%) ownership
Interest (%) Interest (%)
1 L&T Chennai–Tada Tollway Limited India [1]
51.00 [1]
51.00
2 L&T Rajkot-Vadinar Tollway Limited India [1]
51.00 [1]
51.00
3 L&T Samakhiali Gandhidham Tollway Limited India 0.02 51.01 0.02 51.01
4 L&T Infrastructure Development Projects Limited India 51.00 51.00 51.00 51.00
5 L&T Transportation Infrastructure Limited India 26.24 63.86 26.24 63.86
6 Ahmedabad-Maliya Tollway Limited India [1]
51.00 [1]
51.00
7 L&T Halol-Shamlaji Tollway Limited India [1]
24.98 [1]
24.98
8 L&T Howden Private Limited India 50.10 50.10 50.10 50.10
9 L&T-MHI Power Boilers Private Limited India 51.00 51.00 51.00 51.00
10 L&T-MHI Power Turbine Generators Private Limited India 51.00 51.00 51.00 51.00
11 Raykal Aluminium Company Private Limited India 75.50 75.50 75.50 75.50
12 L&T Special Steels and Heavy Forgings Private Limited India 74.00 74.00 74.00 74.00
13 PNG Tollway Limited India [1]
37.74 [1]
37.74
14 L&T MBDA Missile Systems Limited India 51.00 51.00 51.00 51.00
15 L&T-Sargent & Lundy Limited India 50.00 50.00 50.00 50.00
[1]
Proportion of direct ownership is less than 0.01%.

412
Notes forming part of the Financial Statements (contd.)
Note [49]
Basic and diluted Earnings per Share [EPS] computed in accordance with Ind AS 33 “Earnings per Share”:

Particulars 2020-21 2019-20

Basic earnings per share
Profit after tax from continuing operations as per accounts (R crore) A 2686.49 6024.76
Profit after tax from discontinued operations as per accounts (R crore) B 8650.48 654.45
Profit after tax from continuing & discontinued operations as per accounts (R crore) C=A+B 11336.97 6679.21
Weighted average number of equity shares outstanding D 1,40,41,46,937 1,40,33,69,848
Basic EPS from continuing operations (R) A/D 19.13 42.93
Basic EPS from discontinued operations (R) B/D 61.61 4.66
Basic EPS from continuing & discontinued operations (R) C/D 80.74 47.59
Diluted earnings per share
Profit after tax from continuing operations as per accounts (R crore) A 2686.49 6024.76
Profit after tax from discontinued operations as per accounts (R crore) B 8650.48 654.45
Profit after tax from continuing and discontinued operations as per accounts (R crore) C=A+B 11336.97 6679.21
Weighted average number of equity shares outstanding D 1,40,41,46,937 1,40,33,69,848
Add: W
eighted average number of potential equity shares on account of employee E
stock options 14,20,264 18,52,930
Weighted average number of equity shares outstanding for diluted EPS F=D+E 1,40,55,67,201 1,40,52,22,778
Diluted EPS from continuing operations(R) A/F 19.11 42.87
Diluted EPS from discontinued operations(R) B/F 61.54 4.66
Diluted EPS from continuing & discontinued operations(R) C/F 80.65 47.53
Face value per share (R) 2 2
The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares
for the purpose of diluted earnings per share:
Particulars 2020-21 2019-20
Weighted average number of potential equity shares on account of conversion of foreign currency
convertible bonds – 51,90,133

413
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [50]
Disclosures pursuant to Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets”

a) Movement in provisions:

v crore
Class of provisions
Product Expected tax Litigation- Contractual Total
Sr. warranties liability in related rectification
Particulars
No. respect of obligations cost -
indirect taxes construction
contracts
1 Balance as at April 1, 2020 8.03 196.53 143.26 460.15 807.97
2 Additional provision during the year 0.37 66.79 100.21 298.66 466.03
3 Provision used during the year – (0.31) (231.46) (239.56) (471.33)
4 Provision reversed during the year (2.43) (26.10) – (123.61) (152.14)
5 Balance as at March 31, 2021 (5=1+2+3+4) 5.97 236.91 12.01 395.64 650.53
b) Nature of provisions:
i. Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace the items
that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2021 represents the amount of
the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within
a period of 1 to 3 years from the date of Balance Sheet.
ii. Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection
of declaration forms.
iii. Provision for litigation-related obligations represents liabilities that are expected to materialise in respect of matters in appeal.
iv. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per
the contract obligations in respect of completed construction contracts accounted under Ind AS 115 “Revenue from Contracts
with customers”.

c) Disclosure in respect of contingent liabilities is given as part of Note 29 to the Balance Sheet.

Note [51]
The expenditure on research and development activities is as follows:
v crore
Sr. 2020-21 2019-20
Particulars
No.
(i) Recognised as expense in the Statement of Profit and Loss 115.17 198.74
(ii) Capital Expenditure on:
(a) tangible assets 1.14 7.60
(b) intangible assets being expenditure on new product development 9.39 32.27
(c) other intangible assets 0.58 1.14
(iii) Expenditure reimbursable by the customer – 0.08
Of the above, expenditure on research and development activities of discontinued operations is as follows:
v crore
Sr. 2020-21 2019-20
Particulars
No.
(i) Recognised as expense in the Statement of Profit and Loss 30.87 80.97
(ii) Capital Expenditure on:
(a) tangible assets 0.49 4.19
(b) intangible assets being expenditure on new product development 9.39 30.17
(c) other intangible assets – –
(iii) Expenditure reimbursable by the customer – –

414
Notes forming part of the Financial Statements (contd.)
NOTE [52]
Disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”: Market risk management

(a) Foreign exchange rate and interest rate risk:

The Company regularly reviews its foreign currency and interest rate related exposures – both hedged and open exposures. The
Company primarily follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE), hence, the movement
in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the
underlying exposures values. However, till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in
MTM of the hedge contracts will impact the Balance Sheet of the Company. Further, given the effective horizons of the Company’s
risk management activities which coincide with the durations of the projects under execution, which could extend across 3-4 years
and given the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the
gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying
economic exposures and, therefore, may affect the Company’s financial condition and operating results. The Company monitors
the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a
regular basis. For on-balance sheet exposures, the Company monitors the risks on net unhedged exposures.
(i) Foreign exchange rate risk:

In general, the Company is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a
strengthening of the Indian Rupee, may adversely affect the Company’s net sales and gross margins expressed in Indian
Rupees. There is a risk that the Company may have to adjust local currency product pricing due to competitive pressures when
there have been significant volatility in foreign currency exchange rates.
The Company may enter into foreign currency forward and option contracts with financial institutions to protect against
foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted
future cash flows and net investments in foreign subsidiaries. In addition, the Company has entered, and may enter in future,
into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-
denominated debt issuances. The Company’s practice is to hedge a portion of its material net foreign exchange exposures
with tenors in line with the project/business life cycle. The Company may also choose not to hedge certain foreign exchange
exposures.
The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised
financial liabilities and derivatives for major currencies is as follows:
v crore
As at 31-3-2021 As at 31-3-2020
US Dollars EURO Japanese US Dollars EURO Japanese
Particulars including Yen including Yen
pegged pegged
currencies currencies
Net exposure to foreign currency risk in respect of
recognised financial assets/(recognised financial liabilities) (2084.25) (486.42) (516.44) (4303.15) (573.33) (419.49)
Derivatives including embedded derivatives for hedging
receivable/(payable) exposure with respect to non-financial
assets/(liabilities) 34.38 65.82 - 217.94 (28.50) -
Derivatives including embedded derivatives for hedging
receivable/(payable) exposure with respect to firm
commitments and forecast transactions 6099.22 (4700.57) 1031.00 2159.48 (1253.24) 962.38
Receivable/(payable) exposure with respect to forward
contracts and embedded derivatives not designated as cash
flow hedge 71.90 80.03 (16.93) (518.73) 25.37 (27.02)
To provide a meaningful assessment of the foreign currency risk associated with the Company’s foreign currency derivative
positions against off-balance sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities,
the Company uses a multi-currency correlated value-at-risk (“VAR”) model. The VAR model uses a Monte Carlo simulation
to generate thousands of random market price paths for foreign currencies against Indian rupee taking into account the
correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot
exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk
estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Company uses
foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by

415
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [52]
Disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”: Market risk management (contd.)
increases in the fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Company at
95% confidence level is R 32.90 crore as at March 31, 2021 and R 28.78 crore as at March 31, 2020.

Actual future gains and losses associated with the Company’s investment portfolio and derivative positions may differ
materially from the sensitivity analysis performed as at March 31, 2021 due to the inherent limitations associated with
predicting the timing and amount of changes in foreign currency exchanges rates and the Company’s actual exposures and
position.

(ii) Interest rate risk:

The Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding floating rate debt. While
most of the Company’s outstanding debt in local currency is on fixed rate basis and hence not subject to interest rate risk, a
major portion of foreign currency debt is linked to international interest rate benchmarks like LIBOR. The Company also hedges
a portion of these risks by way of derivatives instruments like Interest rate swaps and currency swaps.

L&T has an ECB loan book of USD 250 mn as on date which has a floating interest rate linked to 1 month USD Libor. With
the transition of Libor into another benchmark (SOFR), there will be a spread adjustment that will have to be applied to
these loans. Out of the USD 250 mn worth of outstanding ECB, USD 100 mn worth of ECB will mature in October 2021, and
hence will be repaid before the transition to SOFR. USD 150 mn ECB will mature beyond 2021 and hence will require a credit
adjustment.

The Corporate Treasury team constantly tracks the developments related to this proposed transition and has also had
interactions with the counterparty lenders to prepare for the transition.

Based on the most widely expected methodology to transition from LIBOR to SOFR, the median historical spread between the
two benchmarks is likely to be used as a spread adjustment. In the case mentioned above, both the bank and the Company are
likely to agree on a neutral spread adjustment which does not impact the counterparties financially.

The exposure of the Company’s borrowing to interest rate changes at the end of the reporting period are as follows:
v crore
Particulars As at 31-3-2021 As at 31-3-2020
Floating rate borrowings 4390.76 7671.90
A hypothetical 50 basis point shift in respective currency LIBORs and other benchmarks, holding all other variables constant,
on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Company on a yearly basis as
follows:
v crore
Impact on Profit and Loss
Impact on Equity
after tax
Particulars
2020-21 2019-20 As at As at
31-3-2021 31-3-2020
Indian Rupee
Interest rates -increase by 0.5% in INR interest rate (0.56) (1.77) (0.56) (1.77)
Interest rates -decrease by 0.5% in INR interest rate 0.56 1.77 0.56 1.77
US Dollar
Interest rates -increase by 0.5% in USD interest rate (15.87) (26.94) (15.87) (26.94)
Interest rates -decrease by 0.5% in USD interest rate 15.87 26.94 15.87 26.94

(b) Liquidity Risk Management:

The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding
through adequate committed credit lines. Given the need to fund diverse businesses, the Company maintains flexibility by need
based drawing from committed credit lines. Management regularly monitors the position of cash and cash equivalents. The maturity
profiles of financial assets and financial liabilities including debt financing plans and liquidity ratios are considered while reviewing
the liquidity position.

The Company’s investment policy and strategy are focused on preservation of capital and supporting the Company’s liquidity
requirements. The Company uses a combination of internal and external tools to execute its investment strategy and achieve its

416
Notes forming part of the Financial Statements (contd.)
NOTE [52]
Disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”: Market risk management (contd.)
investment objectives. The Company typically invests in money market funds, large debt funds, Government of India securities,
equity funds and other highly-rated securities under a exposure limit framework. The investment policy focuses on minimising the
potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Company’s investment
portfolio, the Company performed a sensitivity analysis to determine the impact of change in prices of the securities on the value
of the investment portfolio assuming a 0.5% movement in the fair market value of debt funds and debt securities and a 5%
movement in the NAV of the equity funds as below:

v crore
Increase/(decrease) in investment value
Particulars
As at 31-3-2021 As at 31-3-2020
Debt funds and debt securities – increase by 0.50% in fair market value 62.25 17.80
Debt funds and debt securities – decrease by 0.50% in fair market value (62.25) (17.80)
Equity funds– increase by 5% in NAV 2.19 3.90
Equity funds– decrease by 5% in NAV (2.19) (3.90)
The investments in money market funds are for the purpose of liquidity management only and hence not subject to any material
price risk.

(c) Credit Risk Management:

The Company’s customer profile includes public sector enterprises, state owned companies and large private corporates.
Accordingly, the Company’s customer credit risk is low. The Company’s average project execution cycle is around 24 to 36 months.
General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90
days and certain retention money to be released at the end of the project. In some cases, retentions are substituted with bank/
corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within the
organisation to ensure proper attention and focus for realisation.
(i) The Company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL is
as follows:
v crore
Particulars 2020-21 2019-20
Balance as at April 1 2378.28 2270.62
Changes in allowance for ECL:
Provision/(reversal) of allowance for ECL 261.83 334.21
Additional provision (net) towards credit impaired receivables 206.47 32.69
Written off as bad debts (367.60) (157.19)
Less: Balance reported under held for sale – 102.05
Balance as at March 31[refer Note 11] 2478.98 2378.28
(ii) Trade receivable written off during the year but still enforceable for recovery amounts to Nil (previous year: Nil)

(d) Commodity price risk management :

The Company bids for and executes EPC projects on turnkey basis. EPC projects entail procurement of various equipment and
materials which may have direct or indirect linkages to commodity prices like steel (both long and flat steel), copper, aluminium,
zinc, lead, nickel etc. Accordingly, the Company is exposed to the price risk on these commodities. To mitigate the risk of
commodity prices, the Company relies on contractual provisions like pass through of prices, price variation provisions etc., and
further uses financial derivatives where available (refer Note 53 (h)(ii)). There is certain residual risk carried by the Company that
cannot be hedged against.

The table given in the Risk Management section of Management Discussion and Analysis lists out the commodity exposure for the
year (only for projects that been awarded and are under execution).

The Company is also exposed to contingent risk on account of commodity price movements that may not be fully offset by
contractual provisions in the projects that it has bid for but which are not awarded yet. Commodity prices are volatile and have
witnessed 60% to 75% movement for the year. This may impact the margin on projects where the Company has submitted bids on
a firm price basis. However, for projects where the Company is eligible for an adjustment, based on price variation clause, there may
not be a major impact. The actual impact will depend on the exact project wins and the relative contractual provisions therein.

417
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”:

(a) Category-wise classification for applicable financial assets:

R crore
Sr. As at As at
Particulars Note
No. 31-3-2021 31-3-2020
I. Measured at fair value through Profit or Loss (FVTPL):
(i) Investment in equity instruments 5 70.22 73.42
(ii) Investment in mutual funds 10 8009.01 2000.82
(iii) Investment in bonds 10 982.97 997.65
(iv) Derivative instruments not designated as cash flow hedges 7,15 76.10 35.44
(v) Embedded derivatives not designated as cash flow hedges 7,15 10.42 53.52
Sub-total (I) 9148.72 3160.85
II. Measured at amortised cost:
(i) Loans 6,14 3001.96 4022.14
(ii) Investment in CBLO 10 299.98 -
(ii) Trade receivables 11 29948.24 27912.96
(iii) Advances recoverable in cash 15 584.56 671.68
(iv) Cash and cash equivalents and bank balances 7,12,13 4050.02 4212.47
(v) Other receivables 568.82 714.41
Sub-total (II) 38453.58 37533.66
III. Measured at fair value through other comprehensive income (FVTOCI):
(i) Investment in government securities, bonds and debentures 10 9162.44 3060.68
(ii) Derivative financial instruments designated as cash flow hedges 7,15 570.21 552.00
(iii) Embedded derivatives designated as cash flow hedges 7,15 0.02 0.94
Sub-total (III) 9732.67 3613.62
Total (I+II+III) 57334.97 44308.13
(b) Category-wise classification for applicable financial liabilities:
R crore
Sr. As at As at
Particulars Note
No. 31-3-2021 31-3-2020
I. Measured at fair value through Profit or Loss (FVTPL):
(i) Derivative instruments not designated as cash flow hedges 20,26 35.99 23.14
(ii) Embedded derivatives not designated as cash flow hedges 20,26 10.60 56.80
Sub-total (I) 46.59 79.94
II. Measured at amortised cost:
(i) Borrowings 19,23,24 23808.71 25785.29
(ii) Trade payables
Due to micro enterprises and small enterprises 351.47 379.88
Due to others 25 37118.33 36249.51
(iii) Others 2006.97 1334.41
Sub-total (II) 63285.48 63749.09
III. Derivative instruments (including embedded derivatives) through other
comprehensive income:
(i) Derivative instruments designated as cash flow hedges 20,26 296.05 568.53
(ii) Embedded derivatives designated as cash flow hedges 20,26 36.91 38.31
Sub-total (III) 332.96 606.84
IV. Financial guarantee contracts 20,26 19.69 23.97
Total (I+II+III+IV) 63684.72 64459.84

418
Notes forming part of the Financial Statements (contd.)
NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures” (contd.)
(c) Items of income, expense, gains or losses related to financial instruments:
R crore
Sr. 2020-21 2019-20
Particulars
No.
I Net gains/(losses) on financial assets, financial liabilities measured at fair value through Profit or Loss
and amortised cost
A (i) Financial assets or financial liabilities mandatorily measured at fair value through Profit or Loss:
1. Gains/(losses) on fair valuation or sale of Investments 840.72 331.59
2. Gains/(losses) on fair valuation/settlement of derivative:
a. On forward contracts not designated as cash flow hedges (305.17) (94.69)
b. On embedded derivatives contracts not designated as cash flow hedges (7.40) (13.75)
c. On futures not designated as cash flow hedges (52.11) –
Sub-total (A) 476.04 223.15
B Financial assets measured at amortised cost:
(i) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency
(trade receivables, loans given etc.) (177.18) 586.25
(ii) Allowance/(reversal) for expected credit loss during the year in the Statement of Profit or Loss (261.83) (334.21)
(iii) Provision for impairment loss (other than expected credit loss) [net] (1711.39) (171.67)
(iv) Gains/(losses) on derecognition:
1. Bad debts (written off)/written back (net) (11.73) 166.95
2. Gains/(losses) on transfer of financial assets (on non-recourse basis) (58.42) (27.13)
Sub-total (B) (2220.55) 220.19
C Financial liabilities measured at amortised cost:
(i) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency
(trade payables, borrowing availed etc.) 223.32 (666.44)
(ii) Unclaimed credit balances written back 211.54 162.62
Sub-total (C) 434.86 (503.82)
Total [I] = (A+B+C) (1309.65) (60.48)
II Net gains/(losses) on financial assets and financial liabilities measured at fair value through other
comprehensive income:
A Gains/(loses) recognised in other comprehensive income:
(i) Financial assets measured at fair value through other comprehensive income:
1. Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. 355.48 311.54
(ii) Derivative measured at fair value through other comprehensive income:
1. Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow
hedges 524.86 (111.09)
2. Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated
as cash flow hedges (1.67) 44.56
Sub-total (A) 878.67 245.01
Less:
B Gains/(losses) reclassified to Profit or Loss from other comprehensive income:
(i) Financial assets measured at fair value through other comprehensive income:
1. On government securities, bonds, debentures etc. upon sale 116.02 154.47
(ii) Derivative measured at fair value through other comprehensive income:
1. On forward contracts upon hedged future cash flows affecting the Profit or loss or related
asset or liability 288.61 319.29
2. On embedded derivative contracts upon hedged future cash flows affecting the Profit or
Loss or related asset or liability (6.32) 9.01
Sub-total (B) 398.31 482.77
Net gains/(losses) recognised in other comprehensive income [II]= (A)-(B) 480.36 (237.75)
C Impairment loss recognised in Statement of Profit and Loss – 100.00

419
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures” (contd.)
R crore
Sr. 2020-21 2019-20
Particulars
No.
III Other income/(expenses):
A Dividend income:
Dividend income from investments measured at FVTPL 14.24 1.76
Sub- total (A) 14.24 1.76
B Interest income:
(a) Financial assets measured at amortised cost 327.72 398.01
(b) Financial assets measured at fair value through other comprehensive income 640.35 214.09
(c) Financial assets measured at fair value through Profit or Loss 24.51 7.22
Sub- total (B) 992.58 619.32
C Interest expense:
(a) Derivative instruments (including embedded derivatives) that are measured at fair value through
other comprehensive income: (reclassified to Profit or Loss during the year) (137.51) (150.06)
(b) Financial liabilities that are measured at amortised cost (1913.63) (1624.11)
(c) Financial liabilities that are measured at fair value through Profit or Loss (0.17) 5.95
Sub- total (C) (2051.31) (1768.22)
Total [III] = (A+B+C) (1044.49) (1147.14)
(d) Fair value of financial assets and financial liabilities measured at amortised cost:
(i) Financial assets measured at amortised cost:
The carrying amounts of trade receivables, loans, advances and cash and other bank balances are considered to be the same as
their fair values due to their short-term nature. The carrying amounts of long-term loans given with floating rate of interest are
considered to be close to the fair value.

(ii) Financial liabilities measured at amortised cost:

v crore
As at 31-3-2021 As at 31-3-2020 Fair value
Particulars Carrying Fair Value Carrying Fair Value hierarchy
amount amount
Redeemable non-convertible fixed rate debentures 15570.86 16410.60 9781.06 9966.73 L2[1]
Term loan from banks 81.60 88.28 90.67 95.34 L2[1]
Total 15651.86 16499.16 9871.73 10062.07
Note: The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short-
term nature. The carrying amounts of current borrowings at fixed rate and other borrowings at floating rate are considered to
be close to the fair value.

[1] Valuation technique L2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread.

420
Notes forming part of the Financial Statements (contd.)
NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures” (contd.)
(e) Fair value hierarchy of financial assets and liabilities measured at fair value:
v crore
Note As at 31-3-2021 As at 31-3-2020
Particulars
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial assets:
Investments at FVTPL:
(i) Equity shares (other than those held in subsidiary, joint 5
venture and associate companies) 6.88 – 63.34 70.22 5.01 – 68.41 73.42
(ii) Mutual fund units 10 8009.01 – – 8009.01 2000.82 – – 2000.82
(iii) Bonds 10 982.97 – – 982.97 997.65 – – 997.65
(iv) Derivative instruments not designated as cash flow 7,15
hedges – 76.10 – 76.10 – 35.44 – 35.44
(v) Embedded derivative Instruments not designated as 7,15
cash flow hedges – 10.42 – 10.42 – 53.52 – 53.52
Investments at FVTOCI:
(i) Debt instruments viz. government securities, bonds and 10
debentures 9162.44 – – 9162.44 3060.68 – – 3060.68
(ii) Derivative financial instruments designated as cash flow 7,15
hedges – 570.21 – 570.21 – 552.00 – 552.00
(iii) Embedded derivative financial instruments designated 7,15
as cash flow hedges – 0.02 – 0.02 – 0.94 – 0.94
Total 18161.30 656.75 63.34 18881.39 6064.16 641.90 68.41 6774.47
Financial Liabilities:
(i) At FVTPL - Designated at FVTPL:
(a) Derivative instruments not designated as cash flow 20,26
hedges – 35.99 – 35.99 – 23.14 – 23.14
(b) Embedded derivative instruments not designated as 20,26
cash flow hedges – 10.60 – 10.60 – 56.80 – 56.80
(ii) Designated at FVTOCI:
(a) Derivative financial instruments designated as cash 20,26
flow hedges – 296.05 – 296.05 – 568.53 – 568.53
(b) Embedded derivative financial instruments 20,26
designated as cash flow hedges – 36.91 – 36.91 – 38.31 – 38.31
Total – 379.55 – 379.55 – 686.78 – 686.78
Valuation technique and key inputs used to determine fair value:

1. Level-1: Mutual fund, bonds, debentures and government Securities - Quoted price in the active market

2. Level-2: Derivative Instrument – Mark to market on forward covers and embedded derivative instruments is based on forward
exchange rates at the end of reporting period and discounted using G-sec rate plus applicable spread.

(f) Movement of items measured using unobservable inputs (Level 3):

R crore
Particulars Equity Investment in Tidel Park Limited
Balance as at 1-4-2019 65.58
Gains/(losses) recognised in Profit or Loss during 2019-20 2.72
Balance as at 31-3-2020 68.30
Gains/(losses) recognised in Profit or Loss during 2020-21 (5.07)
Balance as at 31-3-2021 63.23

421
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures” (contd.)
Significant unobservable inputs used in level 3 fair value measurements and sensitivity of the fair value measurement to changes in
unobservable inputs:
v crore
Fair Value Fair Value Significant unobservable
Particulars as at as at inputs Sensitivity
31-3-2021 31-3-2020
Equity Investment in 63.23 68.30 31-3-2021: 31-3-2021 : 1% change in net realisation would result in
“Tidel Park Limited” 1. Net realisation per month +/- R 0.28 crore (post tax- R 0.21 crore)
R 31.827 per sq/ft. 25 bps change in capitalisation rate would result in +/- R 0.60
2. Capitalisation rate 11.50% crore (post tax- R 0.45 crore)
31-3-2020: 31-3-2020 : 1% change in net realisation would result in
1. Net realisation per month +/- R 0.33 crore (post tax- R 0.24 crore)
R 31.827 per sq/ft. 25 bps change in capitalisation rate would result in +/- R 0.65
2. Capitalisation rate 12.25% crore (post tax- R 0.49 crore)
(g) Maturity Profile of Financial Liabilities (undiscounted values):
v crore
As at 31-3-2021 As at 31-3-2020
Within After Within After
Particulars Note
twelve twelve Total twelve twelve Total
months months months months
A. Non-derivative liabilities:
Borrowings 19, 23, 24 8063.18 19926.96 27990.14 19522.50 8318.68 27841.18
Trade payables:
Due to micro enterprises and small enterprises 278.34 73.13 351.47 323.48 56.26 379.74
Due to others 25 35643.99 1474.34 37118.33 34823.28 1426.35 36249.63
Other financial liabilities 20, 26 1797.47 65.02 1862.49 1155.74 46.18 1201.92
Lease liabilities 70.45 103.22 173.67 91.21 89.21 180.42
Total 45853.43 21642.67 67496.10 55916.21 9936.68 65852.89
B. Derivative liabilities:
Forward contracts 20, 26 299.73 42.69 342.42 468.46 144.61 613.07
Embedded derivatives 20, 26 48.04 – 48.04 99.90 – 99.90
Total 347.77 42.69 390.46 568.36 144.61 712.97
(h) Details of outstanding hedge instruments for which hedge accounting is followed:
(i) Outstanding currency exchange rate hedge instruments:
(A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge:
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(R crore) (R) months months (R crore) (R) months months
(R crore) (R crore) (R crore) (R crore)
(a) Receivable hedges:
US Dollar 11534.39 78.75 7336.38 4198.01 6543.80 75.80 5211.30 1332.50
Japanese Yen 2537.18 0.73 2426.78 110.40 1640.41 0.69 1324.82 315.59
Qatari Riyal 1207.41 20.72 958.09 249.32 1401.35 20.99 1319.31 82.04
EURO 938.28 92.82 672.99 265.29 925.80 86.60 818.04 107.76
Arab Emirates Dirham 926.09 21.26 779.74 146.35 1174.53 20.78 830.91 343.62
Kuwaiti Dinar 831.62 255.45 645.10 186.52 863.67 239.79 641.12 222.55
Omani Riyal 785.49 193.34 599.11 186.38 485.60 193.42 107.43 378.17
Malaysian Ringgit 91.85 19.40 91.85 – 173.51 17.85 125.19 48.32
Bangladeshi Taka – – – – 1859.64 0.90 1674.92 184.72
Mauritian Rupee – – – – 149.67 1.86 111.93 37.74
Saudi Riyal – – – – 52.82 19.97 52.82 –
Thai Baht – – – – 1.56 2.35 1.56 –
British Pound – – – – 0.94 94.68 0.94 –

422
Notes forming part of the Financial Statements (contd.)
NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures” (contd.)
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(R crore) (R) months months (R crore) (R) months months
(R crore) (R crore) (R crore) (R crore)
(b) Payable hedges:
US Dollar 8952.33 74.83 8640.73 311.60 10530.38 75.14 10330.69 199.69
EURO 5826.14 87.82 5546.31 279.83 2513.05 84.70 2222.79 290.26
Japanese Yen 1325.46 0.72 1325.46 – 701.78 0.70 587.70 114.08
Swiss Franc 293.53 80.10 123.77 169.76 176.13 76.89 176.13 –
Kuwaiti Dinar 242.90 242.90 242.90 – 101.63 239.12 101.63 –
Chinese Yuan 85.99 11.23 85.99 – 84.13 10.67 75.36 8.77
Arab Emirates Dirham 46.35 20.28 46.35 – 396.31 20.75 396.31 –
Qatari Riyal 29.59 20.69 29.59 – – – – –
Omani Riyal 9.46 189.04 9.46 – – – – –
Canadian Dollar 3.51 58.77 3.51 – 31.46 54.37 31.46 –
British Pound 1.11 103.95 1.11 – 10.87 96.00 10.87 –
Bangladeshi Taka – – – – 766.73 0.88 766.73 –
Mauritian Rupee – – – – 385.17 1.86 385.17 –
(B) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge:
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(R crore) (R) months months (R crore) (R) months months
(R crore) (R crore) (R crore) (R crore)
Receivable hedges
US Dollar – – – – 29.00 72.51 29.00 –
Arab Emirates Dirham – – – – 102.55 20.11 102.55 –
Qatari Riyal – – – – 45.77 20.70 45.77 –
(ii) Outstanding commodity price hedge instruments:
Commodity forward contract:
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After twelve Nominal Average Within After
Particulars amount rate twelve months amount rate twelve twelve
(R crore) (R) months (R crore) (R crore) (R) months months
(R crore) (R crore) (R crore)
Copper(Tn)[1] (167.94) 592175.68 (167.94) – (39.12) 447208.55 (65.52) (26.40)
Aluminium(Tn) (23.23) 152475.19 0.25 (23.48) 179.91 134905.03 179.91 –
Iron Ore(Tn) 33.68 7447.47 33.68 – 25.71 5643.17 15.18 10.53
Coking Coal(Tn) – – – – 24.58 13101.74 15.50 9.08
Lead(Tn) 47.04 142207.55 47.04 – 28.98 145469.79 28.98 –
[1] Negative nominal amount represents net sell position.

423
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures” (contd.)
(i) Carrying amounts of hedge instruments for which hedge accounting is followed:
Cash flow hedge:
R crore
As at 31-3-2021 As at 31-3-2020
Particulars Currency Interest rate Commodity Currency Interest rate Commodity
exposure exposure price exposure exposure price
exposure exposure
(i) Forward contracts
Current:
Asset - Other financial assets 322.67 – 152.25 449.39 – 83.69
Liability - Other financial liabilities 242.81 – 58.14 398.37 – 78.32
Non-current:
Asset - Other financial assets 95.31 – – 19.87 – –
Liability - Other financial liabilities 28.99 – 3.02 68.63 – 1.71
(ii) Swap contracts
Non-current:
Liability - Other financial liabilities – – – 59.55 – –
Net investment hedge:
R crore
As at 31-3-2021 As at 31-3-2020
Particulars Currency Interest rate Commodity Currency Interest rate Commodity
exposure exposure price exposure exposure price
exposure exposure
(i) Forward contracts
Liability - Other financial liabilities – – – 0.26 – –
(j) Breakup of Hedging reserve & Cost of hedging reserve balance:
v crore
As at 31-3-2021 As at 31-3-2020

Particulars Cash flow Cost of Cash flow Cost of

hedging hedging hedging hedging
reserve reserve reserve reserve
Balance towards continuing hedges 21.58 (4.34) (76.81) (14.48)
Balance for which hedge accounting discontinued 181.29 – 29.98 –
(k) Reclassification of Hedging reserve & Cost of hedging reserve to Profit and Loss:
v crore
Hedging reserve/Cost of
Particulars hedging reserve
2020-21 2019-20
Future cash flows are no longer expected to occur:
Sales, administration and other expenses 11.93 32.32
Hedged expected future cash flows affecting Profit or Loss:
Progress billing 4.22 (75.17)
Revenue from operation 45.46 25.99
Manufacturing, construction and operating expenses (17.41) (46.53)
Finance costs (137.51) (150.06)
Sales, administration and other expenses 242.30 313.14
Discontinued operations – 3.38

424
Notes forming part of the Financial Statements (contd.)
NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures” (contd.)
(l) Movement of Hedging reserve & Cost of hedging reserve:

v crore
2020-21 2019-20
Hedging reserve
Gross Tax Net of Tax Gross Tax Net of Tax
Opening balance (64.58) 17.75 (46.83) 83.08 (29.84) 53.24
Impact due to change in tax rate – – – – 8.35 (8.35)
Changes in the spot element of the forward contracts
which is designated as hedging instrument for time
period related hedges 202.71 (59.74) 142.97 258.34 (68.51) 189.83
Changes in fair value of forward contracts designated as
hedging instruments 426.93 (125.82) 301.11 (232.00) 61.57 (170.43)
Changes in fair value of swaps 30.19 (8.90) 21.29 53.23 (14.13) 39.10
Amount reclassified to Profit or Loss (294.97) 86.93 (208.04) (302.23) 80.21 (222.02)
Amount included in non-financial asset/liability (6.60) 1.95 (4.65) (0.17) 0.05 (0.13)
Amount included in Progress Billing in balance sheet (4.22) 1.24 (2.98) 75.17 (19.95) 55.23
Closing balance 289.46 (86.59) 202.87 (64.58) 17.75 (46.83)

v crore
2020-21 2019-20
Cost of hedging reserve
Gross Tax Net of Tax Gross Tax Net of Tax
Opening balance (19.34) 4.86 (14.48) 6.41 (2.24) 4.17
Impact due to change in tax rate – – – – 0.63 0.63
Changes in the forward element of the forward contracts
where changes in spot element of forward contract is
designated as hedging instrument for time period related
hedges (136.65) 34.39 (102.26) (150.29) 37.82 (112.47)
Amount Included in carrying amount of hedge item – – – 0.55 (0.14) 0.41
Amount reclassified to Profit or Loss 150.19 (37.80) 112.39 123.99 (31.21) 92.78
Closing balance (5.80) 1.45 (4.35) (19.34) 4.86 (14.48)
Note [54]
Disclosure pursuant to Ind AS 116 “Leases”
(a) Where the Company is a lessor:

Operating leases: The Company has given buildings and plant & equipment under operating lease. The lease income received during
the year is R 196.75 crore (previous year: R 189.00 crore). Leases are renewed only on mutual consent and at a prevalent market
price and sub-lease is generally restricted.

Annual undiscounted lease payments receivable is as under:

v crore
Particulars Upto 1 year 1-2 years 2-3 years 3-4 years 4-5years Beyond 5 years Total
As at 31-3-2021 8.01 0.28 0.28 0.28 0.16 – 9.01
As at 31-3-2020 89.72 0.26 0.09 0.09 0.09 – 90.25
(b) Where the Company is a lessee:

The Company has taken on lease various assets such as, plant & equipment, buildings, office premises, vehicles and computer
equipment. Generally, leases are renewed only on mutual consent and at a prevalent market price and sub-lease is restricted.

425
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [54]
Disclosure pursuant to Ind AS 116 “Leases” (contd.)
Details with respect to right-of-use assets:

v crore
Class of asset Depreciation for the year Additions during the year Carrying amount
2020-21 2019-20 2020-21 2019-20 As at 31-3-2021 As at 31-3-2020
Land 3.93 3.79 0.91 – 264.72 267.74
Buildings 40.95 33.74 101.60 27.54 112.65 57.51
Plant & equipment 51.03 37.27 5.78 78.39 38.33 87.33
Vehicles 0.09 0.11 – 0.15 0.15 0.24
Computers 0.24 – 1.76 – 1.52 –
Total 96.24 74.91 110.05 106.08 417.37 412.82
i. Interest expense on lease liabilities amounts to R 11.32 crore (previous year: R 12.65 crore).

ii. Amounts not included in the measurement of the lease liability and recognised as expense in the Statement of Profit and Loss
during the year are as follows:

• Low value leases - R 3.26 crore (previous year: R 2.16 crore).

• Short-term leases - R 1662.57 crore (previous year: R 1987.91 crore).

iii. Total cash out flow for leases amounts to R 1645.14 crore during the year (previous year: R 1983.09 crore) including cash
outflow of short-term and low value leases.

NOTE [55]
The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at
March 31, 2021. The disclosure pursuant to the said Act is as under:
v crore
Particulars 2020-2021 2019-2020
Principal amount due to suppliers under MSMED Act, 2006 66.27 98.91
Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid 0.05 –
Payment made to suppliers (other than interest) beyond the appointed day during the year 129.16 77.12
Interest paid to suppliers under MSMED Act (Section 16) 0.47 0.43
Interest due and payable towards suppliers under MSMED Act for payments already made 0.46 0.49
Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act 14.01 12.27
Amount of further interest remaining due and payable even in the succeeding years 9.73 8.19
NOTE [56]
There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2021.

426
Notes forming part of the Financial Statements (contd.)
Note [57]
Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015:

v crore
Balance as at Maximum outstanding during
Sr.
Name of the company As at As at 2020-21 2019-20
No.
31-3-2021 31-3-2020
Loans and advances in the nature of loans given to subsidiaries:
(i) L&T Realty Developers Limited [2] – 176.67 176.67 176.67
(ii) L&T Special Steels & Heavy Forgings Private Limited [1] 1730.38 1605.35 1730.38 1605.35
(iii) L&T Geostructure Private Limited 29.60 – 29.60 –
(iv) Nabha Power Limited 22.48 377.59 1584.45 594.39
(v) L&T Metro Rail (Hyderabad) Limited 2450.49 1372.83 2450.49 1372.83
(vi) Hi-Tech Rock Products & Aggregates Limited 34.10 324.17 326.64 324.17
(vii) L&T Hydrocarbon Engineering Limited – – – 54.05
(viii) L&T Finance Limited [3] – – – 1013.98
Total 4267.05 3856.61
[1]
excluding Impairment of R 1730.38 crore (previous year: R 263 crore)
[2]
refer Note 5[1]
[3]
L &T Housing Finance Limited and L&T Infrastructure Finance Company Limited merged with L&T Finance Limited w.e.f. April 1, 2020.
Previous year numbers have been regrouped.

Notes:

• Above figures include interest accrued

• Loans to employees (including directors) under various schemes of the Company (such as housing loan, furniture loan, education
loan, etc.) have been considered to be outside the purview of disclosure requirements.

• Subsidiary classification is in accordance with the Companies Act, 2013

427
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

NOTE [58]
Disclosure pursuant to section 186 of The Companies Act 2013:
v crore
Sr. Nature of the transaction (loans given/investment Purpose for which the loan/guarantee/security is 2020-21 2019-20
No. made/guarantee given/security provided) proposed to be utilised by the recipient
(A) Loan and Advances
Subsidiary companies:
(a) L&T Realty Developers Limited [2] Project funding – 176.67
(b) L&T Special Steels & Heavy Forgings Private
Limited [1] Working Capital and Project funding 1730.38 1605.35
(c) Nabha Power Limited Project funding 22.48 377.59
(d) L&T Metro Rail (Hyderabad) Limited Temporary project funding and working capital 2450.49 1372.83
(e) Hi-Tech Rock Products & Aggregates Limited Investments 34.10 324.17
(f) L&T Geostructure Private Limited Project funding 29.60 –
Total 4267.05 3856.61
(B) Guarantees
Subsidiary companies:
(a) L&T Aviation Services Private Limited – 6.53
(b) L&T - MHI Power Turbine Generators
Private Limited 312.67 394.94
(c) Nabha Power Limited Corporate guarantee given for subsidiary’s debt 4500.00 3700.00
(d) L&T Global holdings Limited – 691.30
(e) L&T Hydrocarbon Engineering Ltd 782.28 809.62
(f) L&T Metro Rail (Hyderabad) Ltd 250.00 250.00
(g) Larsen & Toubro ATCO Saudia LLC – 2469.61
(h) Larsen & Toubro Arabia LLC – 4285.17
(i) L&T Technology Services Limited 465.31 564.31
(j) L&T Technology Services LLC 146.22 151.33
(k) Larsen & Toubro (Saudi Arabia) LLC 1262.12 1304.69
(l) L&T Hydrocarbon Engineering Limited Corporate guarantee for subsidiary’s project performance 12574.41 18783.70
(m) Mindtree Limited 514.50 –
(n) L&T - MHI Power Boilers Private Limited 29.23 29.38
(o) Nabha Power Limited 216.00 216.00
(p) L&T Special Steel & Heavy Forgings
Private Limited 21.95 90.42
(q) L&T Metro Rail (Hyderabad) Ltd Guarantee issued by bank out of the Company’s 472.00 278.00
sanctioned limits on behalf of LTMRHL towards DSRA
(Debt Service Reserve Account) to SBI Cap Trustee
(r) L&T Seawoods Ltd Corporate guarantee given to Maharashtra Pollution 0.50 –
Control Board for CTO/CTE compliances
Total 21547.19 34025.00
(C) Investments in fully paid equity instruments and [Note 5 and Note 10]
Current Investments
[1]
excluding impairment of R 1730.38 crore (previous year: R 263 crore).
[2]
refer Note 5[1]

428
Notes forming part of the Financial Statements (contd.)
Note [59]
Exceptional items for the year ended March 31, 2021 includes the following:

(i) Impairment towards funded exposure of R 1467.38 crore offset by interest income of R 78.58 crore and provision towards
constructive obligation to fund future losses R 14.85 crore in the heavy forgings joint venture.

(ii) Impairment of investments in the power development business R 1415.00 crore.

The impairment is recognised considering the existing business operations and the outlook for the future performance. The present
value of estimated future cash flows of the business (value-in-use) is considered as a recoverable amount (discount rates used 11.90%
to 12.75%). For power development business, in addition to value-in-use, part of the recoverable value is based on the fair value
determined based on benchmark multiple method.

Exceptional items for the year ended March 31, 2020 represents gain of R 626.99 crore on sale of the Company’s stake in a subsidiary
company.

NOTE [60]
The amount spent by the Company on Corporate Social Responsibility (CSR) related activities comprises of following:
v crore

Sr. Disclosed 2020-21 2019-20

Particulars
No. under Paid Provided Total Paid Provided Total
a. Construction/acquisition of assets charged and shown
under sales, administration, and other expenses Note 35 0.16 0.03 0.19 0.69 0.06 0.75
b. Other revenue expenses:
charged and shown under sales, administration
and other expenses Note 35 127.02 7.03 134.05 115.36 12.66 128.02
charged and shown under employee
benefit expense Note 34 11.32 – 11.32 16.52 – 16.52
c. Contribution to PM CARES fund [1] Note 35 2.89 – 2.89 53.23 – 53.23
Total amount shown in Profit & Loss Account 141.39 7.06 148.45 185.80 12.72 198.52
Amount shown in Balance Sheet 1.62 – 1.62 – – –
Total amount spent on CSR 143.01 7.06 150.07 185.80 12.72 198.52
i. The amount required to be spent by the Company on CSR related activities during the year 2020-21 is R 145.56 crore (previous
year: R 144.80 crore).
ii. The amount carried forward by the Company to offset against CSR obligation of the succeeding years is R 57.74 crore under
Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended vide Companies (Corporate Social Responsibility Policy)
Amendment Rules, 2021. This comprises R 4.51 crore of excess spent during the year 2020-21 and R 53.23 crore [1] contributed to
PM CARES fund during the year 2019-20.

The Company contributed R 53.23 crore to PM CARES fund during the year 2019-20 and accounted the same as donation in
[1]

the financial statements. The management believes, the excess amount contributed by the Company to PM CARES fund over and
above the CSR liability is allowed to be offset against the future CSR obligation of the Company under Companies (Corporate Social
Responsibility Policy) Rules, 2014 as amended vide Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.
Accordingly, for the year 2019-20 the Company has regrouped the amount of contribution to PM CARES fund from donation to
CSR expense.

429
Notes forming part of the Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Financial Statements (contd.)

Note [61]
Auditors’ remuneration (excluding GST):
v crore
Sr. 2020-21 2019-20
Particulars
No.
a. Paid as Auditor
(i) Statutory audit fees 2.05 2.05
(ii) Limited review of standalone and consolidated financial statements on a quarterly basis 2.00 1.65
b. For Taxation matters 0.60 0.60
c. For Company law matters – 0.35
d. For Other services including certification work 1.29 1.39
e. For reimbursement of expenses 0.17 0.10
Note [62]
Contribution to political parties during the year 2020-21 is Nil (previous year: The Company purchased Electoral Bonds for R 35.00 crore
and issued the same to political parties as Company’s political contribution).
NOTE [63]
(a) For better understanding of the Company’s performance, line items have been added to show Profit after tax from continuing
operations separately from exceptional items. This is in line with guidance available in Schedule III to Companies Act, 2013.

(b) Figures for the previous year have been regrouped/reclassified to conform to the figures of the current year.

430
DELOITTE HASKINS & SELLS LLP
Chartered Accountants
One International Center, Tower 3
27th – 32nd Floor,
Senapati Bapat Marg
Elphinstone Road (West)
Mumbai 400013.

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF
LARSEN & TOUBRO LIMITED
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying Consolidated Financial Statements of Larsen & Toubro Limited (the “Parent”) and its subsidiaries,
(the Parent and its subsidiaries together referred to as the “Group”) which includes 36 joint operations of the Group accounted on
proportionate basis and the Group’s share of profit in its associates and joint ventures, which comprise the Consolidated Balance Sheet
as at March 31, 2021, and the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated
Statement of Cash Flows and the Consolidated Statement of Changes in Equity for the year then ended, and a summary of significant
accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of
reports of the other auditors on separate financial information of the joint operations, subsidiaries, associates and joint ventures referred
to in the Other Matters section below, the aforesaid consolidated financial statements give the information required by the Companies
Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards
prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (“Ind AS”),
and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2021, and
their consolidated profit, their consolidated total comprehensive income, their consolidated cash flows and their consolidated changes in
equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing specified under section
143 (10) of the Act (“SA”s). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Group, its associates and joint ventures
in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical
requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules made
thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports
referred to in the Other Matters section below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated
financial statements.

Emphasis of Matter
We draw attention to Note [1] (III) to the Consolidated Financial Statements in which the Group describes the uncertainties arising from
the COVID-19 pandemic.
Our report is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have
determined the matters described below to be the key audit matters to be communicated in our report.

Revenue recognition – accounting for construction contracts

Key audit matter There are significant accounting judgements in estimating revenue to be recognised on contracts with
description customers, including estimation of costs to complete and determining the timing of revenue recognition.
The Group recognizes revenue on the basis of stage of completion in proportion of the contract costs incurred
at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of
revenue is therefore dependent on estimates in relation to total estimated costs of each such contract.

431
Auditors’ Report on Consolidated Financial Statements    ANNUAL REPORT 2020-21

Revenue recognition – accounting for construction contracts

Significant judgements are involved in determining the expected losses, when such losses become probable
based on the expected total contract cost.
Cost contingencies are included in these estimates to take into account specific risks of uncertainties or
disputed claims against the Group, arising within each contract. These contingencies are reviewed by the
Management on a regular basis throughout the life of the contract and adjusted where appropriate.
The revenue on contracts may also include variable consideration (variations and claims). Variable
consideration is recognised when the recovery of such consideration is highly probable.
Refer to Note No. [1](II)(i) to the Consolidated Financial Statements
Principal Audit Our audit procedures related to the (1) identification of distinct performance obligations, (2) evaluation of the
Procedures process for estimation of costs to complete (3) evaluation of implications of change orders on costs estimates
of costs to complete and revenue and (4) evaluation of any variable consideration included the following,
amongst others:
1. We tested the effectiveness of controls relating to the (a) evaluation of performance obligations and
identification of those that are distinct; (b) estimation of costs to complete each of the performance
obligations including the contingencies in respect thereof, as work progresses and the impact thereon as
a consequence of change orders; (c) the impact of change orders on the transaction price of the related
contracts; and (d) evaluation of the impact of variable consideration on the transaction price; and
2. We selected a sample of contracts with customers and performed the following procedures:
a. Obtained and read contract documents for each selection, change orders, and other documents that
were part of the agreement;
b. Identified significant terms and deliverables in the contract to assess management’s conclusions
regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete
as work progresses and as a consequence of change orders; (iii) the impact of change orders on the
transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of
variable consideration;
c. Compared costs incurred with Group’s estimates of costs incurred to date to identify significant
variations and evaluated whether those variations have been considered appropriately in estimating
the remaining costs to complete the contract; and
d. Tested the estimate for consistency with the status of delivery of milestones and customer
acceptance to identify possible delays in achieving milestones, which require changes in estimated
costs or efforts to complete the remaining performance obligation.
Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices.
Key audit matter The Group, in its contract with customers, promises to transfer distinct services to its customers, which may
description be rendered in the form of engineering, procurement, and construction (“EPC”) services through design-build
contracts, and other forms of construction contracts. The recognition of revenue is based on contractual
terms, which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting date,
revenue is accrued for costs incurred against work performed that may not have been invoiced.
Identifying whether the Group’s performance has resulted in a service that would be billable and collectable
where the works carried out have not been acknowledged by customers as of the reporting date, or in the
case of certain Defence contracts, where the evidence of work carried out and cost incurred are covered by
confidentiality arrangements, involves a significant amount of judgement.

Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against
invoices raised which have remained unsettled for a significantly long period after the end of the contractual
credit period also involves a significant amount of judgment.

Refer to Note Nos. [1](II)(i) and [1](II)(r) to the Consolidated Financial Statements.
Principal Audit Our audit procedures related to the (1) evaluation of evidence supporting the execution of work; (2) evaluation
Procedures of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (3)
assessment of adjusting events after the reporting date i.e. March 31, 2021 and the date when the financial
statements are approved by the Parent’s Board of Directors included the following amongst others:
1. We tested the effectiveness of controls relating to the (a) gathering and evaluation of evidence
supporting the execution of work; (b) evaluation of recoverability of the overdue amounts including the
impact on the expected credit loss allowance; and (c) assessment of adjusting events after the reporting
date i.e. March 31, 2021 and the date when the financial statements are approved by the Board of
Directors and the impact thereof on the carrying amount of the related contract assets;

432
Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices.
2. We selected a sample of contracts assets with corresponding trade receivables that were overdue and
evaluated the basis for management’s conclusions regarding the (1) evidence supporting the execution
of work for which the contract assets were recognised; (2) reasons for the delays in recovery of invoices
and the basis on which recoverability of the contract assets was assessed; (3) impact on the allowance for
expected credit losses; and (4) adjusting events after the reporting date i.e. March 31, 2021 and the date
when the financial statements are approved by the Parent’s Board of Directors and the impact thereof on
the carrying amount of the related contract assets; and
3. We compared previous estimates relating to recoverability of contract assets and compared it with actual
collections during the year.
Appropriateness of revenues and onerous obligations in respect of fixed price contracts involves critical estimates for
services relating to certain entities in Information Technology & Technology Services Segment
Key audit matter Estimated effort is a critical estimate to determine revenues and provision for onerous obligations on fixed
description price contracts. This estimate has a high inherent uncertainty as it requires consideration of progress of the
contract, efforts/cost incurred till date, efforts/cost required to complete the remaining contract performance
obligations.
Refer to Note No. [1](II)(i) to the Consolidated Financial Statements.
Principal Audit The procedures performed by components’ auditors (being other firms of chartered accountants) included the
Procedures following:
• evaluated the design and implementation of internal controls over recording of actual cost/efforts till date
and the process of estimation of cost/efforts required to complete the performance obligations;
• tested the operating effectiveness of the said internal controls for a selected sample of contracts;
• selected a sample of new and existing contracts and performed following procedures:
a) read, analysed and identified the distinct performance obligations in these contracts;
b) compared such performance obligations with those identified and recorded by the components; and
c) verified contract terms to determine the transaction price including any variable consideration
and verified allocation of the transaction price to each performance obligation after adjusting the
estimated variable consideration; and
• in respect of a sample of fixed price contracts, progress towards satisfaction of performance obligation
used to compute recorded revenue will be verify with the efforts/cost recorded and estimated efforts/cost
from the corresponding information systems.
Provision for expected credit losses for financial services segment
Key audit matter Significant judgement is used in classifying loan assets and applying appropriate measurement principles.
description The allowance for expected credit losses (“ECL”) and fair valuation on such loan assets is a critical estimate
involving greater level of management judgement.
As part of our risk assessment, we determined that the allowance for ECL and fair valuation on loan assets
has a high degree of estimation uncertainty, with a potential range of reasonable outcomes for the financial
statements.
Refer to Note [1](II)(r)(i)(D) to the Consolidated Financial Statements.
Principal Audit We have examined the policies approved by the Boards of Directors of the entities in the component’s group
Procedures that articulate the objectives of managing each portfolio and their business models. We have also verified
the methodology adopted for computation of ECL and fair valuation for assessing and measuring credit and
market risk on all lending exposures.
Additionally, we have confirmed that adjustments to the output of the ECL model is consistent with the
documented rationale and basis for such adjustments which has been approved by the Audit Committee of
the Board of Directors.
Our audit procedures related to the allowance for ECL and fair valuation included the following, among
others:
• Testing the design and effectiveness of internal controls over the:
– completeness and accuracy of the Exposure at Default (“EAD”) and the classification thereof into
stages consistent with the definitions applied in accordance with the policy approved by the Board
of Directors including the appropriateness of the qualitative factors to be applied; and
– completeness, accuracy and appropriateness of information used in the estimation of the Probability
of Default (“PD”) and the Loss Given Default (“LGD”) for the different stages depending on the
nature of the portfolio.

433
Auditors’ Report on Consolidated Financial Statements    ANNUAL REPORT 2020-21

Provision for expected credit losses for financial services segment

• Also, for a sample of loan assets:
– we tested the input data such as ratings and period of default and other related information used in
estimating the PD;
– we evaluated the reasonableness of applicable assumptions, including loss given defaults used into
estimating the fair valuation; and
– computation of the fair value of loans and ECL including methodology used to determine macro-
economic overlays and adjustments to the output of the ECL Model.
• We also tested the arithmetical accuracy of the computations and also performed analytical procedures
by determining various ratios to evaluate the overall reasonableness of the estimates determined by the
management; and
• We also assessed the appropriateness of the disclosures made in relation to the ECL allowance and fair
valuation to confirm compliance with the Ind AS provisions.
Impairment of Toll Collection Rights of certain operating projects who have incurred continuous losses
Key audit matter Toll collection rights obtained in consideration for rendering construction services, represent the right to
description collect toll revenue during the concession period in respect of Build-Operate-Transfer (“BOT”) and Design-
Build-Operate-Transfer (“DBOT”) projects. Toll collection rights are capitalised as intangible assets upon
completion of the project at the cumulative construction costs plus the present value of obligation towards
negative grants and additional concession fee payable to National Highways Authority of India (“NHAI”)/State
Authorities, if any.
Management of the component has carried out an evaluation for impairment of such toll collection
rights where indicators of impairment were identified. In such cases Management of the component has
estimated the future cash flows arising from achieving revenues and costs in line with the increase in traffic
as well as refinancing/restructuring. As such estimations involve complex and subjective judgements by the
Management, there is a risk that there may be an impairment that has not been recorded.
Refer to Note No. [1](II)(o) to the Consolidated Financial Statements.
Principal Audit The component’s auditors (being other firms of chartered accountants) have performed the following audit
Procedures procedures:
• conducted discussions with component’s personnel to identify factors, if any, that should be taken into
account in the impairment analysis;
• evaluated the design and implementation of the relevant controls and the operating effectiveness of such
internal controls in estimating the future projections including assumptions used in determining the value
in use;
• compared the actual revenues and cash flows generated by the entities during the year as compared
to the projections and estimates considered in the previous year and evaluated the basis of future
projections with regard to the revenue and cash flows; and
• evaluated the appropriateness of key assumptions in the valuations including discount rate, growth
rate, and consulted internal specialists for such evaluation. The challenge was based on the auditors’
assessment of the historical accuracy of the Group’s estimates in the prior periods and an assessment of
the consistency of assumptions across all the subsidiaries and comparison of the assumptions with public
data wherever available.
Information Other than the Financial Statements and Auditor’s Report Thereon
• The Parent Company’s Board of Directors is responsible for the other information. The other information comprises the information
included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility
Report, Corporate Governance and Shareholder’s Information, but does not include the consolidated financial statements,
standalone financial statements and our auditor’s report thereon.

• Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, compare with
the financial statements of the joint operations, subsidiaries, joint ventures and associates audited by the other auditors, to the extent it
relates to these entities and, in doing so, place reliance on the work of the other auditors and consider whether the other information
is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or
otherwise appears to be materially misstated. Other information so far as it relates to the joint operations, subsidiaries, joint ventures and
associates, is traced from their financial statements audited by the other auditors.

434
If based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.

Management’s Responsibility for the Consolidated Financial Statements

The Parent Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation
of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial
performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group including
its associates and joint ventures in accordance with Ind AS and other accounting principles generally accepted in India.
The respective Boards of Directors of the companies included in the Group and of its associates and joint ventures are responsible for
maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group
and its associates and its joint ventures and for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated
financial statements by the Directors of the Parent Company, as aforesaid.
In preparing the consolidated financial statements, the respective Boards of Directors of the companies included in the Group and of its
associates and joint ventures are responsible for assessing the ability of the respective entities to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Boards of Directors
either intend to liquidate their respective entities or to cease operations, or has no realistic alternative but to do so.
The respective Boards of Directors of the companies included in the Group and of its associates and joint ventures are also responsible for
overseeing the financial reporting process of the Group and of its associates and joint ventures.

Auditor’s Responsibility for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Parent
Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the
Group and its associates and joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Group and its associates and joint ventures to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and
whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group and its associates and joint ventures to express an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the audit of the financial statements of such entities or business activities included in
the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated
financial statements, which have been audited by the other auditors, such other auditors remain responsible for the direction,
supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

435
Auditors’ Report on Consolidated Financial Statements    ANNUAL REPORT 2020-21

Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable user of the consolidated financial statements may be influenced.
We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of
our work; and (ii) to evaluate the effect of any identified misstatements in the consolidated financial statements.
We communicate with those charged with governance of the Parent Company and such other entities included in the consolidated
financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.

Other Matters
• We did not audit the financial information of 32 joint operations included in the standalone financial statements of the companies
included in the Group whose financial information reflect total assets of R 3,968.67 crore as at March 31, 2021, total revenue
of R 3,188.13 crore, total net loss after tax of R 234.97 crore, total comprehensive loss of R 234.97 crore and net cash outflows
amounting to R 11.89 crore for the year ended March 31, 2021, as considered in the respective standalone financial statements of
the companies included in the Group. The financial information of these joint operations have been audited by the other auditors
whose reports have been furnished to us by the Parent’s Management, and our opinion in so far as it relates to the amounts and
disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far
as it relates to the aforesaid joint operations, is based solely on the report of such other auditors.

• We did not audit the financial information of 69 subsidiaries, whose financial information reflect total assets of R 66,905.56 crore
as at March 31, 2021, total revenues of R 31,349.17 crore, total net profit after tax of R 800.93 crore, total comprehensive income
of R 1,591.43 crore and net cash inflows amounting to R 243.86 crore for the year ended March 31, 2021, as considered in the
consolidated financial statements. The consolidated financial statements also include the Group’s share of profit after tax of R 4.20
crore for the year ended March 31, 2021 and total comprehensive loss of R 21.40 crore for the year ended March 31, 2021, as
considered in the consolidated financial statements, in respect of 3 associates and 9 joint ventures, whose financial information
has not been audited by us. This financial information has been audited by other auditors whose reports have been furnished to
us by the Parent’s Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts
and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of subsection (3) of
Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates is based solely on the reports
of the other auditors.

• We did not audit the financial information of 2 joint operations included in the standalone financial statements of the companies
included in the Group whose financial information reflect total assets of R 0.06 crore as at March 31, 2021, total revenue of
R Nil, total net loss after tax of R 0.02 crore, total comprehensive loss of R 0.02 crore and net cash inflows amount to R Nil for the
year ended March 31, 2021, as considered in the respective standalone financial statements of the companies included in the
Group. This financial information is unaudited and has been furnished to us by the Parent’s Management and our opinion on the
consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations,
is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to
us by the Board of Directors, these financial information are not material to the Group.

• We did not audit the financial information of 40 subsidiaries, whose financial information reflect total assets of R 397.09 crore
as at March 31, 2021, total revenues of R 744.06 crore, total net loss after tax of R 33.20 crore, total comprehensive loss of
R 33.06 crore and net cash outflows amounting to R 62.25 crore for the year March 31, 2021, as considered in the consolidated
financial statements. The consolidated financial statements also include the Group’s share of loss after tax of R 1.47 crore and total
comprehensive loss of R 1.56 crore for the year ended March 31, 2021, as considered in the consolidated financial statements,
in respect of 3 associates and 2 joint ventures, financial information have not been audited by us. This financial information is
unaudited and has been furnished to us by the Parent’s Management and our opinion on the consolidated financial statements, in
so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, is based
solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the
Management, these financial information are not material to the Group.
Our opinion on the consolidated financial statements above and our report on Other Legal and Regulatory Requirements below, is not
modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the
financial information certified by the Management.

436
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the
separate financial information of the joint operations, subsidiaries, associates and joint ventures referred to in the Other Matters section
above we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary
for the purposes of our audit of the aforesaid consolidated financial statements.

b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements
have been kept so far as it appears from our examination of those books and the reports of the other auditors.

c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, the
Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity dealt with by this Report are in
agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

d) In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors of the Parent Company as on March 31, 2021 taken
on record by the Board of Directors of the Company and the reports of the statutory auditors of its joint operation companies,
subsidiary companies, associate companies and joint venture companies incorporated in India, none of the directors of the Group
companies, its associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2021 from
being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such
controls, refer to our separate Report in “Annexure A” which is based on the auditors’ reports of the Parent Company, subsidiary
companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of internal financial controls over financial reporting of those companies.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of
the Act, as amended.

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the
Parent Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the
Group, its associates and joint ventures;

ii. Provision has been made in the consolidated financial statements, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long- term contracts including derivative contracts; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by
the Parent Company and its subsidiary companies, associate companies and joint venture companies incorporated in India.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar
(Partner)
(Membership No. 039826)
UDIN: 21039826AAAAEJ1421
Place: Mumbai
Date: May 14, 2021

437
Auditors’ Report on Consolidated Financial Statements    ANNUAL REPORT 2020-21

ANNEXURE “A” TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph “(f)” under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (the “Act”)
In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2021, we
have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (hereinafter referred to as “Parent”) and
its subsidiary companies which includes one of the Group’s 36 joint operations which is a company incorporated in India, its associate
companies and joint ventures, which are companies incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls

The respective Boards of Directors of the Parent, its subsidiary companies, its joint operation, its associate companies and joint ventures,
which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the
internal control over financial reporting criteria established by the respective Companies considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to
the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies
Act, 2013.

Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary
companies, its joint operation, its associate companies and its joint ventures, which are companies incorporated in India, based on our
audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the “Guidance Note”) issued by ICAI and the Standards on Auditing (“SA”), prescribed under Section 143(10) of the Companies Act,
2013 (the “Act”), to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over
financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining
an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error.

We believe that the audit evidence we have obtained and the audit evidence obtained by other auditors of the subsidiary companies,
joint operation, associate companies and joint ventures, which are companies incorporated in India, in terms of their reports referred
to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial
controls system over financial reporting of the Parent, its subsidiary companies, its joint operation, its associate companies and its joint
ventures, which are companies incorporated in India.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

438
Opinion
In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the
reports of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operation,
its associate companies and joint ventures, which are companies incorporated in India, have, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as
at March 31, 2021, based on the criteria for internal financial controls over financial reporting established by the respective companies
considering the essential components of internal control stated in the Guidance Note.

Other Matters
Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls
over financial reporting in so far as it relates to 29 subsidiary companies, 1 joint operation company, 1 associate company and 9 joint
ventures, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies
incorporated in India.

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over
financial reporting in so far as it relates to 2 subsidiary companies and 1 associate company, which are companies incorporated in India,
whose financial information is unaudited and whose efficacy of internal financial controls over financial reporting is based solely on the
Management’s certification provided to us and our opinion on the adequacy and operating effectiveness of the internal financial controls
over financial reporting of the Group is not affected as the financial information of such entities is not material to the Group.

Our opinion is not modified in respect of the above matters with respect to our reliance on the work done by and the reports of such
other auditors and the financial information certified by the Management.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)

Sanjiv V. Pilgaonkar
Partner
(Membership No. 039826)
UDIN: 21039826AAAAEJ1421

Place: Mumbai
Date: May 14, 2021

439
Consolidated Balance Sheet    ANNUAL REPORT 2020-21

Consolidated Balance Sheet as at March 31, 2021

As at 31-3-2021 As at 31-3-2020
Note v crore v crore v crore v crore
ASSETS:
Non-current assets
Property, plant and equipment 2 11386.29 10103.79
Capital work-in-progress 2 388.37 3224.91
Investment property 3 3646.78 3714.72
Goodwill 4 8066.96 8011.40
Other intangible assets 5 19197.76 19596.98
Intangible assets under development 5 112.02 86.18
Right-of-use assets 61(b)(iii) 2021.53 2226.49
Financial assets
Investments in joint ventures and associates 43(e) 2670.26 2851.01
Other investments 6 5945.14 4496.72
Loans towards financing activities 7 52631.67 58589.36
Other loans 8 482.66 1522.33
Other financial assets 9 1110.77 638.15
62840.50 68097.57
Deferred tax assets (net) 51(d) 2697.00 3846.58
Other non-current assets 10 5949.67 6541.62
Current assets
Inventories 11 5820.54 5746.65
Financial assets
Investments 12 31011.23 12699.75
Trade receivables 13 42229.78 40731.52
Cash and cash equivalents 14 13373.52 11324.57
Other bank balances 15 2867.98 3793.21
Loans towards financing activities 16 41379.03 41723.42
Other loans 17 648.56 716.00
Other financial assets 18 2838.47 2927.87
134348.57 113916.34
Other current assets 19 54791.48 58659.69
Group(s) of assets classified as held for sale 45(f) 6.24 4367.21
TOTAL ASSETS 311273.71 308140.13

440
Consolidated Balance Sheet as at March 31, 2021 (contd.)
As at 31-3-2021 As at 31-3-2020
Note v crore v crore v crore v crore
EQUITY AND LIABILITIES:
Equity
Equity share capital 20 280.91 280.78
Other equity 21 75587.62 66442.44
Equity attributable to owners of the Company 75868.53 66723.22
Non-controlling interests 12051.53 9520.83
Liabilities
Non-current liabilities
Financial liabilities
Borrowings 22 82120.04 82331.33
Lease liability 1617.72 1741.60
Other financial liabilities 23 186.74 901.14
83924.50 84974.07
Provisions 24 773.78 708.67
Deferred tax liabilities (net) 51(d) 1178.66 1453.04
Other non-current liabilities 25 68.70 31.09
Current liabilities
Financial liabilities
Borrowings 26 27765.83 35021.02
Current maturities of long term borrowings 27 22719.39 23654.77
Lease liability 406.10 424.95
Trade payables:
Due to micro enterprises and small enterprises 488.99 479.51
Due to others 28 45015.62 43164.42
Other financial liabilities 29 5569.55 4923.23
101965.48 107667.90
Other current liabilities 30 31269.63 30816.67
Provisions 31 2998.68 2750.85
Current tax liabilities (net) 1171.02 1509.62
Liabilities associated with group(s) of assets classified as held for sale 45(f) 3.20 1984.17
TOTAL EQUITY AND LIABILITIES 311273.71 308140.13

CONTINGENT LIABILITIES 32
COMMITMENTS (capital and others) 33
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 64

In terms of our report attached

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants S. N. SUBRAHMANYAN
Firm’s Registration No.117366W/W-100018 Chief Executive Officer & Managing Director
by the hand of (DIN 02255382)

SANJIV V. PILGAONKAR
Partner R. SHANKAR RAMAN M. M. CHITALE
Membership No. 39826 Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939

Mumbai, May 14, 2021

441
Consolidated Statement of Profit and Loss    ANNUAL REPORT 2020-21

Consolidated Statement of Profit and Loss for the year ended March 31, 2021
2020-21 2019-20

Note v crore v crore v crore v crore

Continuing operations
INCOME:
Revenue from operations 34 135979.03 145452.36
Other income 35 3429.35 2360.90
Total income 139408.38 147813.26
EXPENSES:
Manufacturing, construction and operating expenses: 36
Cost of raw materials, components consumed 15571.40 15548.66
Construction materials consumed 24558.23 30316.12
Purchase of stock-in-trade 1213.58 841.09
Stores, spares and tools consumed 2023.54 2184.46
Sub-contracting charges 22316.18 26454.05
Changes in inventories of finished goods, work-in-progress,
stock-in-trade and property development 343.37 647.70
Other manufacturing, construction and operating expenses 12983.56 13328.71
Finance cost of financial services business and finance lease activity 7691.04 8041.88
86700.90 97362.67
Employee benefits expense 37 24762.03 23114.00
Sales, administration and other expenses 38 8892.00 8646.71
Finance costs 39 3913.44 2796.66
Depreciation, amortisation, impairment and obsolescence 2904.21 2462.27
Total expenses 127172.58 134382.31
Profit before exceptional items and tax 12235.80 13430.95
Tax expense: 51(a)
Current tax 3923.39 3564.58
Deferred tax (net) 87.43 (301.38)
4010.82 3263.20
Net profit after tax (before exceptional items) from continuing operations 8224.98 10167.75
Exceptional items before tax (3693.78) –
Tax expense on exceptional items: 51(a)
Current tax 48.44 –
Deferred tax (186.20) –
(137.76) –
Exceptional items (net of tax) 48 (3556.02) –
Net profit after tax from continuing operations 4668.96 10167.75
Share in profit/(loss) after tax of joint ventures/associates (net) 43(f) 14.40 71.96
Profit for the year from continuing operations 4683.36 10239.71
Discontinued operations
Profit before tax from discontinued operations 45(a) 10790.50 883.25
Tax expense of discontinued operations 51(a) 2552.58 228.68
Net profit after tax from discontinued operations 8237.92 654.57
Net profit after tax from continuing operations & discontinued operations 12921.28 10894.28
Other comprehensive income
A Items that will not be reclassified to profit or loss:
Equity instruments through Other comprehensive income 55.05 (386.05)
Income tax (expenses)/income on equity instruments through Other
comprehensive income – –
55.05 (386.05)
Gain/(loss) on remeasurements of the net defined benefit plans 57.40 (205.94)
Income tax (expenses)/income on remeasurements of the net defined
benefit plans (13.69) 50.60
43.71 (155.34)
Share in Other comprehensive income of joint ventures/associates (net) (51.76) 27.75
B Items that will be reclassified to profit or loss:
Debt instruments through Other comprehensive income 123.69 115.22
Income tax (expenses)/income on debt instruments through Other
comprehensive income (31.14) (19.46)
92.55 95.76
Carried forward - Other comprehensive income 139.55 (417.88)
442
Consolidated Statement of Profit and Loss for the year ended March 31, 2021 (contd.)
2020-21 2019-20

Note v crore v crore v crore v crore

Brought forward - Other comprehensive income 139.55 (417.88)
Exchange differences in translating the financial statements of foreign
operations 99.70 43.60
Income tax (expenses)/income on exchange differences in translating
the financial statements of foreign operations (4.42) 4.45
95.28 48.05
Effective portion of gains/(losses) on hedging instruments in a cash
flow hedge 1717.14 (1281.83)
Income tax (expenses)/income on effective portion of gains/(losses)
on hedging instruments in a cash flow hedge (479.18) 334.42
1237.96 (947.41)
Cost of hedging reserve 11.12 (29.18)
Income tax (expenses)/income on cost of hedging reserve (2.98) 8.14
8.14 (21.04)
Share in Other comprehensive income of joint ventures/associates (net) (26.56) 23.62
Other comprehensive income for the year (net of tax) 1454.37 (1314.66)
Total comprehensive income for the year 14375.65 9579.62
Profit for the year attributable to:
Owners of the Company 11582.93 9549.03
Non-controlling interests 1338.35 1345.25
12921.28 10894.28
Other comprehensive income for the year attributable to:
Owners of the Company 1129.49 (1032.83)
Non-controlling interests 324.88 (281.83)
1454.37 (1314.66)
Total comprehensive income for the year attributable to:
Owners of the Company 12712.42 8516.20
Non-controlling interests 1663.23 1063.42
14375.65 9579.62
Earnings per share (EPS) of R 2 each from continuing operations:
Basic earnings per equity share (R) 55 23.82 63.38
Diluted earnings per equity share (R) 55 23.80 63.29
Earnings per share (EPS) of R 2 each from discontinued operations:
Basic earnings per equity share (R) 55 58.67 4.66
Diluted earnings per equity share (R) 55 58.61 4.66
Earnings per share (EPS) of R 2 each from continuing operations &
discontinued operations:
Basic earnings per equity share (R) 55 82.49 68.04
Diluted earnings per equity share (R) 55 82.41 67.95
Face value per equity share (R) 2.00 2.00
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 64

In terms of our report attached

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants S. N. SUBRAHMANYAN
Firm’s Registration No.117366W/W-100018 Chief Executive Officer & Managing Director
by the hand of (DIN 02255382)

SANJIV V. PILGAONKAR
Partner R. SHANKAR RAMAN M. M. CHITALE
Membership No. 39826 Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939

Mumbai, May 14, 2021

443
Consolidated Statement of changes in Equity    ANNUAL REPORT 2020-21

Consolidated Statement of Changes in Equity for the year ended March 31, 2021
A. Equity share capital
2020-21 2019-20
Particulars Number of v crore Number of v crore
shares shares
Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 1,40,38,92,022 280.78 1,40,27,29,385 280.55
Add: Shares issued on exercise of employee stock options during the year 6,63,275 0.13 7,83,249 0.16
Add: Shares issued on conversion of foreign currency convertible bonds during the year – – 3,79,388 0.07
Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,45,55,297 280.91 1,40,38,92,022 280.78

B. Other equity
v crore
Reserves and surplus Items of Other comprehensive income
Equity
component Debt Equity
Foreign instruments instruments Non-
Particulars of foreign Capital Securities Employee
Capital redemption share Statutory Retained currency Hedging through through
Total other controlling Total
currency equity interests
convertible reserve reserve premium options reserves earnings translation reserve Other Other
bonds (net) reserve comprehen- comprehen-
sive income sive income
Balance as at 31-3-2019 153.20 282.44 42.00 8471.99 337.05 3851.68 48176.31 540.73 245.00 (30.37) 24.22 62094.25 6826.11 68920.36
Change in accounting policy (Ind AS 116) – – – – – – (79.09) – – – – (79.09) (24.24) (103.33)
Restated balance as at 1-4-2019 153.20 282.44 42.00 8471.99 337.05 3851.68 48097.22 540.73 245.00 (30.37) 24.22 62015.16 6801.87 68817.03
Profit for the year (a) – – – – – – 9549.03 – – – – 9549.03 1345.25 10894.28
Other comprehensive income (b) – – – – – – (150.88) 41.83 (682.12) 95.70 (337.36) (1032.83) (281.83) (1314.66)
Total comprehensive income for the
year (a+b) – – – – – – 9398.15 41.83 (682.12) 95.70 (337.36) 8516.20 1063.42 9579.62
Issue of equity shares – – – 127.61 – – – – – – – 127.61 – 127.61
Transfer to non-financial assets/liabilities – – – – – – – – 0.20 – – 0.20 – 0.20
Transfer from/(to) retained earnings during
the year (153.20) – – – (10.68) 305.87 (471.88) – – – 329.89 – – –
Employee share options (net) – – – – 75.12 – – – – – – 75.12 7.32 82.44
Dividend paid (including interim dividend) – – – – – – (3929.61) – – – – (3929.61) (486.90) (4416.51)
Additional tax on dividend paid – – – – – – (748.05) – – – – (748.05) (96.42) (844.47)
Non-controlling interest on acquisition of a
subsidiary – – – – – – – – – – – – 2023.88 2023.88
Net gain/loss on transactions with
non-controlling interests – – – – – – 360.90 – – – – 360.90 (360.90) –
Increase in non-controlling interests due to
dilution/divestment/acquisition – – – – – – 24.91 – – – – 24.91 568.56 593.47
Balance as at 31-3-2020 – 282.44 42.00 8599.60 401.49 4157.55 52731.64 582.56 (436.92) 65.33 16.75 66442.44 9520.83 75963.27

444
Consolidated Statement of Changes in Equity for the year ended March 31, 2021 (contd.)
v crore
Reserves and surplus Items of Other comprehensive income
Equity
component Debt Equity
Foreign instruments instruments Total other Non-
Particulars of Foreign Capital Securities Employee
currency Capital share Statutory Retained currency Hedging through through equity controlling Total
convertible reserve redemption
reserve premium options reserves earnings translation reserve Other Other interests
bonds (net) reserve comprehen- comprehen-
sive income sive income
Balance as at 31-3-2020 – 282.44 42.00 8599.60 401.49 4157.55 52731.64 582.56 (436.92) 65.33 16.75 66442.44 9520.83 75963.27
Profit for the year (c) – – – – – – 11582.93 – – – – 11582.93 1338.35 12921.28
Other comprehensive income (d) – – – – – – 43.32 82.89 923.89 97.07 (17.68) 1129.49 324.88 1454.37
Total comprehensive income for the
year (c+d) – – – – – – 11626.25 82.89 923.89 97.07 (17.68) 12712.42 1663.23 14375.65
Issue of equity shares – – – 68.05 – – – – – – – 68.05 – 68.05
Transfer to non-financial assets/liabilities – – – – – – – – (1.87) – – (1.87) – (1.87)
Transfer from/(to) retained earnings during
the year – – 260.00 – (8.63) (582.13) 330.06 – – – 0.70 – – –
Employee share options (net) – – – – (9.26) – – – – – – (9.26) 76.85 67.59
Dividend paid (including special dividend) – – – – – – (3650.89) – – – – (3650.89) (303.03) (3953.92)
Net gain/loss on transactions with
non-controlling interests – – – – – – 6.93 – – – – 6.93 (6.93) –
Increase in non-controlling interests due to
dilution/divestment/acquisition/right issue – – – – – – 19.80 – – – – 19.80 1100.58 1120.38
Balance as at 31-3-2021 – 282.44 302.00 8667.65 383.60 3575.42 61063.79 665.45 485.10 162.40 (0.23) 75587.62 12051.53 87639.15

In terms of our report attached

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants S. N. SUBRAHMANYAN
Firm’s Registration No.117366W/W-100018 Chief Executive Officer & Managing Director
by the hand of (DIN 02255382)

SANJIV V. PILGAONKAR
Partner R. SHANKAR RAMAN M. M. CHITALE
Membership No. 39826 Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939

Mumbai, May 14, 2021

445
Consolidated Statement of Cash Flows    ANNUAL REPORT 2020-21

Consolidated Statement of Cash Flows for the year ended March 31, 2021
2020-21 2019-20
v crore v crore
A. Cash flow from operating activities:
Profit before tax (excluding exceptional items) from:
Continuing operations 12235.80 13430.95
Discontinued operations 10790.50 883.25
Profit before tax including discontinued operations (excluding exceptional items) 23026.30 14314.20
Adjustments for:
Dividend received (28.47) (101.60)
Depreciation, amortisation, impairment and obsolescence 2904.21 2462.27
Exchange difference on items grouped under financing/investing activities (75.47) 5.69
Effect of exchange rate changes on cash and cash equivalents 74.98 (88.14)
Unrealised (gain)/loss on finance leases (14.55) –
Finance costs 3913.44 2796.66
Interest income (1377.66) (829.78)
(Profit)/loss on sale of fixed assets (net) (528.81) 33.28
(Profit)/loss on sale/fair valuation of investments (net) (1118.77) (733.84)
(Gain)/loss on disposal of discontinued operations (10707.92) –
(Gain)/loss on derivatives at fair value through profit or loss – (13.19)
Employee stock option-discount forming part of employee benefits expense 137.67 190.84
Non-cash items related to discontinued operations 3.13 49.44
Business combination expenses – 84.28
Impairment of debt instruments 151.26 350.59
Impairment recognised on non-current assets held for sale 0.23 3.93
(Gain)/loss on de-recognition of lease liability/right-of-use assets (15.78) (1.85)
Interest expenses/(income) related to discontinued operations 1.16 1.33
Operating profit before working capital changes 16344.95 18524.11
Adjustments for:
(Increase)/decrease in trade and other receivables 2783.81 (11278.12)
(Increase)/decrease in inventories 348.90 353.19
Increase/(decrease) in trade payables and customer advances 2219.78 3134.23
Cash generated from operations before financing activities 21697.44 10733.41
(Increase)/decrease in loans and advances towards financing activities 4617.71 6.92
Cash generated from operations 26315.15 10740.33
Direct taxes refund/(paid) [net] (3471.01) (4046.45)
Net cash (used in)/from operating activities 22844.14 6693.88
B. Cash flow from investing activities:
Purchase of fixed assets (1807.70) (3436.82)
Sale of fixed assets (including advance received) 885.36 137.39
Purchase of non-current investments (1873.24) (1870.64)
Sale of non-current investments 240.19 2245.29
(Purchase)/sale of current investments (net) (16841.55) 2065.74
Change in other bank balance and cash not available for immediate use 915.13 1439.82
Deposits/loans given to associates, joint ventures and third parties (151.59) (115.21)
Deposits/loans repaid by associates, joint ventures and third parties – 17.69
Interest received 1275.45 837.54
Dividend received from joint ventures/associates 175.05 12.53
Dividend received on other investments 28.47 101.60
Settlement of derivative contracts related to current investments – 13.19
Consideration received on disposal of subsidiaries (including advance received) 295.78 –
Net proceeds from transfer of discontinued operations (net of tax) 11530.82 –
Consideration received on disposal of joint venture – 43.16
Consideration paid on acquisition of subsidiaries (121.77) (9895.93)
Cash and cash equivalents acquired pursuant to acquisition of subsidiaries 7.07 210.72
Cash and cash equivalents (of subsidiaries) classified as held for sale (other than discontinued
operations)/reclassified from held for sale 13.69 (14.34)
Consideration paid on acquisition of additional stake in a joint venture – (48.00)
Net cash (used in)/from investing activities (5428.84) (8256.27)

446
Consolidated Statement of Cash Flows for the year ended March 31, 2021 (contd.)
2020-21 2019-20
v crore v crore
C. Cash flow from financing activities:
Proceeds from issue of share capital (including share application money) [net] 15.85 17.56
Proceeds from non-current borrowings [Note 50] 35737.52 42587.43
Repayment of non-current borrowings [Note 50] (38318.78) (33685.03)
Proceeds from/(repayment of) other borrowings (net) [Note 50] (6151.20) 4915.20
Payment (to)/from non-controlling interest (net) - including sale proceeds on divestment of part stake
in subsidiary companies 796.02 (60.05)
Settlement of derivative contracts related to borrowings 66.73 308.29
Dividends paid (3650.89) (3929.61)
Additional tax on dividend – (621.72)
Repayment of lease liability [Note 50] (381.64) (258.03)
Interest paid on lease liability (203.57) (162.79)
Interest paid (including cash flows on account of interest rate swaps) (3184.42) (2739.70)
Net cash (used in)/from financing activities (15274.38) 6371.55
Net (decrease)/increase in cash and cash equivalents (A + B + C) 2140.92 4809.16
Cash and cash equivalents at beginning of the year 11117.95 6460.23
Cash and cash equivalents for discontinued operations (classified as held for sale) (1.86) (151.44)
Cash and cash equivalents at end of the year 13257.01 11117.95

Notes:
1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7
“Statement of Cash Flows” prescribed in the Companies (Indian Accounting Standards) Rules, 2015.
2. Fixed assets include property, plant and equipment, investment property and intangible assets adjusted for movement of (a) capital
work-in-progress for property, plant and equipment and investment property and (b) intangible assets under development during the
year.
3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following:
2020-21 2019-20
v crore v crore
(a) Cash and cash equivalents disclosed under current assets [Note 14] 13373.52 11324.57
(b) Other bank balances disclosed under current assets [Note 15] 2867.98 3793.21
(c) Cash and bank balances disclosed under non-current assets [Note 9] 283.91 273.82
Total cash and cash equivalents as per Balance Sheet 16525.41 15391.60
Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents (reflected in Statement
of Profit and Loss) (41.41) (116.39)
Add: (ii) Unrealised exchange (gain)/loss on cash and cash equivalents (reflected in Other
comprehensive income) (75.10) (90.23)
Less: (iii) Other bank balances disclosed under current assets [Note 15] 2867.98 3793.21
Less: (iv) Cash and bank balances disclosed under non-current assets [Note 9] 283.91 273.82
Total cash and cash equivalents as per Statement of Cash Flows 13257.01 11117.95

4. Previous year’s figures have been regrouped/reclassified wherever applicable.

In terms of our report attached

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants S. N. SUBRAHMANYAN
Firm’s Registration No.117366W/W-100018 Chief Executive Officer & Managing Director
by the hand of (DIN 02255382)

SANJIV V. PILGAONKAR
Partner R. SHANKAR RAMAN M. M. CHITALE
Membership No. 39826 Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939

Mumbai, May 14, 2021

447
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements

NOTE [1](i)
Corporate Information
The Consolidated Financial Statements comprise financial statements of “Larsen & Toubro Limited” (“L&T”, the “Parent Company”) and
its subsidiaries (collectively referred to as “the Group”) for the year ended March 31, 2021.

The principal activities of the Group, its Joint Ventures and associates consist of providing Engineering and Construction solutions in
key sectors such as Infrastructure, Hydrocarbon, Power, Process Industries and Defence, Information Technology and Financial Services.
Further details of the business operations of the Group are mentioned in Note [46] Segment Information.

NOTE [1](II)
Significant Accounting Policies
(a) Statement of compliance
The Group’s financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the
Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments
thereto issued by the Ministry of Corporate Affairs under section 133 of the Companies Act, 2013. In addition, the guidance notes/
announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with
other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board
of Directors at its meeting held on May 14, 2021.

(b) Basis of accounting

The Group maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities that
are measured at fair value in accordance with Ind AS.
Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety:
(i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at
measurement date;
(ii) Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either
directly or indirectly; and
(iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities.

Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value
hierarchy unless the circumstances change warranting such transfer.

(c) Presentation of financial statements

The Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity are prepared and presented in the
format prescribed in the Schedule III to the Companies Act, 2013 (“the Act”). The Statement of Cash Flows has been prepared and
presented in accordance with Ind AS 7 “Statement of Cash Flows”. The disclosures with respect to items in the Balance Sheet and
Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial
statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 as amended.

Amounts in the financial statements are presented in Indian Rupee in crore [1 crore = 10 million] rounded off to two decimal places
as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupee to two decimal places.

(d) Basis of consolidation

(i) The consolidated financial statements incorporate the financial statements of the Parent Company and its subsidiaries. For
this purpose, an entity which is, directly or indirectly, controlled by the Parent Company is treated as subsidiary. The Parent
Company together with its subsidiaries constitute the Group. Control exists when the Parent Company, directly or indirectly,
has power over the investee, is exposed to variable returns from its involvement with the investee and has the ability to use its
power to affect its returns.

(ii) Consolidation of a subsidiary begins when the Parent Company, directly or indirectly, obtains control over the subsidiary and
ceases when the Parent Company, directly or indirectly, loses control of the subsidiary. Income and expenses of a subsidiary
acquired are included in the consolidated Statement of Profit and Loss from the date the Parent Company, directly or indirectly,
gains control until the date when the Parent Company, directly or indirectly, ceases to control the subsidiary.

448
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(iii) The consolidated financial statements of the Group combine financial statements of the Parent Company and its subsidiaries
line-by-line by adding together the like items of assets, liabilities, income and expenses. All intra-group assets, liabilities,
income, expenses and unrealised profits/losses on intra-group transactions are eliminated on consolidation. The accounting
policies of subsidiaries are harmonised to ensure the consistency with the policies adopted by the Parent Company. The
consolidated financial statements are presented to the extent possible, in the same manner as Parent Company’s standalone
financial statements.

Profit or loss and other comprehensive income are attributed to the owners of the Parent Company and to the non-controlling
interests, shown separately in the financial statements.

(iv) Non-controlling interests represent that part of the total comprehensive income and net assets of subsidiaries attributable to
the interest which is not owned, directly or indirectly, by the Parent Company.

(v) The gains/losses in respect of part divestment/dilution of stake in subsidiary companies not resulting in ceding of control, are
recognised directly in other equity attributable to the owners of the Parent Company.

(vi) The gains/losses in respect of divestment of stake resulting in ceding of control in subsidiary companies are recognised in
the Statement of Profit and Loss. The investment representing the interest retained in a former subsidiary, if any, is initially
recognised at its fair value with the corresponding effect recognised in the Statement of Profit and Loss as on the date the
control is ceded. Such retained interest is subsequently accounted as investment in an associate or a joint venture or as a
financial asset.

(e) Investments in joint ventures and associates

When the Group has with other entities joint control of the arrangement and rights to the net assets of the joint arrangement,
it recognises its interest as joint ventures. Joint control exists when the decisions about the relevant activities (i.e. activities that
significantly affects the investee’s returns) require unanimous consent of the parties sharing the control. When the Group has
significant influence over the other entity, it recognises such interest as investment in associates. Significant influence is the power
to participate in the financial and operating policy decisions of the entity but is not control or joint control over the entity.

The results, assets and liabilities of joint ventures and associates are incorporated in the consolidated financial statements using
equity method of accounting after making necessary adjustments to achieve uniformity in application of accounting policies,
wherever required.

An investment in joint venture or associate is initially recognised at cost and adjusted thereafter to recognise the Group’s share of
profit or loss and other comprehensive income of the joint venture or associate. Gain or loss in respect of changes in Other Equity
of joint ventures or associates resulting in divestment or dilution of stake in the joint ventures and associates is recognised in the
Statement of Profit and Loss. On acquisition of investment in a joint venture or associate, any excess of cost of investment over the
fair value of the assets and liabilities of the joint venture and associate, is recognised as goodwill and is included in the carrying
value of the investment in the joint venture and associate. The excess of fair value of assets and liabilities over the investment is
recognised directly in equity as capital reserve.

The unrealised profits/losses on transactions with joint ventures and associates are eliminated by reducing the carrying amount of
investment.

The carrying amount of investment in joint ventures and associates is reduced to recognise impairment, if any, when there is
evidence of impairment.

When the Group’s share of losses of a joint venture or an associate exceeds the Group’s interest in that joint venture or the associate
(which includes any long term interests that, in substance, form part of the Group’s net investment in the joint venture or the
associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the
Group has incurred legal or constructive obligations or made payments on behalf of the joint venture or the associate.

(f) Interests in joint operations

When the Group has joint control of the arrangement based on contractually determined right to the assets and obligations
for liabilities, it recognises such interests as joint operations. Joint control exists when the decisions about the relevant activities
(i.e. activities that significantly affects the investee’s returns) require unanimous consent of the parties sharing the control. In
respect of its interests in joint operations, the Group recognises its share in assets, liabilities, income and expenses line-by-line in
the standalone financial statements of the entity which is party to such joint arrangement, thereby forms part of the consolidated
financial statements. Interests in joint operations are included in the segments to which they relate.

449
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
(g) Business combination/Goodwill on consolidation
The Group accounts for business combinations under acquisition method of accounting. Acquisition-related costs are recognised
in the Statement of Profit and Loss as incurred. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the
condition for recognition are recognised at their fair values at the acquisition date.

Goodwill arising on consolidation of acquisitions represents the excess of (a) consideration paid for acquiring control and (b)
acquisition date fair value of previously held ownership interest, if any, in a subsidiary over the Group’s share in the fair value of the
net assets (including identifiable intangibles) of the subsidiary as on the date of acquisition of control. Where the fair value of the
identifiable assets and liabilities exceed the cost of acquisition, the excess is recognised as Capital Reserve.

Goodwill on consolidation is allocated to cash generating units or group of cash generating units that are expected to benefit from
the acquisition.

Goodwill arising on consolidation is tested for impairment annually and not amortised. In the event of cessation of operations of a
subsidiary, the unimpaired goodwill is written off fully.

Business combinations arising from transfers of interests in entities that are under common control are accounted using pooling of
interest method. The difference between consideration given and the aggregate historical carrying amounts of assets and liabilities
of the acquired entity are recorded in shareholders’ equity.

(h) Operating cycle for current and non-current classification

Operating cycle for the business activities of the Group covers the duration of the specific project or contract or product line or
service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention
monies) within the agreed credit period normally applicable to the respective lines of business.

(i) Revenue recognition

Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or
services to a customer.

For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete
satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to date, to the
total estimated cost attributable to the performance obligation.

The Group transfers control of a good or service over time and therefore satisfies a performance obligation and recognises revenue
over a period of time if one of the following criteria is met:

(a) the customer simultaneously consumes the benefit of company’s performance or

(b) the customer controls the asset as it is being created/enhanced by the company’s performance or

(c) there is no alternative use of the asset and the company has either explicit or implicit right of payment considering legal
precedents.

In all other cases, performance obligations is considered as satisfied at a point in time.

The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price
is the amount of consideration to which the Group expects it to be entitled in exchange for transferring goods or services to a
customer excluding amounts collected on behalf of a third party. The Group includes variable consideration as part of transaction
price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a
significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration
is resolved.

Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance.
Payment terms agreed with a customer are as per business practice and the financing component, if significant, is separated from
the transaction price and accounted as interest income.

Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged off in profit & loss
immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to
fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a
proportion of actual cost incurred to date, to the total estimated cost attributable to the performance obligation.

450
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
Significant judgments are used in:

a. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time. Revenue
recognition is done by measuring the progress towards complete satisfaction of performance obligation.

b. Determining the expected losses, which are recognised in the period in which such losses become probable based on the
expected total contract cost as at the reporting date.

c. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price.

Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims,
which are not ascertainable/acknowledged by customers are not taken into account.

A. Revenue from sale of manufactured and traded goods including contracts for supply/commissioning of complex plant and
equipment is recognised as follows:

Revenue is recognised when the control of the same is transferred to the customer and it is probable that the Group will
collect the consideration to which it is entitled for the exchanged goods. Revenue from commissioning of complex plant and
equipment is recognised either ‘over time’ or ‘in time’ based on assessment of the transfer of control as per the terms of the
contract.

B. Revenue from construction/project related activity is recognised as follows:

• Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the
extent performance obligations have been satisfied. The amount of transaction price allocated to the performance
obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the
customer.

• Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and
control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents
the cost of work performed on the contract plus proportionate margin, using the percentage of completion method.
Percentage of completion is the proportion of cost of work performed to date, to the total estimated contract costs.

For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the
case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as “Due from customers”. For
contracts where progress billing exceeds the aggregate of contract costs incurred to date plus recognised profits (or minus
recognised losses, as the case may be), the surplus is shown as contract liability and termed as “Due to customers”. Amounts
received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as “Advances
from customer”. The amounts billed on customer for work performed and are unconditionally due for payment i.e. only
passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of
retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and
is reclassified as trade receivables when it becomes due for payment.

Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in profit or loss to the
extent the carrying amount of the contract asset exceeds the remaining amount of consideration that the company expects
to receive towards remaining performance obligations (after deducting the costs that relate directly to fulfill such remaining
performance obligations). The Group recognises impairment loss (termed as provision for expected credit loss on contract
assets in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss model on
similar basis as applicable to trade receivables.

C. Revenue from construction/project contracts executed under joint operations [in terms of Ind AS 111 “Joint Arrangements”], is
recognised on the same basis as adopted in respect of contracts independently executed by the Group.

D. Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains control
of the property transferred and a reasonable expectation of collection of the sale consideration from the customer exists.

E. In the case of the developmental project business and the realty business, revenue includes profit on sale of investment
properties or sale of stake in the subsidiary and/or joint venture companies as the sale/divestments are inherent in the business
model.

451
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
F. Rendering of services
Revenue from rendering of services is recognised over time as the customer receives the benefit of the company’s performance
and the company has an enforceable right to payment for services transferred.

Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.

In respect of information technology (IT) business and technology services business, revenue from contracts awarded on time
and material basis is recognised over a period of time when relevant services are rendered and related costs are incurred.
Revenue from fixed price contracts is recognised over a period of time using the proportionate completion method.

Revenue from contracts for rendering of engineering design services and other services which are directly related to the
construction of an asset is recognised on the same basis as stated in (i) B supra.

G. In respect of financial services business and finance lease activity, income from interest-bearing loans/leases is recognised
on accrual basis over the life of the loans/leases based on the effective yield. Income from bill discounting, advisory and
syndication services and other financing activities is accounted on accrual basis.

H. Revenue on account of construction services rendered in connection with Build-Operate-Transfer (BOT) projects undertaken by
the Group is recognised during the period of construction using percentage of completion method. After the completion of
construction period, revenue from fare/toll charges from users of facilities is accounted when they are collected.

I. Commission income is recognised when the terms of the contract are fulfilled.

J. Income from investment management fees is recognised in accordance with the contractual terms and the SEBI regulations
based on average Assets Under Management (AUM) of mutual fund schemes over the period of the agreement in terms of
which services are performed. Portfolio management fees are recognised in accordance with the related contracts entered into
with the clients over the period of the agreement. Trusteeship fees are accounted on accrual basis.

K. Revenue from charter hire is recognised as per the terms of the time charter agreement.

L. Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement is
recognised on accrual basis.

M. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the
performance obligation is satisfied and the right to receive the income is established as per the terms of the contract.

(j) Other income

A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the
effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other
comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on
accrual basis provided there is no uncertainty of realisation.
B. Dividend income is accounted in the period in which the right to receive the same is established.

C. Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the
Group, are recognised as other income/reduced from underlying expenses in the Statement of Profit and Loss in the period in
which such costs are incurred. Government grant receivable in the form duty credit scrips is recognised as other income in the
Statement of Profit and Loss in the period in which the application is made to the government authorities and to the extent
there is no uncertainty towards its receipt.
D. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic
benefits will flow to the Group and the amount of income can be measured reliably.

(k) Exceptional items

An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the
performance of the Group is treated as an exceptional item and the same is disclosed in Statement of Profit and Loss and in the
notes forming part of the financial statements.

452
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(l) Property, Plant and Equipment (PPE)
PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation
and cumulative impairment, if any.

All directly attributable costs related to the acquisition of PPE and borrowing costs in case of qualifying assets are capitalised in
accordance with the Group’s accounting policy.

Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general
overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition
are allocated and capitalised as a part of the cost of the PPE.

Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.

PPE not ready for the intended use on the date of the Balance Sheet are disclosed as “capital work-in-progress”. (Also refer to the
policies on leases, borrowing costs, impairment of assets and foreign currency transactions infra).

Depreciation is recognised using straight-line method so as to write off the cost of the assets (other than freehold land and capital
work-in-progress) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in case
of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is
reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the
asset. The estimated useful life and residual values are also reviewed at each financial year end with the effect of any change in the
estimates of useful life/residual value is accounted on prospective basis.

Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset
is allocated over its remaining useful life.

Where cost of a part of the asset (“asset component”) is significant to total cost of the asset and useful life of that part is different
from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is
depreciated over its separate useful life.

Depreciation on additions to/deductions from, owned assets is calculated pro rata from the date it is ready for use.

PPE is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss
arising on derecognition is recognised in the Statement of Profit and Loss in the same period.

(m) Investment property

Properties (including those under construction) held to earn rentals and/or capital appreciation are classified as investment
property and are measured and reported at cost, including transaction costs and borrowing cost capitalised for qualifying assets, in
accordance with the Group’s accounting policy. Policies with respect to depreciation, useful life and derecognition are on the same
basis as stated in PPE supra.

(n) Intangible assets

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to
the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits
availed, if any, including borrowing costs capitalised for qualifying assets and reduced by accumulated amortisation and cumulative
impairment. All directly attributable costs and other administrative and other general overhead expenses that are specifically
attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets.

Research and development expenditure on new products:

(i) Expenditure on research is expensed under respective heads of account in the period in which it is incurred

(ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:
A. the technical feasibility of completing the intangible asset so that it will be available for use or sale;

453
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Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
B. the Group has intention to complete the intangible asset and use or sell it;
C. the Group has ability to use or sell the intangible asset;
D. the manner in which the probable future economic benefits will be generated including the existence of a market for
output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets;
E. the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
F. the Group has ability to reliably measure the expenditure attributable to the intangible asset during its development.
Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred.

Fare collection rights obtained in consideration for rendering construction services represent the right to collect fare during
the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the Group. Fare collection rights are
capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “intangible assets under
development”.
Intangible assets are amortised on straight-line basis over the estimated useful life. The method of amortisation and useful
life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a
prospective basis. The estimated useful life for major categories of the intangible assets are as follows:
(i) Specialised software: over a period of three to ten years;

(ii) Technical know-how: over a period of three to seven years;

(iii) New product design and development: over a period of five years;

(iv) Customer contracts and relationship: over a period of the contract which generally is over three to ten years;

(v) Trade names: over a period of three months to five years;

(vi) Rights under licensing agreement: over a period of six years;

(vii) Intangible assets with indefinite useful life that are acquired separately are carried at cost less accumulated impairment
losses;
(viii) Fare collection rights are amortised using the straight-line method over the period of concession; and

(ix) Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to
allocate the asset’s revised carrying amount over its remaining useful life.

(o) Impairment of assets

As at the end of each accounting year, the carrying amounts of PPE, investment property and intangible assets are reviewed to
determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the PPE,
investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and
the intangible assets with indefinite useful life are tested for impairment each year.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is
determined:

(i) in the case of an individual asset, at the higher of the fair value less costs to sell and the value in use; and

(ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the
higher of the cash generating unit’s fair value less costs to sell and the value in use.

(The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset,
which may vary based on the future performance of the entity and from its disposal at the end of its useful life. For this purpose,
the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks
specified to the estimated cash flows of the asset).

454
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is
recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash
generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash
generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to
reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated
goodwill, is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in
prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the
Statement of Profit and Loss.

(p) Employee benefits

(i) Short term employee benefits:
Employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia, and performance-linked
rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are
expensed in the period in which the employee renders the service.

(ii) Post-employment benefits:

A. Defined contribution plans: The Group’s superannuation scheme, state governed provident fund scheme, employee
state insurance scheme, social security contributions and employee pension scheme are defined contribution plans. The
contribution paid/payable under the schemes is recognised during the period in which the employee renders the service.

B. Defined benefit plans: The employees’ gratuity fund schemes and employee provident fund schemes managed by board
of trustees established by the company, the post-retirement medical care plan and the Parent Company pension plan
represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on
actuarial valuation using the Projected Unit Credit Method.

The obligation towards Defined benefit plans is measured at the present value of the estimated future cash flows using a
discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average
maturity profile of the defined benefit obligations at the Balance Sheet date.

Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest
on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other
comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss.

Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised
in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is
recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan
are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or
curtailment and when the Group recognises related restructuring costs or termination benefits.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans
to recognise the obligation on a net basis.

(iii) Long term employee benefits:

The obligation recognised in respect of long term benefits such as compensated absences, long service award etc. is measured
at present value of estimated future cash flows expected to be made by the Group and is recognised in a similar manner as in
the case of defined benefit plans vide (ii) B supra.

Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements,
re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit
expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under
finance cost.

455
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
(iv) Termination benefits:
Termination benefits such as compensation under employee separation schemes are recognised as expense when the
company’s offer of the termination benefit can no longer be withdrawn or when the Group recognises the related restructuring
costs whichever is earlier.

(q) Leases
Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is recognised at the lease
commencement date.

Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the underlying asset or the site on which it is located, as reduced by any lease
incentives received.

The lease liability is initially measured at the present value of the lease payments, discounted using the Group’s incremental
borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or
a change in the estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and
accumulated impairment losses. The right-of-use asset is depreciated using the straight-line method from the commencement date
to the end of the lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased
by interest on lease liability and reduced by lease payments made.

Lease payments associated with following leases are recognised as expense on straight-line basis:

(i) Low value leases; and

(ii) Leases which are short term.

Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset. Asset held under finance lease is initially
recognised in balance sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income
is recognised over the lease term, based on a pattern reflecting a constant periodic rate of return on Groups’ net investment in the
lease. A lease which is not classified as a finance lease is an operating lease.

The Group recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The Group
presents underlying assets subject to operating lease in its balance sheet under the respective class of asset.

(Also refer to policy on depreciation, supra)

(r) Financial instruments

Financial assets and/or financial liabilities are recognised when the Group becomes party to a contract embodying the related
financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction
values and where such values are different from fair value, at fair value. Transaction costs that are attributable to the acquisition
or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or
loss) are added to or deducted from, as the case may be, the fair value of such financial assets or liabilities on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss
are recognised in profit or loss.

A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally
enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle
the liability simultaneously.

(i) Financial assets

A. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, as follows:

1. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value

456
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
2. Other investments in debt instruments – at amortised cost (unless the same are designated as fair value through
profit or loss), subject to following conditions:

• The asset is held within a business model whose objective is to hold assets in order to collect contractual cash
flows; and

• The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

3. Debt instruments that meet the following conditions are subsequently measured at fair value through other
comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss)

• The asset is held within a business model whose objective is achieved both by collecting contractual cash flows
and selling financial assets; and

• The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

4. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit
or loss.

5. Investments in equity instruments are classified as FVTPL, unless the related instruments are not held for trading
and the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other
comprehensive income.

6. Trade receivables, security deposits, cash and cash equivalents, employee and other advances – at amortised cost.

7. The Group has elected to measure the investments in associates and joint ventures held through unit trusts at FVTPL.

B. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment
and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other
than on account of above income or expense) are recognised in other comprehensive income and accumulated in
other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other
equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not
reclassified to profit or loss on disposal of investments.

C. A financial asset is primarily derecognised when:

1. the right to receive cash flows from the asset has expired, or

2. the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a pass-through arrangement; and a) the
group has transferred substantially all the risks and rewards of the asset, or b) the group has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount at the date of
derecognition and the consideration received is recognised in profit or loss.

D. Impairment of financial assets: The Group recognises impairment loss on trade receivables using expected credit loss
model which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted
under Ind AS 109.

For all other financial assets, expected credit losses are measured at an amount equal to 12-month expected credit losses
or at an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased significantly
since initial recognition.

In respect of financial services business, the Group applies a separate model of the expected credit loss for recognising
impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade
receivables and other contractual rights to receive cash or other financial asset and financial guarantees not designated as
at FVTPL as follows:
• Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the
weights. Credit loss is the difference between all contractual cash flows that are due to the Group in accordance

457
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
with the contract and all the cash flows that the Group expects to receive (i.e. all cash shortfalls), discounted at the
original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired
financial assets). The Group estimates cash flows by considering all contractual terms of the financial instrument (eg.
prepayment, extension, call and similar options) through the expected life of that financial instrument.

• The loss allowance for a financial instrument is measured at an amount equal to the lifetime expected credit losses
if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on
a financial instrument has not increased significantly since initial recognition, the loss allowance for that financial
instrument is measured at an amount equal to 12-month expected credit losses. 12-month expected credit losses
are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if default
occurs within the 12 months weighted by the probability of default after the reporting date and thus, are not cash
shortfalls that are predicted over the next 12 months.

• When making the assessment of whether there has been a significant increase in credit risk since initial recognition,
the change in the risk of a default occurring over the expected life of the financial instrument is used instead of
the change in the amount of expected credit losses. To make that assessment, the risk of a default occurring on
the financial instrument as at the reporting date is compared with the risk of a default occurring on the financial
instrument as at the date of initial recognition using reasonable and supportable information, that is available
without undue cost or effort.
(ii) Financial liabilities

A. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL
are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of
impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All
other financial liabilities including loans and borrowings, trade and other payables are initially recognised at fair value and
subsequently measured at amortised cost using Effective Interest Rate (EIR) method.
B. A financial liability is derecognised when the related obligation expires or is discharged or cancelled.

(iii) The Group designates certain hedging instruments such as derivatives, embedded derivatives and in respect of foreign currency
risk, certain non-derivatives as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations.
Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges.
A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are
recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold,
terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying
amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date.
B. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in
equity as ‘hedging reserve’. The gain or loss relating to the ineffective portion is recognised immediately in profit or
loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective
portion are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as
the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the
hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the
inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion.
In case of time period related hedges, the premium element and the spot element of a forward contract is separated and
only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly,
wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the
designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the
fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is
accumulated in a separate component of equity as ‘cost of hedging reserve’. The changes in the fair value of such premium
element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight-line basis
over the period of the forward contract or the financial instrument.

458
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Where the hedged forecast
transaction results in the recognition of a non-financial asset, such gains/losses are transferred from hedge reserve (but not as
reclassification adjustment) and included in the initial measurement cost of the non-financial asset.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no
longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity
at that time remains in equity and is recognised in profit or loss when the forecast transaction is ultimately recognised in profit
or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised in
profit or loss.

(iv) Compound financial instruments issued by the Group which can be converted into fixed number of equity shares at the
option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the
liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability
that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair
value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable
transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised
cost using the effective interest method. The equity component of a compound financial instrument is not remeasured
subsequently.

(s) Inventories
Inventories are valued after providing for obsolescence, as under:

(i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net
realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used,
are expected to be sold at or above cost.
(ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some
cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of
qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs.
(iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable
value. Cost includes costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present
location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost.
(iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically
identifiable cost or net realisable value.
Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused
inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value
because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original
amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value.

(t) Cash and bank balances

Cash and bank balances include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances
which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in
value, are not included as part of cash and bank balances.

(u) Securities premium

(i) Securities premium includes:

A. The difference between the face value of the equity shares and the consideration received in respect of shares issued.

B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock
Options Scheme.
(ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium.

459
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
(v) Borrowing Costs
Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired
on lease and exchange differences arising on foreign currency borrowings, to the extent they are regarded as an adjustment to
finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and
are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortisation of premium element
of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument.

Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the
acquisition, construction or production of a qualifying asset are capitalised/inventoried as part of cost of such asset till such time the
asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get
ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(w) Share-based payment arrangements

The stock options granted to employees in terms of the Group’s Stock Options Schemes, are measured at the fair value of the
options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over
the vesting period on a straight-line basis. The amount recognised as expense in each year is arrived at based on the number of
grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such
grant is transferred to the general reserve within equity. The share-based payment equivalent to the fair value as on the date of
grant of employee stock options granted to key managerial personnel is disclosed as a related party transaction in the year of grant.

(x) Foreign currencies

(i) The functional currency and presentation currency of the Group is Indian Rupee. Functional currency of the Group and foreign
operations has been determined based on the primary economic environment in which the Group and its foreign operations
operate considering the currency in which funds are generated, spent and retained.

(ii) Transactions in currencies other than the Group’s functional currency are recorded on initial recognition using the exchange
rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate.
Non-monetary items that are measured in terms of historical cost in foreign currency are not translated. Exchange differences
that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot
rate are recognised in the Statement of Profit and Loss in the period in which they arise except for:

A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, are
included in the cost of those assets when such exchange differences are regarded as an adjustment to finance costs on
those foreign currency borrowings;

B. exchange differences on transactions entered into to hedge certain foreign currency risks; and
C. exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither
planned nor likely to occur or included in the net investment in foreign operation, and are recognised initially in other
comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

(iii) Exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of
advance consideration is used for initial recognition of related asset, expense or income.

(iv) Financial statements of foreign operations whose functional currency is different than Indian Rupee are translated into Indian
Rupees as follows:

A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet;

B. income and expenses for each income statement are translated at average exchange rate for the reporting period; and

C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign
currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. The
portion of foreign currency translation reserve attributed to non-controlling interests is reflected as part of non-controlling
interests.

460
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(y) Accounting and reporting of information for Operating Segments
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating
decision making body in the Group to make decisions for performance assessment and resource allocation. The reporting of
segment information is the same as provided to the management for the purpose of the performance assessment and resource
allocation to the segments.

Segment accounting policies are in line with the accounting policies of the Group. In addition, the following specific accounting
policies have been followed for segment reporting:
(i) Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including (a)
inter-segment revenue and (b) profit on sale of stake in the subsidiary and/or joint venture companies under developmental
projects segment and realty business grouped under “Others” segment.
(ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. In respect
of (a) financial services segment and (b) power generation projects under developmental projects segment which are classified
as assets given on finance lease, the finance costs on borrowings are accounted as segment expenses.
(iii) Most of the common costs are allocated to segments mainly on the basis of their respective expected segment revenue
estimated at the beginning of the reported period.
(iv) Income which relates to the Group as a whole and not allocable to segments is included in “unallocable corporate income/
(expenditure) [net]”.
(v) Segment result represents profit before interest and tax and includes margins on inter-segment capital jobs, which are reduced
in arriving at the profit before tax of the Group. It also includes the finance costs incurred on interest bearing advances with
corresponding credit included in “unallocable corporate income/(expenditure) [net]”. Segment results are not adjusted for any
exceptional item.
(vi) Segment assets and liabilities include those directly identifiable with the respective segments. In respect of (a) financial services
segment, and (b) power generation projects under developmental projects segment which are classified as assets given on
finance lease, segment liabilities include borrowings as the finance costs on borrowings are accounted as segment expenses
in respect of the segment and projects. Investment in joint ventures and associates identified with a particular segment are
reported as part of the segment assets of those respective segments.
Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Group as a whole.
(vii) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is
accounted as employee compensation cost [Note 1(w) supra] and is allocated to the segment.
(viii) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which
are either determined to yield a desired margin or agreed on a negotiated basis.

(z) Taxes on income

Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever
minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the applicable tax laws, and
using estimates and judgments based on the expected outcome of assessments/appeals and the relevant rulings in the areas of
allowances and disallowances.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Group’s financial
statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws
enacted or substantively enacted as on the Balance Sheet date.

Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated
with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head “capital gains”/ other temporary
differences are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing
other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. The
carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

461
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [1](ii)
Significant Accounting Policies (contd.)
Deferred tax assets in respect of unutilised tax credits which mainly relate to minimum alternate tax are recognised, to the extent it
is probable that such unutilised tax credits will get realised, in the period in which such determination is made.

Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity or in case of
business combination, is recorded along with the tax as applicable.

(aa) Provisions, contingent liabilities and contingent assets

Provisions are recognised only when:

(i) the Group has a present obligation (legal or constructive) as a result of a past event; and

(ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(iii) a reliable estimate can be made of the amount of the obligation.

Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money
is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of
expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of:

(i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the
obligation; and

(ii) a present obligation arising from past events, when no reliable estimate is possible.

Contingent assets are disclosed where an inflow of economic benefits is probable.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received
under such contract, the present obligation under the contract is recognised and measured as a provision.

(ab) Commitments
Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:

a) estimated amount of contracts remaining to be executed on capital account and not provided for;

b) uncalled liability on shares and other investments partly paid;

c) funding related commitment to associate and joint venture companies; and

d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of
management.

Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive
details.

(ac) Discontinued Operations and non-current assets held for sale

Discontinued operation is a component of the Group that has been disposed of or classified as held for sale and represents a major
line of business.

Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally
through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present
condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly
probable and is expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less
costs to sell.

462
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(ad) Statement of Cash Flows
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from
operating activities is reported using indirect method adjusting the profit before tax (excluding exceptional items) for the effects of:

i. changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;

ii. non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses, and undistributed profits of
associates and joint ventures; and

iii. all other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available
for general use as at the date of Balance Sheet.

(ae) Key sources of estimation

The preparation of financial statements in conformity with Ind AS requires that the management of the Group makes estimates
and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and
liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying
assumptions made by the management are explained under respective policies. Revisions to accounting estimates include useful
lives of property, plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of
retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value/recoverable amount
measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are
known.

NOTE [1](III)
Based on assessment of the impact of COVID-19 pandemic on the business/economic conditions, the Group expects to recover the
carrying value of its assets. The Group will continue to evaluate the pandemic-related uncertainty arising from the on-going second wave
and update its assessment.

463
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [2]
Property, plant and equipment and Capital work-in-progress
v crore
Cost Depreciation Impairment Book value
Class of assets Transfer to Foreign Classified Transfer to Foreign Classified
As at Business As at Up to Business For the Up to Up to Up to As at As at
right-of- currency as held for right-of- currency as held for
1-4-2020 combination Additions Deductions 31-3-2021 31-3-2020 combination year Deductions 31-3-2021 31-3-2020 31-3-2021 31-3-2021 31-3-2020
use assets fluctuation sale use assets fluctuation sale
Land
Freehold 1044.92 – – 5.38 0.70 – 18.06 1032.94 – – – – – – – – – 1032.94 1044.92
Leasehold 140.69 – – – – – 0.34 140.35 11.32 – – 1.71 – – 0.02 13.01 – – 127.34 129.37
Sub-total 1185.61 – – 5.38 0.70 – 18.40 1173.29 11.32 – – 1.71 – – 0.02 13.01 – – 1160.28 1174.29
Buildings 3943.04 – – 681.21 (10.59) – 187.46 4426.20 837.38 – – 135.71 (4.30) – 96.45 872.34 207.79 230.28 3323.58 2897.87
Plant &
equipment
Owned 7480.17 – – 2468.24 (18.12) – 194.09 9736.20 3787.95 – – 737.44 (13.33) – 128.72 4383.34 29.93 743.41 4609.45 3662.29
Leased out 300.93 – – – – – 3.90 297.03 174.46 – – 16.42 – – 1.79 189.09 – – 107.94 126.47
Sub-total 7781.10 – – 2468.24 (18.12) – 197.99 10033.23 3962.41 – – 753.86 (13.33) – 130.51 4572.43 29.93 743.41 4717.39 3788.76
Computers
Owned 1424.97 – – 249.55 3.61 – 64.29 1613.84 933.71 – – 240.82 2.38 – 59.61 1117.30 – – 496.54 491.26
Leased out 6.28 – – – – – – 6.28 6.26 – – – – – – 6.26 – – 0.02 0.02
Sub-total 1431.25 – – 249.55 3.61 – 64.29 1620.12 939.97 – – 240.82 2.38 – 59.61 1123.56 – – 496.56 491.28
Office equipment
Owned 542.88 – – 75.61 (1.20) – 25.65 591.64 380.71 – – 67.23 (1.14) – 24.38 422.42 0.01 0.01 169.21 162.16
Leased out 0.02 – – – – – – 0.02 – – – – – – – – – – 0.02 0.02
Sub-total 542.90 – – 75.61 (1.20) – 25.65 591.66 380.71 – – 67.23 (1.14) – 24.38 422.42 0.01 0.01 169.23 162.18
Furniture and
fixtures
Owned 460.78 – – 51.69 (1.78) – 38.65 472.04 273.63 – – 50.35 (1.69) – 32.74 289.55 0.24 0.24 182.25 186.91
Leased out 7.89 – – – – – – 7.89 6.34 – – 0.38 (0.01) – – 6.71 – – 1.18 1.55
Sub-total 468.67 – – 51.69 (1.78) – 38.65 479.93 279.97 – – 50.73 (1.70) – 32.74 296.26 0.24 0.24 183.43 188.46
Vehicles
Owned 431.57 – – 23.27 (3.24) – 40.43 411.17 234.34 – – 47.01 (2.85) – 28.43 250.07 – – 161.10 197.23
Leased out 4.33 – – – – – 2.65 1.68 2.08 – – 0.42 (0.01) – 1.49 1.00 – – 0.68 2.25
Sub-total 435.90 – – 23.27 (3.24) – 43.08 412.85 236.42 – – 47.43 (2.86) – 29.92 251.07 – – 161.78 199.48
Other assets
Aircraft 244.45 – – – – – – 244.45 43.94 – – 13.89 – – – 57.83 – – 186.62 200.51
Ships 185.79 – – 78.40 – – 0.18 264.01 34.72 – – 15.81 – – 0.18 50.35 – – 213.66 151.07
Shiplift, marine
structures and
related assets 696.25 – – 0.02 – – 13.20 683.07 204.21 – – 32.64 – – (0.39) 237.24 – – 445.83 492.04
Breakwater
structures 232.70 – – – – – (0.73) 233.43 34.20 – – 4.26 – – (0.91) 39.37 – – 194.06 198.50
Leasehold
Improvements 368.70 – – 55.76 (0.37) – 3.23 420.86 209.35 – – 80.61 (0.15) – 2.82 286.99 – – 133.87 159.35
Sub-total 1727.89 – – 134.18 (0.37) – 15.88 1845.82 526.42 – – 147.21 (0.15) – 1.70 671.78 – – 1174.04 1201.47
Total 17516.36 – – 3689.13 (30.99) – 591.40 20583.10 7174.60 – – 1444.70 (21.10) – 375.33 8222.87 237.97 973.94 11386.29 10103.79
Previous year 16838.25 (297.45) 1385.59 1511.97 129.50 1282.75 768.75 17516.36 5723.95 (15.27) 829.90 1459.80 78.18 502.98 398.98 7174.60 – 237.97
Add: Capital work-in-progress 388.37 3224.91
11774.66 13328.70

Notes:
(a) Carrying value of property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2021 is
R 1611.29 crore (previous year: R 1872.22 crore).
(b) Depreciation for the year includes R 7.45 crore (previous year: R 5.23 crore) on account of obsolescence.
(c) Net increase in impairment as on March 31, 2021 in -
(i) Property, plant and equipment is R 735.97 crore (previous year: R 13.23 crore) which includes further impairment R 742.43
crore (previous year: R 2.08 crore), foreign currency fluctuation (R 4.38) crore (previous year: R 11.15 crore) and transfer to
inventories (R 2.08) crore (previous year: Nil);
(ii) Capital work-in-progress R 492.69 crore (previous year: Nil).

464
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [2] (contd.)
Segment wise details of impairment: R crore
Nature of assets Reportable segment 2020-21 2019-20
Property, plant and equipment Developmental Projects 742.33 –
Corporate 0.10 2.08
Total 742.43 2.08
Capital work-in-progress Developmental Projects 492.69 –
(d) Owned assets given on operating lease have been presented separately under respective class of assets as “Leased out” pursuant to
Ind AS 116 “Leases”.
(e) Range of useful life of property, plant and equipment is as below:
Sr. Minimum useful life Maximum useful life
Class of assets
No. (in years) (in years)
1 Leasehold land 15 99
2 Buildings 3 60
3 Plant & equipment 3 40
4 Computers 2 7
5 Office equipment 3 30
6 Furniture and fixtures 3 10
7 Vehicles 3 10
8 Aircraft 18 18
9 Ships 5 15
10 Shiplift, marine structures and related assets and Breakwater structures 30 50
NOTE [3]
Investment property
v crore
Cost Depreciation Impairment Book value
Transfer Transfer
(to)/from (to)/from
Class of assets Foreign Classified Classified
As at inventories As at Up to For the inventories Up to Up to Up to As at As at
Additions currency as held for Deductions as held for Deductions
1-4-2020 and owners 31-3-2021 31-3-2020 period and owners 31-3-2021 31-3-2020 31-3-2021 31-3-2021 31-3-2020
fluctuation sale sale
occupied occupied
property property
Land 547.64 475.85 – – – 56.02 967.47 22.16 9.98 – – 3.49 28.65 – – 938.82 525.48
Buildings 1607.39 127.70 – – (7.48) 110.08 1617.53 66.23 50.04 – (1.49) 10.03 104.75 – 5.18 1507.60 1541.16
Total 2155.03 603.55 – – (7.48) 166.10 2585.00 88.39 60.02 – (1.49) 13.52 133.40 – 5.18 2446.42 2066.64
Previous year 1928.40 448.73 1.01 39.92 (163.34) 19.85 2155.03 51.31 40.85 2.79 (0.76) 0.22 88.39 –
Add: Capital work-in-progress 1200.36 1648.08
3646.78 3714.72
Notes:
(a) Carrying value of investment property pledged as collateral for liabilities and/or commitments and having restriction on title as at
March 31, 2021 is R 0.16 crore (previous year: R 0.16 crore).
(b) Useful life of building included in investment property: 3 to 60 years.
(c) Amounts recognised in the Statement of Profit and Loss in respect of investment property:
v crore
Sr. No. Particulars 2020-21 2019-20
1 Rental income derived from investment property 70.06 129.29
2 Direct operating expenses incurred on investment property that generated rental income 9.91 5.24
3 Direct operating expenses incurred on investment property that did not generate rental income 0.64 0.63
(d) Fair value of investment property as at March 31, 2021 is R 5918.31 crore (previous year: R 5582.46 crore).
(e) The fair values of investment property have been determined by internal architectural department or independent valuer, as
appropriate. Fair value of property that are evaluated by independent valuers amounted to R 1616.64 crore (previous year:
R 3279.01 crore). Valuation is based on government rates, market research, market trend and comparable values as considered
appropriate.
(f) Addition in investment property includes transfer from held for sale reported in previous year: R 25.13 crore (previous year: Nil).

465
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [4]
Goodwill
v crore
Cost Impairment Book value
Class of assets Foreign
As at Business Classified as held As at As at As at As at
Additions currency Deductions
1-4-2020 combination for sale 31-3-2021 31-3-2021 31-3-2021 31-3-2020
fluctuation
Goodwill on consolidation 8059.50 40.83 2.49 14.06 – – 8116.88 49.92 8066.96 8011.40
Previous year 1875.01 6467.91 2.02 48.00 333.44 – 8059.50 48.10 8011.40
Note:
(a) Impairment recognised in the Statement of Profit and Loss during the year is v 1.82 crore (previous year: Nil).

NOTE [5]
Other intangible assets and Intangible assets under development
v crore
Cost Amortisation Book value
Foreign Classified Foreign Classified
Class of assets As at Business As at Up to Business For the Up to As at As at
Additions currency as held for Deductions currency as held for Deductions
1-4-2020 combination 31-3-2021 31-3-2020 combination year 31-3-2021 31-3-2021 31-3-2020
fluctuation sale fluctuation sale
Fare collection rights 16383.03 – 144.68 – – – 16527.71 164.69 – 274.49 – – – 439.18 16088.53 16218.34
Specialised software 1449.64 4.09 184.06 36.66 – 41.77 1632.68 1194.74 – 141.16 33.70 – 37.63 1331.97 300.71 254.90
Technical know-how 115.12 – 2.79 – – 3.62 114.29 68.07 – 24.17 – – 3.62 88.62 25.67 47.05
Trade names 307.10 4.68 – (0.12) – – 311.66 54.65 – 64.10 – – – 118.75 192.91 252.45
New product design
and development 10.33 – 1.87 1.91 – 4.80 9.31 8.48 – 0.85 0.78 – 2.16 7.95 1.36 1.85
Customer contracts
and relationship 3298.34 43.41 0.71 8.04 – – 3350.50 475.95 – 398.41 8.50 – – 882.86 2467.64 2822.39
Rights under licensing
agreement – – 124.29 – – – 124.29 – – 3.35 – – – 3.35 120.94 –
Total 21563.56 52.18 458.40 46.49 – 50.19 22070.44 1966.58 – 906.53 42.98 – 43.41 2872.68 19197.76 19596.98
Previous year 5620.57 3444.98 12864.59 27.46 389.46 4.58 21563.56 1397.66 114.27 626.28 18.50 186.12 4.01 1966.58
Add: Intangible assets under development 112.02 86.18
19309.78 19683.16

Details of addition in other intangible assets:

R crore
2020-21 2019-20
Class of assets Internal Acquired Total Internal Acquired Total
development development
Fare collection rights – 144.68 144.68 – 12659.63 12659.63
Specialised software 49.60 134.46 184.06 39.97 97.33 137.30
Technical know-how – 2.79 2.79 8.34 – 8.34
New product design and development 1.87 – 1.87 58.11 – 58.11
Customer contracts and relationship 0.71 – 0.71 – 1.21 1.21
Rights under licensing agreement – 124.29 124.29 – – –
Total 52.18 406.22 458.40 106.42 12758.17 12864.59

466
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [5] (contd.)
Notes:
(a) Borrowing cost capitalised in accordance with Ind AS 23 “Borrowing Costs” is as follows:
v crore
Nature of assets 2020-21 2019-20
Capital work-in-progress (Property, plant and equipment) 27.75 130.16
Investment property 13.11 5.73
Intangible assets under development – 726.84
Total 40.86 862.73
(b) The rate used to determine the amount of borrowing costs eligible for capitalisation is 6.56% (previous year: 9.83%).

NOTE [6]
Non-current assets: Financial assets - Other investments

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Equity instruments 544.89 579.87
Preference shares 87.00 89.20
Government and trust securities 101.15 0.07
Debentures and bonds 1004.47 1098.28
Mutual funds 31.39 93.21
Security receipts 4114.88 2498.65
Units of fund 61.36 106.44
Other investments – 31.00

5945.14 4496.72

NOTE [7]
Non-current assets: Financial assets - Loans towards financing activities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Considered good - secured 37184.23 39485.69
Less: Allowance for expected credit loss 343.45 199.75
36840.78 39285.94
Considered good - unsecured 13342.63 14466.13
Less: Allowance for expected credit loss 255.20 129.70
Less: Impairment 1659.70 –
11427.73 14336.43
Having significant increase in credit risk 3200.50 3469.63
Less: Allowance for expected credit loss 178.74 188.53
3021.76 3281.10
Credit impaired 5048.21 5470.39
Less: Allowance for expected credit loss 3706.81 3784.50
1341.40 1685.89
52631.67 58589.36

467
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [8]
Non-current assets: Financial assets - Other loans

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Security deposits
Considered good - unsecured 442.22 425.26
Less: Allowance for expected credit loss 37.79 36.54
404.43 388.72
Loans and advances to related parties
Considered good - unsecured 1149.30 1072.90
Less: Allowance for expected credit loss 1139.03 –
10.27 1072.90
Others loans
Considered good - unsecured 181.76 174.51
Less: Allowance for expected credit loss 113.80 113.80
67.96 60.71
482.66 1522.33

NOTE [9]
Non-current assets: Financial assets - Others

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Cash and bank balances not available for immediate use 283.91 273.82
Fixed deposits with banks (maturity more than 12 months) 228.07 1.04
Forward contract receivables 532.10 257.00
Embedded derivative receivables 1.75 54.20
Other receivables 64.94 52.09

1110.77 638.15

NOTE [10]
Other non-current assets

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Capital advances:
Secured 0.61 0.78
Unsecured 79.84 271.23
80.45 272.01
Advance recoverable other than in cash 2607.12 2125.54
Current tax receivable (net) 3262.10 4144.07
5949.67 6541.62

468
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [11]
Current assets: Inventories
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Raw materials [include goods-in-transit R 76.78 crore
(previous year: R 16.56 crore)] 844.90 860.49
Components [include goods-in-transit R 9.58 crore
(previous year: R 15.89 crore)] 320.71 403.39
Construction materials [include goods-in-transit R 39.17 crore
(previous year: R 17.13 crore)] 90.22 95.86
Manufacturing work-in-progress 261.37 467.87
Finished goods 86.01 98.56
Stock-in-trade (in respect of goods acquired for trading) [include goods-in-
transit R 44.34 crore (previous year: R 37.10 crore)] 361.31 308.36
Stores and spares [include goods-in-transit R 4.60 crore
(previous year: R 1.14 crore)] 292.06 295.98
Loose tools [include goods-in-transit R 0.01 crore (previous year: Nil)] 10.28 13.38
Property development projects (including land) 3553.68 3202.76

5820.54 5746.65

Note: During the year R 8.15 crore (previous year: R 83.39 crore) was recognised as expense towards write-down of inventories (net).

NOTE [12]
Current assets: Financial assets - Investments
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Equity shares 97.91 3.04
Preference shares 0.68 0.68
Government and trust securities 2336.16 758.35
Debentures and bonds 7331.66 3959.79
Mutual funds 20143.53 7677.60
Collateral borrowing and lending obligation (CBLO) 299.98 -
Other investments 801.31 300.29
31011.23 12699.75

NOTE [13]
Current assets: Financial assets - Trade receivables
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Considered good - secured 24.49 160.37
Considered good - unsecured 44670.39 42365.84
Less: Allowance for expected credit loss 2591.83 1963.85
42078.56 40401.99
Credit impaired 940.49 1386.52
Less: Allowance for expected credit loss 813.76 1217.36
126.73 169.16
42229.78 40731.52

469
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [14]
Current assets: Financial assets - Cash and cash equivalents

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Balance with banks 5743.64 4535.56
Cheques and drafts on hand 456.86 173.66
Cash on hand 11.84 6.64
Fixed deposits with banks (maturity less than 3 months) 7161.18 6608.71

13373.52 11324.57

NOTE [15]
Current assets: Financial assets - Other bank balances

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Fixed deposits with banks 616.49 1876.65
Earmarked balances with banks - unclaimed dividend 136.43 120.08
Earmarked balances with banks - Section 4(2)(l)(D) of RERA [a]
6.69 0.25
Earmarked balances with banks - others 771.04 505.61
Margin money deposits with banks 944.01 930.84
Cash and bank balances not available for immediate use 393.32 359.78

2867.98 3793.21

[a]
Real Estate (Regulation and Development) Act, 2016

NOTE [16]
Current assets: Financial assets - Loans towards financing activities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Considered good - secured 32721.18 33534.47
Less: Allowance for expected credit loss 15.37 61.72
Less: Net fair value changes 360.57 220.84
32345.24 33251.91
Considered good - unsecured 8534.40 7584.55
Less: Allowance for expected credit loss 444.65 169.82
Less: Impairment 27.12 –
8062.63 7414.73
Having significant increase in credit risk 1103.08 1147.73
Less: Allowance for expected credit loss 131.92 90.95
971.16 1056.78
41379.03 41723.42

470
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [17]
Current assets: Financial assets - Other loans

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Security deposits
Considered good - unsecured 447.56 502.72
Less: Allowance for expected credit loss 0.57 0.97
446.99 501.75
Loans and advances to related parties
Considered good - unsecured 167.09 194.87
Others loans
Considered good - secured – 0.07
Considered good - unsecured 34.48 19.31
648.56 716.00

NOTE [18]
Current assets: Financial assets - Others

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Advances to related parties:
Associate companies 13.14 8.73
Joint venture companies 35.28 51.83
48.42 60.56
Advances recoverable in cash 1758.74 1748.66
Forward contract receivables 980.25 886.42
Embedded derivative receivables 51.06 232.23
Doubtful advances:
Deferred credit sale of ships 27.11 27.11
Other loans and advances 789.13 758.73
816.24 785.84
Less: Allowance for expected credit loss 816.24 785.84
– –
2838.47 2927.87

471
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [19]
Other current assets

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Contract assets [Note 47(d)(i)]
Due from customers (construction and project related activity) 32448.31 36124.80
Retention money including unbilled revenue 15170.83 15724.83
47619.14 51849.63
Advance recoverable other than in cash 6878.77 6426.60
Government grant receivable 102.21 149.91
Other loans and advances 11.72 7.00
Less: Allowance for expected credit loss 11.72 7.00
– –
Others 191.36 233.55
54791.48 58659.69

Note [20]
Equity share capital
(a) Share capital authorised, issued, subscribed and paid up:

As at 31-3-2021 As at 31-3-2020
Particulars Number of v crore Number of v crore
shares shares
Authorised: [a]
Equity shares of R 2 each 25,12,50,00,000 5025.00 25,12,50,00,000 5025.00

Issued, subscribed and fully paid up:

Equity shares of R 2 each 1,40,45,55,297 280.91 1,40,38,92,022 280.78

Pursuant to the approval of the Scheme of Amalgamation of L&T Shipbuilding Limited with the Company, the authorised share
[a]

capital of L&T Shipbuilding Limited is added to the authorised share capital of the Company, w.e.f. the appointed date i.e. April 1,
2019.

(b) Reconciliation of the number of equity shares and share capital:

2020-21 2019-20
Particulars Number of v crore Number of v crore
shares shares
Issued, subscribed and fully paid up equity share outstanding at the beginning of
the year 1,40,38,92,022 280.78 1,40,27,29,385 280.55
Add: Shares issued on exercise of employee stock options during the year 6,63,275 0.13 7,83,249 0.16
Add: Shares issued on conversion of foreign currency convertible bonds during
the year – – 3,79,388 0.07
Issued, subscribed and fully paid up equity shares outstanding at the end of the
year 1,40,45,55,297 280.91 1,40,38,92,022 280.78
(c) Terms/rights attached to equity shares:
The Company has only one class of share capital, i.e., equity shares having face value of R 2 per share. Each holder of equity share is
entitled to one vote per share.

472
Notes forming part of the Consolidated Financial Statements (contd.)
Note [20] (contd.)
(d) Shareholder holding more than 5% of equity shares as at the end of the year:

As at 31-3-2021 As at 31-3-2020
Name of the shareholder
Number of Shareholding Number of Shareholding
shares % shares %
Life Insurance Corporation of India 19,24,67,386 13.70 20,91,83,856 14.90
L&T Employees Trust 19,25,58,158 13.71 18,55,24,682 13.22
(e) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital:

As at 31-3-2021 As at 31-3-2020

Number of R crore Number of R crore

Particulars
equity shares (at face equity shares (at face
to be issued value) to be issued as value)
as fully paid fully paid
Employee stock options granted and outstanding [a] 17,81,564 0.36[b] 25,21,389 0.50 [b]

[a]
Note 20(h) infra for terms of employee stock option schemes

[b]
The equity shares will be issued at a premium of R 42.74 crore (previous year: R 63.06 crore)

(f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended
March 31, 2021 are 46,67,64,755 (period of five years ended March 31, 2020: 46,67,64,755 shares).

(g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately
preceding five years ended on March 31, 2021 - Nil (previous period of five years ended March 31, 2020: Nil).

(h) Stock option scheme of the Parent Company:

(A) Terms:

i. The grant of options to the employees under the stock option schemes is on the basis of their performance and other
eligibility criteria. The options are vested equally over a period of 4 years for series 2003(B) and 5 years in the case of
series 2006(A), subject to the discretion of the management and fulfillment of certain conditions.

ii. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue
of equity shares. Management has discretion to modify the exercise period.

(B) The details of the grants under the aforesaid scheme are summarised below:

Sr. 2003(B) 2006(A)

Series reference
No. 2020-21 2019-20 2020-21 2019-20
i. Grant price (R) 7.80 7.80 267.10 267.10
ii. Grant dates 23-5-2003 onwards 1-7-2007 onwards
iii. Vesting commences on 23-5-2004 onwards 1-7-2008 onwards
iv. Options granted and outstanding at the beginning of the year 1,45,935 1,73,309 23,75,454 27,11,931
v. Options lapsed 4,875 13,837 1,75,675 2,64,380
vi. Options granted 1,04,000 38,700 - 6,58,915
vii. Options exercised 71,910 52,237 5,91,365 7,31,012
viii. Options granted and outstanding at the end of the year, of which 1,73,150 1,45,935 16,08,414 23,75,454
Options vested 23,575 49,762 4,84,082 6,51,653
Options yet to vest 1,49,575 96,173 11,24,332 17,23,801
ix. Weighted average remaining contractual life of options (in years) 5.74 4.63 4.23 4.61

473
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [20] (contd.)
(C) The number and weighted average exercise price of stock options are as follows:

2020-21 2019-20
No. of stock Weighted No. of stock Weighted
Particulars options average options average
exercise price exercise price
(R) (R)
(A) Options granted and outstanding at the beginning of the year 25,21,389 252.09 28,85,240 251.52
(B) Options granted 1,04,000 7.80 6,97,615 252.72
(C) Options allotted 6,63,275 238.99 7,83,249 249.81
(D) Options lapsed 1,80,550 260.10 2,78,217 254.20
(E) Options granted and outstanding at the end of the year 17,81,564 241.90 25,21,389 252.09
(F) Options exercisable at the end of the year out of (E) supra 5,07,657 255.06 7,01,415 248.70
(D) Weighted average share price at the date of exercise for stock options exercised during the year is R 1001.47 (previous year:
R 1065.30) per share.
(E) The fair value of the options granted under the stock option scheme is treated as discount and accounted as employee
compensation over the vesting period.
(F) Weighted average fair values of options granted during the year is R 834.24 (previous year: R 804.63) per option.
(G) The fair value of the options granted during the year has been calculated as per the Black-Scholes Option Pricing Model using
the following significant assumptions and inputs:

Sr.
Particulars 2020-21 2019-20
No.
(A) Weighted average risk-free interest rate 4.81% 6.23%
(B) Weighted average expected life of options 2.85 years 4.12 years
(C) Weighted average expected volatility 35.39% 25.40%
(D) Weighted average expected dividends over the life of the option R 51.22 per option R 74.07 per option
(E) Weighted average share price R 884.83 per option R 1056.34 per option
(F) Weighted average exercise price R 7.80 per option R 252.72 per option
(G) Method used to determine expected volatility Expected volatility is based on the historical volatility
of the Company’s share price applicable to the total
expected life of each option.
(i) During the year ended March 31, 2021, the Company paid the final dividend of R 8 per equity share for the year ended March 31,
2020.
(j) During the year ended March 31, 2021, the Company paid special dividend of R 18 per equity share.
(k) The Board of Directors, at their meeting held on May 14, 2021 recommended a final dividend of R 18 per equity share for the year
ended March 31, 2021, subject to approval of shareholders. On approval, the dividend outgo is expected to be R 2528.20 crore
based on number of shares outstanding as on March 31, 2021.
(l) Stock option scheme of subsidiary companies:
(i) Larsen & Toubro Infotech Limited
Employee Stock Ownership Scheme (ESOS Plan)
(A) The options are vested equally over a period of 5 years subject to the discretion of the management and fulfilment of
certain conditions. The options can be exercised anytime within a period of 7 years from the date of grant and would be
settled by way of issue of equity shares. Management has discretion to modify the exercise period.

474
Notes forming part of the Consolidated Financial Statements (contd.)
Note [20] (contd.)
(B) The details of the grants under the aforesaid schemes under various series are summarised below:
Sr. ESOP Scheme 2000 ESOP Scheme 2000 U.S. Stock Option ESOP Scheme
No. Particulars I, II & III IV - XXI Sub-plan 2006 2015
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
i. Grant price R5 R5 R2 R2 USD 2.4 USD 2.4 R1 R1
ii. Grant dates 01-4-2001 onwards 01-10-2001 onwards 15-3-2007 onwards 10-6-2016 onwards
iii. Vesting commences on 01-4-2002 onwards 01-10-2002 onwards 15-3-2008 onwards 10-6-2017 onwards
iv. Options granted & outstanding at
the beginning of the year – 11,840 – 58,190 – 33,000 15,25,395 21,16,860
v. Options reinstated during the year – – – – – – – –
vi. Options granted during the year – – – – – – 83,650 63,660
vii. Options allotted/exercised during
the year – 2,055 – 15,065 – – 6,23,839 5,99,565
viii. Options lapsed/cancelled during
the year – 9,785 – 43,125 – 33,000 1,02,600 55,560
ix. Options granted & outstanding at
the end of the year – – – – – – 8,82,606 15,25,395
x. Options vested at the end of the
year out of (ix) supra – – – – – – 1,22,208 6,24,400
xi. Options unvested at the end of the
year out of (ix) supra – – – – – – 7,60,398 9,00,995
xii. Weighted average remaining
contractual life of options (in
years) – – – – – – 3.3 3.8
(C) The number and weighted average exercise price of stock options are as follows:
2020-21 2019-20
Sr. No. of stock Weighted No. of stock Weighted
Particulars options average options average
No.
exercise price exercise price
(R) (R)
(A) Options granted and outstanding at the beginning of
the year 15,25,395 1.00 2,219,890 3.50
(B) Options granted during the year 83,650 1.00 63,660 1.00
(C) Options allotted during the year 6,23,839 1.00 6,16,685 1.04
(D) Options lapsed/cancelled during the year 1,02,600 1.00 1,41,470 40.06
(E) Options granted and outstanding at the end of the year 8,82,606 1.00 15,25,395 1.00
(F) Options vested at the end of the year out of (E) supra 1,22,208 1.00 6,24,400 1.00
(D) Weighted average share price at the date of exercise for stock options exercised during the year is R 2,691.00 per share
(previous year: R 1,581.00 per share).
(E) Weighted average fair value of options granted during the year is R 2,348.93 per share (previous year: R 1,540.66 per
share).

475
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [20] (contd.)
(F) The fair value has been calculated using the Black-Scholes Option Pricing Model and significant assumptions and inputs to
estimate the fair value options granted during the year are as follows:

Sr. No. Particulars 2020-21 2019-20

(A) Weighted average risk-free interest rate 4.62% 6.18%
(B) Weighted average expected life of options 3 years 3 years
(C) Weighted average expected volatility 25.17% 17.44%
(D) Weighted average expected dividends over the life of option R 148.59 R 148.29
(E) Weighted average share price R 2349.87 R 1541.55
(F) Weighted average exercise price R1 R1
(G) Method used to determine expected volatility The expected volatility has been calculated
entirely based on historical volatility of IT Index.

(ii) L&T Technology Services Limited

(A) Employee stock option plan (ESOP)
(i) The options are vested equally over a period of 5 years subject to the discretion of the management and fulfillment
of certain conditions.

(ii) The exercise period for the options granted under the ESOP Scheme, 2016 would be seven years (84 months) from
the date of grant of options or six years (72 months) from the date of first vesting or three years (36 months) from
the date of retirement/death, whichever is earlier, subject to any change as may be approved by the Board. The
exercise price may be decided by the Board, in such manner, during such period, in one or more tranches and on
such terms and conditions as it may deem fit, provided that the exercise price per option shall not be less than the
par value of the equity share of the Company and shall not be more than the market price as defined in the SEBI
(Share Based Employee Benefits) Regulations, 2014 and shall be subject to compliance with accounting policies
under the said regulation. The number of shares to be allotted on exercise of options should not exceed the total
number of unexercised vested options that may be exercised by the employee. Details of grant under ESOP Scheme,
2016 is summarised below:

Sr. ESOP Scheme, 2016

No. Particulars
2020-21 2019-20
i. Grant price R2 R2
ii. Grant dates 28-7-2016 onwards
iii. Vesting commences on 28-7-2017 onwards
iv. Options granted and outstanding at the beginning of the year 13,22,434 17,38,667
v. Options lapsed during the year 76,200 84,000
vi. Options granted during the year 20,500 1,66,000
vii. Options exercised during the year 5,34,265 4,98,233
viii. Options granted and outstanding at the end of the year 7,32,469 13,22,434
ix. Options vested at the end of the year out of (viii) supra 1,46,929 1,05,074
x. Options unvested at the end of the year out of (viii) supra 5,85,540 12,17,360
xi. Weighted average remaining contractual life of options (in 1.99 2.99
years)

476
Notes forming part of the Consolidated Financial Statements (contd.)
Note [20] (contd.)
(B) The number and weighted average exercise price of stock options are as follows:
2020-21 2019-20
Sr. Weighted Weighted
Particulars No. of stock No. of stock
No. average exercise average exercise
options options
price (R) price (R)
(A) Options granted and outstanding at the
beginning of the year 13,22,434 2 17,38,667 2
(B) Options granted during the year 20,500 2 1,66,000 2
(C) Options exercised during the year 5,34,265 2 4,98,233 2
(D) Options lapsed during the year 76,200 2 84,000 2
(E) Options granted and outstanding at the end of
the year 7,32,469 2 13,22,434 2
(F) Options exercisable at the end of the year out
of - (E) supra 1,46,929 2 1,05,074 2
(C) Weighted average share price at the date of exercise for stock options exercised during the year is R 1763.19 per share
(previous year: R 1619.53 per share).
(D) In respect of stock options granted pursuant to the Company’s stock options schemes, the fair value of the options is
treated as discount and accounted as employee compensation over the vesting period.
(E) The fair value at grant date of options granted during the year ended 31-3-2021 is R 1378.40 per option (previous year:
R 1588.88 per option and R 1527.59 per option). The fair value of grant date is determined using the Black-Scholes
Option Pricing Model which takes into account the exercise price, term of option, share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the
option. The model inputs for options granted during the year included:
Sr.
Particulars 2020-21 2019-20
No.
(A) Weighted average exercise price R 2.00 R 2.00 R 2.00
(B) Grant date 16-7-2020 19-7-2019 18-10-2019
(C) Expiry date 16-7-2027 18-7-2026 17-10-2026
(D) Weighted average share price at grant date R 1441.70 per R 1660.45 per R 1593.30 per
option option option
(E) Weighted average expected price volatility of Company’s share 30.42% 24.01% 23.21%
(F) Weighted average expected dividend yield over life of option 5.12% 5.30% 5.08%
(G) Weighted average risk-free interest rate 4.55% 6.22% 6.03%
(H) Method used to determine expected volatility The expected price volatility is based on the
historical volatility (based on the remaining
life of the options), adjusted for any expected
changes to future volatility due to publicly
available information.
(iii) L&T Finance Holdings Limited
The Company has formulated Employee Stock Option Schemes 2010 (Scheme 2010) and 2013 (Scheme 2013). The grant of
options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria.
The options allotted under the scheme 2010 are vested over a period of four years in the ratio of 15%, 20%, 30% and 35%
respectively from the end of 12 months from the date of grant, subject to the discretion of the management and fulfillment
of certain conditions. The options granted under the scheme 2013 are vested in a graded manner over a period of four years
with 0%, 33%, 33% and 34% of grants vesting each year, commencing from the end of 24 months from the date of grant or
w.e.f. July 10, 2019 vested in a graded manner over a period of four years with 25%, 25%, 25% and 25% of grants vesting
each year, commencing from the end of 12 months from the date of grant.

477
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [20] (contd.)
(A) The details of the grants are summarised below:
Sr. Scheme 2010 Scheme 2013
No. Particulars
2020-21 2019-20 2020-21 2019-20
i. Grant price R 44.20 R 10.00 [a]/Market Price
ii. Options granted and outstanding at the beginning of the
year 29,20,500 49,52,000 4,51,95,840 4,16,34,600
iii. Options granted during the year – 2,45,000 21,31,627 1,56,63,240
iv. Options cancelled/lapsed during the year 3,07,500 12,59,250 48,92,793 67,64,000
v. Options exercised and shares allotted during the year 6,84,000 10,17,250 26,02,573 50,04,000
vi. Options granted and outstanding at the end of the year 19,28,500 29,20,500 3,98,32,101 4,51,95,840
of which:
Options vested 5,37,000 6,19,250 1,81,71,874 89,77,400
Options unvested 13,91,500 23,01,250 2,16,60,227 3,62,18,440
vii. Weighted average remaining contractual life of options (in
years) 4.02 4.78 4.81 5.80
w.e.f. July 10, 2019
[a]

(B) The average fair values of options granted during the year is R 33.15 (previous year: R 108.82) per option.

(C) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and
inputs to estimate the fair value of options granted during the year are as follows:
Sr. No. Particulars 2020-21 2019-20
(A) Weighted average risk-free interest rate 2.70% 6.10%
(B) Weighted average expected life of options 1.73 years 2.94 years
(C) Weighted average expected volatility 25.26% 35.28%
(D) Weighted average expected dividends R 1.68 per option R 3.25 per option
(E) Weighted average share price R 39.61 per option R 120.25 per option
(F) Weighted average exercise price R 5.82 per option R 10.53 per option
(G) Method used to determine expected volatility Expected volatility is based on the historical volatility of
the Company’s shares price applicable to the expected
life of each option.
(iv) Mindtree Limited
(A) Employee Restricted Stock Purchase Plan 2012 (ERSP 2012)
ERSP 2012 was instituted with effect from July 16, 2012 to issue equity shares of nominal value of R 10 each. Shares
under this program are granted to employees at an exercise price of not less than R 10 per equity share or such higher
price as determined by the Nomination and Remuneration Committee. Shares shall vest over such term as determined by
the Nomination and Remuneration Committee not exceeding ten years from the date of the grant. All shares will have a
minimum lock in period of one year from the date of allotment.
2020-21 2019-20
Sr. Weighted Weighted
Particulars No. of stock No. of stock
No. average exercise average exercise
options options
price (R) price (R)
i. Options granted and outstanding at the beginning of
the year – – – –
ii. Options granted during the year 1,54,155 10.00 3,60,025 10.00
iii. Options exercised during the year 1,45,700 10.00 3,60,025 10.00
iv. Options lapsed/forfeited during the year 3,255 10.00 – –
v. Options granted and outstanding at the end of the
year 5,200 10.00 – –
vi. Options vested at the end of the year out of (v) supra 5,200 10.00 – –

478
Notes forming part of the Consolidated Financial Statements (contd.)
Note [20] (contd.)
(B) Other stock based compensation arrangements:
The Company has granted phantom stock options and letter of intent to issue shares under ERSP 2012 plan to certain
employees which is subject to certain vesting conditions. Details of the outstanding options/units as at March 31, 2021
are given below:
2020-21 2019-20
Sr. No. Particulars
Phantom stock options plan
(A) Total no. of units/shares – 5,00,000
(B) Vested units/shares – 4,25,000
(C) Lapsed units/shares – –
(D) Forfeited units/shares – –
(E) Cancelled units/shares – 75,000
(F) Contractual life – 1 year
(G) Grant date – 1-4-2018,
24-7-2019
(H) Grant price per share/unit – R 772 per share/
R 930 per share

2020-21 2019-20
Sr. No. Particulars Employee Restricted Stock Option Plan
2012 [a]
(A) Outstanding units/shares as at the beginning of the year 2,40,450 3,69,650
(B) Number of units/shares granted under letter of intent during the 1,44,466 3,12,900
year
(C) Vested units/shares 1,54,155 3,60,025
(D) Lapsed units/shares 5000 -
(E) Cancelled units/shares 33,595 82,075
(F) Outstanding units/shares as at the end of the year 1,92,166 2,40,450
(G) Contractual life 1-2 year 1-2 year
(H) Grant date [b] 12-5-2020, 24-7-2019,
18-6- 2020, 2-8-2019,
30-10-2020, 24-10-2019,
8-2-2021 28-1-2020
(I) Grant price per share/unit [b]
R 10 per share R 10 per share
[a] Does not include direct allotment of shares
[b] Based on letter of intent
The weighted average fair value of each unit under the above mentioned ERSP 2012 plan, granted during the year ended
March 31, 2021 was R 873.36 using the Black-Scholes Option Pricing Model with the following assumptions:
Sr. No. Particulars 2020-21 2019-20
(A) Weighted average grant date share price R 873.36 R 697.78
(B) Weighted average exercise price R 10.00 R 10.00
(C) Dividend yield % 0.42% 0.43%
(D) Expected life 1-2 year 1-2 year
(E) Risk-free interest rate 4.31% 5.96%
(F) Volatility 48.33% 34.72%
(m) Capital Management
The Group continues its policy of a conservative capital structure. Low gearing levels also enable the Group to navigate business
stress on one hand and raise growth capital on the other. This policy also provides flexibility of fund-raising options for future, which
is especially important in times of global economic volatility. The gross debt equity ratio is 1.51:1 (as at 31-3-2020: 1.85:1).

479
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [21]
Other equity

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Capital reserve [Note 1(II)(g)]
Capital reserve 10.52 10.52
Capital reserve on consolidation 271.92 271.92
282.44 282.44
Capital redemption reserve [a] 302.00 42.00
Securities premium [Note 1(II)(u)] 8667.65 8599.60
Employee share options (net) [Note 1(II)(w)]
Employee share options outstanding 427.52 580.76
Deferred employee compensation expense (43.92) (179.27)
383.60 401.49
Statutory reserves
Debenture redemption reserve [b] 776.76 1407.28
Reserve u/s 45-IC of the Reserve Bank India Act, 1934 1955.78 1919.93
Reserve u/s 29C of the National Housing Bank Act, 1987 168.81 168.81
Reserve u/s 36(1)(viii) of the Income-tax Act, 1961 645.71 645.71
Impairment reserve as per Reserve Bank of India [c] 28.36 15.82
3575.42 4157.55
Retained earnings 61063.79 52731.64
Foreign currency translation reserve [Note 1(II)(x)(iv)] 665.45 582.56
Hedging reserve [Note 1(II)(r)(iii)(B)]
Cash flow hedging reserve 492.11 (421.77)
Cost of hedging reserve (7.01) (15.15)
485.10 (436.92)
Debt instruments through Other comprehensive income [Note 1(II)(r)(i)(B)] 162.40 65.33
Equity instruments through Other comprehensive income [Note 1(II)(r)(i)(B)] (0.23) 16.75
75587.62 66442.44

[a]
Capital redemption reserve: Created by the subsidiaries on redemption of preference shares out of profits in accordance with Section
55(2)(c) of the Companies Act, 2013.

Debenture redemption reserve: Created on non-convertible debentures in accordance with the Companies (Share capital and
[b]

Debenture) Rules, 2014 (as amended).

[c]
Impairment reserve as per Reserve Bank of India: Created pursuant to circular issued by Reserve Bank of India where impairment
allowance as per Ind AS 109 is lower than the provisioning required as per extant prudential norms.

480
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [22]
Non-current liabilities: Financial liabilities - Borrowings

As at 31-3-2021 As at 31-3-2020
Particulars Secured Unsecured Total Secured Unsecured Total
v crore v crore v crore v crore v crore v crore
Redeemable non-convertible fixed rate debentures 29162.95 20021.22 49184.17 29336.17 12055.08 41391.25
Redeemable non-convertible inflation linked debentures - 126.15 126.15 - 124.11 124.11
Preference shares - 1123.66 1123.66 - 1404.03 1404.03
Term loans from banks 29334.73 2351.33 31686.06 37184.03 2227.91 39411.94
58497.68 23622.36 82120.04 66520.20 15811.13 82331.33

Notes:
(a) Loans guaranteed by directors: Nil (previous year: Nil)
(b) Non-convertible debentures and bank borrowings are secured by charge on the specified movable and immovable assets of the
respective entities.

NOTE [23]
Non-current liabilities: Other financial liabilities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Forward contract payables 66.74 696.66
Embedded derivative payables 13.84 0.21
Financial guarantee contracts 0.12 0.44
Due to others 106.04 203.83

186.74 901.14

NOTE [24]
Non-current liabilities: Provisions

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Employee pension scheme [Note 52(b)(i)] 348.86 339.63
Post-retirement medical benefits plan [Note 52(b)(i)] 338.42 318.66
Provision for other employee benefits 18.12 19.86
Other provisions [Note 56(a)] 68.38 30.52

773.78 708.67

481
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [25]
Other non-current liabilities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Other payables 68.70 31.09

68.70 31.09

NOTE [26]
Current liabilities: Financial liabilities - Borrowings

As at 31-3-2021 As at 31-3-2020
Particulars Secured Unsecured Total Secured Unsecured Total
v crore v crore v crore v crore v crore v crore
Loans repayable on demand 7121.19 3775.18 10896.37 7577.48 4376.42 11953.90
Short term loans and advances from banks 1953.81 4215.93 6169.74 2843.23 7883.29 10726.52
Short term loans from others – – – – 3.19 3.19
Short term debentures – 477.90 477.90 – – –
Loans from related parties – 90.91 90.91 – 59.68 59.68
Commercial paper – 10130.91 10130.91 – 12277.73 12277.73

9075.00 18690.83 27765.83 10420.71 24600.31 35021.02

Note: The secured portion of loans payable on demand and bank borrowings are secured by charge on the specified movable and
immovable assets of the respective entities.

NOTE [27]
Current liabilities: Financial liabilities - Current maturities of long term borrowings

As at 31-3-2021 As at 31-3-2020
Particulars Secured Unsecured Total Secured Unsecured Total
v crore v crore v crore v crore v crore v crore
Redeemable non-convertible fixed rate debentures 9659.27 3230.04 12889.31 9474.52 4863.05 14337.57
Redeemable non-convertible floating rate debentures – 1.60 1.60 – – –
Preference shares – 319.26 319.26 – 669.98 669.98
Term loans from banks 9419.55 89.67 9509.22 7930.00 717.22 8647.22
19078.82 3640.57 22719.39 17404.52 6250.25 23654.77

Notes:
(a) Loans guaranteed by directors: Nil (previous year: Nil)
(b) Non-convertible debentures and bank borrowings are secured by charge on the specified movable and immovable assets of the
respective entities.

482
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [28]
Current liabilities: Financial liabilities - Other trade payables

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Acceptances 382.35 237.30
Due to related parties:
Associate companies 60.53 109.26
Joint venture companies 1715.13 1300.77
1775.66 1410.03
Due to others 42857.61 41517.09
45015.62 43164.42

NOTE [29]
Current liabilities: Other financial liabilities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
Unclaimed dividend 127.78 114.27
Unclaimed interest on debentures 244.66 17.99
Financial guarantee contracts 0.79 0.58
Forward contract payables 406.49 1277.04
Embedded derivative payables 55.38 118.21
Due to others 4734.45 3395.14

5569.55 4923.23

NOTE [30]
Other current liabilities

As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Contract liabilities [Note 47(d)(i)]
Due to customers (construction and project related activity) 11943.66 11666.09
Advances from customers 15876.07 16353.36
27819.73 28019.45
Other payables 3449.90 2797.22
31269.63 30816.67

483
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [31]
Current liabilities: Provisions
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore v crore v crore
Provision for employee benefits:
Gratuity [Note 52(b)(i)] 210.43 233.47
Compensated absences 1372.56 1337.85
Employee pension scheme [Note 52(b)(i)] 29.09 29.49
Post-retirement medical benefits plan [Note 52(b)(i)] 21.64 21.61
Others 0.84 0.83
1634.56 1623.25
Other provisions [Note 56(a)] 1364.12 1127.60
2998.68 2750.85

Note [32]
Contingent liabilities
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
(a) Claims against the Group not acknowledged as debts 3222.99 3630.92
(b) Sales tax/GST liability that may arise in respect of matters in appeal 350.33 305.37
(c) Excise duty/service tax/custom duty/entry tax/stamp duty/municipal cess
liability that may arise, including those in respect of matters in appeal/
challenged by the Group in Writ 830.91 736.87
(d) Income tax liability (including penalty) that may arise in respect of which the
Group is in appeal 674.05 1239.61
(e) Guarantees or letter of credit or letter of comfort given to third parties 340.16 2258.84
(f) Corporate guarantees for debt given on behalf of joint ventures 312.67 394.94
(g) Bank guarantees given on behalf of joint ventures 51.18 119.80
(h) Contingent liabilities incurred in relation to interest in joint operations 7042.11 7460.44
(i) Share in contingent liabilities of joint operations for which the Group is
contingently liable 61.95 64.05
(j) Contingent liabilities in respect of liabilities of other joint operators in
respect of joint operations 4875.31 5464.89
(k) Share of contingent liabilities incurred jointly with other investors of the
associate 0.68 0.68
(l) Share of joint ventures’ contingent liabilities in respect of a legal claim
lodged against the entity 169.26 163.38
(m) Indemnities for performance given on behalf of third parties 479.43 –
Notes:
(i) The Group expects reimbursements of R 14.24 crore (previous year: R 25.07 crore) in respect of the above contingent liabilities
except in respect of matters at (m).
(ii) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the
arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the
Group has determined that the possibility of such levy is remote.
(iii) In respect of matters at (e), the cash outflows, if any, could occur any time during the subsistence of the underlying agreement.
(iv) In respect of matters at (f), the cash outflows, if any, could generally occur up to two years, being the period over which the validity
of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the
borrowing to which the guarantees relate.
(v) In respect of matters at (g), the cash outflows, if any, could generally occur up to two years, being the period over which the validity
of the guarantees extends.
(vi) In respect of matters at (h) to (j), the cash outflows, if any, could generally occur upto completion of projects undertaken by the
respective joint operations.
(vii) In respect of matters at (k) and (l), the cash outflows, in any, could generally occur any time up to settlement of claims or during
subsistence of the underlying agreements.
(viii) In respect of matters at (m), the cash outflows, if any, is fully reimbursable by the third parties under an agreement entered into
with them.

484
Notes forming part of the Consolidated Financial Statements (contd.)
Note [33]
Commitments
As at 31-3-2021 As at 31-3-2020
Particulars
v crore v crore
(a) Estimated amount of contracts remaining to be executed on capital account
(net of advances):
(i) Property, plant and equipment 1905.99 1239.55
(ii) Investment property 47.56 117.02
(iii) Intangible assets 151.14 187.14
(b) Other funding commitments:
(i) Undrawn/undisbursed commitments to other companies (in Financial
Services) 1010.35 1364.53
(ii) Share of joint ventures’ capital commitments 14.78 19.56
NOTE [34]
Revenue from operations

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Sales & service:
Construction and project related activity 86406.51 97452.17
Manufacturing and trading activity 3760.72 3225.64
Engineering service fees 5530.89 5649.10
Software development products and services 20088.56 16620.95
Income from financing activity/annuity based projects 14107.19 14442.06
Property development activity 606.14 2065.94
Fare collection and related activity 84.00 370.14
Servicing fees 1178.07 1321.35
Commission 110.27 123.38
Charter hire income 3.56 1.78
Investment/portfolio management and trusteeship fees 311.34 353.25
Fees for operation and maintenance of power plant 2267.90 2682.29
Revenue from sale of power 21.60 –
134476.75 144308.05
Other operational income:
Lease rentals 81.96 150.91
Property maintenance recoveries 56.44 69.71
Premium earned (net) on related forward exchange contracts 61.50 44.55
Profit on sale of investment property 466.20 –
Technical fees 7.12 0.06
Miscellaneous income 829.06 879.08
1502.28 1144.31
135979.03 145452.36

485
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [35]
Other income

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Interest income on [Note 46(a)]:
Loans and advances to joint venture and associate companies 60.84 109.34
Investments 638.57 378.65
Others 678.25 341.79

1377.66 829.78
Dividend income on:
Trade investments 14.24 1.76
Current investments 0.21 0.60
Others 14.02 99.24

28.47 101.60
Net gain/(loss) on sale or fair valuation of investments 1118.77 733.84
Net gain/(loss) on derivatives at fair value through profit or loss (42.46) 13.19
Net gain/(loss) on sale of property, plant and equipment 62.61 (33.28)
Lease rentals 19.35 19.94
Miscellaneous income (net of expenses) 864.95 695.83

3429.35 2360.90

NOTE [36]
Manufacturing, construction and operating expenses

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Cost of raw materials, components consumed:
Raw materials and components 15660.55 15632.01
Less: Scrap sales 89.15 83.35
15571.40 15548.66
Construction materials consumed 24558.23 30316.12
Purchase of stock-in-trade 1213.58 841.09
Stores, spares and tools consumed 2023.54 2184.46
Sub-contracting charges 22316.18 26454.05
Changes in inventories of finished goods, stock-in-trade, work-in-progress and
property development:
Closing stock:
Finished goods 86.01 98.56
Stock-in-trade 360.03 308.36
Work-in-progress 5252.57 5748.17
Cost of built-up space and property development land:
Work-in-progress 3169.07 3130.39
Completed property 384.60 72.37
9252.28 9357.85
Carried forward 9252.28 65682.93 9357.85 75344.38

486
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [36]
Manufacturing, construction and operating expenses (contd.)

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Brought forward 9252.28 65682.93 9357.85 75344.38
Less: Opening stock:
Finished goods 98.56 55.09
Stock-in-trade 308.36 291.28
Work-in-progress 5748.17 5609.37
Cost of built-up space and property development land:
Work-in-progress 3130.39 3174.88
Completed property 72.37 115.32
9357.85 9245.94
105.57 (111.91)
Inventorisation of investment property 237.80 759.61
343.37 647.70
Other manufacturing, construction and operating expenses:
Power and fuel 1458.30 1922.13
Royalty and technical know-how fees 57.50 119.52
Packing and forwarding 536.23 572.93
Rent and hire charges 2265.80 2714.02
Bank guarantee charges 310.09 248.67
Engineering, professional, technical and consultancy fees 2008.62 2003.15
Insurance 471.08 321.32
Rates and taxes 686.11 632.18
Travelling and conveyance 828.06 1113.94
Repairs to plant and equipment 69.78 90.48
Repairs to buildings 22.74 22.22
General repairs and maintenance 581.74 640.32
Provision/(reversal) for foreseeable losses on construction contracts 23.66 (103.28)
Other provisions 116.85 12.84
Expenses on construction job in realty business 236.81 392.48
Software development expenses 2199.44 1759.24
Miscellaneous expenses 1110.75 866.55
12983.56 13328.71
Finance cost of financial services business and finance lease activity 7691.04 8041.88
86700.90 97362.67

487
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [37]
Employee benefits expense

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Salaries, wages and bonus 22464.37 20821.99
Contribution to and provision for:
Provident fund and pension fund 519.31 407.06
Superannuation/employee pension and social security schemes 296.55 199.13
Gratuity funds [Note 52(b)(ii)] 180.30 154.25
996.16 760.44
Expenses on employee stock option scheme 137.67 190.84
Employee medical and other insurance premium expenses 329.80 411.48
Staff welfare expenses 1015.33 1133.82
Recoveries on account of deputation charges (181.30) (204.57)
24762.03 23114.00

NOTE [38]
Sales, administration and other expenses

2020-21 2019-20
Particulars
v crore v crore v crore v crore
Power and fuel 123.03 157.71
Packing and forwarding 74.66 67.30
Insurance 131.47 113.37
Rent and hire charges 211.70 244.17
Rates and taxes 292.25 392.89
Travelling and conveyance 317.25 946.82
Repairs to buildings 102.45 98.85
General repairs and maintenance 435.17 544.72
Professional fees 1239.15 1176.94
Directors’ fees 7.97 11.64
Telephone, postage and telegrams 220.90 227.03
Advertising and publicity 101.32 206.94
Stationery and printing 49.10 69.61
Commission:
Distributors and agents 33.56 62.30
Others 8.47 1.61
42.03 63.91
Bank charges 145.10 182.24
Miscellaneous expenses 835.64 1259.41
Bad debts and advances written off (net of written back) 3039.99 1759.76
Less: Allowances for expected credit loss written back 2481.66 1885.56
558.33 (125.80)
Impairment of debt instruments 151.26 350.59
Allowances for expected credit loss 3400.09 2724.43
Loss on fair valuation of loans towards financing activities (net) 158.76 93.31
Recoveries from joint venture and associate companies (39.48) (40.40)
Exchange (gain)/loss [net] (37.31) (438.96)
Other provisions 371.16 319.99
8892.00 8646.71

488
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [39]
Finance costs

2020-21 2019-20
Particulars
v crore v crore
Interest expenses 3904.54 2723.26
Other borrowing costs 4.27 12.71
Exchange (gain)/loss [net] 4.63 60.69

3913.44 2796.66

39(a) Aggregation of expenses disclosed vide Note 36 - Manufacturing, construction and operating expenses, Note 37 - Employee
benefits expense, Note 38 - Sales, administration and other expenses and Note 39 - Finance costs
R crore

Sr. 2020-21 2019-20

Nature of expenses
No. Note 36 Note 37 Note 38 Note 39 Total Note 36 Note 37 Note 38 Note 39 Total
1 Power and fuel 1458.30 – 123.03 – 1581.33 1922.13 – 157.71 – 2079.84
2 Packing and forwarding 536.23 – 74.66 – 610.89 572.93 – 67.30 – 640.23
3 Insurance 471.08 329.80 131.47 – 932.35 321.32 411.48 113.37 – 846.17
4 Rent and hire charges 2265.80 – 211.70 – 2477.50 2714.02 – 244.17 – 2958.19
5 Rates and taxes 686.11 – 292.25 – 978.36 632.18 – 392.89 – 1025.07
6 Travelling and conveyance 828.06 – 317.25 – 1145.31 1113.94 – 946.82 – 2060.76
7 Repairs to plant and
equipment 69.78 – – – 69.78 90.48 – – – 90.48
8 Repairs to buildings 22.74 – 102.45 – 125.19 22.22 – 98.85 – 121.07
9 General repairs and
maintenance 581.74 – 435.17 – 1016.91 640.32 – 544.72 – 1185.04
10 Engineering, professional,
technical and consultancy fees 2008.62 – 1239.15 – 3247.77 2003.15 – 1176.94 – 3180.09
11 Finance costs 7691.04 – – 3913.44 11604.48 8041.88 – – 2796.66 10838.54
12 Miscellaneous expenses 1110.75 – 835.64 – 1946.39 866.55 – 1259.41 – 2125.96

489
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [40]
The list of subsidiaries, associates, joint ventures and joint operations included in the Consolidated Financial Statements are as under:

As at 31-3-2021 As at 31-3-2020
Principal place of Proportion Proportion of Proportion Proportion of
Sr. business of effective voting power of effective voting power
Name of subsidiaries
No. ownership held (%) ownership held (%)
interest (%) interest (%)
Indian subsidiaries
1 Hi-Tech Rock Products and Aggregates Limited India 100.00 100.00 100.00 100.00
2 L&T Geostructure Private Limited (formerly known as India
L&T Geostructure LLP) 100.00 100.00 100.00 100.00
3 L&T Geo – L&T JV for Maharatangarh project India 100.00 100.00 100.00 100.00
4 L&T Geo – L&T UJV CMRL CS India 100.00 100.00 100.00 100.00
5 L&T Infrastructure Engineering Limited India 100.00 100.00 100.00 100.00
6 L&T Cassidian Limited [a] India – – 100.00 100.00
7 L&T Hydrocarbon Engineering Limited India 100.00 100.00 100.00 100.00
8 L&T Gulf Private Limited [b] India – – 100.00 100.00
9 Larsen & Toubro Infotech Limited India 74.27 74.27 74.53 74.53
10 Syncordis Software Services India Private Limited India 74.27 74.27 74.53 74.53
11 Ruletronics Systems Private Limited India 74.27 74.27 74.53 74.53
12 Lymbyc Solutions Private Limited India 74.27 74.27 74.53 74.53
13 Powerup Cloud Technologies Private Limited India 74.27 74.27 74.53 74.53
14 L&T Technology Services Limited India 74.24 74.24 74.62 74.62
15 L&T Thales Technology Services Private Limited India 54.94 54.94 55.22 55.22
16 Graphene Semiconductor Services Private Limited India 74.24 74.24 74.62 74.62
17 Seastar Labs Private Limited India 74.24 74.24 74.62 74.62
18 Esencia Technologies India Private Limited India 74.24 74.24 74.62 74.62
19 Mindtree Limited India 61.03 61.03 61.08 61.08
20 L&T Capital Markets Limited [c] India – – 63.72 63.72
21 L&T Finance Holdings Limited India 63.62 63.62 63.72 63.72
22 L&T Finance Limited India 63.62 63.62 63.72 63.72
23 L&T Housing Finance Limited [d] India – – 63.72 63.72
24 L&T Infrastructure Finance Company Limited [d] India – – 63.72 63.72
25 L&T Infra Debt Fund Limited India 63.62 63.62 63.72 63.72
26 L&T Infra Investment Partners Advisory Private Limited India 63.62 63.62 63.72 63.72
27 L&T Infra Investment Partners Trustee Private Limited India 63.62 63.62 63.72 63.72
28 L&T Investment Management Limited India 63.62 63.62 63.72 63.72
29 L&T Mutual Fund Trustee Limited India 63.62 63.62 63.72 63.72
30 L&T Financial Consultants Limited India 63.62 63.62 63.72 63.72
31 Mudit Cement Private Limited India 63.62 63.62 63.72 63.72
32 L&T Infra Investment Partners India 34.94 34.94 34.99 34.99
33 L&T Metro Rail (Hyderabad) Limited India 100.00 100.00 100.00 100.00
34 Sahibganj Ganges Bridge-Company Private Limited [e] India – – 100.00 100.00
35 L&T Arunachal Hydropower Limited India 100.00 100.00 100.00 100.00
36 L&T Himachal Hydropower Limited India 100.00 100.00 100.00 100.00
37 L&T Power Development Limited India 100.00 100.00 100.00 100.00
38 L&T Uttaranchal Hydropower Limited India 100.00 100.00 100.00 100.00
39 Nabha Power Limited India 100.00 100.00 100.00 100.00
40 Chennai Vision Developers Private Limited India 100.00 100.00 100.00 100.00
41 L&T Asian Realty Project LLP India 100.00 100.00 100.00 100.00
42 L&T Parel Project LLP India 100.00 100.00 100.00 100.00
43 L&T Westend Project LLP India 100.00 100.00 100.00 100.00

490
Notes forming part of the Consolidated Financial Statements (contd.)
Note [40] (contd.)

As at 31-3-2021 As at 31-3-2020
Principal place of Proportion Proportion of Proportion Proportion of
Sr. business of effective voting power of effective voting power
Name of subsidiaries
No. ownership held (%) ownership held (%)
interest (%) interest (%)
Indian subsidiaries
44 LTR SSM Private Limited [f] India 99.00 99.00 99.00 99.00
45 L&T Seawoods Limited India 100.00 100.00 100.00 100.00
46 L&T Vision Ventures Limited India 68.00 68.00 68.00 68.00
47 L&T Electricals and Automation Limited India 100.00 100.00 100.00 100.00
48 L&T Realty Developers Limited (formerly known as L&T India
Construction Equipment Limited) 100.00 100.00 100.00 100.00
49 L&T Construction Equipment Limited (formerly known India
as L&T Construction Machinery Limited) 100.00 100.00 100.00 100.00
50 L&T Valves Limited India 100.00 100.00 100.00 100.00
51 Bhilai Power Supply Company Limited India 99.90 99.90 99.90 99.90
52 L&T Power Limited India 99.99 99.99 99.99 99.99
53 Kesun Iron and Steel Company Private Limited [f] India 95.00 95.00 95.00 95.00
54 L&T Aviation Services Private Limited India 100.00 100.00 100.00 100.00
55 L&T Capital Company Limited India 100.00 100.00 100.00 100.00
56 L&T Infra Contractors Private Limited [f] India 100.00 100.00 100.00 100.00
[a]
The company is dissolved on January 28, 2021
[b]
The company is merged with L&T Hydrocarbon Engineering Limited w.e.f. April 1, 2020
[c]
The Group has sold its stake on April 24, 2020
[d]
The company is merged with L&T Finance Limited w.e.f. April 1, 2020
[e]
The company is dissolved on March 30, 2021
[f]
The company is in process of being struck off from the register of companies

As at 31-3-2021 As at 31-3-2020
Principal place of Proportion Proportion of Proportion Proportion of
Sr. business of effective voting power of effective voting power
Name of subsidiaries
No. ownership held (%) ownership held (%)
interest (%) interest (%)
Foreign subsidiaries
1 Larsen & Toubro (Oman) LLC Sultanate of
Oman 65.00 65.00 65.00 65.00
2 Larsen & Toubro Qatar LLC [a] Qatar 49.00 100.00 49.00 100.00
3 Larsen & Toubro Saudi Arabia LLC Kingdom of
Saudi Arabia 100.00 100.00 100.00 100.00
4 Larsen & Toubro T&D SA (Proprietary) Limited South Africa 72.50 72.50 72.50 72.50
5 Larsen & Toubro Heavy Engineering LLC Sultanate of
Oman 70.00 100.00 70.00 100.00
6 Larsen & Toubro Hydrocarbon International Limited Kingdom of
LLC [b] Saudi Arabia – – 100.00 100.00
7 L&T Modular Fabrication Yard LLC Sultanate of
Oman 70.00 100.00 70.00 100.00
8 L&T Overseas Projects Nigeria Limited [c] Nigeria – – 100.00 100.00
9 Larsen Toubro Arabia LLC Kingdom of
Saudi Arabia 75.00 100.00 75.00 100.00
10 L&T Hydrocarbon Saudi Company Kingdom of
Saudi Arabia 100.00 100.00 100.00 100.00
11 Larsen & Toubro Kuwait Construction General
Contracting Company WLL Kuwait 49.00 100.00 49.00 100.00

491
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [40] (contd.)
As at 31-3-2021 As at 31-3-2020
Principal place of Proportion Proportion of Proportion Proportion of
Sr. business of effective voting power of effective voting power
Name of subsidiaries
No. ownership held (%) ownership held (%)
interest (%) interest (%)
Foreign subsidiaries
12 PT Larsen & Toubro Hydrocarbon Engineering Indonesia Indonesia 95.00 95.00 95.00 95.00
13 Larsen & Toubro Electromech LLC Sultanate of
Oman 70.00 100.00 70.00 100.00
14 L&T Hydrocarbon International FZE UAE 100.00 100.00 100.00 100.00
15 L&T Information Technology Services (Shanghai) Co.,
Ltd. China 74.27 74.27 74.53 74.53
16 L&T Infotech Financial Services Technologies Inc. Canada 74.27 74.27 74.53 74.53
17 Larsen & Toubro Infotech Canada Limited Canada 74.27 74.27 74.53 74.53
18 Larsen & Toubro Infotech LLC USA 74.27 74.27 74.53 74.53
19 Larsen & Toubro Infotech South Africa (Proprietary)
Limited South Africa 51.68 51.68 55.83 55.83
20 Larsen & Toubro Infotech GmbH Germany 74.27 74.27 74.53 74.53
21 L&T Information Technology Spain SL Spain 74.27 74.27 74.53 74.53
22 Larsen & Toubro Infotech Norge AS Norway 74.27 74.27 74.53 74.53
23 Larsen & Toubro LLC USA 98.77 98.77 98.79 98.79
24 L&T Infotech S. DE R.L. DE C.V. Mexico 74.27 74.27 74.53 74.53
25 Syncordis S.A. Luxembourg 74.27 74.27 74.53 74.53
26 Syncordis France SARL France 74.27 74.27 74.53 74.53
27 Syncordis Limited UK 74.27 74.27 74.53 74.53
28 Syncordis PSF S.A. Luxembourg 74.27 74.27 74.53 74.53
29 Nielsen+Partner Unternehmensberater GmbH Germany 74.27 74.27 74.53 74.53
30 Nielsen+Partner Unternehmensberater AG Switzerland 74.27 74.27 74.53 74.53
31 Nielsen+Partner Pte Ltd Singapore 74.27 74.27 74.53 74.53
32 NIELSEN+PARTNER S.A. [d] Luxembourg – – 74.53 74.53
33 Nielsen&Partner Company Limited Thailand 74.27 74.27 74.53 74.53
34 Nielsen&Partner Pty Ltd Australia 74.27 74.27 74.53 74.53
35 Ruletronics Limited UK 74.27 74.27 74.53 74.53
36 Ruletronics Systems Inc. USA 74.27 74.27 74.53 74.53
37 Larsen & Toubro Infotech UK Limited [e] UK 74.27 74.27 – –
38 LTI Middle East FZ-LLC [f] UAE 74.27 74.27 – –
39 Lymbyc Solutions Inc. USA 74.27 74.27 74.53 74.53
40 L&T Technology Services LLC USA 74.24 74.24 74.62 74.62
41 Graphene Solutions PTE Ltd. Singapore 74.24 74.24 74.62 74.62
42 Graphene Solutions SDN. BHD. Malaysia 74.24 74.24 74.62 74.62
43 Graphene Solutions Taiwan Limited Taiwan 74.24 74.24 74.62 74.62
44 Esencia Technologies Inc. USA 74.24 74.24 74.62 74.62
45 L&T Technology Services (Shanghai) Co. Ltd China 74.24 74.24 74.62 74.62
46 L&T Technology Services (Canada) Ltd Canada 74.24 74.24 74.62 74.62
47 Orchestra Technology, Inc. [g] USA 74.24 74.24 – –
48 Mindtree Software (Shanghai) Co. Limited China 61.03 61.03 61.08 61.08
49 Bluefin Solutions Sdn. Bhd. Malaysia 61.03 61.03 61.08 61.08
50 Henikwon Corporation SDN. BHD. [h] Malaysia – – 100.00 100.00
51 Kana Controls General Trading & Contracting Company
W.L.L. [h] Kuwait – – 49.00 100.00

492
Notes forming part of the Consolidated Financial Statements (contd.)
Note [40] (contd.)
As at 31-3-2021 As at 31-3-2020
Principal place of Proportion Proportion of Proportion Proportion of
Sr. business of effective voting power of effective voting power
Name of subsidiaries
No. ownership held (%) ownership held (%)
interest (%) interest (%)
Foreign subsidiaries
52 L&T Electrical & Automation FZE [h] UAE – – 100.00 100.00
53 L&T Electricals & Automation Saudi Arabia Company Kingdom of
Limited LLC [h] Saudi Arabia – – 100.00 100.00
54 PT. Tamco Indonesia [h] Indonesia – – 100.00 100.00
55 Tamco Electrical Industries Australia Pty Limited [h] Australia – – 100.00 100.00
56 Tamco Switchgear (Malaysia) SDN BHD [h] Malaysia – – 100.00 100.00
57 Servowatch Systems Limited [i] UK – – 100.00 100.00
58 Thalest Limited UK 100.00 100.00 100.00 100.00
59 Larsen & Toubro (East Asia) Sdn.Bhd. Malaysia 30.00 100.00 30.00 100.00
60 Larsen & Toubro International FZE UAE 100.00 100.00 100.00 100.00
61 L&T Global Holdings Limited UAE 100.00 100.00 100.00 100.00
62 L&T Capital Markets (Middle East) Ltd [j] UAE – – 63.72 63.72
63 L&T Valves Arabia Manufacturing LLC Kingdom of
Saudi Arabia 100.00 100.00 100.00 100.00
64 L&T Valves USA LLC USA 100.00 100.00 100.00 100.00
[a]
The company is in process of liquidation
[b]
The company is liquidated on May 16, 2020
[c]
The company is dissolved on January 21, 2021
[d]
The company is merged with Syncordis S.A. w.e.f. December 21, 2020
[e]
The company has been incorporated on August 17, 2020
[f]
The company has been incorporated on November 25, 2020
[g]
The Group has acquired stake on October 2, 2020
[h]
The Group has sold its stake on August 31, 2020
[i]
The Group has sold its stake on December 1, 2020
[j]
The company is liquidated on December 17, 2020

As at 31-3-2021 As at 31-3-2020
Principal place of Proportion Proportion of Proportion Proportion of
Sr. business of effective voting power of effective voting power
Name of associates
No. ownership held (%) ownership held (%)
interest (%) interest (%)
1 L&T-Chiyoda Limited India 50.00 50.00 50.00 50.00
2 Gujarat Leather Industries Limited [a] India 50.00 50.00 50.00 50.00
3 Larsen & Toubro Qatar & HBK Contracting Co. WLL Qatar 50.00 50.00 50.00 50.00
4 L&T Camp Facilities LLC UAE 49.00 49.00 49.00 49.00
5 Magtorq Private Limited India 42.85 42.85 42.85 42.85
6 Magtorq Engineering Solutions Private Limited India 39.28 39.28 39.28 39.28
[a]
The company is under liquidation

493
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [40] (contd.)

As at 31-3-2021 As at 31-3-2020
Sr. Principal place of Proportion of effective Proportion of effective
Name of joint ventures
No. business ownership interest (%) ownership interest (%)
Joint ventures
1 L&T - MHI Power Boilers Private Limited (formerly known as India
L&T-MHPS Boilers Private Limited) 51.00 51.00
2 L&T - MHI Power Turbine Generators Private Limited (formerly India
known as L&T-MHPS Turbine Generators Private Limited) 51.00 51.00
3 L&T Howden Private Limited India 50.10 50.10
4 L&T-Sargent & Lundy Limited India 50.00 50.00
5 L&T Special Steels and Heavy Forgings Private Limited India 74.00 74.00
6 L&T MBDA Missile Systems Limited India 51.00 51.00
7 L&T Sapura Offshore Private Limited India 60.00 60.00
8 L&T Sapura Shipping Private Limited India 60.00 60.00
9 L&T Hydrocarbon Caspian LLC Azerbaijan 50.00 50.00
10 L&T Infrastructure Development Projects Limited India 51.00 51.00
11 L&T Chennai-Tada Tollway Limited India 51.00 51.00
12 L&T Rajkot-Vadinar Tollway Limited India 51.00 51.00
13 L&T Deccan Tollways Limited India 52.89 52.89
14 L&T Samakhiali Gandhidham Tollway Limited India 51.01 51.01
15 Kudgi Transmission Limited India 51.00 51.00
16 L&T Sambalpur-Rourkela Tollway limited India 51.00 51.00
17 Panipat Elevated Corridor Limited India 51.00 51.00
18 Vadodara Bharuch Tollway Limited India 51.00 51.00
19 L&T Transportation Infrastructure Limited India 63.86 63.86
20 L&T Interstate Road Corridor Limited India 51.00 51.00
21 Ahmedabad-Maliya Tollway Limited India 51.00 51.00
22 L&T Halol-Shamlaji Tollway Limited India 24.98 24.98
23 PNG Tollway Limited India 37.74 37.74
24 Raykal Aluminium Company Private Limited India 75.50 75.50
25 Indiran Engineering Projects and Systems Kish PJSC Iran 50.00 50.00

As at 31-3-2021 As at 31-3-2020
Sr. Name of joint operations (with specific ownership interest in the Principal place of Proportion of effective Proportion of effective
No. arrangement) business ownership interest (%) ownership interest (%)
1 Desbuild L&T Joint Venture India 49.00 49.00
2 Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint
Venture India 50.00 50.00
3 Al Balagh Trading & Contracting Co W.L.L.- L&T Joint Venture Qatar 80.00 80.00
4 L&T-AM Tapovan Joint Venture India 65.00 65.00
5 HCC-L&T Purulia Joint Venture India 43.00 43.00
6 International Metro Civil Contractors Joint Venture India 26.00 26.00
7 Metro Tunneling Group India 26.00 26.00
8 L&T-Hochtief Seabird Joint Venture India 90.00 90.00
9 Metro Tunneling Chennai-L&T Shanghai Urban Construction
(Group) Corporation Joint Venture India 75.00 75.00
10 Metro Tunneling Delhi-L&T Shanghai Urban Construction (Group)
Corporation Joint Venture India 60.00 60.00
11 L&T-Shanghai Urban Construction (Group) Corporation Joint
Venture CC27 Delhi India 68.00 68.00

494
Notes forming part of the Consolidated Financial Statements (contd.)
Note [40] (contd.)
As at 31-3-2021 As at 31-3-2020
Sr. Name of joint operations (with specific ownership interest in the Principal place of Proportion of effective Proportion of effective
No. arrangement) business ownership interest (%) ownership interest (%)
12 Aktor-Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering
Joint Venture Qatar 22.00 22.00
13 Civil Works Joint Venture Kingdom of Saudi
Arabia 29.00 29.00
14 L&T-Shanghai Urban Construction (Group) Corporation Joint
Venture India 51.00 51.00
15 DAEWOO and L&T Joint Venture India 50.00 50.00
16 L&T-STEC JV MUMBAI India 65.00 65.00
17 L&T-ISDPL (JV) India 100.00 100.00
18 L&T-IHI Consortium India 100.00 100.00
19 L&T-Eastern Joint Venture [a] UAE – 65.00
20 Larsen and Toubro Limited-Scomi Engineering BHD Consortium-
Residual Joint Works Joint Venture India 60.00 60.00
21 Larsen and Toubro Limited-Scomi Engineering BHD Consortium-
O&M Joint Venture India 50.00 50.00
22 L&T-Inabensa Consortium India 100.00 100.00
23 L&T-Delma Mafraq Joint Venture UAE 100.00 100.00
24 L&T-AL-Sraiya LRDP 6 Joint Venture Qatar 75.00 75.00
25 Larsen & Toubro Limited & NCC Limited Joint Venture India 55.00 55.00
26 Besix-Larsen & Toubro Joint Venture UAE 50.00 50.00
27 Larsen & Toubro Ltd - Passavant Energy & Environment JV India 50.00 50.00
28 LNT-Shriram EPC Tanzania UJV Tanzania 90.00 90.00
29 LTH Milcom Private Limited India 56.67 56.67
30 L&T - Tecton JV India 60.00 60.00
31 L&T - Powerchina JV UAE 55.00 55.00
32 L&T - PCIPL JV India 99.00 99.00
33 Bauer-L&T Geo Joint Venture India 50.00 50.00
34 EMAS Saudi Arabia Ltd Kingdom of Saudi
Arabia 50.00 50.00
35 L&T Infrastructure Engineering - LEA Associates South Asia JV India 61.00 61.00
36 L&T Infra Engineering JV United Consultancy Bhutan 75.81 75.81
[a]
The joint arrangement is dissolved

Sr. Name of joint operations (with specific proportion of activity carried out through the arrangement) Principal place of business
No.
1 L&T Sojitz Consortium India
2 L&T-KBL (UJV) Hyderabad India
3 L&T-KBL-MAYTAS UJV India
4 Mallanna Sagar Reservoir LnT-Prasad-RK Infra JV India
5 Larsen & Toubro Limited Waterleau Consortium Qatar
6 L&T-BRAPL JV (package II) India
7 L&T-BRAPL JV (package III) India
8 IIS-L&T Consortium India
9 PES Engg P Ltd-L&T Consortium India
10 L&T ISDPL - DI (JV) India

495
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [40] (contd.)
Sr. Name of joint operations (with specific proportion of activity carried out through the arrangement) Principal place of business
No.
11 L&T Galfar Consortium Sultanate of Oman
12 Sojitz Corporation-L&T Consortium India
13 Sojitz Corporation-Gayathri Projects Ltd-L&T consortium India
14 PESB and Larsen & Toubro Joint Venture Malaysia
15 Scomi Engineering Bhd-L&T consortium India
16 L&T-Kyosan Consortium India
17 LTSA-OTSA Inside Kingdom Consortium Kingdom of Saudi Arabia
18 LTUAE-OTDMCC Outside Kingdom Consortium UAE
19 Consortium of M/s. J. Ray McDermott Sdn. Bhd. and M/s. L&T Hydrocarbon Engineering Limited India
20 Consortium of L&T Hydrocarbon Engineering Limited and EMAS AMC Pte. Ltd. Kingdom of Saudi Arabia
21 Consortium of L&T Hydrocarbon Engineering Limited and Reliance Naval and Engineering Limited India
22 Consortium of L&T Hydrocarbon Engineering Limited, GE Oil & Gas UK Ltd, McDermott International Management S.
de RL, Berlian McDermott Sdn Bhd and Vetco Gray Pte Ltd India
23 Consortium of L&T Hydrocarbon Engineering Limited, Technip France and Technic India Limited India
24 L&T Parel Project LLP-Omkar Realtors & Developers Private Limited (Crescent bay) India
25 L&T Asian Realty Project LLP-Nirmal Life Style Developers Private Limited (Nirmal Lifestyle) India
26 L&T Asian Realty Project LLP-L&T Finance Limited, Aryaman Developers Private Limited and Xrbia Chakan Developers
Private Limited (Centrona Project) India
27 L&T Infrastructure Engineering Limited-Fortress Infrastructure Advisory Services India
28 L&T Infrastructure Engineering Limited-Mahindra Consulting Engineers Ltd. and PriceWaterhouse Coopers Private
Limited India
29 L&T Infrastructure Engineering Limited-PriceWaterhouse Coopers Private Limited India
30 L&T Infrastructure Engineering Limited-Rajendran Associates India
31 L&T Infrastructure Engineering Limited-Transtek Engineers & Services Private Limited India
32 L&T Infrastructure Engineering Limited-Vax Consultants Private Limited India
33 L&T Infrastructure Engineering Limited-Aakar Abhinav Consultants Private Limited India
34 L&T Infrastructure Engineering Limited-Centre for Symbiosis of Technology Environment & Management (STEM) India
35 L&T Infrastructure Engineering Limited-CRISIL Risk & Infrastructure Solutions Limited India
36 L&T Infrastructure Engineering Limited-Rites Limited and KPMG India
37 L&T Infrastructure Engineering Limited-Tractabel Engineering India
38 L&T Infrastructure Engineering Limited-LEA Associates South Asia Private Limited India
Note [41]
The components of other equity shown in the Consolidated Balance Sheet include the Group’s share in the respective reserves of
subsidiaries, joint arrangements and associates. Reserve attributable to non-controlling interest is reported separately in the Consolidated
Balance Sheet. Retained earnings comprise Group’s share in general reserve and balance of Profit and Loss.

496
Notes forming part of the Consolidated Financial Statements (contd.)
Note [42]
Disclosure pursuant to Ind AS 112 “Disclosure of Interest in other entities”: Subsidiaries

(a) Change in the Group’s ownership interest in a subsidiary (without ceding control)
(i) On account of divestment of part stake:
During the year 2019-20, the Group sold 3.89% stake in L&T Technology Services Limited and the proceeds of R 668.95 crore
were received in cash. An amount of R 118.37 crore (being the proportionate share of the carrying amount of the net assets of
L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of R 550.58 crore between
the consideration received and the increase in the non-controlling interests has been credited to retained earnings.
(ii) On account of dilution due to exercise of Employee Stock Options:
v crore
2020-21 2019-20
Dilution Proceeds Credit to Retained Dilution Proceeds Credit to Retained
(%) received non- earnings (%) received non- earnings
Name of company
controlling (Dr)/Cr controlling (Dr)/Cr
interest interest
(Dr)/Cr [a] (Dr)/Cr [a]
L&T Finance Holdings Limited 0.10% 8.58 32.75 (24.17) 0.19% 39.70 52.61 (12.91)
Larsen & Toubro Infotech Limited 0.27% 0.06 28.73 (28.67) 0.26% 0.06 22.57 (22.51)
L&T Technology Services Limited 0.38% 0.11 18.09 (17.98) 0.38% 0.10 14.56 (14.46)
Mindtree Limited 0.05% 0.15 6.99 (6.84) 0.04% 0.12 (0.06) 0.18
Total 8.90 86.56 (77.66) 39.98 89.68 (49.70)
[a] Represents proportionate share of the carrying amount of the net assets of subsidiaries.

(b) The effect of divestment with ceding of control in subsidiaries during the year is as under:
v crore
Effect on consolidated profit/
(loss) before non-controlling Line item in Statement of Profit & Loss
Name of company
interest in which the gain/(loss) is recognised
2020-21 2019-20
L&T Capital Markets Limited 224.72 – Exceptional items before tax
Subsidiaries in Electrical and Automation business:
a. Henikwon Corporation SDN. BHD.
b. K ana Controls General Trading &
Contracting Company W.L.L.
c. L &T Electrical & Automation FZE
d. L &T Electricals & Automation Saudi Arabia
Profit before tax from discontinued
Company Limited LLC (370.41) –
operations
e. P T. Tamco Indonesia
f. T amco Electrical Industries Australia Pty
Limited
g. T amco Switchgear (Malaysia) SDN BHD
h. S ervowatch Systems Limited
Total (145.69) –

497
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [42] (contd.)
(c) Disclosure of subsidiaries having material non-controlling interest:

(i) Summarised Statement of Profit and Loss

v crore
L&T Finance Limited [a] L&T Finance Holdings Limited
Particulars
2020-21 2019-20 2020-21 2019-20
Revenue 12125.67 12486.60 166.74 475.28
Profit/(loss) for the year 1.36 682.92 116.05 266.81
Other comprehensive income 43.19 (159.09) 0.11 (0.11)
Total comprehensive income 44.55 523.83 116.16 266.70
Effective % of non-controlling interest 36.38% 36.28% 36.38% 36.28%
Profit/(loss) allocated to non-controlling interest (including
consolidation adjustments) 226.45 484.68 6.94 (58.38)
Dividend (including dividend distribution tax) to non-
controlling interest – – – 137.30
L&T Housing Finance Limited and L&T Infrastructure Finance Company Limited merged with L&T Finance Limited w.e.f. April
[a]

1, 2020. Previous year numbers have been regrouped.

v crore
Larsen & Toubro Infotech L&T Technology Services
Particulars Limited Limited
2020-21 2019-20 2020-21 2019-20
Revenue 11563.54 10287.59 4971.60 5225.65
Profit/(loss) for the year 1787.39 1552.36 673.13 790.03
Other comprehensive income 438.62 (438.10) 254.00 (260.32)
Total comprehensive income 2226.01 1114.26 927.13 529.71
Effective % of non-controlling interest 25.73% 25.46% 25.76% 25.38%
Profit/(loss) allocated to non-controlling interest (including
consolidation adjustments) 455.44 367.53 170.84 189.98
Dividend (including dividend distribution tax) to non-
controlling interest 135.58 143.38 55.84 66.10

v crore
Mindtree Limited
Particulars
2020-21 2019-20 [b]
Revenue 7967.80 5930.10
Profit/(loss) for the year 1110.30 538.10
Other comprehensive income 329.82 (209.10)
Total comprehensive income 1440.12 329.00
Effective % of non-controlling interest 38.97% 38.92%
Profit/(loss) allocated to non-controlling interest (including consolidation adjustments) 340.18 144.33
Dividend (including dividend distribution tax) to non-controlling interest 112.12 211.01
[b] from the date of acquisition

498
Notes forming part of the Consolidated Financial Statements (contd.)
Note [42] (contd.)
(ii) Summarised Balance Sheet
v crore
L&T Finance Limited [a] L&T Finance Holdings Limited
Particulars As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020
Current assets (a) 49371.46 49763.54 2748.26 1153.20
Current liabilities (b) 37390.19 34497.24 754.58 2099.72
Net current assets (c)=(a) - (b) 11981.27 15266.30 1993.68 (946.52)
Non-current assets (d) 46845.00 49836.42 10091.42 10184.59
Non-current liabilities (e) 43204.83 49476.85 1074.82 1393.23
Net non-current assets (f)=(d) - (e) 3640.17 359.57 9016.60 8791.36
Net assets (g)=(c) + (f) 15621.44 15625.87 11010.28 7844.84
Accumulated non-controlling interest 2388.47 2139.51 3916.45 2765.91
[a] L&T Housing Finance Limited and L&T Infrastructure Finance Company Limited merged with L&T Finance Limited w.e.f. April
1, 2020. Previous year numbers have been regrouped.
v crore
Larsen & Toubro Infotech L&T Technology Services
Limited Limited
Particulars
As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020
Current assets (a) 7574.04 5985.20 3313.92 2779.82
Current liabilities (b) 2321.66 2084.65 1010.68 980.61
Net current assets (c)=(a) - (b) 5252.38 3900.55 2303.24 1799.21
Non-current assets (d) 2413.66 2331.61 1506.19 1301.88
Non-current liabilities (e) 726.24 1003.32 469.35 481.06
Net non-current assets (f)=(d) - (e) 1687.42 1328.29 1036.84 820.82
Net assets (g)=(c) + (f) 6939.80 5228.84 3340.08 2620.03
Accumulated non-controlling interest 1779.56 1320.47 869.76 672.69

v crore
Mindtree Limited
Particulars As at As at
31-3-2021 31-3-2020
Current assets (a) 4573.20 3253.40
Current liabilities (b) 1592.20 1323.70
Net current assets (c)=(a) - (b) 2981.00 1929.70
Non-current assets (d) 1787.40 1903.10
Non-current liabilities (e) 449.80 676.20
Net non-current assets (f)=(d) - (e) 1337.60 1226.90
Net assets (g)=(c) + (f) 4318.60 3156.60
Accumulated non-controlling interest 2193.14 1829.41

499
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [42] (contd.)
(iii) Summarised Statement of Cash Flows
v crore
L&T Finance Limited [a] L&T Finance Holdings Limited
Particulars
2020-21 2019-20 2020-21 2019-20
Cash flows from operating activities 4761.01 2243.71 (170.40) 82.24
Cash flows from investing activities (2471.20) 376.24 272.18 (1006.23)
Cash flows from financing activities (3235.28) 1013.62 1295.74 924.08
Net increase/(decrease) in cash and cash equivalents (945.47) 3633.57 1397.52 0.09
[a] L&T Housing Finance Limited and L&T Infrastructure Finance Company Limited merged with L&T Finance Limited w.e.f. April
1, 2020. Previous year numbers have been regrouped.

v crore
Larsen & Toubro Infotech L&T Technology Services
Particulars Limited Limited
2020-21 2019-20 2020-21 2019-20
Cash flows from operating activities 2179.46 1643.93 1267.13 664.41
Cash flows from investing activities (1638.19) (578.11) (964.62) (280.52)
Cash flows from financing activities (512.82) (918.39) (353.80) (377.23)
Net increase/(decrease) in cash and cash equivalents 28.45 147.43 (51.29) 6.66

v crore
Mindtree Limited
Particulars
2020-21 2019-20 [b]
Cash flows from operating activities 1995.30 634.00
Cash flows from investing activities (1183.30) 153.40
Cash flows from financing activities (422.50) (614.70)
Net increase/(decrease) in cash and cash equivalents 389.50 172.70
[b] from the date of acquisition

500
Notes forming part of the Consolidated Financial Statements (contd.)
Note [43]
Disclosures pursuant to Ind AS 112 “Disclosure of interest in other entities” :- Joint Ventures and Associates
(a) Summarised Balance Sheet of material joint ventures:
v crore
L&T - MHI Power L&T Special Steels and L&T Infrastructure
Boilers Private Limited Heavy Forgings Private Development Projects
(formerly known as Limited Limited (consolidated)
Particulars L&T-MHPS Boilers
Private Limited)
As at As at As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020
Current assets:
Cash and bank balances 549.29 850.71 1.62 0.05 1605.66 1220.91
Other assets 2631.37 2500.57 246.59 312.31 1082.99 1089.26
Total current assets (A) 3180.66 3351.28 248.21 312.36 2688.65 2310.17
Total non-current assets (including Goodwill) (B) 551.12 514.40 194.69 1198.72 10815.82 11554.09
Current liabilities:
Financial liabilities (excluding trade payables) 403.26 469.40 1820.11 1710.89 2031.78 1233.69
Other liabilities (including trade payables) 1583.95 1663.34 97.27 146.66 523.86 420.88
Total current liabilities (C) 1987.21 2132.74 1917.38 1857.55 2555.64 1654.57
Non-current liabilities:
Financial liabilities (excluding trade payables) 15.69 – 748.66 672.74 8326.21 9341.03
Other liabilities (including trade payables) – – 15.26 15.78 574.11 561.93
Total non-current liabilities (D) 15.69 – 763.92 688.52 8900.32 9902.96
Non-controlling interest (NCI) (E) – – – – 138.64 163.78
Net assets (A+B-C-D-E) 1728.88 1732.94 (2238.40) (1034.99) 1909.87 2142.95
(b) Reconciliation of carrying amounts of material joint ventures:
v crore
L&T - MHI Power L&T Special Steels and L&T Infrastructure
Boilers Private Limited Heavy Forgings Private Development Projects
(formerly known as Limited Limited (consolidated)
Particulars L&T-MHPS Boilers
Private Limited)
As at As at As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020
Opening net assets 1732.94 1445.42 (1034.98) (812.48) 2142.95 1692.98
Profit/(loss) for the year (net of NCI) 253.08 312.20 (1203.54) (222.12) (130.07) (284.03)
Dividend distributed during the year (including (234.10) (28.22) – – – –
dividend distribution tax)
Other comprehensive income (net of NCI) (23.04) 3.54 0.13 (0.26) (102.92) 56.01
Infusion during the year (including securities – – – – – 863.00
premium)
Amount adjusted against securities premium – – – – – (148.29)
Equity component of other financial instruments – – – – – (70.00)
Other adjustments – – – (0.12) (0.09) 33.28
Closing net assets 1728.88 1732.94 (2238.39) (1034.98) 1909.87 2142.95
Group’s share (%) 51.00% 51.00% 74.00% 74.00% 51.00% 51.00%
Group’s share 881.72 883.80 (1656.41) (765.88) 1128.81 1247.68
Parent’s investment in group companies – – – – 10.88 10.88
Losses absorbed against and impairment of other
long term interest – – 1608.14 731.75 – –
Other adjustments – – 48.27 34.13 19.85 36.34
Carrying amount 881.72 883.80 – – 1159.54 1294.90

501
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [43] (contd.)
(c) Summarised Statement of Profit and Loss of material joint ventures:

v crore

L&T - MHI Power L&T Special Steels and L&T Infrastructure

Boilers Private Limited Heavy Forgings Private Development Projects
(formerly known as Limited Limited (consolidated)
Particulars L&T-MHPS Boilers
Private Limited)
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
Revenue 1763.44 2035.62 235.25 222.78 1548.31 1759.15
Interest income 42.76 36.22 0.18 0.20 54.53 137.25
Depreciation and amortisation (67.17) (65.00) (46.22) (48.59) (491.09) (487.30)
Finance cost (1.92) (5.19) (216.71) (199.45) (842.38) (1063.40)
Tax expense (89.15) (117.60) – – (34.91) (118.47)
Profit/(loss) for the year (net of NCI) (i) 253.08 312.20 (1203.54) (222.12) (130.07) (284.03)
Other comprehensive income (net of NCI) (ii) (23.04) 3.54 0.13 (0.26) (102.92) 56.01
Total comprehensive income (net of NCI) (i+ii) 230.04 315.74 (1203.41) (222.38) (232.99) (228.02)
(d) Financial information in respect of individually not material joint ventures/associates:
v crore
As at As at
Particulars
31-3-2021 31-3-2020
Aggregate carrying amount of investment in individually not material joint ventures/associates 629.00 672.31
Aggregate amounts of the Group’s share of:
Profit/(loss) for the year 22.03 55.20
Other comprehensive income for the year (14.09) 24.93
Total comprehensive income for the year 7.94 80.13
(e) Carrying amount of investments in joint ventures/associates:
v crore
As at As at
Particulars
31-3-2021 31-3-2020
Non-material associates 80.30 115.02
Non-material joint ventures 548.70 557.29
Sub-total 629.00 672.31
Material joint ventures 2041.26 2178.70
Total 2670.26 2851.01
(f) Share in profit/(loss) of joint ventures/associates (net):
v crore
Particulars 2020-21 2019-20
Non-material associates 6.18 25.88
Non-material joint ventures 15.85 29.32
Sub-total 22.03 55.20
Material joint ventures (7.63) 16.76
Total 14.40 71.96

502
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [44]
Disclosures pursuant to Ind AS 103 “Business Combinations”:

Acquisition of Orchestra Technology, Inc.

(i) On October 2, 2020, the Group has acquired 100% stake in Orchestra Technology, Inc. (Orchestra), a US based company, operating
in the IT & Technology Services segment.
Orchestra is Dallas, Texas based company which provides specialist technology solutions to the clients, mainly in telecom industry.
Orchestra will help bolster Group’s offerings in the areas of network engineering & enterprise mobility and next generation digital
systems for 5G and IoT networks.

(ii) Assets acquired and liabilities recognised on the date of acquisition are as follows:

v crore
Particulars Orchestra
Assets
Non-current assets
Specialised software 4.09
Trade names 4.68
Customer contracts and relationship 43.41 52.18
Current assets
Trade receivables 8.22
Cash and bank balances 7.07
Other current assets 10.28 25.57
Total Assets 77.75
Liabilities
Non-current liabilities
Deferred tax liabilty 4.50
Current liabilities
Trade payables 3.53
Short term borrowings 18.42
Other current liabilities 42.82 64.77
Total Liabilities 69.27
Net Assets acquired 8.48
(iii) Calculation of Goodwill:
v crore
Particulars Orchestra
Total cash paid (A) 80.22
Less: Payment towards assumed liabilities of the entity (B) (49.55)
Purchase consideration paid in cash for acquisition of net assets (C= A-B) 30.67
Present value of contingent consideration payable over future years (D) 18.64
Purchase consideration (E=C+D) 49.31
Less: Fair value of net assets acquired 8.48
Goodwill 40.83
(iv) Goodwill is attributable to future growth of business from this acquisition and assembled workforce. The goodwill is not deductible
for income tax purposes.

(v) The Group has recognised contingent consideration in accordance with the terms of the share purchase agreement. The maximum
contingent consideration of R 27.44 crore is payable to the promoters of Orchestra upon achievement of the specified financial
targets. The fair value of the contingent consideration is determined by assigning probabilities to achievement of the targets.

503
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [44] (contd.)
(vi) The entity has reported revenue of R 63.22 crore and loss of R 0.01 crore from the date of acquisition till March 31, 2021. Had the
entity been acquired from April 1, 2020, it would have reported revenue of R 125.00 crore and loss of R 0.02 crore during 2020-21.

(vii) The transaction costs of R 2.95 crore related to the acquisition have been expensed in the Statement of Profit & Loss for the year
ended March 31, 2021

(viii) Trade receivables acquired have been substantially collected during the year.

Note [45]
Disclosure pursuant to Ind AS 105 “Non-current Assets Held for Sale and Discontinued Operations”:

(a) On May 1, 2018, the Group signed, subject to regulatory approvals, definitive agreements with Schneider Electric SE for sale of
its Electrical & Automation (E&A) business [refer Note 46 for composition of E&A business]. The Competition Commission of India
(CCI) accorded on April 18, 2019 its approval (the detailed order was uploaded on its website on June 6, 2019) for acquisition of
the Group’s E&A business by Schneider Electric SE subject to fulfilment of certain conditions. The E&A business was classified as
discontinued operation.

During the year 2020-21, the Group completed divestment of the E&A business (including Servowatch Systems Limited) for a cash
consideration of R 14077.66 crore. The operatng profit from E&A business upto the date of divestment and the gain on divestment
have been shown below. The post-closing adjustments are under discussion.

v crore
Sr. 2020-21 2019-20
Particulars
No.
(i) Revenue from operations 1605.67 5566.99
(ii) Other Income 5.38 15.38
(iii) Total Income [(i)+(ii)] 1611.05 5582.37
(iv) Total expenses 1528.47 4699.12
(v) Profit/(loss) before tax [(iii)-(iv)] 82.58 883.25
(vi) Tax expenses 30.12 228.68
(vii) Profit/(loss) after tax [(v)-(vi)] 52.46 654.57
(viii) Non-controlling interest - discontinued operations – –
(ix) Profit for the year attributable to owners of the Company [(vii)-(viii)] 52.46 654.57
(x) Gain on sale of E&A business before tax 10707.92 –
(xi) Tax on above (including related deferred tax reversal) 2522.46 –
(xii) Gain on sale of E&A business (net of tax) [includes reclassification of exchange differences 8185.46 –
on foreign curreny translation R 138.50 crore]
(xiii) Other comprehensive income 14.90 22.02
(xiv) Total comprehensive income [(ix)+(xii)+(xiii)] 8252.82 676.59

504
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [45] (contd.)
(b) Details of net assets of Electrical & Automation business divested:

v crore
As at
Particulars
the date of sale
Group(s) of assets classified as held for sale:
Property, plant and equipment 812.09
Capital work-in-progress 11.22
Investment property -
Goodwill 335.11
Other intangible assets 205.55
Intangible assets under development 130.46
Right-of-use assets 17.50
Other loans 3.35
Inventories 840.18
Trade receivables 1195.14
Cash and cash equivalents 151.74
Tax assets (net) 1.63
Other assets 504.59
Total 4208.56
Liabilities associated with group(s) of assets classified as held for sale:
Borrowings 59.06
Trade payables 943.43
Provisions 169.44
Tax liabilities (net) 6.84
Other liabilities 574.71
Total 1753.48
Carrying amount of net assets sold 2455.08
(c) Summarised Statement of Cash Flows of discontinued operations:
v crore
Particulars 2020-21 2019-20
Cash flows from operating activities 87.01 570.74
Cash flows from investing activities (57.17) (118.14)
Cash flows from financing activities 6.98 (31.00)
Net increase/(decrease) in cash and cash equivalents 36.82 421.60
(d) The Group has following non-current assets/disposal group recognised as held for sale as on March 31, 2021:
Assets/disposal group Reportable segment
Net assets (L&T Vision Ventures Limited) Others
(e) The Group has following non-current assets/disposal group recognised as held for sale as on March 31, 2020:
Assets/discposal group Reportable Segment
Electrical & Automation business Electrical & Automation
Wealth management business
[L&T Capital Markets Limited & L&T Capital Markets (Middle East) Limited] Financial Services
Non-current assets (buildings) (L&T Financial Consultants Limited) Financial Services
Net assets (L&T Vision Ventures Limited) Others
Non-current assets (land taken on finance lease and buildings)
(Mindtree Limited) IT and Technology Services

505
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [45] (contd.)
(f) The details of assets/disposal group classified as held for sale and liabilities associated thereto are as under:
v crore
As at As at
Particulars
31-3-2021 31-3-2020
Group(s) of assets classified as held for sale:
Property, plant and equipment – 780.95
Capital work-in-progress – 21.79
Investment property – 25.13
Goodwill – 333.44
Other intangible assets – 203.35
Intangible assets under development – 122.25
Right-of-use assets – 32.83
Other loans 6.24 3.52
Inventories – 1009.04
Trade receivables – 1184.41
Cash and cash equivalents – 165.78
Tax assets (net) – 4.74
Other assets – 479.98
Total 6.24 4367.21
Liabilities associated with group(s) of assets classified as held for sale:
Borrowings 3.19 61.26
Trade payables – 1240.34
Provisions – 203.84
Tax liabilities (net) – 21.30
Other liabilities 0.01 457.43
Total 3.20 1984.17

506
Notes forming part of the Consolidated Financial Statements (contd.)
Note [46]
Disclosure pursuant to Ind AS 108 “Operating Segment”:
(a) Information about reportable segments:
v crore
For the year ended 31-3-2021 For the year ended 31-3-2020
Particulars
External Inter-segment Total External Inter-segment Total
Revenue
Infrastructure 61431.32 530.32 61961.64 71941.58 740.75 72682.33
Power 3174.15 18.49 3192.64 2293.62 24.84 2318.46
Heavy Engineering 2711.67 306.81 3018.48 2853.18 351.86 3205.04
Defence Engineering 3396.30 13.82 3410.12 3690.48 8.68 3699.16
Electrical & Automation [Note 45] 1520.63 85.04 1605.67 5232.29 334.70 5566.99
Hydrocarbon 16924.54 39.26 16963.80 17420.45 25.02 17445.47
IT & Technology Services 25463.36 155.40 25618.76 22135.33 199.91 22335.24
Financial Services 13403.55 – 13403.55 13822.36 – 13822.36
Developmental Projects 3621.43 – 3621.43 4850.33 – 4850.33
Others 5852.71 240.04 6092.75 6445.03 238.68 6683.71
Total 137499.66 1389.18 138888.84 150684.65 1924.44 152609.09
Less: Revenue from discontinued operations 1520.63 85.04 1605.67 5232.29 334.70 5566.99
Inter-segment revenue – 1304.14 1304.14 – 1589.74 1589.74
Total 135979.03 – 135979.03 145452.36 – 145452.36
Segment result [Profit/(loss) before interest and tax]
Infrastructure 4521.54 5169.86
Power 111.22 236.11
Heavy Engineering 488.32 566.01
Defence Engineering 616.98 544.19
Electrical & Automation [Note 45] 84.37 888.06
Hydrocarbon 1568.31 1746.18
IT & Technology Services 4823.20 3693.23
Financial Services 1285.78 2678.65
Developmental Projects (196.55) 387.28
Others 1122.96 1038.59
Total 14426.13 16948.16
Result of discontinued operations (84.37) (888.06)
Inter-segment margins on capital jobs (24.95) (63.01)
Finance costs (3913.44) (2796.66)
Unallocated corporate income net of expenditure 1832.43 230.52
Profit before exceptional items and tax 12235.80 13430.95
Tax expense:
Current tax (3923.39) (3564.58)
Deferred tax (net) (87.43) 301.38
Net profit after tax (before exceptional items)
from continuing operations 8224.98 10167.75
Exceptional items before tax (3693.78) –
Tax expense on exceptional items:
Current tax (48.44) –
Deferred tax 186.20 –
Exceptional items (net of tax) (3556.02) –
Net profit after tax from continuing operations 4668.96 10167.75
Share in profit/(loss) after tax of joint ventures/associates
(net) 14.40 71.96
Profit for the year from continuing operations 4683.36 10239.71
Discontinued operations
Profit before tax from discontinued operations 10790.50 883.25
Tax expense of discontinued operations (2552.58) (228.68)
Net profit after tax from discontinued operations 8237.92 654.57
Net profit after tax from continuing operations &
discontinued operations 12921.28 10894.28
Non-controlling interest for the year (1338.35) (1345.25)
Net profit after tax, non-controlling interests and
share in profit/(loss) of joint ventures/associates 11582.93 9549.03

507
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [46]
(a) Information about reportable segments: (contd.)
v crore
Segment Assets Segment Liabilities
Particulars As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020
Infrastructure 77112.89 78196.07 51943.12 51004.11
Power 6694.17 6126.80 4672.13 4381.75
Heavy Engineering 3169.97 4320.26 1430.06 1414.15
Defence Engineering 5857.41 7121.03 3766.94 4139.33
Electrical & Automation [Note 45] – 4370.28 – 1973.08
Hydrocarbon 14519.27 15355.49 11489.78 12475.30
IT & Technology Services 30340.20 26514.97 6898.22 6876.49
Financial Services 107342.41 108481.90 89968.72 95021.16
Developmental Projects 30091.85 33166.54 8689.24 8768.35
Others 13636.87 13013.55 5984.01 4759.40
Segment total 288765.04 296666.89 184842.22 190813.12
Corporate unallocated assets/liabilities 24749.90 15365.22 40752.66 44974.94
Inter-segment assets/liabilities (2241.23) (3891.98) (2241.23) (3891.98)
Consolidated total assets/liabilities 311273.71 308140.13 223353.65 231896.08
v crore
Depreciation, amortisation, Non-cash expenses other
impairment & obsolescence than depreciation included in
Particulars included in segment expense segment expense
2020-21 2019-20 2020-21 2019-20
Infrastructure 705.46 702.67 33.53 39.76
Power 35.58 38.07 0.48 0.94
Heavy Engineering 47.21 46.29 0.82 1.18
Defence Engineering 136.69 140.45 1.14 1.40
Electrical & Automation [Note 45] 0.69 46.94 2.14 2.50
Hydrocarbon 179.36 151.56 3.58 2.81
IT & Technology Services 1162.65 941.28 39.27 52.08
Financial Services 86.41 78.44 54.51 88.64
Developmental Projects 390.97 151.77 – –
Others 104.26 99.06 2.39 1.13
Segment total 2849.28 2396.53 137.86 190.44
Unallocable 77.51 131.89 1.95 2.90
Less: Relates to discontinued operations 0.69 46.94 2.14 2.50
Inter-segment 21.89 19.21 – –
Consolidated total 2904.21 2462.27 137.67 190.84
Note: Impairment loss included in segment expense: Financial Services segment R 5.18 crore (previous year: R 12.00 crore),
Developmental Projects segment R 76.17 crore (previous year: Nil), Other segment Nil (previous year: R 3.28 crore) and Corporate
Unallocated R 1.92 crore (previous year: R 2.09 crore).

508
Notes forming part of the Consolidated Financial Statements (contd.)
Note [46]
(a) Information about reportable segments: (contd.)
v crore
Interest income included in Finance costs included in Profit/(loss) of associates and
segment income segment expense joint ventures accounted
Particulars applying equity method not
included in segment result
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
Infrastructure 6.80 22.60 276.08 379.58 (1.73) 0.80
Power – 58.21 – – 173.29 204.81
Heavy Engineering – – – – (86.68) (162.88)
Defence Engineering – – – – 8.09 (1.14)
Electrical & Automation [Note 45] 0.63 3.21 – – – –
Hydrocarbon 83.42 243.26 – – (50.03) 9.98
IT & Technology Services 33.05 36.43 – – – –
Financial Services 257.82 232.10 7206.59 7519.97 – –
Developmental Projects 394.47 2.35 627.12 562.24 (63.93) (16.88)
Others 63.83 60.56 – – (0.14) (0.03)
Segment total 840.02 658.72 8109.79 8461.79 (21.13) 34.66
Unallocable 912.40 548.08 (276.08) (365.83) 35.53 37.30
Less: R
elates to discontinued
operations 0.63 3.21 – – – –
Inter-segment 374.13 373.81 142.67 54.08 – –
Consolidated total 1377.66 829.78 7691.04 8041.88 14.40 71.96
v crore
Additions to non-current assets Investment in associates and
joint ventures accounted
applying equity method
Particulars included in segment assets
2020-21 2019-20 As at As at
31-3-2021 31-3-2020
Infrastructure 1177.39 1278.04 4.23 6.22
Power 55.88 97.67 1173.34 1123.84
Heavy Engineering 36.32 176.76 – –
Defence Engineering 56.83 183.32 13.80 5.71
Electrical & Automation [Note 45] 68.81 235.19 – –
Hydrocarbon 105.93 300.18 319.28 419.82
IT & Technology Services 1024.00 12711.68 – –
Financial Services 692.09 474.70 – –
Developmental Projects 324.35 2007.26 1159.54 1296.49
Others 735.65 674.04 0.07 0.20
Segment total 4277.25 18138.84 2670.26 2852.28
Unallocable 1809.22 852.08 – (1.27)
Inter-segment (1207.12) (54.47) – –
Consolidated total 4879.35 18936.45 2670.26 2851.01

509
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [46] (contd.)
(b) Geographical Information:
v crore
Revenue [a]
Particulars
2020-21 2019-20
India (i) 86564.17 100897.26
Foreign countries (ii):
United States of America 17806.21 14143.55
Kingdom of Saudi Arabia 7641.83 7218.18
Algeria 3019.13 1213.26
Kuwait 2930.32 2596.72
Sultanate of Oman 2333.69 2966.19
United Arab Emirates 1981.85 3851.08
Qatar 1670.39 3692.20
Other countries 13552.07 14106.21
Total foreign countries (ii) 50935.49 49787.39
Total (i+ii) 137499.66 150684.65
Less: Discontinued operations 1520.63 5232.29
Total 135979.03 145452.36
[a]
Geography wise break up of revenue is based on location of project other than service industries where it is based on location of
customer.
v crore
Non-current assets
Particulars As at As at
31-3-2021 31-3-2020
India 48168.09 51085.35
Foreign countries 2601.29 2420.74
Total 50769.38 53506.09
(c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed
ten percent of the Group’s total revenue.

(d) The Group’s reportable segments are organised based on the nature of products and services offered by these segments.

(e) Segment reporting: basis of identifying operating segments, reportable segments and definition of each reportable segment:
(i) Basis of identifying operating segments:
Operating segments are identified as those components of the Group (a) that engage in business activities to earn revenues
and incur expenses (including transactions with any of the Group’s other components); (b) whose operating results are
regularly reviewed by the Group’s Corporate Executive Management to make decisions about resource allocation and
performance assessment; and (c) for which discrete financial information is available.

The Group has nine reportable segments [described under “segment composition”] which are the Group’s independent
businesses. The nature of products and services offered by these businesses are different and are managed separately given
the different sets of technology and competency requirements. In arriving at the reportable segment, the six operating
segments have been aggregated and reported as “infrastructure segment” as these operating segments have similar economic
characteristics in terms of long term average gross margins, nature of the products and services, type of customers, methods
used to distribute the products and services and the nature of regulatory environment applicable to them.

(ii) Reportable segments:

An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute
amount of result or assets exceed 10% or more of the combined total of all the operating segments.

510
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [46] (contd.)
(iii) Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal
management reports that are reviewed by the Group’s Corporate Executive Management. The performance of financial services
segment and finance lease activities of power development segment are measured based on segment profit (before tax) after
deducting the interest expense.

(iv) Segment composition:

• Infrastructure segment comprises engineering and construction of (a) building and factories, (b) transportation
infrastructure, (c) heavy civil infrastructure, (d) power transmission & distribution, (e) water & effluent treatment and (f)
metallurgical & material handling systems.

• Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power
generation equipment with associated systems and/or balance-of-plant packages.

• Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment &
systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas and Thermal & Nuclear Power.

• Defence Engineering segment comprises (a) design, development, serial production and through life-support of
equipment, systems and platforms for Defence and Aerospace sectors and (b) design, construction and repair/refit of
defence vessels.

• Electrical & Automation segment [disclosed as discontinued operation] comprises (a) manufacture and sale of low and
medium voltage switchgear components, custom-built low and medium voltage switchboards, electronic energy meters/
protection (relays) systems and control & automation products and (b) marine control & automation systems.

• Hydrocarbon segment comprises EPC solutions for the global Oil & Gas Industry from front-end design through detailed
engineering, modular fabrication, procurement, project management, construction, installation and commissioning.

• IT & Technology Services segment comprises information technology and integrated engineering services.

• Financial Services segment comprises (a) rural finance, housing finance, wholesale finance, mutual fund and (b)wealth
management (upto the date of sale i.e. April 24, 2020).

• Developmental Projects segment comprises development, operation and maintenance of basic infrastructure projects,
toll and fare collection and power generation & development.

• Others segment includes realty, manufacture and sale of industrial valves, smart world & communication projects
(including military communications), manufacture, marketing and servicing of construction equipment and parts
thereof, marketing and servicing of mining machinery and parts thereof and manufacture and sale of rubber processing
machinery. None of the businesses reported as part of others segment meet any of the quantitative thresholds for
determining reportable segments for the year ended March 31, 2021.

511
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [47]
Disclosure pursuant to Ind AS 115 “Revenue from Contracts with Customers”:
(a) Disaggregation of revenue into operating segments and geographical areas:
v crore
2020-21
Revenue as per Ind AS 115 Other revenue Total as per
Segment Domestic Foreign Total Statement of
Profit and Loss/
Segment report
Infrastructure 45439.78 15689.25 61129.03 302.29 61431.32
Power 3004.23 148.25 3152.48 21.67 3174.15
Heavy Engineering 1176.67 1492.11 2668.78 42.89 2711.67
Defence Engineering 2565.67 823.24 3388.91 7.39 3396.30
Electrical & Automation
(discontinued operations) 1048.59 462.59 1511.18 9.45 1520.63
Hydrocarbon 8923.18 7985.88 16909.06 15.48 16924.54
IT & Technology Services 1806.84 23656.52 25463.36 – 25463.36
Financial Services 455.59 1.68 457.27 12946.28 13403.55
Developmental Projects 2564.96 – 2564.96 1056.47 3621.43
Others 4682.73 648.53 5331.26 521.45 5852.71
Total 71668.24 50908.05 122576.29 14923.37 137499.66
Less: Revenue from discontinued
operations 1048.59 462.59 1511.18 9.45 1520.63
Revenue from continuing operations 70619.65 50445.46 121065.11 14913.92 135979.03
v crore
2019-20
Revenue as per Ind AS 115 Other revenue Total as per
Segment Domestic Foreign Total Statement of
Profit and Loss/
Segment report
Infrastructure 53893.46 17883.73 71777.19 164.39 71941.58
Power 1848.75 385.96 2234.71 58.91 2293.62
Heavy Engineering 1390.92 1428.61 2819.53 33.65 2853.18
Defence Engineering 3344.95 342.33 3687.28 3.20 3690.48
Electrical & Automation
(discontinued operations) 3904.50 1320.59 5225.09 7.20 5232.29
Hydrocarbon 9804.07 7527.39 17331.46 88.99 17420.45
IT & Technology Services 1834.31 20301.02 22135.33 – 22135.33
Financial Services 669.83 – 669.83 13152.53 13822.36
Developmental Projects 3712.05 – 3712.05 1138.28 4850.33
Others 5822.88 570.75 6393.63 51.40 6445.03
Total 86225.72 49760.38 135986.10 14698.55 150684.65
Less: Revenue from discontinued
operations 3904.50 1320.59 5225.09 7.20 5232.29
Revenue from continuing operations 82321.22 48439.79 130761.01 14691.35 145452.36

512
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [47] (contd.)
(b) Break up of revenue (as per Ind AS 115) into over a period of time and at a point in time:
v crore
Over a period of time At a point in time
Year Continuing Discontinued Total Continuing Discontinued Total
operations operations operations operations
2020-21 112080.96 112.61 112193.57 8984.15 1398.57 10382.72
2019-20 120248.36 276.15 120524.51 10512.65 4948.94 15461.59

(c) Movement in expected credit loss (“ECL”) during the year:

v crore
Provision on trade receivables Provision on contract assets
Particulars
2020-21 2019-20 2020-21 2019-20
Provision as at April 1 3181.21 3000.83 1012.05 856.31
Changes in allowance for ECL:
Provision/(reversal) of allowance for ECL 375.05 313.00 144.83 173.42
Additional provision (net) 279.07 178.37 17.95 2.14
Write off as bad debts (425.58) (194.62) – –
Translation adjustment (4.25) 12.12 (0.61) 3.40
Classified as held for sale – (154.10) – (23.25)
Addition on account of business combination 0.09 25.61 – 0.03
Provision as at March 31 3405.59 3181.21 1174.22 1012.05

(d) Contract balances:

(i) Movement in contract balances during the year:

v crore
2020-21 2019-20

Particulars Contract Contract Net contract Contract Contract Net contract

assets liabilities balances assets liabilities balances
(A) (B) (A-B) (A) (B) (A-B)
Opening balance as at April 1 51849.63 28019.45 23830.18 46475.33 28272.43 18202.90
Closing balance as at March 31 47619.14 27819.73 19799.41 51849.63 28019.45 23830.18
Net increase/(decrease) (4230.49) (199.72) (4030.77) 5374.30 (252.98) 5627.28

Balances do not include balances classified as held for sale.

Note:
During the current year, decrease in net contract balances is primarily due to lower revenue recognition as compared to
progress bills raised.

During the previous year, increase in net contract balances is primarily due to higher revenue recognition as compared to
progress bills raised.

(ii) Revenue recognised from opening balance of contract liabilities amounts to R 6529.93 crore (previous year: R 7536.12 crore).

(iii) Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of contract
modifications) amounts to R 184.65 crore (previous year: R 295.31 crore).

(e) Cost to obtain/fulfil the contract:

(i) Amortisation in Statement of Profit and Loss: R 8.88 crore (previous year: R 18.97 crore).

(ii) Recognised as contract assets as at March 31, 2021: R 104.69 crore (as at March 31, 2020 R 118.87 crore).

513
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [47] (contd.)
(f) Reconciliation of contracted price with revenue during the year:

v crore
Particulars 2020-21 2019-20
Opening contracted price of orders on hand as at April 1[a] 726478.59 640145.61
Add:
Fresh orders/change orders received (net) 172612.76 176430.35
Increase due to additional consideration recognised as per (19858.81) (24041.59)
contractual terms/(decrease) due to scope reduction (net)
Addition/(deletion) on account of business combination/divestment (5195.92) 2320.76
Increase/(decrease) due to exchange rate movements (net) and others (1971.03) 6929.54
Less:
Orders completed during the year 114481.26 75306.08
Closing contracted price of orders on hand as at March 31[a] 757584.33 726478.59
Total revenue recognised during the year 122576.29 135986.10
Less: Revenue out of orders completed during the year 31443.00 34451.56
Revenue out of orders under execution at the end of the year (I) 91133.29 101534.54
Revenue recognised upto previous year (from orders pending
completion at the end of the year) (II) 324114.92 304746.53
Increase due to exchange rate movements (net) (III) 585.64 2422.33
Balance revenue to be recognised in future viz. Order book (IV) 341750.48 317775.19
Closing contracted price of orders on hand as at March 31[a] (I+II+III+IV) 757584.33 726478.59
Closing contracted price of orders on hand at the end of the year –
Continuing operations 757584.33 722210.41
Closing contracted price of orders on hand at the end of the year –
Discontinued operations – 4268.18
[a]
including full value of partially executed contracts

(g) Outstanding performance and time for its expected conversion into revenue:
v crore
Time for expected conversion in revenue
Outstanding performance Total Upto 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Beyond
1 Year 5 years
As at March Continuing 341750.48 133445.56 111800.51 64675.40 18652.99 6020.31 7155.71
31, 2021 operations
Total 317775.19 126750.06 104518.84 58127.31 19742.88 4517.78 4118.32
Continuing 315199.16 124719.69 104141.46 58051.78 19719.71 4500.33 4066.19
As at March
operations
31, 2020
Discontinued 2576.03 2030.37 377.38 75.53 23.17 17.45 52.13
operations

514
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [47] (contd.)
(h) The Group has undertaken a project for construction, operation and maintenance of the Metro Rail System on Design-Build-
Finance-Operate-Transfer (DBFOT) basis as per the concession agreement with the government authorities. The significant terms of
the arrangement are as under:
Period of the Initial period of 35 years and extendable by another 25 years at the option of the concessionaire subject
concession to fulfilment of certain conditions under concession agreement. Considered further extension of initial
concession period by 7 years in terms of Article 29 of Concession Agreement.
Remuneration Fare collection rights from the users of the Metro Rail System, license to use land provided by the
government for constructing depots and for transit oriented development and earn lease rental income
on such development and grant of viability gap fund.
Funding from grantor Viability Gap Funding of R 1458 crore.
Infrastructure return Being DBFOT project, the project assets have to be transferred at the end of concession period.
at the end of the
concession period
Renewal and Further extension of 25 years will be granted at the option of the concessionaire upon satisfaction of
termination options Key Performance Indicators laid under the concession agreement. This option is to be exercised by the
concessionaire during the 33rd year of the initial concession period. Termination of the concession
agreement can either be due to (a) Force Majeure (b) Non Political event (c) Indirect political event (d)
Political event. On occurrence of any of the above events, the obligations, dispute resolution, termination
payments etc are as detailed in the concession agreement.
Rights & Obligations Major obligations of the concessionaire are relating to –
(a) project agreements
(b) change in ownership
(c) issuance of Golden Share to the Government
(d) maintenance of aesthetic quality of the Rail System
(e) operation and maintenance of the rolling stock and equipment necessary and sufficient for handling
Users equivalent to 110% of the Average PHPDT etc.
Major obligations of the Government are –
(a) providing required constructible right of way for construction of rail system and land required for
construction of depots and transit oriented development
(b) providing reasonable support and assistance in procuring applicable permits required for
construction
(c) providing reasonable assistance in obtaining access to all necessary infrastructure facilities and
utilities
(d) obligations relating to competing facilities
(e) obligations relating to supply of electricity etc.
Classification of Intangible assets have been recognised towards rights to charge the users of the utility.
service arrangement
Construction revenue R 80.04 crore (previous year: R 512.75 crore) [included in Note 47 (a) above]
recognised

515
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [48]
Exceptional items (net of tax) for 2020-21 include:
(a) Gain on divestment of wealth management business: R 176.28 crore.
(b) Impairment of funded exposure in L&T Special Steels and Heavy Forgings Private Limited: R 1075.30 crore (net), comprising
impairment of R 1139.03 crore, applying value-in-use method and using discount rate of 11.90% and provision towards
constructive obligation to fund its future losses R 14.85 crore, reduced by interest income of R 78.58 crore from the joint venture.
(c) Impairment of following assets in power development business on assessment of recoverable value and management’s long-term
plan for the business: R 2657.00 crore comprising
(i) Property, plant and equipment including capital work-in-progress in a hydro power project: R 1053.00 crore, applying value-in-
use method and using discount rate of 12.75%.
(ii) Finance lease receivables in a thermal power project: R 1604.00 crore, applying fair value method based on benchmark
multiples (level 2 of the fair value hierarchy).

Note [49]
Disclosure pursuant to Ind AS 1 ”Presentation of financial statements“:

(a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date:

v crore
Note As at 31-3-2021 As at 31-3-2020
Sr. Within After Within After
Particulars
No. twelve twelve Total twelve twelve Total
months months months months
1 Inventories 11 3606.22 2214.32 5820.54 3637.58 2109.07 5746.65
2 Trade receivables 13 41202.04 1027.74 42229.78 40284.22 447.30 40731.52
3 Other loans 17 647.22 1.34 648.56 716.00 – 716.00
4 Other financial assets 18 2838.46 0.01 2838.47 2926.52 1.35 2927.87
5 Other current assets 19 46580.54 8210.94 54791.48 49689.89 8969.80 58659.69
(b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date:
v crore
Note As at 31-3-2021 As at 31-3-2020
Sr. Within After Within After
Particulars
No. twelve twelve Total twelve twelve Total
months months months months
1 Lease liability 367.44 38.66 406.10 374.37 50.58 424.95
2 Trade payables:
Due to micro enterprises and small 368.94 120.05 488.99 423.25 56.26 479.51
enterprises
Due to others 28 42662.63 2352.99 45015.62 41695.77 1468.65 43164.42
3 Other financial liabilities 29 5547.65 21.90 5569.55 4902.41 20.82 4923.23
4 Other current liabilities 30 25762.66 5506.97 31269.63 25575.15 5241.52 30816.67
5 Provisions 31 2244.34 754.34 2998.68 2536.17 214.68 2750.85

516
Notes forming part of the Consolidated Financial Statements (contd.)
Note [50]
Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 “Statement of Cash Flows”:
v crore

Non-current Current Current Non- Current Total

borrowings borrowings maturities current lease
Sr. (Note 22) (Note 26) of long lease liability
Particulars
No. term liability
borrowings
(Note 27)
i Balance as at 31-3-2019 74120.79 29223.84 22210.54 – – 125555.17
ii Transition impact of Ind AS 116 (0.06) – – 876.58 298.48 1175.00
iii Additions to lease liability – – – 380.66 279.57 660.23
iv Changes from financing cash flows 29105.80 4915.20 (20203.40) (58.66) (199.37) 13559.57
v The effect of changes in foreign exchange rates 391.81 246.68 157.81 41.25 4.61 842.16
vi Interest accrued (net of interest paid) (142.63) 696.56 399.10 – – 953.03
vii Other changes (transfer within categories) (21145.53) – 21145.53 (58.90) 58.90 –
viii Conversion to equity – – (54.81) – – (54.81)
ix De-recognition of lease liability – – – (15.17) (1.12) (16.29)
x Liabilities classified as held for sale – (61.26) – – (17.57) (78.83)
xi Addition on account of business combination 1.15 – – 575.84 1.45 578.44
xii Balance as at 31-3-2020 (xii = i to xi) 82331.33 35021.02 23654.77 1741.60 424.95 143173.67
xiii Additions to lease liability – – – 153.00 202.79 355.79
xiv Changes from financing cash flows 13804.46 (6151.20) (16385.72) (188.28) (193.36) (9114.10)
xv The effect of changes in foreign exchange rates 37.85 (166.70) (31.87) (6.19) 0.62 (166.29)
xvi Interest accrued (net of interest paid) (258.27) (614.32) 1341.88 – – 469.29
xvii Other changes (transfer within categories) (13795.33) (345.00) 14140.33 9.34 (9.34) –
xviii De-recognition of lease liability – – – (91.75) (19.56) (111.31)
xix Liabilities classified as held for sale/realised on
disposal – 22.03 – – – 22.03
xx Balance as at 31-3-2021 (xx = xii to xix) 82120.04 27765.83 22719.39 1617.72 406.10 134629.08

Amounts reported in Statement of Cash Flows under financing activities:

v crore
Sr. No. Particulars 2020-21 2019-20
a Proceeds from non-current borrowings 35737.52 42587.43
b Repayment of non-current borrowings (38318.78) (33685.03)
c Proceeds from/(repayment of) other borrowings (net) (6151.20) 4915.20
d Repayment of lease liability (381.64) (258.03)
e Total changes from financing cash flows (e = a to d) (9114.10) 13559.57

517
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [51]
Disclosure pursuant to Ind AS 12 “Income Taxes”:
(a) Major components of tax expense/(income):
v crore
Sr. 2020-21 2019-20
Particulars
No.
Consolidated Statement of Profit and Loss:
(a) Profit and Loss section:
(i) Current income tax:
Current income tax expense 6124.21 3983.86
Effect of previously unrecognised tax losses and tax offsets used during the current year (164.99) (148.77)
Tax expense of earlier years 117.77 (80.96)
6076.99 3754.13
(ii) Deferred tax:
Tax expense on origination and reversal of temporary differences 350.21 (251.71)
Effect of previously unrecognised tax losses and tax offsets on which deferred tax
benefit is recognised (1.56) (752.38)
Effect on deferred tax balances due to the change in income tax rate – 741.84
348.65 (262.25)
Income tax expense/(income) reported in the Consolidated Statement of Profit
and Loss [(i)+(ii)] 6425.64 3491.88
Income tax expense attributable to:
Profit from continuing operations (including exceptional items) 3873.06 3263.20
Profit from discontinued operations 2552.58 228.68
6425.64 3491.88
(b) Other comprehensive income section:
(i) Items not to be reclassified to profit or loss in subsequent periods:
(A) Current tax expense/(income):
On re-measurement of defined benefit plans 13.53 (49.19)
13.53 (49.19)
(B) Deferred tax expense/(income):
On re-measurement of defined benefit plans 0.16 (1.41)
0.16 (1.41)
(ii) Items to be reclassified to profit or loss in subsequent periods:
(A) Current tax expense/(income):
On gain/(loss) on cash flow hedges other than mark to market (2.45) 36.29
(2.45) 36.29
(B) Deferred tax expense/(income):
Net gain/(loss) on cost of hedging reserve 2.98 (8.14)
On mark to market gain/(loss) on cash flow hedges 481.63 (370.71)
On gain/(loss) on fair value of debt securities 31.14 19.46
On exchange differences in translating the financial statements of foreign operations 4.42 (4.45)
520.17 (363.84)
Income tax expense/(income) reported in the Other comprehensive income [(i)+(ii)] 531.41 (378.15)
(c) Retained earnings:
Deferred tax – (31.03)
Income tax expense/(income) reported in retained earnings – (31.03)

518
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [51] (contd.)
(b) Reconciliation of Income tax expense and accounting profit multiplied by domestic tax rate applicable in India:
v crore
Sr. No. Particulars 2020-21 2019-20
(a) Profit before tax from:
Continuing operations (including exceptional items) 8542.02 13430.95
Discontinued operations 10790.50 883.25
19332.52 14314.20
(b) Corporate tax rate as per Income Tax Act, 1961 25.17% 25.17%
(c) Tax on accounting profit [(c)=(a)*(b)] 4865.61 3602.60
(d) (i) Tax on income exempt from tax:
Dividend income and interest on tax free bonds – (7.08)
(ii) Tax on expense not tax deductible:
(A) Corporate Social Responsibility expenses 52.83 69.39
(B) Expenses in relation to exempt income – 80.04
(C) Tax on employee perquisites borne by the Group 2.52 2.08
(iii) Tax effect on impairment and fair valuation losses recognised on which deferred
tax asset is not recognised 875.18 (6.83)
(iv) Effect of previously unrecognised tax losses and unutilised tax credits used to
reduce tax expense (166.56) (901.15)
(v) Tax effect of losses of current year on which no deferred tax benefit is recognised 488.34 106.56
(vi) Effect of tax paid on foreign source income which is exempt from tax in India (329.17) (325.91)
(vii) Effect on deferred tax due to change in income tax rate – 741.84
(viii) Effect of current tax related to earlier years 117.77 (80.96)
(ix) Tax effect on various other Items 519.12 211.30
Total effect of tax adjustments [(i) to (ix)] 1560.03 (110.72)
(e) Tax expense recognised during the year [(e)=(c)+(d)] 6425.64 3491.88
(f) Effective tax rate [(f)=(e)/(a)] 33.24% 24.39%
(c) (i) Unused tax losses for which no deferred tax asset is recognised in Balance Sheet:
As at 31-3-2021 As at 31-3-2020
Particulars
v crore Expiry year v crore Expiry year
Tax losses (Business loss and unabsorbed depreciation)
- Amount of losses having expiry 1189.04 FY 2021-22 to 3206.46 FY 2020-21 to
FY 2028-29 FY 2027-28
- Amount of losses having no expiry 6874.92 6611.48
Tax losses (Capital loss) 1280.40 FY 2021-22 to 624.38 FY 2020-21 to
FY 2028-29 FY 2027-28
Total 9344.36 10442.32
(ii) Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet:
v crore
Sr. As at As at
Particulars
No. 31-3-2021 31-3-2020
(a) Towards provision for diminution in value of investments 2020.94 630.94
(b) Arising out of upward revaluation of tax base of assets (on account of indexation
benefit) 2991.19 2718.10
(c) Other items giving rise to temporary differences 2113.58 78.08
Total 7125.71 3427.12

519
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [51] (contd.)
(d) Major components of deferred tax liabilities and deferred tax assets:
v crore
Deferred tax Charge/(credit) Effect due to Effect due to Charge/(credit) Debit/(credit) to Exchange Deferred tax
liabilities/ to Statement of acquisition disposal to Other hedge reserve difference liabilities/
Particulars
(assets) as at Profit and Loss comprehensive (other than (assets) as at
31-3-2020 income through OCI) 31-3-2021
Deferred tax liabilities:
- Difference between book base and tax base
of property, plant & equipment, investment
property and intangible assets 2123.08 395.26 – (0.06) – – (0.01) 2518.27
- Disputed statutory liabilities paid and claimed as
deduction for tax purposes but not debited to
Statement of Profit and Loss 133.66 41.53 – – – – – 175.19
- Net gain/(loss) on derivative transactions to be
offered for tax purposes in the year of transfer/
settlement (229.13) 1.60 – – 484.60 0.37 – 257.44
- Other items giving rise to temporary differences 529.42 (73.73) 15.72 – – – 0.86 472.27
Deferred tax liabilities 2557.03 364.66 15.72 (0.06) 484.60 0.37 0.85 3423.17
Offsetting of deferred tax liabilities with deferred
tax (assets) (1103.99) (2244.51)
Net deferred tax liabilities 1453.04 1178.66
Deferred tax (assets):
- Provision for doubtful debts, loans & advances
and contract assets (1601.62) (184.64) – – – – – (1786.26)
- Unpaid statutory liabilities (355.85) 64.10 – – – – – (291.75)
- Unabsorbed depreciation (838.99) (378.80) – – – – – (1217.79)
- Carried forward tax losses (916.29) 456.25 – – – – – (460.04)
- Unutilised MAT credit (309.00) 92.00 – – – – – (217.00)
- Other items giving rise to temporary differences (928.82) (64.92) (11.22) (0.06) 35.73 – 0.62 (968.67)
Deferred tax (assets) (4950.57) (16.01) (11.22) (0.06) 35.73 – 0.62 (4941.51)
Offsetting of deferred tax (assets) with deferred
tax liabilities 1103.99 2244.51
Net deferred tax (assets) (3846.58) (2697.00)
Net deferred tax liability/(assets) (2393.54) 348.65 4.50 (0.12) 520.33 0.37 1.47 (1518.34)

520
Notes forming part of the Consolidated Financial Statements (contd.)
Note [52]
Disclosure pursuant to Ind AS 19 “Employee Benefits” [Note 1(II)(p)]:
(a) Defined contribution plans: Amount of R 670.80 crore (previous year: R 463.20 crore) has been incurred. Out of above, R 657.31
crore (previous year: R 443.18 crore) is included in “Employee benefit expense” [Note 37] and R 7.24 crore (previous year:
R 19.61 crore) pertains to discontinued operations in the Statement of Profit and Loss and R 6.25 crore (previous year: R 0.41 crore)
has been capitalised.

(b)
Defined benefit plans:

(i) The amounts recognised in Balance Sheet are as follows:

v crore
Gratuity plan Post-retirement medical Pension plan Trust-managed
benefit plan provident fund plan
Particulars
As at As at As at As at As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020 31-3-2021 31-3-2020
A) Present value of defined benefit obligation
– Wholly funded 1092.19 1051.92 – – – – 5235.33 4671.90
– Wholly unfunded 210.43 233.47 360.06 340.27 377.95 369.12 – –
1302.62 1285.39 360.06 340.27 377.95 369.12 5235.33 4671.90
Less: Fair value of plan assets 1026.42 851.04 – – – – 5727.47 4960.42
Less: Unrecognised past service costs – – – – – – – –
Add: Amount not recognised as an asset
[limit in para 64(b)] 1.06 1.40 – – – – 7.14 6.34
Amount to be recognised as liability or
(asset) 277.26 435.75 360.06 340.27 377.95 369.12 (485.00) (282.18)
B) Amounts reflected in the Balance Sheet
Liabilities 277.78 438.09 360.06 340.27 377.95 369.12 49.22 51.82
Assets (0.52) (2.34) – – – – – –
Net liability/(asset) 277.26 435.75 360.06 340.27 377.95 369.12 49.22 51.82
Net liability/(asset) - Current 277.26 435.75 21.64 21.61 29.09 29.49 49.22 51.82
Net liability/(asset) - Non-current – – 338.42 318.66 348.86 339.63 – –
(ii) The amounts recognised in Statement of Profit and Loss are as follows:
v crore
Gratuity plan Post-retirement medical Pension plan Trust-managed
Particulars benefit plan provident fund plan
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
1 Current service cost 183.77 164.01 21.81 22.41 4.03 3.57 172.20 [c] 157.67
[c]

2 Interest cost 67.41 62.53 22.31 17.65 23.62 24.31 402.85 357.39
3 Interest income on plan assets (54.36) (50.73) – – – – (402.85) (357.39)
4 Actuarial losses/(gains) - Difference
between actual return on plan assets and
interest income (53.12) (21.53) – – – – (194.87) (253.37)
5 Actuarial losses/(gains) - Others 3.05 117.60 (12.06) 83.68 5.25 26.24 – –
6 Past service cost – 0.17 – – – – – –
7 Actuarial gain/(loss) not recognised in – – – – – – 194.87 253.37
books
8 Adjustment for earlier years 0.19 – – – – – – –
9 Effect of the limit in para 64(b) (0.59) (0.33) – – – – – –
10 Translation adjustments 0.29 (2.14) – – – – – –
11 Amount capitalised out of the above (0.32) (0.34) (0.02) (0.03) – – – –
Total (1 to 11) 146.32 269.24 32.04 123.71 32.90 54.12 172.20 157.67

521
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [52] (contd.)
v crore
Gratuity plan Post-retirement medical Pension plan Trust-managed
Particulars benefit plan provident fund plan
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
I. Amount included in “Employee benefits
expense” 180.30 154.25 21.34 21.51 4.03 3.57 169.09 150.74
II. Amount included as part of
“Manufacturing, construction and
operating expenses” 0.87 0.64 – – – – – –
III. Amount included as part of “Finance costs” 12.20 10.54 22.31 17.65 23.62 24.31 – –
IV. Amount included as part of “Other
comprehensive income” (50.59) 96.02 (12.06) 83.68 5.25 26.24 – –
V. Amount included in “Profit from
discontinued operations” 3.54 7.79 0.45 0.87 – 3.11 6.93
Total (I+II+III+IV+V) 146.32 269.24 32.04 123.71 32.90 54.12 172.20 157.67
Actual return on plan assets 107.48 72.26 – – – – 597.72 610.76
(iii) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances
thereof are as follows:
v crore
Gratuity plan Post-retirement medical Pension plan Trust-managed provident
Particulars benefit plan fund plan
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
Opening balance of the present value of
defined benefit obligation 1285.39 1008.05 340.27 241.63 369.12 337.28 4671.90 4090.42
Add: Current service cost 183.77 164.01 21.81 22.41 4.03 3.57 172.20 [c] 157.67 [c]
Add: Interest cost 67.41 62.53 22.31 17.65 23.62 24.31 402.85 357.39
Add: Contribution by plan participants – – – –
i) Employer – – – – – – – –
ii) Employee – – – – – – 483.25 414.78
iii) Transfer-in/(out) – – – – – – – –
Add/(less): Actuarial losses/(gains) arising
from changes in -
i) Demographic assumptions (5.08) (1.98) 2.44 6.78 – (0.04) – –
ii) Financial assumptions 36.90 93.00 9.07 40.13 6.00 24.41 – –
iii) Experience adjustments (29.36) 26.26 (23.58) 36.76 (0.75) 1.87 – –
Less: Benefits paid [a] (223.37) (158.46) (11.98) (12.52) (24.07) (22.28) (579.02) (483.54)
Less: Unfunded liablity classified as held
for sale/divestment (1.04) (23.40) (0.28) (12.57) – – – –
Add: Past service cost – 0.17 – – – – – –
Add: Liabilities assumed on transfer of
employees (5.22) 0.46 – – – – 79.50 134.63
Add: Business combination/acquisition – 95.16 – – – – – –
Add: Adjustment for earlier years (0.17) (0.17) – – – – 4.68 (0.07)
Add/(less): Translation adjustments (6.61) 19.76 – – – – (0.03) 0.62
Closing balance of the present value of
defined benefit obligation 1302.62 1285.39 360.06 340.27 377.95 369.12 5235.33 4671.90
[a] Excluding amount pertaining to discontinued operations.

522
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [52] (contd.)
(iv) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:
v crore
Gratuity plan Trust-managed
Particulars provident fund plan
2020-21 2019-20 2020-21 2019-20
Opening balance of the fair value of the plan assets 851.04 649.28 4960.42 4128.60
Add: Interest income on plan assets [b] 54.36 50.73 402.85 357.39
Add/(less): A
ctuarial gains/(losses) - Difference between
actual return on plan assets and interest income 53.12 21.53 194.87 253.37
Add: Contribution by the employer 223.73 136.91 171.45 160.88
Add: Contribution by plan participants – – 437.87 408.23
Add: Assets assumed on transfer of employees (0.83) 0.10 134.49 135.02
Add: Business combination/disposal (net) – 63.80 – –
Less: Benefits paid (154.99) (71.31) (579.02) (483.54)
Add: Adjustment for earlier years – – 4.54 0.47
Closing balance of the plan assets 1026.43 851.04 5727.47 4960.42
Notes: The fair value of the plan assets under the trust-managed provident fund plan has been determined at amounts based
on their value at the time of redemption, assuming a constant rate of return to maturity.
[b]
Basis used to determine interest income on plan assets:
The Trust formed by the Parent Company and a few subsidiaries manage the investments of provident funds and gratuity
fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate
stated in (vii) below both determined at the start of the annual reporting period.
The Group expects to fund R 74.42 crore (previous year: R 168.82 crore) towards its gratuity plan and R 180.66 crore
(previous year: R 174.71 crore) towards its trust-managed provident fund plan during the year 2021-22.
[c] Employer’s contribution to provident fund.
(v) The fair value of major categories of plan assets are as follows:
v crore
Gratuity plan
Particulars As at 31-03-2021 As at 31-03-2020
Quoted Unquoted Total Quoted Unquoted Total
Cash and cash equivalents – 50.74 50.74 – 3.06 3.06
Equity instruments 26.70 – 26.70 11.62 – 11.62
Debt instruments - Corporate bonds 264.93 0.31 265.24 244.33 – 244.33
Debt instruments - Central Government bonds 200.58 – 200.58 170.41 – 170.41
Debt instruments - State Government bonds 97.14 – 97.14 92.54 – 92.54
Debt instruments - Public Sector Unit bonds 21.64 – 21.64 14.91 – 14.91
Mutual funds - Equity 20.00 19.90 39.90 11.62 9.35 20.97
Mutual funds - Debt 1.69 3.17 4.86 – – –
Mutual funds - Others – 2.90 2.90 0.25 2.62 2.87
Special deposit scheme – 1.48 1.48 – 2.60 2.60
Fixed deposits – 3.44 3.44 – 3.00 3.00
Insurer managed fund – 381.90 381.90 – 277.54 277.54
Other (payables)/receivables 4.60 (74.69) (70.09) – 7.19 7.19
Closing balance of the plan assets 637.28 389.15 1026.43 545.68 305.36 851.04

523
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [52] (contd.)
v crore
Trust-managed provident fund plan
Particulars As at 31-3-2021 As at 31-3-2020
Quoted Unquoted Total Quoted Unquoted Total
Cash and cash equivalents – 50.18 50.18 – 24.63 24.63
Equity instruments 100.23 0.05 100.28 16.09 – 16.09
Debt instruments - Corporate bonds 1640.71 23.77 1664.48 1391.85 – 1391.85
Debt instruments - Central Government bonds 1264.76 – 1264.76 1069.27 – 1069.27
Debt instruments - State Government bonds 1313.54 – 1313.54 1236.85 – 1236.85
Debt instruments - Public Sector Unit bonds 709.73 – 709.73 774.67 – 774.67
Mutual funds - Equity 125.00 157.99 282.99 77.90 66.76 144.66
Mutual funds - Debt 0.72 – 0.72 0.09 – 0.09
Mutual funds - Others – 20.82 20.82 10.84 0.04 10.88
Special deposit scheme – 271.56 271.56 – 271.69 271.69
Fixed deposits – 1.66 1.66 – 2.13 2.13
Others 24.15 22.60 46.75 13.26 4.35 17.61
Closing balance of the plan assets 5178.84 548.63 5727.47 4590.82 369.60 4960.42
(vi) The average duration (in number of years) of the defined benefit obligation at the end of the reporting period is as follows:
Plans As at 31-3-2021 As at 31-3-2020
1. Gratuity 6.97 6.83
2. Post-retirement medical benefit plan 14.92 14.60
3. Pension plan 8.01 7.81
(vii) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted average):
Plans As at 31-3-2021 As at 31-3-2020
(A) Discount rate:
(a) Gratuity plan 6.30% 6.48%
(b) Pension plan 6.30% 6.48%
(c) Post-retirement medical benefit plan 6.30% 6.48%
(B) Annual increase in healthcare costs (see note below) 5.00% 5.00%
(C) Salary growth rate:
(a) Gratuity plan 6.06% 5.77%
(b) Pension plan 9% 7.92%
(D) Attrition rate for various age groups:
(a) For gratuity plan, the attrition rate varies from 1% to 31% (previous year: 1% to 25%).
(b) For pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%).
(c) For post-retirement medical benefit plan, the attrition rate varies from 1% to 19% (previous year: 1% to 19%).
(E) The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors, such as supply and demand in the employment market.

(F) The interest payment obligation of trust-managed provident fund is expected to be adequately covered by the interest
income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is
recognised in the Statement of Profit and Loss as actuarial losses.

(G) The obligation of the Group under the post-retirement medical benefit plan is limited to the overall ceiling limits. At
present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at
5% p.a.

524
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [52] (contd.)
(H) A one percentage point change in actuarial assumptions would have the following effects on defined benefit obligation:
v crore
Effect of 1% increase Effect of 1% decrease
Particulars As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020
Gratuity
Impact of change in salary growth rate 89.01 86.20 (79.91) (76.84)
Impact of change in discount rate (79.22) (76.50) 90.02 86.74
Post-retirement medical benefit plan
Impact of change in health care cost 27.96 27.19 (22.84) (22.27)
Impact of change in discount rate (48.28) (46.36) 61.81 59.00
Company pension plan
Impact of change in discount rate (28.08) (27.51) 32.39 31.72
(viii) Characteristics of defined benefit plans and associated risks:
Gratuity plan:
(A)
The Parent Company operates gratuity plan through a trust whereby every employee is entitled to the benefit equivalent
to fifteen days salary last drawn for each completed year of service. The same is payable to vested employees at
retirement, death while in employment or on termination of employment. The benefit vests after five years of continuous
service. The company’s scheme is more favourable as compared to the obligation under The Payment of Gratuity Act,
1972.
The defined benefit plans for gratuity of the Parent Company and material domestic subsidiary companies are
administered by separate gratuity funds that are legally separate from the Parent Company and the material domestic
subsidiary companies. The trustees nominated by the Group are responsible for the administration of the plans. There
are no minimum funding requirements of these plans. The funding of these plans is based on gratuity fund’s actuarial
measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared
to the assumptions set out in (vii) supra. An insignificant portion of the gratuity plan of the Group attributable to
subsidiary companies is administered by the respective subsidiary companies and is funded through insurer managed
funds. A part of the gratuity plan is unfunded and managed within the Group. Further, the unfunded portion also
includes amounts payable in respect of the Group’s foreign operations which result in gratuity payable to employees
engaged as per the local laws of country of operation. Employees do not contribute to any of these plans.
(B) Post-retirement medical care plan:
The post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of
employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the
employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan.
Pension plan:
(C)
In addition to contribution to State-managed pension plan (EPS scheme), the Group operates a post retirement pension
scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre
of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan.
(D) Trust-managed provident fund plan:
The Parent Company and a few subsidiaries manage provident fund plan through a provident fund trust for its employees
which is permitted under The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The plan mandates
contribution by employer at a fixed percentage of employee’s salary. Employees also contribute to the plan at a fixed
percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest
at the rate notified by the provident fund authority. The contribution by employer and employee together with interest
are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests
immediately on rendering of service.
The interest payment obligation of trust-managed provident fund is expected to be adequately covered by the interest
income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is
recognised in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and
actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/gain
occurs.
All the above defined benefit plans expose the Group to general actuarial risks such as interest rate risk and market
(investment) risk.
(ix) The Code on Wages, 2019 and the Code on Social Security, 2020 have been enacted, however, the effective date from which
changes are applicable are yet to be notified. The impact of the same would be given in the financial statements in the period
in which the Codes become effective and the Rules/Schemes thereunder are notified.

525
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [53]
Disclosure pursuant to Ind AS 20 “Accounting for Government Grants and Disclosure of Government Assistance”:

The Group’s exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed
by Department General of Foreign Trade India (DGFT). Income/reduction from underlying expenses recognised towards such export
incentives and duty drawback amounts to R 311.26 crore (previous year: R 253.61 crore).

Other government grants received: (a) towards employee benefit expenses on fulfilment of certain employee related conditions
consequent to the outbreak of COVID-19 pandemic R 53.91 crore (previous year: Nil) and (b) Research & Development tax credit in a
foreign jurisdiction R 5.10 crore (previous year: R 1.80 crore).

NOTE [54]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “Related Party Disclosures”
(a) List of related parties:
(i) Name of associate companies with whom transactions were carried out during the year:
Associate Companies:
1 L&T‐Chiyoda Limited 2 Magtorq Private Limited
3 L&T Camp Facilities LLC 4 Larsen & Toubro Qatar & HBK Contracting Co. WLL
(ii) Name of joint venture companies with whom transactions were carried out during the year:
Joint Venture Companies:
1 L&T Infrastructure Development Projects Limited 2 L&T Interstate Road Corridor Limited
3 Ahmedabad ‐ Maliya Tollway Limited 4 L&T Halol‐Shamlaji Tollway Limited
5 L&T Chennai-Tada Tollway Limited 6 Panipat Elevated Corridor Limited
7 L&T Rajkot‐Vadinar Tollway Limited 8 Vadodara Bharuch Tollway Limited
9 L&T Deccan Tollways Limited 10 L&T Samakhiali Gandhidham Tollway Limited
11 Kudgi Transmission Limited 12 L&T Sambalpur‐ Rourkela Tollway limited
13 PNG Tollway Limited 14 L&T Transportation Infrastructure Limited
15 L&T - MHI Power Boilers Private Limited (Formerly 16 L&T - MHI Power Turbine Generators Private Limited
L&T-MHPS Boilers Private Limited) (Formerly L&T-MHPS Turbine Generators Private
Limited)
17 L&T‐Sargent & Lundy Limited 18 L&T Howden Private Limited
19 Raykal Aluminium Company Private Limited 20 L&T Kobelco Machinery Private Limited [a]
21 L&T Sapura Shipping Private Limited 22 L&T Sapura Offshore Private Limited
23 L&T Special Steels and Heavy Forgings Private Limited 24 L&T MBDA Missile Systems Limited
25 L&T‐Gulf Private Limited [b]
[a] The Group has sold its stake on April 17, 2019
[b] R
eclassified as subsidiary w.e.f. November 20, 2019 due to purchase of additional stake and merged with L&T Hydrocarbon
Engineering Limited w.e.f. April 1, 2020.

(iii) Name of post-employment benefit plans with whom transactions were carried out during the year:
Provident Fund Trusts:
1 Larsen & Toubro Officers & Supervisory Staff Provident Fund
2 Larsen & Toubro Limited Provident Fund of 1952
3 Larsen & Toubro Limited Provident Fund
4 L&T Kansbahal Officers & Supervisory Provident Fund
5 L&T Kansbahal Staff & Workmen Provident Fund
6 L&T Construction Equipment Employees Provident Fund Trust
7 L&T Valves Employees Provident Fund

526
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
Gratuity Trusts:
1 Larsen & Toubro Officers & Supervisors Gratuity Fund
2 Larsen & Toubro Gratuity Fund
3 L&T Technology Services Limited Employee Group Gratuity Scheme
4 L&T Shipbuilding Limited Employees Group Gratuity Assurance Scheme
5 Nabha Power Limited Employees’ Group Gratuity Assurance Scheme
6 L&T Hydrocarbon Engineering Ltd Group Gratuity Scheme
7 Mindtree Limited Employees Gratuity Fund Trust [a]
8 L&T-Gulf Employees Group Gratuity Assurance Scheme [b]
[a] w.e.f. July 2, 2019
[b] w.e.f. November 20, 2019

Superannuation Trust
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme
(iv) Name of Key Management Personnel (of the Parent Company) and their relatives with whom transactions were carried out
during the year:
(A) Executive Directors:
1 Mr. S. N. Subrahmanyan (Chief Executive Officer & 2 Mr. R. Shankar Raman (Whole‐time Director & Chief
Managing Director) Financial Officer)
3 Mr. Shailendra Roy (Whole‐time Director) [a] 4 Mr. D. K. Sen (Whole‐time Director)
5 Mr. M. V. Satish (Whole‐time Director) 6 Mr. J. D. Patil (Whole-time Director)
7 Mr. Subramanian Sarma (Whole‐time Director) [b] 8 Mr. S. V. Desai (Whole‐time Director) [c]
9 Mr. T. Madhava Das (Whole-time Director) [c]
(B) Non-executive/Independent Directors:
1 Mr. A. M. Naik (Group Chairman) 2 Mr. M. M. Chitale
3 Mr. Subodh Bhargava 4 Mr. M. Damodaran
5 Mr. Vikram Singh Mehta 6 Mr. Adil Zainulbhai
7 Mr. Akhilesh Krishna Gupta [d] 8 Ms. Sunita Sharma [e]
9 Mr. Thomas Mathew T [f] 10 Mr. Ajay Shankar [g]
11 Ms. Naina Lal Kidwai [h] 12 Mr. Sanjeev Aga
13 Mr. Narayanan Kumar 14 Mr. Arvind Gupta [i]
15 Mr. Hemant Bhargava 16 Ms. Preetha Reddy [j]
[a]
Ceased w.e.f. July 7, 2020 on account of superannuation [b]
Appointed as Whole-time Director w.e.f. August
19, 2020 (Non-executive Director till August 18,
2020)
[c]
Appointed w.e.f. July 11, 2020 [d]
Ceased w.e.f. September 8, 2019 on account of
completion of term
[e]
Ceased w.e.f. May 3, 2021 on account of withdrawal of nomination [f]
Ceased w.e.f. April 2, 2020 on account of
by Life Insurance Corporation of India completion of term
[g]
Ceased w.e.f. May 29, 2020 on account of completion of term [h]
Ceased w.e.f. February 28, 2021 on account of
completion of term
[i]
Ceased w.e.f. March 26, 2020 on account of withdrawal of [j]
Appointed w.e.f. March 1, 2021
nomination by Specified Undertaking of the Unit Trust of India
(v) Entity with common Key Managerial Person
Mindtree Foundation [a]

w.e.f. September 17, 2019

[a]

527
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [54] (contd.)
(b) Disclosure of related party transactions:
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
(i) Purchase of goods & services (including commission paid)
Joint ventures, including: 1164.45 853.97
L&T - MHI Power Boilers Private Limited 698.19 587.70
L&T - MHI Power Turbine Generators Private Limited 253.06 117.38
L&T Howden Private Limited 116.81 2.88
Associates: 165.94 249.53
L&T-Chiyoda Limited 147.76 234.65
Magtorq Private Limited 18.18 14.88
Total 1330.39 1103.50
(ii) Sale of goods/contract revenue & services
Joint ventures, including: 51.22 104.30
L&T - MHI Power Boilers Private Limited 40.53 96.79
L&T Special Steels and Heavy Forgings Private Limited 5.49 3.52
Associate: 7.74 –
L&T-Chiyoda Limited 7.74 –
Total 58.96 104.30
(iii) Purchase/lease of property, plant and equipment
Joint ventures: – 0.20
L&T - MHI Power Boilers Private Limited – 0.05
L&T Sapura Shipping Private Limited – 0.15
Total – 0.20
(iv) Sale of property, plant and equipment
Joint venture: – 0.44
L&T - MHI Power Boilers Private Limited – 0.44
Key management personnel: 0.61 –
Mr. Shailendra Roy 0.61 –
Total 0.61 0.44
(v) Investments as other equity
Joint venture: – 0.33
L&T - MHI Power Turbine Generators Private Limited – 0.33
Total – 0.33
(vi) Sale/Redemption of investments
Joint venture: – 22.42
L&T Infrastructure Development Projects Limited – 22.42
Total – 22.42

528
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
(vii) Net inter-corporate deposits given/(repaid)
Joint ventures: 151.59 97.52
L&T Special Steels and Heavy Forgings Private Limited 151.59 115.21
L&T Sapura Shipping Private Limited – (17.69)
Total 151.59 97.52
(viii) Net inter-corporate borrowing taken/(repaid)
Joint venture: 32.00 57.50
L&T MBDA Missile Systems Limited 32.00 57.50
Total 32.00 57.50
(ix) Charges paid for miscellaneous services
Joint ventures, including: 4.73 9.90
L&T-Sargent & Lundy Limited 3.61 8.21
L&T - MHI Power Boilers Private Limited 0.99 1.63
Associate: 25.17 7.29
L&T-Chiyoda Limited 25.17 7.29
Total 29.90 17.19
(x) Rent paid, including lease rentals under leasing arrangements
Joint ventures, including: 0.01 3.49
L&T Special Steels and Heavy Forgings Private Limited – 3.20
L&T - MHI Power Turbine Generators Private Limited 0.01 –
Total 0.01 3.49
(xi) Rent received, overheads recovered and miscellaneous income
Joint ventures, including: 75.95 72.71
L&T - MHI Power Boilers Private Limited 31.86 28.40
L&T-Sargent & Lundy Limited 11.57 11.39
L&T - MHI Power Turbine Generators Private Limited 8.66 8.32
L&T Infrastructure Development Projects Limited 5.47 7.93
Associate: 25.39 18.44
L&T-Chiyoda Limited 25.39 18.44
Total 101.34 91.15
(xii) Charges recovered for deputation of employees to related parties
Joint ventures, including: 4.81 5.50
L&T Infrastructure Development Projects Limited 1.14 0.66
L&T Special Steels and Heavy Forgings Private Limited 0.73 0.77
L&T Sapura Shipping Private Limited 2.94 4.08
Associate: 2.83 6.59
L&T-Chiyoda Limited 2.83 6.59
Total 7.64 12.09

529
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [54] (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
(xiii) Dividend received
Joint ventures, including: 133.88 12.53
L&T - MHI Power Boilers Private Limited 119.39 11.94
Associate: 40.50 –
L&T-Chiyoda Limited 40.50 –
Total 174.38 12.53
(xiv) Commission received, including those under agency arrangements
Joint venture: – 0.05
L&T - MHI Power Boilers Private Limited – 0.05
Total – 0.05
(xv) Guarantee charges recovered from
Joint venture: 0.47 0.55
L&T - MHI Power Turbine Generators Private Limited 0.47 0.55
Total 0.47 0.55
(xvi) Interest paid to
Joint ventures: 13.64 4.16
L&T MBDA Missile Systems Limited 2.81 2.42
L&T - MHI Power Turbine Generators Private Limited 10.83 1.74
Total 13.64 4.16
(xvii) Interest received from
Joint ventures, including: 206.60 133.10
L&T Special Steels and Heavy Forgings Private Limited 134.52 104.14
L&T Infrastructure Development Projects Limited 21.44 21.56
Kudgi Transmission Limited 45.93 2.79
Associate: 0.19 0.26
L&T Camp Facilities LLC 0.19 0.26
Total 206.79 133.36
(xviii) Amount recognised/(reversed) in P&L as provision towards bad and
doubtful debts (including expected credit loss on account of delay)
Joint ventures, including: 0.31 4.76
L&T Special Steels and Heavy Forgings Private Limited (0.09) 0.08
L&T - MHI Power Boilers Private Limited 0.39 (0.37)
L&T Sapura Offshore Private Limited – 5.08
Total 0.31 4.76
(xix) Amount recognised in P&L on account of impairment loss on loans &
advances recoverable
Joint venture: 1139.03 –
L&T Special Steels and Heavy Forgings Private Limited 1139.03 –
Total 1139.03 –

530
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
v crore
2020-21 2019-20
Sr.
Nature of transaction/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
(xx) Amount recognised in Profit and Loss on account of provision towards
constructive obligation
Joint venture: 14.84 –
L&T Special Steels and Heavy Forgings Private Limited 14.84 –
Total 14.84 –
(xxi) Donation given:
Entity with common Key Management Personnel: 1.65 1.15
Mindtree Foundation 1.65 1.15
Total 1.65 1.15
(xxii) Contribution to post employment benefit plan
(A) Towards Employer’s contribution to provident fund trusts, including: 199.05 165.75
Larsen & Toubro Officers & Supervisory Staff Provident Fund 186.25 152.29
Total 199.05 165.75
(B) Towards Employer’s contribution to gratuity fund trusts, including: 188.49 110.32
Larsen & Toubro Officers & Supervisors Gratuity Fund 86.47 55.65
L&T Technology Services Limited Employee Group Gratuity Scheme 18.06 17.32
Mindtree Limited Employees Gratuity Fund Trust 56.12 22.56
Total 188.49 110.32
(C) Towards Employer’s contribution to superannuation trust: 6.81 10.99
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme 6.81 10.99
Total 6.81 10.99

“Major parties” denote entities accounting for 10% or more of the aggregate for that category of transaction during respective
year.

531
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [54] (contd.)
(xxiii)
Compensation to Key Management Personnel (KMP):
v crore
2020-21 2019-20
Key Management Personnel Short term Post Short term Post
Other long Share based
employee employment Total employee employment Total
term benefit payment
benefits benefits benefits benefits
Executive Directors:
(a) Mr. S. N. Subrahmanyan 11.26 2.97 – – 14.23 11.87 3.13 15.00
(b) Mr. R. Shankar Raman 7.50 1.98 – – 9.48 7.89 2.08 9.97
(c) Mr. Shailendra Roy 4.83 7.64 [a] 10.20 [b] – 22.67 5.26 1.37 6.63
(d) Mr. D. K. Sen 3.93 1.01 – – 4.94 3.56 0.91 4.47
(e) Mr. M. V. Satish 4.24 1.08 – – 5.32 4.60 1.18 5.78
(f) Mr. J. D. Patil 4.23 1.09 – – 5.32 4.04 1.04 5.08
(g) Mr. Subramanian Sarma (Executive Director
w.e.f. August 19, 2020) 4.48 1.02 – 8.39 13.89 – – –
(h) Mr. S. V. Desai 2.83 0.64 – – 3.47 – – –
(i) Mr. T. Madhava Das 2.94 0.72 – – 3.66 – – –
Non-executive/Independent Directors:
(a) Mr. A. M. Naik (Group Chairman) 9.18 3.00 [c] – – 12.18 9.13 3.00 [c] 12.13
(b) Mr. Subramanian Sarma (Non-executive
Director till August 18, 2020) 3.10 1.26 – – 4.36 16.33 – 16.33
(c) Other Non-executive/Independent Directors 5.86 – – – 5.86 5.01 – 5.01
Total 64.38 22.41 10.20 8.39 105.38 67.69 12.71 80.40
[a] Post retirement benefits include gratuity R 6.60 crore
[b] Represents encashment of past service accumulated leave
[c] Represents pension

(c) Amount due to/from related parties (including commitments):

v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
(i) Accounts receivable
Joint ventures, including: 133.39 118.38
L&T - MHI Power Boilers Private Limited 75.49 98.03
L&T MBDA Missile Systems Limited 2.83 12.00
L&T Deccan Tollways Limited 50.00 –
Associates: 2.38 0.21
L&T-Chiyoda Limited 2.18 –
Larsen & Toubro Qatar & HBK Contracting Co. WLL 0.20 0.21
Total 135.77 118.59
(ii) Accounts payable including other payable
Joint ventures, including: 1726.78 1302.14
L&T - MHI Power Boilers Private Limited 863.49 746.15
L&T - MHI Power Turbine Generators Private Limited 576.54 476.41
L&T Infrastructure Development Projects Limited 177.35 (2.58)
Associates, including: 60.52 109.25
L&T-Chiyoda Limited 45.99 92.02
L&T Camp Facilities LLC 8.79 11.94
Total 1787.30 1411.39

532
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
(iii) Investment in debt securities [including preference shares (debt portion)]
Joint ventures: 1097.54 1049.70
L&T Special Steels and Heavy Forgings Private Limited * 213.17 213.17
L&T Infrastructure Development Projects Limited 272.65 266.60
Kudgi Transmission Limited 611.72 569.93
Total 1097.54 1049.70
* Before set-off of losses under equity accounting
(iv) Loans & advances recoverable
Joint ventures, including: 2150.48 2065.71
L&T Special Steels and Heavy Forgings Private Limited * 1746.17 1635.67
Associates: 32.27 27.58
L&T Camp Facilities LLC 14.44 16.87
L&T-Chiyoda Limited 12.83 8.37
Magtorq Private Limited 5.00 2.34
Total 2182.75 2093.29
* Before set-off of losses under equity accounting
(v) Impairment/provision of loans & advances recoverable
Joint ventures: 1144.11 5.08
L&T Special Steels and Heavy Forgings Private Limited 1139.03 –
L&T Sapura Offshore Private Limited 5.08 5.08
Total 1144.11 5.08
(vi) Provision towards constructive obligation
Joint venture: 14.84 –
L&T Special Steels and Heavy Forgings Private Limited 14.84 –
Total 14.84 –
(vii) Unsecured loans taken
Joint venture: 90.91 59.68
L&T MBDA Missile Systems Limited 90.91 59.68
Total 90.91 59.68
(viii) Advances received in the capacity of supplier of goods/ services
classified as “advances from customers”
Joint venture: 20.46 6.97
L&T - MHI Power Boilers Private Limited 20.46 6.97
Total 20.46 6.97

533
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [54] (contd.)
v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
(ix) Due to directors [a]: 41.04 40.29
Key management personnel, including:
Mr. A. M. Naik 3.60 2.06
Mr. S. N. Subrahmanyan 8.40 9.01
Mr. R. Shankar Raman 5.49 5.88
Mr. Shailendra Roy 0.92 3.37
Mr. D. K. Sen 2.40 2.03
Mr. M. V. Satish 2.66 3.02
Mr. J. D. Patil 2.91 2.72
Mr. Subramanian Sarma 5.31 8.33
Mr. S. V. Desai 2.29 –
Mr. T. Madhava Das 2.43 –
Total 41.04 40.29
(x) Post employment benefit plans
(A) Due to provident fund trusts, including: 56.45 53.33
Larsen & Toubro Officers & Supervisory Staff Provident Fund 52.92 48.19
Total 56.45 53.33
(B) Due to gratuity trusts, including: 19.77 159.35
Larsen & Toubro Officers & Supervisors Gratuity Fund – 94.08
L&T Technology Services Limited Employee Group Gratuity Scheme 11.11 17.00
Mindtree Limited Employees Gratuity Fund Trust 7.60 27.24
Total 19.77 159.35
(C) Due to superannuation fund: 4.48 3.91
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme 4.48 3.91
Total 4.48 3.91
(xi) Revenue commitment given
Joint ventures, including: 2224.37 2316.16
L&T - MHI Power Boilers Private Limited 1643.73 1224.92
L&T - MHI Power Turbine Generators Private Limited 387.72 668.92
Associates, including: 363.31 245.94
L&T-Chiyoda Limited 327.86 220.96
Total 2587.68 2562.10
(xii) Revenue commitment received
Joint ventures, including: 187.73 65.13
L&T - MHI Power Boilers Private Limited 158.78 21.28
L&T - MHI Power Turbine Generators Private Limited 8.90 6.88
L&T MBDA Missile Systems Limited 20.00 30.00
Total 187.73 65.13

[a]
includes commission due to other Non-executive directors R 4.63 crore (as at 31-3-2020 : R 3.87 crore)

534
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
v crore
As at 31-3-2021 As at 31-3-2020
Sr.
Category of balance/relationship/major parties Amount Amounts for Amount Amounts for
No.
major parties major parties
(xiii) Provision for doubtful debts on outstanding balances in respect of
Joint ventures, including: 23.30 23.09
L&T - MHI Power Boilers Private Limited 23.28 23.00
Total 23.30 23.09
(xiv) Guarantees given on behalf of
Joint ventures, including: 363.85 514.74
L&T - MHI Power Turbine Generators Private Limited 312.67 394.94
L&T Special Steels and Heavy Forgings Private Limited 21.95 90.42
Total 363.85 514.74

“Major parties” denote entities accounting for 10% or more of the aggregate for that category of balance during respective year.
Note: 1. All the related party contracts/arrangements have been entered into on arm’s length basis.
2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash.

Note [55]
Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 ”Earnings per Share”:

Particulars 2020-21 2019-20

Basic EPS
Profit after tax from continuing operations as per accounts (R crore) A 3345.01 8894.46
Profit after tax from discontinued operations as per accounts (R crore) B 8237.92 654.57
Profit after tax from continuing operations & discontinued operations as per
accounts (R crore) C=A+B 11582.93 9549.03
Weighted average number of equity shares outstanding D 1,40,41,46,937 1,40,33,69,848
Basic EPS from continuing operations (R) A/D 23.82 63.38
Basic EPS from discontinued operations (R) B/D 58.67 4.66
Basic EPS from continuing operations & discontinued operations (R) C/D 82.49 68.04
Diluted EPS
Profit after tax from continuing operations as per accounts (R crore) A 3345.01 8894.46
Profit after tax from discontinued operations as per accounts (R crore) B 8237.92 654.57
Profit after tax from continuing operations & discontinued operations as per
accounts (R crore) C=A+B 11582.93 9549.03
Weighted average number of equity shares outstanding D 1,40,41,46,937 1,40,33,69,848
Add: Weighted average number of potential equity shares on account of employee
stock options E 14,20,264 18,52,930
Weighted average number of equity shares outstanding for diluted EPS F=D+E 1,40,55,67,201 1,40,52,22,778
Diluted EPS from continuing operations (R) A/F 23.80 63.29
Diluted EPS from discontinued operations (R) B/F 58.61 4.66
Diluted EPS from continuing operations & discontinued operations (R) C/F 82.41 67.95
Face value per share (R) 2 2

535
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [55] (contd.)
The following potential equity shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares for
the purpose of diluted earnings per share:

Particulars 2020-21 2019-20

Weighted average number of potential equity shares on account of conversion of foreign currency
convertible bonds – 5,190,133

Note [56]
Disclosure pursuant to Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets”:

(a) Movement in provisions:

v crore
Class of provisions
Product Expected tax Litigation- Contractual Others Total
Sr. warranties liability in related rectification
Particulars
No. respect of obligations cost-
indirect taxes construction
contracts
1 Balance as at 1-4-2020 13.15 308.03 214.15 561.35 61.44 1158.12
2 Additional provision during the year 4.72 144.30 489.10 389.55 17.92 1045.59
3 Provision used during the year – (87.43) (231.46) (241.46) – (560.35)
4 Unused provision reversed during the year (4.57) (26.10) – (172.31) (6.93) (209.91)
5 Translation adjustments (0.23) – – (0.84) – (1.07)
6 Additional provision for unwinding of interest and
change in discount rate 0.12 – – – – 0.12
7 Balance as at 31-3-2021 (1 to 6) 13.19 338.80 471.79 536.29 72.43 1432.50
Breakup of provisions:
v crore
Particulars Note 24 Note 31 Total
Balance as at 1-4-2020 30.52 1127.60 1158.12
Balance as at 31-3-2021 68.38 1364.12 1432.50
(b) Nature of provisions:

(i) Product warranties: The Group gives warranties on certain products and services, undertaking to repair or replace the items
that fail to perform satisfactorily during the warranty period.

Provision made as at March 31, 2021 represents the amount of the expected cost of meeting such obligations of rectification/
replacement. The timing of the outflows is expected to be within a period of three years from the date of Balance Sheet.

(ii) Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection
of declaration forms and liability for goods and services tax, customs duty and excise duty.

(iii) Provision for litigation-related obligations represents liabilities that are expected to materialise in respect of matters in appeal.

(iv) Contractual rectification cost represents the estimated cost the Group is likely to incur during defect liability period as per the
contract obligations and in respect of completed construction contracts accounted under Ind AS 115 “Revenue from contracts
with customers”.

(v) Other provisions mainly includes backwork charges, provision for foreseeable losses and onerous contracts.
(c) Disclosure in respect of contingent liabilities is given in Note 32.

536
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [57]
Research & Development
The expenditure on research and development activities is as follows:
v crore
Sr. 2020-21 2019-20
Particulars
No.
(i) Recognised as expense in the Statement of Profit and Loss 197.16 274.39
(ii) Capital expenditure on:
(a) tangible assets 1.24 7.60
(b) intangible assets being expenditure on new product development 9.80 34.28
(c) other intangible assets 8.10 5.32
(iii) Expenditure reimbursable by the customer – 0.08
Of the above, expenditure on research and development activities of discontinued operations is as follows:
v crore
Sr. 2020-21 2019-20
Particulars
No.
(i) Recognised as expense in the Statement of Profit and Loss 32.29 88.32
(ii) Capital expenditure on:
(a) tangible assets 0.49 4.19
(b) intangible assets being expenditure on new product development 9.39 30.17
(c) other intangible assets 0.01 1.93
(iii) Expenditure reimbursable by the customer – –
NOTE [58]
Disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”: Market risk management
(a) Foreign exchange rate and interest rate risk:
The Group regularly reviews its foreign currency and interest rate related exposures - both hedged and open exposures. The Group
primarily follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE), hence, the movement in mark to
market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying
exposures values. However, till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in MTM of the
hedge contracts will impact the Balance Sheet of the Group. Further, given the effective horizons of the Group’s risk management
activities which coincide with the durations of the projects under execution, which could extend across 3-4 years and given the
business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses
related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic
exposures and, therefore, may affect the Group’s financial condition and operating results. The Group monitors the potential risk
arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For
on-balance sheet exposures, the Group monitors the risks on net unhedged exposures.

(i) Foreign exchange rate risk:

In general, the Group is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a
strengthening of the Indian Rupee, may adversely affect the Group’s net sales and gross margins expressed in Indian Rupee.
There is a risk that the Group may have to adjust local currency product pricing due to competitive pressures when there have
been significant volatility in foreign currency exchange rates.

The Group may enter into foreign currency forward and option contracts with financial institutions to protect against foreign
exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future
cash flows and net investments in foreign subsidiaries. In addition, the Group has entered, and may enter in the future, into
non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-
denominated debt issuances. The Group’s practice is to hedge a portion of its material net foreign exchange exposures with
tenors in line with the project/business life cycle. The Group may also choose not to hedge certain foreign exchange exposures.

537
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [58] (contd.)
The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised
financial liabilities and derivatives for major currencies is as follows:
v crore
As at 31-3-2021 As at 31-3-2020
US Dollar EURO Malaysian Canadian Japanese Kuwaiti US Dollar EURO Malaysian Canadian Japanese Kuwaiti
Particulars including Ringgit Dollar Yen Dinar including Ringgit Dollar Yen Dinar
pegged pegged
currencies currencies
Net exposure to foreign currency risk in respect
of recognised financial assets/(recognised
financial liabilities) (1207.93) 400.90 89.12 232.84 (505.18) (52.56) (5875.09) 320.56 127.86 129.31 (394.37) 314.93
Derivatives including embedded derivatives for
hedging receivable/(payable) exposure with
respect to non-financial assets/(non-financial
liabilities) 357.96 65.82 – – – – 494.65 (28.50) – – – –
Derivatives including embedded derivatives for
hedging receivable/(payable) exposures with
respect to firm commitments and highly
probable forecast transactions 29116.78 (4244.49) 75.32 37.78 1031.00 404.79 27222.66 (213.93) 163.93 (29.22) 890.32 877.29
Receivable/(payable) exposures with respect to
forward contracts and embedded derivatives
not designated as cash flow hedge 2337.79 164.57 – – (14.43) 21.02 (2991.34) 56.90 – – 21.08 –
To provide a meaningful assessment of the foreign currency risk associated with the Group’s foreign currency derivative
positions against off-balance sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities, the
Group uses a multi-currency correlated value-at-risk (“VAR”) model. The VAR model uses a Monte Carlo simulation to generate
thousands of random market price paths for foreign currencies against Indian Rupee taking into account the correlations
between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates,
at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool.
The model assumes normal market conditions and is a historical best fit model. Because the Group uses foreign currency
instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increase in the
fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Group at 95% confidence
level is R 203.08 crore as at March 31, 2021 and R 111.39 crore as at March 31, 2020.
Actual future gains and losses associated with the Group’s investment portfolio and derivative positions may differ materially
from the sensitivity analysis performed as at March 31, 2021 due to the inherent limitations associated with predicting the
timing and amount of changes in foreign currency exchange rates and the Group’s actual exposures and position.
(ii) Interest rate risk:
The Group’s exposure to changes in interest rates relates primarily to the Group’s outstanding floating rate debt and lending.
The Group’s outstanding debt in local currency is a combination of fixed rate and floating rate. For the portion of local currency
debt on fixed rate basis, there is no interest rate risk. For the portion of local currency debt on floating rate basis, there is a
natural hedge with receivables in respect of financial services business. There is a portion of debt that is linked to international
interest rate benchmarks like LIBOR. The Group also hedges a portion of these risks by way of derivative instruments like
interest rate swaps and currency swaps.
The Group has availed ECBs and the details of outstanding ECBs as on March 31, 2021 are given below. These borrowings
have a floating interest rate linked to LIBOR. With the transition of LIBOR into another benchmark (widely anticipated to
be SOFR for USD LIBOR) which is expected to be effective from January 1, 2022 in a phased manner, there will be a spread
adjustment on these loans as below -
USD Mn
a) Borrowings linked to LIBOR as at 31.03.2021 938
b) Borrowings expected to be settled before transition from LIBOR to alternate benchmark 456
c) Borrowings expected to be outstanding on transition date (a-b) 482
d) Hedged borrowings out of (c) above 225
e) Unhedged borrowings expected to be outstanding on transition date requiring spread adjustment (c-d) 257

538
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [58] (contd.)
Based on the expected transitioning methodology, the median historical spread between the two benchmarks is likely to
be used as a spread adjustment. The banks and the Group are likely to consider a spread adjustment which is neutral to
counterparties financially.

The exposure of the Group’s borrowing to interest rate changes is R 48077.49 crore (as at 31-03-2020 R 60042.02 crore).

A hypothetical 50 basis point shift in respective currency LIBOR and other benchmarks, holding all other variables constant,
on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Group on a yearly basis as
follows:
v crore
Increase/(decrease) in Profit after Tax Increase/(decrease) in Equity
Particulars 2020-21 2019-20 As at As at
31-3-2021 31-3-2020
INR loans (net of loans given)
Interest rates - increase by 0.50% in INR interest rate 2.09 (24.65) 2.09 (24.65)
Interest rates - decrease by 0.50% in INR interest rate (2.09) 24.65 (2.09) 24.65
USD (including pegged currencies) loans
Interest rates - increase by 0.50% in USD interest rate (19.80) (33.99) (19.80) (33.99)
Interest rates - decrease by 0.50% in USD interest rate 19.80 33.99 19.80 33.99
(b) Liquidity risk management:
The Group manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through
an adequate committed credit lines. Given the need to fund diverse businesses, the Group maintains flexibility by needbased
drawing from committed credit lines. Management regularly monitors the position of cash and cash equivalents. The maturity
profiles of financial assets/liabilities including debt financing plans and liquidity ratios are considered while reviewing the liquidity
position.

The Group’s investment policy and strategy are focused on preservation of capital and supporting the Group’s liquidity requirements.
The Group uses a combination of internal and external tools to execute its investment strategy and achieve its investment
objectives. The Group typically invests in money market funds, large debt funds, Government of India securities, equity and equity
marketable securities and other highly rated securities under a exposure limit framework. The investment policy focusses on
minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Group’s
investment portfolio, the Group performed a sensitivity analysis to determine the impact of change in prices of the securities on the
value of the investment portfolio assuming a 0.50% movement in the fair market value of debt funds and debt securities and a 5%
movement in the NAV of the equity and equity marketable securities as below -
v crore
Increase/(decrease) in investment value
Particulars
As at 31-3-2021 As at 31-3-2020
Debt funds and debt securities - increase by 0.50% in fair market value 119.74 39.42
Debt funds and debt securities - decrease by 0.50% in fair market value (119.74) (39.42)
Equity and equity marketable securities - increase by 5% in NAV 6.10 6.49
Equity and equity marketable securities - decrease by 5% in NAV (6.10) (6.49)
The investments in money market funds are for the purpose of liquidity management only and hence not subject to any material
price risk.

(c) Credit risk management:

(i) Financial services business:
Financial services business has a risk management framework that monitors and ensures that the business lines operate within
the defined risk appetite and risk tolerance levels defined by the management. Risk management function is closely involved
in management and control of credit risk, portfolio monitoring, market risks including liquidity risk and operational risks. The
credit risk function independently evaluates proposals based on well-established sector specific internal frameworks, in order to
identify, mitigate and allocate risks as well as to enable risk-based pricing of assets. Regulatory and process risks are identified,
mitigated and managed by a separate group. Risk management policies are made under the guidance of Risk Management
Committee and are approved by Board of Directors.

539
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [58] (contd.)
(ii) Other than financial services business:
The Group’s customer profile include public sector enterprises, state owned companies and large private corporates.
Accordingly, the Group’s customer credit risk is low. The Group’s average project execution cycle is around 24 to 36 months.
General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90
days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/
corporate guarantees. The Group has a detailed review mechanism of overdue customer receivables at various levels within
organisation to ensure proper attention and focus for realisation.

(iii) Reconciliation of loss allowance provision for financial services business - Loans:
v crore
Particulars Stage 1 Stage 2 Stage 3 Total
Loss allowance as at 1-4-2019 480.00 228.11 3912.88 4620.99
On new assets originated or purchased 339.90 34.94 77.01 451.85
Amount written off – – (1657.06) (1657.06)
Transfers to Stage 1 81.11 (73.77) (7.34) –
Transfers to Stage 2 (12.70) 15.34 (2.64) –
Transfers to Stage 3 (40.96) (118.59) 159.55 –
Impact on year end ECL of exposure transferred between stages
during the year (68.33) 121.33 1115.94 1168.94
Increase/(decrease) in provision on existing financial assets (net
of recovery) (208.64) 61.29 187.59 40.24
Loss allowance as at 31-3-2020 570.38 268.65 3785.93 4624.96
Provision on new financial assets 461.25 60.59 35.71 557.55
Amount written off – – (2230.13) (2230.13)
Transfers to Stage 1 43.35 (26.24) (17.11) –
Transfers to Stage 2 (30.17) 34.57 (4.40) –
Transfers to Stage 3 (27.72) (143.69) 171.41 –
Impact on year end ECL of exposure transferred between stages
during the year (42.17) 331.10 1476.54 1765.47
Increase/(decrease) in provision on existing financial assets (net
of recovery) (66.11) (179.38) 603.77 358.28
Loss allowance as at 31-3-2021 908.81 345.60 3821.72 5076.13
(iv) Reconciliation of allowance for expected credit loss (“ECL”) on trade receivables (other than financial services business):
v crore
Particulars 2020-21 2019-20
Provision as at April 1 3181.21 3000.83
Changes in allowance for ECL:
Provision/(reversal) of allowance for ECL 375.05 313.00
Additional provision (net) 279.07 178.37
Write off as bad debts (425.58) (194.62)
Translation adjustment (4.25) 12.12
Classified as held for sale – (154.10)
Addition on account of business combination 0.09 25.61
Provision as at March 31 (Note 13) 3405.59 3181.21
(v) Amounts written off:
v crore
Particulars 2020-21 2019-20
Amount of financial assets written off during the period but still enforceable 1972.77 900.38

540
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [58] (contd.)
(d) Commodity price risk management :
The Group bids for and executes EPC projects on turnkey basis. EPC projects entail procurement of various equipment and materials
which may have direct or indirect linkages to commodity prices like Steel (both long and flat steel), Copper, Aluminium, Zinc, Lead,
Nickel, etc. Accordingly, the Group is exposed to the price risk on these commodities. To mitigate the risk of commodity prices, the
Group relies on contractual provisions like pass through of prices, price variation provisions, etc and further uses financial derivatives
where available [Note 59 (k)(iii)]. There is certain residual risk carried by the Group that cannot be hedged against.

The Group is also exposed to contingent risk on account of commodity price movements that may not be fully offset by contractual
provisions in the projects that it has bid for but which are not awarded yet. Commodity prices are volatile and have witnessed 60%
to 75% movement for the year. This may impact the margin on projects where the Group has submitted bids on a firm price basis.
However, for projects where the Group is eligible for an adjustment, based on price variation clause, there may not be a major
impact. The actual impact will depend on the exact project wins and the relative contractual provisions therein.

NOTE [59]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”:
(a) Category-wise classification for applicable financial assets:
v crore
Sr. Note As at As at
Particulars
No. 31-3-2021 31-3-2020
I. Measured at fair value through Profit or Loss (FVTPL):
(i) Investment in equity instruments 6,12 642.70 551.20
(ii) Investment in preference shares 6,12 87.01 89.21
(iii) Investment in mutual funds and units of fund 6,12 20236.28 7877.25
(iv) Investment in government securities, debentures and bonds 6,12 1739.80 1857.96
(v) Derivative instruments not designated as cash flow hedges 9,18 167.47 99.93
(vi) Embedded derivatives not designated as cash flow hedges 9,18 33.68 177.84
(vii) Investment in security receipts 6 4114.88 2498.65
(viii) Loans 7,8,16,17 22877.66 24877.64
(ix) Other investments 6,12 0.94 0.94
Sub-total (I) 49900.42 38030.62
II. Measured at amortised cost:
(i) Loans 7,8,16,17 72264.26 77673.47
(ii) Investment in government securities, debentures and bonds 6,12 584.31 59.73
(iii) Other investments 6,12 800.37 330.35
(iv) Trade receivables 13 42229.78 40731.52
(v) Advances recoverable in cash 18 1758.74 1748.66
(vi) Cash and bank balances 9,14,15 16753.48 15392.64
(vii) Other receivables 113.36 112.65
Sub-total (II) 134504.30 136049.02
III. Measured at fair value through Other comprehensive income (FVTOCI):
(i) Investment in government securities, debentures and bonds 6,12 8749.31 3898.80
(ii) Investment in equity instruments 6,12 0.10 31.71
(iii) Investment in preference shares 6,12 0.67 0.67
(iv) Derivative instruments designated as cash flow hedges 9,18 1344.88 1043.49
(v) Embedded derivative designated as cash flow hedges 9,18 19.13 108.59
Sub-total (III) 10114.09 5083.26
Total (I+II+III) 194518.81 179162.90

541
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [59] (contd.)
(b) Category-wise classification for applicable financial liabilities:
v crore
Sr. Note As at As at
Particulars
No. 31-3-2021 31-3-2020
I. Measured at fair value through Profit or Loss (FVTPL):
(i) Derivative instruments not designated as cash flow hedges 23,29 57.01 158.76
(ii) Embedded derivatives not designated as cash flow hedges 23,29 11.73 57.18
(iii) Others 150.24 218.20
Sub-total (I) 218.98 434.14
II. Measured at amortised cost:
(i) Borrowings 22,26,27 132605.26 141007.12
(ii) Trade payables:
Due to micro enterprises and small enterprises 488.99 479.51
Due to others 28 45015.62 43164.42
(iii) Lease liability 2023.82 2166.55
(iv) Others 5062.69 3513.03
Sub-total (II) 185196.38 190330.63
III. Derivative instruments (including embedded derivatives) through Other
comprehensive income:
(i) Derivative instruments designated as cash flow hedges 23,29 416.22 1814.94
(ii) Embedded derivatives designated as cash flow hedges 23,29 57.49 61.24
Sub-total (III) 473.71 1876.18
IV. Financial guarantee contracts 23,29 0.91 1.02
Total (I+II+III+IV) 185889.98 192641.97
(c) Items of income, expenses, gains or losses related to financial instruments:

v crore
Sr. 2020-21 2019-20
Particulars
No.
I. Net gains/(losses) on financial assets and financial liabilities measured at fair value through Profit
or Loss and amortised cost:
A. (i) Financial asset or financial liabilities measured at fair value through Profit or Loss:
1. Gains/(losses) on fair valuation or sale of investments 1002.28 561.72
2. Gains/(losses) on fair valuation or sale of loans (Financial Services) (158.76) (93.31)
3. Gains/(losses) on fair valuation/settlement of derivative:
(a) Gains/(losses) on fair valuation or settlement of forward contracts not designated as
cash flow hedges (107.03) (300.59)
(b) Gains/(losses) on fair valuation or settlement of embedded derivative contracts not
designated as cash flow hedges (146.41) 124.73
(c) Gains/(losses) on fair valuation or settlement of futures not designated as cash flow
hedges (42.46) 13.19
Sub-total (A) 547.62 305.74

542
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
v crore
Sr. 2020-21 2019-20
Particulars
No.
B. Financial assets measured at amortised cost:
(i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in
foreign currency (trade receivables, loans given etc.) (314.22) 1076.54
(ii) (Allowance)/reversal for expected credit loss during the year (2713.53) (1950.15)
(iii) Provision for impairment loss (other than ECL) [net] (327.76) (311.09)
(iv) Impairment loss recognised in Statement of Profit and Loss [as exceptional items (net of tax)] (2743.03) –
(v) Gains/(losses) on derecognition:
(a) Bad debts written off (net) (363.02) 175.60
(b) Gains/(losses) on transfer of financial assets (non-recourse) (253.79) (78.35)
Sub-total (B) (6715.35) (1087.45)
C. Financial liabilities measured at amortised cost:
(i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in
foreign currency (trade payables, borrowing availed etc.) 336.01 (777.86)
(ii) Unclaimed credit balances written back 232.51 190.30
Sub-total (C) 568.52 (587.56)
Total [I] = (A+B+C) (5599.21) (1369.27)
II. Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other
comprehensive income:
A. Gains recognised in Other comprehensive income:
(i) Financial assets measured at fair value through Other comprehensive income:
(a) Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. 239.71 269.68
(ii) Derivative measured at fair value through Other comprehensive income:
(a) Gains/(losses) on fair valuation or settlement of forward contracts designated as cash
flow hedges 1911.09 (1039.11)
(b) Gains/(losses) on fair valuation or settlement of embedded derivative contracts
designated as cash flow hedges 30.97 100.98
Sub-total (A) 2181.77 (668.45)
Less:
B. Gains reclassified to Profit or Loss from Other comprehensive income:
(i) Financial assets measured at fair value through Other comprehensive income:
1. On government securities, bonds, debentures etc. upon sale 116.02 154.47
(ii) Derivative measured at fair value through Other comprehensive income:
1. On forward contracts upon hedged future cash flows affecting the Profit or Loss or
related assets or liabilities 405.36 355.35
2. On embedded derivative contracts upon hedged future cash flows affecting the Profit or
Loss or related assets or liabilities 3.72 (18.39)
Sub-total (B) 525.10 491.43
Net gains recognised in Other comprehensive income (A-B) 1656.67 (1159.88)
C. Impairment loss recognised in Statement of Profit and Loss (151.26) (350.59)

543
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [59] (contd.)
v crore
Sr. 2020-21 2019-20
Particulars
No.
III. Other income/(expense):
A. Dividend income:
Dividend income from investments measured at fair value through Profit or Loss 28.47 101.62
Sub-total (A) 28.47 101.62
B. Interest income:
(i) Financial assets measured at amortised cost 12984.43 11306.24
(ii) Financial assets measured at fair value through Other comprehensive income 615.14 371.43
(iii) Financial assets measured at fair value through Profit or Loss 1820.54 3332.76
Sub-total (B) 15420.11 15010.43
C. Interest expense:
(i) Financial liabilities measured at amortised cost (11067.75) (10168.49)
(ii) Derivative instruments (including embeded derivatives) that are measured at fair value
through Other comprehensive income (reclassified to Profit or Loss during the year) (137.51) (150.06)
(iii) Financial liabilities measured at fair value through Profit or Loss (0.17) 5.95
Sub-total (C) (11205.43) (10312.60)
Total [III] =(A+B+C) 4243.15 4799.45
(d) Fair value of financial assets and financial liabilities measured at amortised cost:

v crore
As at 31-3-2021 As at 31-3-2020
Particulars Note Carrying Fair value Carrying Fair value
amount amount
Financial assets:
Loans 7,8,16,17 52659.55 52659.55 58644.08 58644.08
Government securities, debentures and bonds 6,12 584.31 584.31 59.73 59.73
Total 53243.86 53243.86 58703.81 58703.81
Financial liabilities:
Borrowings 22,26,27 63597.99 67013.48 57893.50 58893.74
Total 63597.99 67013.48 57893.50 58893.74
Notes:

1. Carrying amount of loans are net of provision for expected credit losses

2. The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables are considered to
be the same as their fair values due to their short term nature. The carrying amounts of loans given and borrowings taken for
short term or at floating rate of interest are considered to be close to the fair value. Accordingly, these items have not been
included in the above table.

544
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(e) Disclosure pursuant to Ind AS 113 “Fair Value Measurement” - Fair value hierarchy of financial assets and financial liabilities
measured at amortised cost:
v crore
Level 1 Level 2 Level 3 Total Valuation technique for
As at 31-3-2021
level 3 items
Financial assets:
Loans – 6833.45 45826.10 52659.55 Discounted cash flow
Government securities, debentures and bonds 550.34 33.97 – 584.31
Total 550.34 6867.42 45826.10 53243.86
Financial liabilities:
Borrowings 582.62 21378.04 45052.82 67013.48 Discounted cash flow
Total 582.62 21378.04 45052.82 67013.48

v crore
Level 1 Level 2 Level 3 Total Valuation technique for
As at 31-3-2020
level 3 items
Financial assets:
Loans – 8658.31 49985.77 58644.08 Discounted cash flow
Government securities, debentures and bonds 59.66 0.07 – 59.73
Total 59.66 8658.38 49985.77 58703.81
Financial liabilities:
Borrowings 737.02 13948.81 44207.91 58893.74 Discounted cash flow
Total 737.02 13948.81 44207.91 58893.74
Valuation technique Level 2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread.

(f) Fair value hierarchy of financial assets and financial liabilities at fair value:

v crore
Note As at 31-3-2021 As at 31-3-2020
Particulars
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial assets:
Financial assets at FVTPL:
(i) Equity shares 6, 12 104.79 – 537.91 642.70 8.05 – 543.15 551.20
(ii) Preference shares 6, 12 – – 87.01 87.01 – – 89.21 89.21
(iii) Mutual funds 6, 12 20174.92 – – 20174.92 7770.81 – – 7770.81
(iv) Debt instruments viz. government securities,
bonds and debentures 6, 12 1014.35 – 725.45 1739.80 997.64 – 860.32 1857.96
(v) Derivative instruments not designated as cash
flow hedges 9,18 – 167.47 – 167.47 – 99.93 – 99.93
(vi) Embedded derivative instruments not
designated as cash flow hedges 9,18 – 33.68 – 33.68 – 177.84 – 177.84
(vii) Other investments 6, 12 – 0.94 4176.24 4177.18 – 0.94 2605.09 2606.03
(viii) Loans (Financial Services) 16 – – 22877.66 22877.66 – – 24877.64 24877.64

545
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [59] (contd.)

v crore
Note As at 31-3-2021 As at 31-3-2020
Particulars
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial assets at FVTOCI
(i) Debt instruments viz. government securities,
bonds and debentures 6, 12 6503.01 2104.54 141.76 8749.31 2729.27 876.46 293.07 3898.80
(ii) Preference shares 6 – – 0.67 0.67 – – 0.67 0.67
(iii) Equity shares 6 – – 0.10 0.10 31.61 – 0.10 31.71
(iv) Derivative financial instruments designated as
cash flow hedges 9,18 – 1344.88 – 1344.88 – 1043.49 – 1043.49
(v) Embedded derivative financial instruments
designated as cash flow hedges 9,18 – 19.13 – 19.13 – 108.59 – 108.59
Total 27797.07 3670.64 28546.80 60014.51 11537.38 2307.25 29269.25 43113.88
Financial liabilities:
Financial liabilities at FVTPL:
(i) Designated at FVTPL:
(a) Derivative instruments not designated as
cash flow hedges 23,29 – 57.01 – 57.01 – 158.76 – 158.76
(b) Embedded derivative instruments not
designated as cash flow hedges 23,29 – 11.73 – 11.73 – 57.18 – 57.18
(c) Others 23,29 – – 150.24 150.24 – – 218.20 218.20
(ii) Designated at FVTOCI:
(a) Derivative financial instruments
designated as cash flow hedges 23,29 – 416.22 – 416.22 – 1814.94 – 1814.94
(b) Embedded derivative financial
instruments designated as cash flow
hedges 23,29 – 57.49 – 57.49 – 61.24 – 61.24
Total – 542.45 150.24 692.69 – 2092.12 218.20 2310.32
Valuation technique and key inputs used to determine fair value:
A. Level 1: Mutual funds, bonds, debentures and government securities - Quoted price in the active market
B. Level 2: (a) Derivative Instruments - Present vaue technique using forward exchange rates as at reporting period.
(b) Preference share and government securities, bonds and debentures - Future cash flows are discounted using G-sec
rates as at reporting date.

(g) Movement of items measured using unobservable inputs (Level 3):

v crore
Equity Preference Debt Loans Other Total
Particulars
shares shares instruments investments
Balance as at 31-3-2019 542.56 99.81 874.75 24395.92 979.86 26892.90
Addition during the year 0.10 0.67 – 6927.18 2099.75 9027.70
Reclassification from Level 2 to Level 3 – – 536.54 – – 536.54
Disposal during the year – (6.17) (7.31) (6415.32) (298.05) (6726.85)
Gains/(losses) recognised in Profit or Loss 0.59 (4.43) – (30.14) (176.47) (210.45)
Impairment recognised in Profit or Loss – – (250.59) – – (250.59)
Balance as at 31-3-2020 543.25 89.88 1153.39 24877.64 2605.09 29269.25
Addition during the year – 10.85 – 3721.30 1913.27 5645.42
Disposal during the year – (13.60) (9.29) (5562.49) (214.55) (5799.93)
Gains/(losses) recognised in Profit or Loss (5.24) 0.55 (125.61) (158.79) (127.57) (416.66)
Impairment recognised in Profit or Loss – – (151.28) – – (151.28)
Balance as at 31-3-2021 538.01 87.68 867.21 22877.66 4176.24 28546.80

546
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(h) Sensitivity disclosure for level 3 fair value measurements:
Fair value as at
Particulars 31-3-2021 31-3-2020 Significant unobservable inputs Sensitivity
v crore
469.71 474.95 Book value 31-3-2021: Increase/(decrease) of 5% in the book value would result in
impact on profit or loss by R 19.57 crore
31-3-2020: Increase/(decrease) of 5% in the book value would result in
impact on profit or loss by R 19.57 crore
68.30 68.30 31-3-2021: 31-3-2021: 1% change in net realisation would result in +/- R 0.28 crore
1. Net realisation per month (post tax- R 0.21 crore)
Equity shares
R 31.83 per sq/ft. 25 bps change in capitalisation rate would result in +/- R 0.60 crore (post
2. Capitalisation rate 11.50% tax- R 0.45 crore)
31-3-2020: 31-3-2020: 1% change in net realisation would result in +/- R 0.33 crore
1. Net realisation per month (post tax- R 0.24 crore)
R 31.83 per sq/ft. 25 bps change in capitalisation rate would result in +/- R 0.65 crore (post
2. Capitalisation rate 12.25% tax- R 0.49 crore)
10.85 – Book value 31-3-2021: Increase/(decrease) of 5% in the book value would result in
impact on profit or loss by R 0.54 crore
Preference 76.83 89.88 Expected yield 31-3-2021: Increase/(decrease) in the fair value by 5% would result in
shares impact on profit or loss by R 3.82 crore
31-3-2020: Increase/(decrease) in the fair value by 5% would result in
impact on profit or loss by R 4.44 crore
Debt 867.21 1153.39 Expected yield 31-3-2021: Increase/(decrease) in fair value by 0.25% would result in
instruments impact on profit or loss by R 1.76 crore
31-3-2020: Increase/(decrease) in fair value by 0.25% would result in
impact on profit or loss by R 1.79 crore
Loans 22877.66 24877.64 Expected yield 31-3-2021: Increase/(decrease) in fair value by 0.25% would result in
impact on profit or loss by R 42.80 crore
31-3-2020: Increase/(decrease) in fair value by 0.25% would result in
impact on profit or loss by R 46.54 crore
Other 4176.24 2605.09 Net Assets Value (NAV) 31-3-2021: Increase/(decrease) in the NAV by 5% would result in impact on
investments profit or loss by R 156.25 crore
31-3-2020: Increase/(decrease) in the NAV by 5% would result in impact on
profit or loss by R 97.47 crore
(i) Movement of financial liabilities measured using unobservable inputs (Level 3):
v crore
Particulars Contingent consideration
Balance as at 31-3-2019 157.00
Addition during the year 61.50
Charge recognised in Statement of Profit and Loss 9.35
Settled during the year (20.67)
Foreign exchange difference 11.02
Balance as at 31-3-2020 218.20
Addition during the year 18.48
Charge recognised in Statement of Profit and Loss (49.95)
Settled during the year (40.81)
Foreign exchange difference 4.32
Balance as at 31-3-2021 150.24
Note: A one percentage point change in the unobservable inputs used in fair valuation of Level 3 liabilities does not have a
significant impact on the value.

547
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [59] (contd.)
(j) Maturity profile of financial liabilities based on undiscounted cash flows:
v crore
Note As at 31-3-2021 As at 31-3-2020

Particulars Within After Within After

twelve twelve Total twelve twelve Total
months months months months
A. Non-derivative liabilities:
Borrowings  22,26,27 54887.25 95784.33 150671.58 64484.49 95134.82 159619.31
Trade payables:
Due to micro enterprises and small enterprises 368.94 120.05 488.99 423.25 56.26 479.51
Due to others 28 42662.63 2352.99 45015.62 41695.77 1468.65 43164.42
Other financial liabilities  23,29 5084.70 128.23 5212.93 3458.62 272.61 3731.23
Lease liability 395.55 1637.77 2033.32 407.46 1783.06 2190.52
Total 103399.07 100023.37 203422.44 110469.59 98715.40 209184.99
B. Derivative liabilities:
Forward contracts  23,29 413.98 69.63 483.61 1287.28 707.84 1995.12
Embedded derivatives  23,29 69.74 – 69.74 121.12 2.09 123.21
Total 483.72 69.63 553.35 1408.40 709.93 2118.33
(k) Details of outstanding hedge instruments for which hedge accounting is followed:
(i) Outstanding currency exchange rate hedge instruments:
(A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge:
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(v crore) (v) months months (v crore) (v) months months
(v crore) (v crore) (v crore) (v crore)
(a) Receivable hedges:
US Dollar 37310.77 79.03 20391.92 16918.85 33569.57 76.26 19267.26 14302.31
EURO 1715.73 90.63 1450.44 265.29 2277.73 84.47 2068.58 209.15
Malaysian Ringgit 91.85 19.40 91.85 – 173.51 17.85 125.19 48.32
Omani Riyal 785.49 193.34 599.11 186.38 485.60 193.42 107.43 378.17
Arab Emirates Dirham 926.09 21.26 779.75 146.34 1174.53 20.78 830.91 343.62
Canadian Dollar 37.78 57.24 37.78 – – – – –
British Pound 257.70 100.22 257.70 – 55.12 99.23 55.12 –
Japanese Yen 2537.18 0.73 2426.78 110.40 1640.41 0.69 1324.82 315.59
Kuwaiti Dinar 831.62 255.45 645.10 186.52 1393.32 238.30 1170.76 222.56
Qatari Riyal 1207.41 20.72 958.10 249.31 1401.35 20.99 1319.32 82.03
Bangladesh Taka – – – – 1859.64 0.90 1674.92 184.72
Saudi Riyal – – – – 52.82 19.97 52.82 –
Australian Dollar 72.07 55.10 72.07 – – – – –
South African Rand 63.52 4.67 63.52 – 2.96 5.00 2.96 –
Danish krone 38.91 11.94 38.91 – – – – –
Mauritian Rupee – – – – 149.67 1.91 111.93 37.74
Thai Baht – – – – 1.56 2.35 1.56 –
Swedish Krona 108.54 8.70 108.54 – – – – –

548
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(v crore) (v) months months (v crore) (v) months months
(v crore) (v crore) (v crore) (v crore)
(b) Payable hedges:
US Dollar 14875.35 73.39 11322.88 3552.47 16377.55 73.86 12888.45 3489.10
EURO 7293.72 87.63 7013.89 279.83 4376.52 84.32 4086.26 290.26
Qatari Riyals 29.59 20.69 29.59 – – – – –
Arab Emirates Dirham 46.35 20.28 46.35 – 396.31 20.75 396.31 –
British Pound 26.41 101.30 26.41 – 47.35 94.10 47.35 –
Japanese Yen 1325.68 0.72 1325.68 – 771.37 0.70 657.29 114.08
Kuwaiti Dinar 242.90 242.90 242.90 – 409.62 236.91 409.62 –
Omani Riyal 9.46 189.04 9.46 – – – – –
Swiss Franc 355.03 80.29 185.27 169.76 176.13 76.89 176.13 –
Chinese Yuan 85.99 11.23 85.99 – 84.13 10.67 75.37 8.76
Bangladesh Taka – – – – 766.73 0.88 766.73 –
Mauritian Rupee – – – – 385.17 1.86 385.17 –
Canadian Dollar 3.51 58.77 3.51 – 31.46 54.37 31.46 –
(B) Options taken to hedge exchange rate risk and accounted as cash flow hedge:
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(v crore) (v) months months (v crore) (v) months months
(v crore) (v crore) (v crore) (v crore)
(a) Receivable hedges:
US Dollar/Indian Rupees 1052.91 81.76 90.50 962.41 915.51 87.19 – 915.51
EURO/US Dollar 1093.04 $1.08 to 582.92 510.12 936.12 $1.16 577.04 359.08
$1.18
US Dollar/EURO 618.03 $1.15 to 238.53 379.50 681.58 $1.16 to 485.62 195.96
$1.18 $1.24
(b) Payable hedges:
US Dollar/EURO 618.03 $1.15 to 238.53 379.50 681.58 $1.16 to 485.62 195.96
$1.18 $1.24
EURO/US Dollar 273.94 $1.08 106.23 167.71 298.75 $1.05 213.02 85.73
(C) Forward covers taken to hedge exchange rate risk and accounted as fair value hedge:
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(v crore) (v) months months (v crore) (v) months months
(v crore) (v crore) (v crore) (v crore)
(a) Receivable hedges:
US Dollar 1444.18 73.26 1444.18 – 1694.48 73.82 1694.48 –
Canadian Dollar 3.48 58.01 3.48 – 14.45 53.00 14.45 –
British Pound 66.98 100.72 66.98 – 40.12 89.00 40.12 –
Australian Dollar 3.34 55.64 3.34 – 10.60 44.00 10.60 –
South African Rand 1.95 4.86 1.95 – 37.99 5.00 37.99 –
Danish Krone – – – – 4.41 11.00 4.41 –
Norwegian Krone – – – – 3.70 7.00 3.70 –
EURO 86.29 86.29 86.29 – – – – –
Arab Emirates Dirham 112.90 20.34 112.90 – – – – –
Swedish Krona 10.04 8.37 10.04 – 18.46 8.00 18.46 –

549
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [59] (contd.)
(D) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge:
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(v crore) (v) months months (v crore) (v) months months
(v crore) (v crore) (v crore) (v crore)
(a) Receivable hedges:
US Dollar – – – – 29.00 72.51 29.00 –
Arab Emirates Dirham – – – – 102.55 20.11 102.55 –
Qatari Riyal – – – – 45.77 20.70 45.77 –
(ii) Outstanding interest rate hedge instruments:
Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge:
As at 31-3-2021 As at 31-3-2020
Nominal Average Within After Nominal Average Within After
Particulars amount rate twelve twelve amount rate twelve twelve
(v crore) (%) months months (v crore) (%) months months
(v crore) (v crore) (v crore) (v crore)
Floating interest rate borrowings - US
Dollar – – – – 4.32 7.35 4.32 –
(iii) Outstanding commodity price hedge instruments:
Commodity forward contract:
As at 31-3-2021 As at 31-3-2020
Average Nominal
Within After Nominal Average Within After
Particulars rate amount
twelve twelve amount rate twelve twelve
(v) (v crore)
months months (v crore) (v) months months
(v crore) (v crore) (v crore) (v crore)
Copper (Tn)[a] (114.88) 587748.64 (114.88) – 53.65 404260.66 27.25 26.40
Aluminium (Tn)[a] (11.71) 151245.62 11.78 (23.49) 355.02 133756.31 355.02 –
Iron Ore (Tn) 33.68 7447.47 33.68 – 25.71 5643.17 15.18 10.53
Coking Coal (Tn) – – – – 24.58 13101.74 15.50 9.08
Lead (Tn) 48.19 142370.06 48.19 – 42.56 146921.65 42.56 –
Nickel (Tn) 143.04 1030545.11 143.04 – 112.49 992854.36 112.49 –
[a] Negative nominal amount represents sell position (net).

(l) Carrying amounts of hedge instruments for which hedge accounting is followed:
(A) Cash flow hedge:
v crore
As at 31-3-2021 As at 31-3-2020
Currency Interest rate Commodity Currency Interest rate Commodity
Particulars
exposure exposure price exposure exposure price
exposure exposure
(i) Forward contracts
(a) Current:
Asset - Other financial assets 664.21 – 165.25 795.45 (0.96) 83.78
Liability - Other financial liabilities 329.79 – 61.35 1055.95 – 136.18
(b) Non-current:
Asset - Other financial assets 451.91 – – 53.00 – –
Liability - Other financial liabilities 44.22 – 3.02 580.21 – 1.71
(ii) Swap contracts
(a) Non-current:
Asset - Other financial assets – – – 155.06 – –
Liability - Other financial liabilities – – – 59.55 – –

550
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
v crore
As at 31-3-2021 As at 31-3-2020
Currency Interest rate Commodity Currency Interest rate Commodity
Particulars
exposure exposure price exposure exposure price
exposure exposure
(iii) Option contracts
(a) Current:
Asset - Other financial assets 20.38 – – 26.61 – –
Liability - Other financial liabilities 9.79 – – 8.97 – –
(b) Non-current:
Asset - Other financial assets 62.26 – – 39.13 – –
Liability - Other financial liabilities 25.54 – – 33.36 – –
(B) Fair value hedge:
v crore
As at 31-3-2021 As at 31-3-2020
Particulars Currency Interest rate Commodity Currency Interest rate Commodity
exposure exposure price exposure exposure price
exposure exposure
(i) Forward contracts
(a) Current:
Asset - Other financial assets 7.65 – – – – –
Liability - Other financial liabilities 3.06 – – 63.86 – –
(ii) Option contracts
(a) Current:
Asset - Other financial assets – – – 4.84 – –
(b) Non-current:
Asset - Other financial assets – – – 4.67 – –
(C) Net investment hedge:
v crore
As at 31-3-2021 As at 31-3-2020
Particulars Currency Interest rate Commodity Currency Interest rate Commodity
exposure exposure price exposure exposure price
exposure exposure
(i) Forward contracts
(a) Current:
Liability - Other financial liabilities – – – 0.26 – –
(m) Breakup of cash flow hedging reserve and cost of hedging reserve:
v crore
As at 31-3-2021 As at 31-3-2020
Particulars Cash flow Cost of hedging Cash flow Cost of hedging
hedging reserve reserve hedging reserve reserve
Balance towards continuing hedges 284.77 (4.34) (412.63) (13.78)
Balance for which hedge accounting discontinued 207.34 (2.67) (9.14) (1.37)
Total 492.11 (7.01) (421.77) (15.15)

551
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [59] (contd.)
(n) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss:
v crore
Particulars 2020-21 2019-20
(A) Future cash flows are no longer expected to occur:
(i) Sales, administration and other expenses 39.49 (16.65)
(B) Hedged expected future cash flows affecting Profit or loss:
(i) Progress billing 260.25 (100.64)
(ii) Revenue from operations 38.12 166.52
(iii) Manufacturing, construction and operating expenses 90.86 (131.68)
(iv) Finance costs (137.54) (150.26)
(v) Sales, administration and other expenses 242.30 313.90
(vi) Discontinued operations – 3.38
(o) Movement of cash flow hedging reserve and cost of hedging reserve:
v crore
Cash flow hedging reserve 2020-21 2019-20
Opening balance (421.77) 239.11
Changes in the spot element of the forward contracts which is designated as hedging
instruments for time period related hedges 222.30 248.63
Changes in fair value of forward contracts designated as hedging instruments 1837.49 (1001.89)
Changes in intrinsic value of option contracts (6.94) 3.64
Changes in fair value of swaps 28.16 (43.85)
Amount reclassified to Profit or Loss (421.08) (307.86)
Amount included in non-financial asset/liability (6.62) 5.39
Amount included in progress billing in Balance Sheet (260.25) 100.64
Taxes related to above (479.18) 334.42
Closing balance 492.11 (421.77)

v crore
Cost of hedging reserve 2020-21 2019-20
Opening balance (15.15) 5.89
Changes in the forward element of the forward contracts where changes in spot element of
forward contract is designated as hedging instruments for time period related hedges (138.38) (151.87)
Included in carrying amount of hedge item – 0.55
Amount reclassified to Profit or Loss 149.50 122.14
Taxes related to above (2.98) 8.14
Closing balance (7.01) (15.15)

552
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [60]
Value of financial assets and inventories hypothecated as collateral for liabilities and/or commitments and/or contingent liabilities:
v crore
As at As at
Particulars
31-3-2021 31-3-2020
Current:
Inventories and trade receivables 15290.95 15325.09
Cash and cash equivalents 345.59 22.70
Loans 34777.90 39286.44
Other assets 522.27 85.90
Total inventories and current financial assets hypothecated as collateral 50936.71 54720.13
Non-current:
Investments – 1447.99
Loans 47357.97 46722.84
Total non-current financial assets hypothecated as collateral 47357.97 48170.83
Note [61]
Disclosure pursuant to Ind AS 116 “Leases”:
(a) Where the Group is a lessor:
(i) Finance leases:
A. Assets given under leases mainly include power plant where the Group has agreed to manufacture/construct an asset
and convey, in substance, a right to the beneficiary to use the asset over a major part of its economic life, for a pre-
determined consideration.
B. Finance lease income recognised in the Statement of Profit and Loss: R 1023.64 crore (previous year: R 1035.33 crore).
Out of above, R 984.30 crore (previous year: R 1003.04 crore) is on the net investment in finance lease and R 39.34 crore
(previous year: R 32.29 crore) is income relating to variable lease payments not included in the measurement of the net
investment in finance leases.
C. Selling profit on finance lease recognised in the Statement of Profit and Loss: R 14.55 crore (previous year: Nil).
D. Sub-lease income recognised on finance leases: R 0.18 crore (previous year: R 0.25 crore).
E. The gross investment in these leases and the present value of minimum lease payments receivable is as under:
v crore
Present value of minimum
Minimum lease payments
Sr. lease payments
Particulars
No. As at As at As at As at
31-3-2021 31-3-2020 31-3-2021 31-3-2020
1 Receivable not later than 1 year 1151.43 1189.58 207.15 214.76
2 Receivable later than 1 year and not later than 2 years 1235.89 1137.71 310.37 185.55
3 Receivable later than 2 years and not later than 3 years 1517.28 1231.54 642.15 306.33
4 Receivable later than 3 years and not later than 4 years 1290.94 1511.98 478.38 637.00
5 Receivable later than 4 years and not later than 5 years 1017.77 1289.63 246.40 476.96
6 Receivable later than 5 years 12449.61 13467.38 5841.02 6087.22
7 Unguaranteed residual value 990.36 990.36 990.36 990.36
8 Gross investment in leases (1+2+3+4+5+6+7) 19653.28 20818.18 8715.83 8898.18
9 Less: Unearned finance income 10937.45 11920.00
10 Present value of minimum lease payments receivable (8-9) 8715.83 8898.18
11 Less: Impairment [in Developmental Projects Segment
(Note 48)]/expected credit loss on lease receivables 1687.42 – 1687.42 –
Net lease receivables (10-11) 7028.41 8898.18 7028.41 8898.18

553
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [61] (contd.)
F. Reconciliation of carrying amount of net investment in finance lease receivables:
v crore
Sr. No. Particulars 2020-21 2019-20
1 Opening balance 8898.18 9067.70
2 Impact of Ind AS 116 - derecognition of right-of-use asset on sub- lease
treated as finance lease – 3.26
3 Finance income/sub-lease income recognised during the year 984.48 1003.29
4 Addition to finance lease during the year 28.65 76.10
5 Lease rental received during the year (1195.48) (1252.17)
6 Impairment [in Developmental Projects Segment (Note 48)]/expected credit loss
recognised during the year (1687.42) –
Closing balance (1+2+3+4+5+6) 7028.41 8898.18
(ii) Operating leases:
A. The Group has given on non-cancellable lease certain assets such as buildings, plant & equipment, furniture & fixtures and
vehicles. Leases are renewed only on mutual consent and at a prevalent market price and sub-lease is generally restricted.
B. Operating lease income recognised in the Statement of Profit and Loss: R 101.31 crore (previous year: R 170.85 crore).
C. Sub-lease income recognised on operating leases: R 3.94 crore (previous year: R 1.28 crore).
D. Annual undiscounted lease payments receivable is as under:
v crore
Sr. As at As at
Particulars
No. 31-3-2021 31-3-2020
1 Receivable not later than 1 year 70.29 116.97
2 Receivable later than 1 year and not later than 2 years 48.66 81.77
3 Receivable later than 2 years and not later than 3 years 22.82 50.78
4 Receivable later than 3 years and not later than 4 years 7.41 27.28
5 Receivable later than 4 years and not later than 5 years 0.37 7.41
6 Receivable later than 5 years 0.64 0.61
Total (1+2+3+4+5+6) 150.19 284.82
(b) Where the Group is a lessee:
(i) The Group has taken on lease various assets such as plant & equipment, buildings, office premises, furniture & fixtures,
vehicles and computers. Generally, leases are renewed only on mutual consent and at a prevalent market price and sub-lease is
restricted.
(ii) The Group during the year has leased out surplus capacity in leased assets and has accounted an income of R 4.12 crore
(previous year: R 1.53 crore) on such sub-leases.

554
Notes forming part of the Consolidated Financial Statements (contd.)
Note [61] (contd.)
(iii) Details with respect to right-of-use assets:
v crore
Depreciation for the year [a]
Additions during the year Carrying amount
Class of asset
2020-21 2019-20 2020-21 2019-20 [b]
As at 31-3-2021 As at 31-3-2020
Land 19.03 17.81 5.64 26.57 368.80 385.44
Buildings 363.20 288.15 354.63 1125.51 1602.80 1716.20
Plant & equipment 73.57 45.60 5.78 114.52 42.82 117.77
Furniture & fixtures 1.67 1.67 – – 5.14 6.81
Vehicles 0.16 0.21 0.34 0.15 0.45 0.27
Computers 0.24 – 1.76 – 1.52 –
Total 457.87 353.44 368.15 1266.75 2021.53 2226.49
[a] Depreciation for the year includes depreciation on land Nil (previous year: R 0.14 crore) and on buildings Nil (previous year:
R 0.04 crore) pertaining to discontinued operations.
[b] Include addition on account of business combination R 607.03 crore (R 23.89 crore in land and R 583.14 crore in buildings).
(iv) Interest expense on lease liabilities amounts to R 203.57 crore (previous year: R 162.79 crore) [including R 0.28 crore (previous
year: R 0.74 crore) pertaining to discontinued operations].
(v) Amounts not included in the measurement of the lease liability and recognised as expense in the Statement of Profit and Loss
during the year are as follows:
A. Short term leases - R 2339.65 crore (previous year: R 2749.00 crore) [including R 4.60 crore (previous year: R 10.91 crore)
pertaining to discontinued operations];
B. Low value leases - R 38.88 crore (previous year: R 48.45 crore).
(vi) Total cash outflow for leases amounts to R 2791.11 crore (previous year: R 3090.44 crore) [including R 5.89 crore (previous
year: R 13.63 crore) pertaining to discontinued operations] during the year including cash outflow of short term and low value
leases.
(vii) The Group has entered into certain lease agreements, which had not commenced by the year end and as a result, a lease
liability and right-of-use asset has not been recognised as at year end. The aggregate future cash flows to which the Group is
exposed in respect of these contracts are:
Fixed payments of R 8.39 crore (previous year: R 17.99 crore) per year, for a lease term of 10 years (previous year: 9 years).

555
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

Note [62]
Additional information pursuant to Schedule III to the Companies Act, 2013 for the year ended 31-3-2021:

Net Assets, i.e., total Share in profit or (loss) Share in Other Share in Total
assets minus total comprehensive income comprehensive income
liabilities
As % of Amount As % of Amount As % of Amount As % of Amount
Name of the entity
consolidated (R crore) consolidated (R crore) consolidated (R crore) consolidated (R crore)
net assets profit or loss Other Total
comprehensive comprehensive
income income
Parent Company
Larsen and Toubro Limited 79.63% 60413.54 97.88% 11336.97 43.52% 491.55 93.05% 11828.52
Indian Subsidiaries
Infrastructure:
Hi-Tech Rock Products and Aggregates
Limited (0.00%) (0.01) 0.05% 5.50 – – 0.04% 5.50
L&T Geostructure Private Limited
(Formerly known as L&T Geostructure
LLP) 0.32% 239.32 0.34% 39.80 0.03% 0.30 0.32% 40.10
L&T Infrastructure Engineering Limited 0.06% 45.48 0.00% 0.11 0.02% 0.20 0.00% 0.31
Heavy Engineering:
L&T Cassidian Limited – – – – – – – –
Hydrocarbon:
L&T Hydrocarbon Engineering Limited 3.76% 2850.72 7.13% 826.41 (8.58%) (96.85) 5.74% 729.56
IT & Technology Services:
Larsen & Toubro Infotech Limited 9.15% 6939.80 15.43% 1787.39 38.83% 438.62 17.51% 2226.01
L&T Technology Services Limited 4.40% 3340.08 5.81% 673.13 22.49% 254.00 7.29% 927.13
Mindtree Limited (Consolidated) 5.69% 4319.02 9.59% 1110.50 29.20% 329.82 11.33% 1440.32
L&T Thales Technology Services Private
Limited 0.05% 37.86 0.11% 12.48 0.00% 0.02 0.10% 12.50
Syncordis Software Services India Private
Limited 0.01% 3.85 0.01% 1.18 – – 0.01% 1.18
Graphene Semiconductor Services Private
Limited 0.01% 10.84 0.01% 0.73 – – 0.01% 0.73
Seastar Labs Private Limited 0.00% 0.11 0.00% 0.40 – – 0.00% 0.40
Ruletronics Systems Private Limited 0.00% 3.50 (0.00%) (0.40) – – (0.00%) (0.40)
Esencia Technologies India Private Limited 0.00% 0.60 (0.00%) (0.02) – – (0.00%) (0.02)
Lymbyc Solutions Private Limited 0.00% 2.68 (0.01%) (1.11) – – (0.01%) (1.11)
Powerup Cloud Technologies Private
Limited 0.01% 4.52 (0.03%) (3.15) (0.00%) (0.04) (0.02%) (3.19)
Financial Services:
L&T Capital Markets Limited – – 0.03% 3.73 – – 0.03% 3.73
L&T Finance Holdings Limited 14.51% 11010.28 1.00% 116.05 0.01% 0.11 0.91% 116.16
L&T Infra Debt Fund Limited 1.76% 1335.59 0.55% 63.23 (0.15%) (1.67) 0.49% 61.56
L&T Infra Investment Partners Advisory
Private Limited 0.02% 17.94 0.03% 3.31 – – 0.03% 3.31
L&T Infra Investment Partners Trustee
Private Limited 0.00% 0.07 0.00% 0.01 – – 0.00% 0.01
L&T Investment Management Limited 0.85% 643.07 1.40% 162.04 0.14% 1.60 1.29% 163.64
L&T Mutual Fund Trustee Limited 0.00% 0.92 (0.00%) (0.39) – – (0.00%) (0.39)
L&T Financial Consultants Limited 0.23% 177.45 0.82% 95.31 (0.00%) (0.01) 0.75% 95.30
Mudit Cement Private Limited (0.07%) (53.46) (0.10%) (11.30) – – (0.09%) (11.30)
L&T Finance Limited 20.59% 15621.23 0.01% 1.36 3.82% 43.19 0.35% 44.55
L&T Infra Investment Partners (The Fund) 0.58% 437.36 (0.43%) (49.70) – – (0.39%) (49.70)

556
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [62] (contd.)
Net Assets, i.e., total Share in profit or (loss) Share in Other Share in Total
assets minus total comprehensive income comprehensive income
liabilities
As % of Amount As % of Amount As % of Amount As % of Amount
Name of the entity
consolidated (R crore) consolidated (R crore) consolidated (R crore) consolidated (R crore)
net assets profit or loss Other Total
comprehensive comprehensive
income income
Developmental Projects:
L&T Metro Rail (Hyderabad) Limited 0.10% 75.97 (15.25%) (1766.74) – – (13.90%) (1766.74)
Sahibganj Ganges Bridge-Company
Private Limited – – – – – – – –
Power Development:
L&T Arunachal Hydropower Limited (0.00%) (0.23) (0.00%) (0.05) – – (0.00%) (0.05)
L&T Himachal Hydropower Limited (0.00%) (3.02) (0.01%) (0.73) – – (0.01%) (0.73)
L&T Power Development Limited 3.02% 2289.66 (4.88%) (564.56) – – (4.44%) (564.56)
L&T Uttaranchal Hydropower Limited 1.11% 843.57 (6.39%) (739.61) – – (5.82%) (739.61)
Nabha Power Limited 4.81% 3650.03 1.41% 163.86 (1.57%) (17.68) 1.15% 146.18
Realty:
Chennai Vision Developers Private Limited (0.00%) (0.02) 0.00% 0.01 – – 0.00% 0.01
L&T Asian Realty Project LLP (0.06%) (45.42) (0.13%) (14.65) – – (0.11%) (14.65)
L&T Parel Project LLP 0.19% 146.81 0.47% 54.79 0.01% 0.08 0.43% 54.87
L&T Realty Developers Limited (Formerly
known as L&T Construction Equipment
Limited) 1.29% 981.07 3.30% 381.79 – – 3.00% 381.79
LTR SSM Private Limited – – – – – – – –
L&T Seawoods Limited 3.69% 2796.93 0.46% 52.72 0.00% 0.01 0.42% 52.73
L&T Vision Ventures Limited (0.00%) (0.17) 0.04% 4.50 – – 0.04% 4.50
L&T Electricals and Automation Limited (0.00%) (1.73) (0.02%) (2.03) – – (0.02%) (2.03)
L&T Westend Project LLP – – – – – – – –
Valves, Construction Equipment and
Others:
L&T Construction Equipment Limited
(Formerly known as L&T Construction
Machinery Limited) 0.25% 193.03 (0.02%) (2.54) (0.37%) (4.17) (0.05%) (6.71)
L&T Valves Limited 0.64% 482.40 0.39% 45.03 1.16% 13.10 0.46% 58.13
Others:
Bhilai Power Supply Company Limited 0.00% 0.05 – – – – – –
L&T Power Limited 0.01% 5.72 0.00% 0.18 – – 0.00% 0.18
Kesun Iron and Steel Company Private
Limited – – – – – – – –
L&T Aviation Services Private Limited 0.05% 35.12 0.00% 0.28 0.00% 0.03 0.00% 0.31
L&T Capital Company Limited 0.01% 5.20 0.00% 0.16 – – 0.00% 0.16
L&T Infra Contractors Private Limited – – 0.00% 0.01 – – 0.00% 0.01
Foreign Subsidiaries
Infrastructure:
Larsen & Toubro (Oman) LLC 0.54% 409.75 (0.22%) (25.37) (1.00%) (11.32) (0.29%) (36.69)
Larsen & Toubro Qatar LLC 0.00% 0.09 (0.00%) (0.11) – – (0.00%) (0.11)
Larsen & Toubro Saudi Arabia LLC 0.50% 382.99 0.78% 90.75 2.73% 30.80 0.96% 121.55
Larsen & Toubro T&D SA (Proprietary)
Limited 0.00% 3.40 0.00% 0.12 0.04% 0.48 0.01% 0.60
Larsen & Toubro (East Asia) Sdn.Bhd. 0.01% 4.22 0.02% 1.79 – – 0.01% 1.79

557
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [62] (contd.)
Net Assets, i.e., total Share in profit or (loss) Share in Other Share in Total
assets minus total comprehensive income comprehensive income
liabilities
As % of Amount As % of Amount As % of Amount As % of Amount
Name of the entity
consolidated (R crore) consolidated (R crore) consolidated (R crore) consolidated (R crore)
net assets profit or loss Other Total
comprehensive comprehensive
income income
Hydrocarbon:
Larsen & Toubro Heavy Engineering LLC (0.15%) (115.80) (0.38%) (44.29) 0.28% 3.18 (0.32%) (41.11)
Larsen & Toubro Hydrocarbon
International Limited LLC – – – – – – – –
L&T Modular Fabrication Yard LLC 0.27% 208.14 0.11% 13.27 (0.56%) (6.34) 0.06% 6.93
L&T Overseas Projects Nigeria Limited – – 0.00% 0.07 – – 0.00% 0.07
Larsen Toubro Arabia LLC (0.38%) (289.24) 0.58% 67.64 1.09% 12.28 0.63% 79.92
L&T Hydrocarbon Saudi Company (0.76%) (578.09) (0.67%) (77.98) 4.23% 47.77 (0.24%) (30.21)
Larsen & Toubro Kuwait Construction
General Contracting Company WLL 0.01% 7.82 0.03% 3.02 (0.01%) (0.11) 0.02% 2.91
PT Larsen & Toubro Hydrocarbon
Engineering Indonesia – – – – – – – –
Larsen & Toubro Electromech LLC 0.06% 47.28 0.63% 72.60 (0.46%) (5.16) 0.53% 67.44
L&T Hydrocarbon International FZE (0.00%) (0.48) (0.00%) (0.30) 0.00% 0.01 (0.00%) (0.29)
IT & Technology Services:
L&T Information Technology Services
(Shanghai) Co., Ltd. (0.00%) (3.70) (0.02%) (2.25) (0.01%) (0.06) (0.02%) (2.31)
L&T Infotech Financial Services
Technologies Inc. 0.48% 360.79 0.74% 86.05 2.30% 25.99 0.88% 112.04
Larsen & Toubro Infotech Canada Limited 0.05% 36.05 0.08% 9.20 0.23% 2.56 0.09% 11.76
Larsen & Toubro Infotech LLC 0.01% 6.14 0.02% 2.33 (0.02%) (0.18) 0.02% 2.15
Larsen and Toubro Infotech South Africa
(Proprietary) Limited 0.01% 11.16 0.06% 6.90 0.10% 1.14 0.06% 8.04
Larsen & Toubro Infotech GmbH 0.50% 381.58 0.46% 53.68 (0.45%) (5.03) 0.38% 48.65
L&T Information Technology Spain SL 0.00% 0.33 (0.01%) (1.42) 0.01% 0.07 (0.01%) (1.35)
Larsen & Toubro Infotech Norge AS 0.00% 3.54 0.03% 3.00 0.02% 0.23 0.03% 3.23
Larsen & Toubro LLC 0.00% 2.84 0.00% 0.06 (0.01%) (0.10) (0.00%) (0.04)
L&T Infotech S. DE R.L. DE C.V. 0.00% 1.58 0.01% 1.20 0.01% 0.08 0.01% 1.28
Syncordis S.A. 0.04% 33.79 0.02% 2.11 0.12% 1.39 0.03% 3.50
Syncordis France SARL (0.01%) (6.09) (0.01%) (1.15) (0.01%) (0.16) (0.01%) (1.31)
Syncordis Limited (0.03%) (18.32) (0.01%) (0.64) (0.12%) (1.30) (0.02%) (1.94)
Syncordis PSF S.A. 0.00% 3.02 (0.00%) (0.46) (0.03%) (0.36) (0.01%) (0.82)
Nielsen+Partner Unternehmensberater
GmbH 0.02% 11.91 (0.00%) (0.13) 0.03% 0.35 0.00% 0.22
Nielsen+Partner Unternehmensberater AG 0.00% 3.47 0.00% 0.27 (0.00%) (0.04) 0.00% 0.23
Nielsen+Partner Pte Ltd 0.05% 34.46 0.10% 11.79 0.05% 0.55 0.10% 12.34
Nielsen&Partner Company Limited (0.00%) (1.74) (0.01%) (1.54) 0.00% 0.03 (0.01%) (1.51)
Nielsen&Partner Pty Ltd (0.00%) (0.77) (0.01%) (0.78) (0.00%) (0.03) (0.01%) (0.81)
Ruletronics Limited 0.01% 6.97 (0.01%) (0.82) 0.05% 0.53 (0.00%) (0.29)
Ruletronics Systems Inc. 0.00% 0.75 (0.01%) (1.16) (0.00%) (0.05) (0.01%) (1.21)
Lymbyc Solutions Inc. (0.00%) (0.39) (0.00%) (0.02) 0.00% 0.02 – –
L&T Technology Services LLC 0.42% 319.96 0.54% 62.55 (0.71%) (7.96) 0.43% 54.59
Graphene Solutions PTE Ltd. 0.00% 0.64 (0.00%) (0.35) 0.00% 0.02 (0.00%) (0.33)
Graphene Solutions SDN. BHD. 0.00% 0.14 (0.00%) (0.02) – – (0.00%) (0.02)
Graphene Solutions Taiwan Limited 0.00% 0.30 (0.00%) (0.38) – – (0.00%) (0.38)
Esencia Technologies Inc. (0.01%) (5.38) 0.00% 0.41 0.00% 0.01 – 0.42

558
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [62] (contd.)
Net Assets, i.e., total Share in profit or (loss) Share in Other Share in Total
assets minus total comprehensive income comprehensive income
liabilities
As % of Amount As % of Amount As % of Amount As % of Amount
Name of the entity
consolidated (R crore) consolidated (R crore) consolidated (R crore) consolidated (R crore)
net assets profit or loss Other Total
comprehensive comprehensive
income income
L&T Technology Services (Shanghai) Co.
Ltd 0.00% 1.13 (0.01%) (0.88) 0.01% 0.07 (0.01%) (0.81)
Orchestra Technology, Inc. 0.03% 21.31 (0.00%) (0.01) (0.02%) (0.19) (0.00%) (0.20)
Larsen & Toubro Infotech UK Limited 0.00% 0.22 0.00% 0.20 0.00% 0.01 0.00% 0.21
LTI Middle East FZ-LLC 0.00% 1.39 (0.02%) (2.34) 0.01% 0.07 (0.02%) (2.27)
L&T Technology Services (Canada) Ltd 0.00% 0.08 0.00% 0.04 – – 0.00% 0.04
Financial Services:
L&T Capital Markets (Middle East) Ltd – – (0.05%) (5.97) – – (0.05%) (5.97)
Valves, Construction Equipment and
Others:
L&T Valves Arabia Manufacturing LLC (0.00%) (1.64) (0.02%) (2.30) 0.00% 0.01 (0.02%) (2.29)
L&T Valves USA LLC 0.00% 1.31 (0.02%) (1.97) (0.01%) (0.08) (0.02%) (2.05)
Electrical & Automation:
Henikwon Corporation SDN. BHD. – – (0.01%) (1.56) – – (0.01%) (1.56)
Kana Controls General Trading and
Contracting company W.L.L. – – (0.03%) (3.21) – – (0.03%) (3.21)
L&T Electrical & Automation FZE – – (0.17%) (19.26) – – (0.15%) (19.26)
L&T Electricals & Automation Saudi Arabia
Company Limited LLC – – (0.01%) (1.19) – – (0.01%) (1.19)
PT. Tamco Indonesia – – (0.05%) (5.44) – – (0.04%) (5.44)
Servowatch Systems Limited – – (0.03%) (3.39) – – (0.03%) (3.39)
Tamco Electrical Industries Australia Pty
Limited – – (0.01%) (1.04) – – (0.01%) (1.04)
Tamco Switchgear (Malaysia) SDN BHD – – (0.10%) (11.71) – – (0.09%) (11.71)
Thalest Limited – – (0.00%) (0.55) (0.07%) (0.82) (0.01%) (1.37)
Others:
Larsen & Toubro International FZE 0.46% 347.49 1.46% 169.57 (28.42%) (321.05) (1.19%) (151.48)
L&T Global Holdings Limited 0.76% 580.16 (0.05%) (6.07) (1.81%) (20.39) (0.21%) (26.46)
Total Subsidiaries 60658.35 2881.58 707.58 3589.16
Non-controlling Interest in all subsidiaries (15.88%) (12051.53) (11.56%) (1338.35) (28.76%) (324.88) (13.08%) (1663.23)
Indian Associates
L&T-Chiyoda Limited 0.09% 68.92 0.07% 7.72 (0.01%) (0.14) 0.06% 7.58
Gujarat Leather Industries Limited – – – – – – – –
Magtorq Private Limited 0.01% 4.77 0.00% 0.14 – – 0.00% 0.14
Magtorq Engineering Solutions Private
Limited 0.00% 0.49 0.00% 0.05 – – 0.00% 0.05
Foreign Associates
Larsen & Toubro Qatar & HBK Contracting
Co. WLL (0.00%) (3.79) – – – – – –
L&T Camp Facilities LLC 0.01% 4.30 (0.01%) (1.73) (0.01%) (0.08) (0.01%) (1.81)
Total Associates 74.69 6.18 (0.22) 5.96

559
Notes forming part of the Consolidated Financial Statements    ANNUAL REPORT 2020-21

Notes forming part of the Consolidated Financial Statements (contd.)

NOTE [62] (contd.)
Net Assets, i.e., total Share in profit or (loss) Share in Other Share in Total
assets minus total comprehensive income comprehensive income
liabilities
As % of Amount As % of Amount As % of Amount As % of Amount
Name of the entity
consolidated (R crore) consolidated (R crore) consolidated (R crore) consolidated (R crore)
net assets profit or loss Other Total
comprehensive comprehensive
income income
Indian Joint Ventures
Power:
L&T - MHI Power Boilers Private Limited
(Formerly known as L&T - MHPS Boilers
Private Limited) 1.16% 881.73 1.11% 129.07 (1.04%) (11.75) 0.92% 117.32
L&T - MHI Power Turbine Generators
Private Limited (Formerly known as
L&T-MHPS Turbine Generators Private
Limited) 0.24% 183.64 0.16% 18.28 (0.39%) (4.45) 0.11% 13.83
L&T Howden Private Limited 0.09% 65.47 0.14% 14.48 0.00% 0.01 0.11% 14.49
L&T-Sargent & Lundy Limited 0.06% 42.51 0.09% 9.69 0.04% 0.42 0.08% 10.11
Heavy Engineering:
L&T Special Steels and Heavy Forgings
Private Limited [Note 48(b)] (2.18%) (1656.41) (7.69%) (890.62) 0.01% 0.09 (7.01%) (890.53)
Defence Engineering:
L&T MBDA Missile Systems Limited 0.01% 7.34 0.07% 7.90 – – 0.06% 7.90
Hydrocarbon:
L&T Sapura Offshore Private Limited 0.00% 0.30 0.00% 0.01 – – 0.00% 0.01
L&T Sapura Shipping Private Limited 0.33% 248.79 (0.50%) (58.02) (0.87%) (9.84) (0.53%) (67.86)
Developmental Projects:
L&T Infrastructure Development Projects
Limited (Consolidated) 1.07% 808.58 (0.57%) (66.33) (4.65%) (52.49) (0.93%) (118.82)
Others:
Raykal Aluminium Company Private
Limited 0.00% 0.07 (0.00%) (0.14) – – (0.00%) (0.14)
Foreign Joint Ventures
Hydrocarbon:
Indiran Engineering Projects & Systems
Kish PJSC (0.00%) (0.03) 0.00% 0.26 (0.00%) (0.04) 0.00% 0.22
L&T Hydrocarbon Caspian LLC – – – – – – – –
Total Joint Ventures 581.99 (835.42) (78.05) (913.47)
CFS adjustment and elimination (44.57%) (33808.51) (4.04%) (468.03) 29.53% 333.51 (1.07%) (134.52)
Total 75868.53 11582.93 1129.49 12712.42
NOTE [63]
There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2021.

Note [64]
a. For better understanding of the Group’s financial performance, line items have been added to show Profit after tax from continuing
operations separately from exceptional items. This is in line with guidance available in Schedule III to Companies Act, 2013.
b. The Company has consolidated financials of Mindtree Limited from the quarter beginning July 1, 2019. Accordingly, the figures for
the previous year are not comparable.
c. Figures for the previous year have been regrouped/re-classified to conform to the figures of the current year.

560
Statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] v crore
Sr. No. 1 2 3 4 5 6
Sr. Particulars Bhilai Power L&T Electricals Hi-Tech Rock L&T Seawoods Kesun Iron and L&T Valves
no. Supply Company and Automation Products and Limited Steel Company Limited
Limited Limited Aggregates Private Limited
Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 11-Jul-95* 12-Dec-07* 01-Jan-08* 13-Mar-08* 16-Jan-09* 23-Nov-61*
1 Share capital (including share application
money pending allotment) 0.05 7.44 0.05 1654.55 0.01 18.00
2 Other equity/Reserves and surplus (as
applicable) – (9.17) (0.06) 1142.38 (0.01) 464.40
3 Liabilities 1.06 18.06 132.11 449.28 – 718.51
4 Total equity and liabilities 1.11 16.33 132.10 3246.21 – 1200.91
5 Total assets 1.11 16.33 132.10 3246.21 – 1200.91
6 Investments – – 11.53 265.17 – 5.48
7 Turnover – – 125.17 109.62 – 1219.73
8 Profit before taxation – (1.89) 5.50 68.82 (0.00) 59.12
9 Provision for taxation – 0.14 – 16.10 – 14.09
10 Profit after taxation – (2.03) 5.50 52.72 (0.00) 45.03
11 Interim dividend - equity – – – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 99.90 100.00 100.00 100.00 95.00 100.00
Sr. No. 7 8 9 10 11 12
Sr. Particulars Chennai Vision L&T Vision L&T Power L&T Aviation Larsen & Toubro L&T Finance
no. Developers Ventures Limited Limited Services Private Infotech Limited Holdings Limited
Private Limited Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 14-Aug-08* 22-Dec-06* 09-Mar-06* 06-Nov-09* 23-Dec-96* 01-May-08*
1 Share capital (including share application
money pending allotment) 0.01 0.05 0.05 45.60 17.50 2469.45
2 Other equity/Reserves and surplus (as
applicable) (0.03) (0.22) 5.67 (10.48) 6922.30 8540.83
3 Liabilities 0.04 11.99 0.22 1.35 3047.90 1829.40
4 Total equity and liabilities 0.02 11.82 5.94 36.47 9987.70 12839.68
5 Total assets 0.02 11.82 5.94 36.47 9987.70 12839.68
6 Investments 0.00 – 5.92 – 4396.50 10069.68
7 Turnover 0.01 – – 19.59 11562.60 171.26
8 Profit before taxation 0.01 6.02 0.24 1.56 2391.00 188.79
9 Provision for taxation – 1.51 0.06 1.28 603.61 72.74
10 Profit after taxation 0.01 4.50 0.18 0.28 1787.39 116.05
11 Interim dividend - equity – – – – (261.98) –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – (436.88) –
14 Proposed dividend - preference – – – – – –
15 % of share holding 100.00 68.00 99.99 100.00 74.27 63.62

Note: * Date of incorporation

561
salient features of the financial statements of subsidiaries/associate companies/joint ventures    ANNUAL REPORT 2020-21

Statement containing salient features of the financial statements of

subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 13 14 15 16 17 18
Sr. Particulars L&T Finance L&T Investment L&T Mutual Fund L&T Infra Debt L&T Infra L&T Infra
no. Limited Management Trustee Limited Fund Limited Investment Investment
Limited Partners Partners Trustee
Advisory Private Private Limited
Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 31-Dec-12* 25-Apr-96* 30-Apr-96* 19-Mar-13* 30-May-11* 12-Aug-11*
1 Share capital (including share application
money pending allotment) 2684.17 251.82 0.15 490.18 5.00 0.10
2 Other equity/Reserves and surplus (as
applicable) 12937.06 391.25 0.77 845.41 12.94 (0.03)
3 Liabilities 80587.52 67.76 0.09 8571.56 0.40 0.01
4 Total equity and liabilities 96208.75 710.83 1.01 9907.15 18.34 0.08
5 Total assets 96208.75 710.83 1.01 9907.15 18.34 0.08
6 Investments 8427.00 555.38 0.74 159.22 16.93 0.00
7 Turnover 12349.31 343.99 0.08 891.77 6.46 0.03
8 Profit before taxation 332.24 185.25 (0.39) 159.16 4.43 0.01
9 Provision for taxation 330.88 23.21 – 95.93 1.12 –
10 Profit after taxation 1.36 162.04 (0.39) 63.23 3.31 0.01
11 Interim dividend - equity – (97.96) – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 63.62 63.62 63.62 63.62 63.62 63.62
Sr. No. 19 20 21 22 23 24
Sr. Particulars L&T Financial Mudit Cement L&T Capital L&T Power L&T Uttaranchal L&T Arunachal
no. Consultants Private Limited Company Limited Development Hydropower Hydropower
Limited Limited Limited Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 16-Jun-11* 27-Dec-13 06-Apr-00* 12-Sep-07* 13-Nov-06* 24-Jun-10*
1 Share capital (including share application
money pending allotment) 18.75 2.10 0.05 3112.70 161.05 40.39
2 Other equity/Reserves and surplus (as
applicable) 158.70 (55.56) 5.15 (823.04) 682.52 (40.62)
3 Liabilities 280.48 73.65 0.07 0.83 26.42 0.27
4 Total equity and liabilities 457.93 20.19 5.27 2290.49 869.99 0.04
5 Total assets 457.93 20.19 5.27 2290.49 869.99 0.04
6 Investments – – 0.00 2286.04 12.21 –
7 Turnover 136.40 – – 6.21 21.60 –
8 Profit before taxation 136.35 (11.77) 0.26 (564.40) (739.61) (0.05)
9 Provision for taxation 41.04 (0.47) 0.10 0.16 – 0.00
10 Profit after taxation 95.31 (11.30) 0.16 (564.56) (739.61) (0.05)
11 Interim dividend - equity – – – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 63.62 63.62 100.00 100.00 100.00 100.00
Note: * Date of incorporation

562
Statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 25 26 27 28 29 30
Sr. Particulars L&T Himachal Nabha Power L&T Metro Rail L&T Technology L&T Realty L&T
no. Hydropower Limited (Hyderabad) Services Limited Developers Infrastructure
Limited Limited Limited Engineering
Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 22-Jun-10* 09-Apr-07* 24-Aug-10* 14-Jun-12* 29-Jul-97 09-Dec-98*
1 Share capital (including share application
money pending allotment) 200.55 2325.00 2439.00 21.00 167.16 3.60
2 Other equity/Reserves and surplus (as
applicable) (203.57) 1325.03 (2363.03) 3319.10 813.91 41.88
3 Liabilities 3.07 7409.24 17870.79 1480.00 531.76 56.60
4 Total equity and liabilities 0.05 11059.27 17946.76 4820.10 1512.83 102.08
5 Total assets 0.05 11059.27 17946.76 4820.10 1512.83 102.08
6 Investments – 335.02 – 1700.06 534.57 –
7 Turnover – 3391.08 347.70 4964.00 507.70 65.57
8 Profit before taxation (0.73) 163.86 (1766.74) 895.10 414.28 0.29
9 Provision for taxation 0.00 – – 222.00 32.49 0.18
10 Profit after taxation (0.73) 163.86 (1766.74) 673.10 381.79 0.11
11 Interim dividend - equity – – – (78.66) – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – (152.32) – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 100.00 100.00 100.00 74.24 100.00 100.00
Sr. No. 31 32 33 34 35 36
Sr. Particulars L&T Thales L&T Hydrocarbon L&T Infra Esencia Syncordis LTR SSM Private
no. Technology Engineering Contractors Technologies Software Limited
Services Private Limited Private Limited India Private Services India
Limited Limited Private Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 15-Feb-14 02-Apr-09* 17-Mar-17* 31-May-17 11-Dec-17 24-Sep-18*
1 Share capital (including share application
money pending allotment) 2.06 1000.05 0.01 0.01 0.45 0.10
2 Other equity/Reserves and surplus (as
applicable) 35.80 1850.67 (0.01) 0.59 3.45 (0.10)
3 Liabilities 18.98 11004.75 – 0.02 0.29 –
4 Total equity and liabilities 56.84 13855.47 – 0.62 4.19 –
5 Total assets 56.84 13855.47 – 0.62 4.19 –
6 Investments 14.59 3936.66 – – – –
7 Turnover 84.93 14350.26 – – 8.31 –
8 Profit before taxation 17.09 1246.56 0.01 (0.02) 1.68 –
9 Provision for taxation 4.61 420.15 – – 0.45 –
10 Profit after taxation 12.48 826.41 0.01 (0.02) 1.23 –
11 Interim dividend - equity – (200.01) – – – –
12 Interim dividend - preference – (43.91) – – – –
13 Proposed dividend - equity – – – – –
14 Proposed dividend - preference – (12.50) – – – –
15 % of share holding 54.94 100.00 100.00 74.24 74.27 99.00

Note: * Date of incorporation

563
salient features of the financial statements of subsidiaries/associate companies/joint ventures    ANNUAL REPORT 2020-21

Statement containing salient features of the financial statements of

subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 37 38 39 40 41 42
Sr. Particulars L&T-Sargent & L&T - MHI Power L&T - MHI Raykal L&T Special L&T Howden
no. Lundy Limited Boilers Private Power Turbine Aluminium Steels and Heavy Private Limited
Limited Generators Company Private Forgings Private
Private Limited Limited Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 05-May-95* 09-Oct-06* 27-Dec-06* 23-Feb-99* 01-Jul-09* 17-Jun-10*
1 Share capital (including share application
money pending allotment) 5.57 234.10 710.60 0.05 566.60 30.00
2 Other equity/Reserves and surplus (as
applicable) 79.45 1494.78 (350.52) 0.04 (2805.00) 100.68
3 Liabilities 32.26 2002.90 1625.13 0.85 2681.30 184.34
4 Total equity and liabilities 117.28 3731.78 1985.21 0.94 442.90 315.03
5 Total assets 117.28 3731.78 1985.21 0.94 442.90 315.03
6 Investments 63.75 96.50 305.13 – – –
7 Turnover 98.03 1763.44 724.85 – 235.25 254.80
8 Profit before taxation 23.06 342.23 35.85 (0.01) (1203.54) 38.22
9 Provision for taxation 3.68 89.15 – 0.17 – 9.32
10 Profit after taxation 19.38 253.08 35.85 (0.18) (1203.54) 28.90
11 Interim dividend - equity (17.36) – – – – (3.75)
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 50.00 51.00 51.00 75.50 74.00 50.10
Sr. No. 43 44 45 46 47 48
Sr. Particulars L&T Sapura L&T Sapura L&T MBDA L&T Panipat Elevated Vadodara
no. Offshore Private Shipping Private Missile Systems Infrastructure Corridor Limited Bharuch Tollway
Limited Limited Limited Development Limited
Projects Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR USD INR INR INR INR
Exchange rate on the last day of
financial year – 73.11 – – – –
Date of Acquisition 02-Sep-10* 02-Sep-10* 05-Apr-17* 26-Feb-01* 21-Jul-05* 23-Dec-05*
1 Share capital (including share application
money pending allotment) 0.01 158.85 1.00 629.52 30.05 43.50
2 Other equity/Reserves and surplus (as
applicable) 0.49 255.81 13.39 2463.24 (332.69) 11.71
3 Liabilities 5.99 304.21 228.72 415.01 450.22 741.10
4 Total equity and liabilities 6.49 718.87 243.11 3507.77 147.58 796.31
5 Total assets 6.49 718.87 243.11 3507.77 147.58 796.31
6 Investments – – – 2833.53 – 64.75
7 Turnover – 0.23 92.71 99.82 45.35 338.45
8 Profit before taxation 0.01 (96.68) 16.17 (49.01) (28.23) 128.41
9 Provision for taxation 0.00 – 0.67 4.09 – 22.62
10 Profit after taxation 0.01 (96.68) 15.50 (53.10) (28.23) 105.79
11 Interim dividend - equity – – – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 60.00 60.00 51.00 51.00 51.00 51.00
Note: * Date of incorporation

564
Statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 49 50 51 52 53 54
Sr. Particulars L&T Interstate L&T L&T Halol- Ahmedabad- L&T Samakhiali L&T Deccan
no. Road Corridor Transportation Shamlaji Tollway Maliya Tollway Gandhidham Tollways Limited
Limited Infrastructure Limited Limited Tollway Limited
Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 02-Feb-06* 24-Sep-97* 09-Sep-08* 09-Sep-08* 05-Feb-10* 20-Dec-11*
1 Share capital (including share application
money pending allotment) 57.16 41.40 795.35 149.00 80.54 285.34
2 Other equity/Reserves and surplus (as
applicable) (10.51) 354.57 (482.26) (72.86) (433.68) (544.95)
3 Liabilities 165.31 38.21 905.85 1252.90 1952.64 2223.85
4 Total equity and liabilities 211.96 434.18 1218.94 1329.04 1599.49 1964.24
5 Total assets 211.96 434.18 1218.94 1329.04 1599.49 1964.24
6 Investments 2.82 93.64 – 53.50 4.85 13.80
7 Turnover 29.15 45.01 94.83 180.26 176.21 157.79
8 Profit before taxation 3.40 32.89 (40.95) (7.24) (100.16) (34.60)
9 Provision for taxation 1.54 6.63 – – – –
10 Profit after taxation 1.86 26.26 (40.95) (7.24) (100.16) (34.60)
11 Interim dividend - equity – – – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 51.00 63.86 24.98 51.00 51.01 52.89
Sr. No. 55 56 57 58 59 60
Sr. Particulars Kudgi L&T Sambalpur- PNG Tollway L&T Rajkot- L&T Chennai- Graphene
no. Transmission Rourkela Tollway Limited Vadinar Tollway Tada Tollway Semiconductor
Limited Limited Limited Limited Services Private
Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 30-Aug-13 18-Oct-13* 16-Feb-09* 08-Sep-08* 24-Mar-08* 15-Oct-18
1 Share capital (including share application
money pending allotment) 192.60 290.03 169.10 110.00 42.00 1.43
2 Other equity/Reserves and surplus (as
applicable) 281.56 (162.65) (335.43) (280.37) (5.91) 9.41
3 Liabilities 1531.35 1038.50 167.32 960.75 355.21 0.35
4 Total equity and liabilities 2005.51 1165.88 0.99 790.38 391.30 11.19
5 Total assets 2005.51 1165.88 0.99 790.38 391.30 11.19
6 Investments 24.23 4.05 0.39 0.00 – 7.23
7 Turnover 189.00 144.89 – 94.60 – –
8 Profit before taxation 61.59 (49.33) (4.96) (15.35) (0.28) 1.02
9 Provision for taxation – – 0.08 – 0.01 0.29
10 Profit after taxation 61.59 (49.33) (5.04) (15.35) (0.29) 0.73
11 Interim dividend - equity – – – – – (18.04)
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 51.00 51.00 37.74 51.00 51.00 74.24
Note: * Date of incorporation

565
salient features of the financial statements of subsidiaries/associate companies/joint ventures    ANNUAL REPORT 2020-21

Statement containing salient features of the financial statements of

subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 61 62 63 64 65 66
Sr. Particulars Seastar Labs L&T Construction Ruletronics Mindtree Limited Lymbyc Solutions Powerup Cloud
no. Private Limited Equipment Systems Private Private Limited Technologies
Limited Limited Private Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency INR INR INR INR INR INR
Exchange rate on the last day of
financial year – – – – – –
Date of Acquisition 15-Oct-18 18-Dec-18* 01-Feb-19 02-Jul-19 29-Aug-19 25-Oct-19
1 Share capital (including share application
money pending allotment) 0.05 199.14 0.51 164.72 1.15 0.02
2 Other equity/Reserves and surplus (as
applicable) 0.06 (6.11) 2.99 4153.90 1.26 4.50
3 Liabilities 0.20 172.23 4.63 2041.98 3.16 17.26
4 Total equity and liabilities 0.31 365.26 8.13 6360.60 5.57 21.78
5 Total assets 0.31 365.26 8.13 6360.60 5.57 21.78
6 Investments – – – 1930.70 0.56 –
7 Turnover – 298.23 0.36 7967.80 1.81 26.07
8 Profit before taxation 0.40 (3.77) (0.29) 1498.20 (1.47) (0.90)
9 Provision for taxation – (1.23) (0.11) 387.90 (0.08) 2.06
10 Profit after taxation 0.40 (2.54) (0.18) 1110.30 (1.39) (2.96)
11 Interim dividend - equity – – – (123.53) – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – (288.26) – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 74.24 100.00 74.27 61.03 74.27 74.27
Sr. No. 67 68
Sr. Particulars L&T Geostructure LT IDPL INDVIT
no. Private Limited Services Limited
Financial year ending on 31-Mar-21 31-Mar-21
Currency INR INR
Exchange rate on the last day of financial year – –
Date of Acquisition 25-Nov-20* 20-May-99*
1 Share capital (including share application money pending allotment) 25.00 13.95
2 Other equity/Reserves and surplus (as applicable) 203.15 28.62
3 Liabilities 952.36 77.53
4 Total equity and liabilities 1180.51 120.10
5 Total assets 1180.51 120.10
6 Investments 32.00 70.00
7 Turnover 761.86 15.58
8 Profit before taxation 62.08 4.21
9 Provision for taxation 22.92 1.05
10 Profit after taxation 39.16 3.16
11 Interim dividend - equity – –
12 Interim dividend - preference – –
13 Proposed dividend - equity – –
14 Proposed dividend - preference – –
15 % of share holding 100.00 51.00

Note: * Date of incorporation

566
Statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 69 70 71 72 73 74
Sr. Particulars Larsen & Toubro Larsen & Toubro Larsen & Toubro Larsen & Toubro L&T Infotech Larsen and
no. LLC Infotech GmbH Infotech Canada Infotech LLC Financial Toubro Infotech
Limited Services South Africa
Technologies Inc. (Proprietary)
Limited
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-21
Currency USD EURO CAD USD CAD ZAR
Exchange rate on the last day of
financial year 73.11 85.75 58.03 73.11 58.03 4.94
Date of Acquisition 02-Jan-01* 14-Jun-99* 25-Apr-00 21-Jul-09* 01-Jan-11 25-Jul-12
1 Share capital (including share application
money pending allotment) 0.38 1.07 0.00 – 217.59 0.18
2 Other equity/Reserves and surplus (as
applicable) 2.46 383.33 36.10 6.14 146.40 10.98
3 Liabilities 1.74 150.26 19.94 5.97 21.94 4.25
4 Total equity and liabilities 4.58 534.66 56.04 12.11 385.93 15.41
5 Total assets 4.58 534.66 56.04 12.11 385.93 15.41
6 Investments – 471.05 – – – –
7 Turnover 3.70 139.60 245.78 22.98 303.91 29.82
8 Profit before taxation 0.10 4.52 12.17 2.33 120.29 9.74
9 Provision for taxation 0.04 0.07 3.23 – 34.24 2.84
10 Profit after taxation 0.06 4.45 8.94 2.33 86.05 6.90
11 Interim dividend - equity – – – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 98.77 74.27 74.27 74.27 74.27 51.68
Sr. No. 75 76 77 78 79 80
Sr. Particulars L&T Information Larsen & Toubro Thalest Limited L&T Modular Larsen & Toubro Larsen & Toubro
no. Technology International FZE Fabrication Yard (East Asia) Sdn. Qatar LLC
Services LLC Bhd.
(Shanghai) Co.,
Ltd.
Financial year ending on 31-Dec-20 31-Mar-21 31-Mar-21 31-Dec-20 31-Mar-21 31-Dec-20
Currency CNY USD GBP OMR MYR QAR
Exchange rate on the last day of
financial year 11.20 73.11 100.75 189.79 17.63 19.95
Date of Acquisition 28-Jun-13* 25-Sep-01* 04-Apr-12 05-Jul-06* 13-Jun-96* 31-Mar-04*
1 Share capital (including share application
money pending allotment) 1.20 125.02 0.00 54.75 1.32 0.60
2 Other equity/Reserves and surplus (as
applicable) (1.51) 222.47 0.00 142.04 2.90 –
3 Liabilities 8.81 110.49 – 317.37 73.61 5.01
4 Total equity and liabilities 8.50 457.98 0.00 514.16 77.83 5.61
5 Total assets 8.50 457.98 0.00 514.16 77.83 5.61
6 Investments – 48.36 – – – –
7 Turnover 24.61 0.24 – 801.58 139.12 –
8 Profit before taxation 1.07 184.69 (0.55) 71.43 1.79 (0.04)
9 Provision for taxation (0.21) 15.12 – 11.54 – –
10 Profit after taxation 1.28 169.57 (0.55) 59.90 1.79 (0.04)
11 Interim dividend - equity – (1.86) (6.48) – – –
12 Interim dividend - preference – – (8.10) – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 74.27 100.00 100.00 70.00 30.00 49.00
Note: * Date of incorporation

567
salient features of the financial statements of subsidiaries/associate companies/joint ventures    ANNUAL REPORT 2020-21

Statement containing salient features of the financial statements of

subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 81 82 83 84 85 86
Sr. Particulars Larsen & Larsen & Toubro Larsen Toubro L&T Larsen & Larsen &
no. Toubro Kuwait Saudi Arabia LLC Arabia LLC Hydrocarbon Toubro Heavy Toubro T&D SA
Construction Saudi Company Engineering LLC (Proprietary)
General Limited
Contracting
Company WLL
Financial year ending on 31-Dec-20 31-Dec-20 31-Dec-20 31-Dec-20 31-Dec-20 31-Mar-21
Currency KWD SAR SAR SAR OMR ZAR
Exchange rate on the last day of
financial year 238.60 19.48 19.48 19.48 189.79 4.94
Date of Acquisition 29-Nov-06* 22-Jun-99* 01-Jul-12* 08-Jul-07* 07-Apr-08* 06-Sep-10*
1 Share capital (including share application
money pending allotment) 47.72 28.01 19.48 1.95 107.52 3.70
2 Other equity/Reserves and surplus (as
applicable) (40.85) 410.30 (315.10) (542.46) (218.23) (0.30)
3 Liabilities 46.92 1495.73 701.70 895.19 182.12 0.35
4 Total equity and liabilities 53.79 1934.04 406.08 354.68 71.41 3.75
5 Total assets 53.79 1934.04 406.08 354.68 71.41 3.75
6 Investments – – – – – –
7 Turnover 45.22 1685.45 423.39 706.97 52.54 –
8 Profit before taxation 2.74 138.52 76.76 (114.15) (20.88) 0.12
9 Provision for taxation – 28.68 7.18 0.45 20.99 –
10 Profit after taxation 2.74 109.84 69.58 (114.60) (41.87) 0.12
11 Interim dividend - equity – (241.98) – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 49.00 100.00 75.00 100.00 70.00 72.50
Sr. No. 87 88 89 90 91 92
Sr. Particulars L&T Technology L&T Global L&T Information Larsen & Toubro Esencia Syncordis S.A.
no. Services LLC Holdings Limited Technology (Oman) LLC Technologies Inc.
Spain SL
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21 31-Dec-20 31-Mar-21 31-Dec-20
Currency USD USD EURO OMR USD EURO
Exchange rate on the last day of
financial year 73.11 73.11 85.75 189.79 73.11 89.74
Date of Acquisition 26-Jun-14* 24-Feb-16* 01-Feb-16* 29-Jan-94* 31-May-17 15-Dec-17
1 Share capital (including share application
money pending allotment) 190.16 58.49 0.43 27.66 36.09 0.50
2 Other equity/Reserves and surplus (as
applicable) 130.31 521.67 0.50 362.30 (42.09) 20.21
3 Liabilities 85.78 0.03 5.19 2143.61 9.95 115.07
4 Total equity and liabilities 406.25 580.19 6.12 2533.57 3.96 135.78
5 Total assets 406.25 580.19 6.12 2533.57 3.96 135.78
6 Investments 230.73 579.56 – – – 4.50
7 Turnover 463.79 – 22.91 1358.54 36.98 182.52
8 Profit before taxation 76.08 (6.07) (0.90) (0.96) 0.44 6.38
9 Provision for taxation 13.39 – – (1.84) 0.03 2.50
10 Profit after taxation 62.68 (6.07) (0.90) 0.88 0.41 3.88
11 Interim dividend - equity – – – – (34.14) –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 74.24 100.00 74.27 65.00 74.24 74.27
Note: * Date of incorporation

568
Statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 93 94 95 96 97 98
Sr. Particulars Syncordis Syncordis Syncordis PSF L&T Infotech S. Larsen & Toubro Larsen & Toubro
no. France SARL Limited S.A. DE R.L. DE C.V. Electromech LLC Infotech Norge
AS
Financial year ending on 31-Dec-20 31-Dec-20 31-Dec-20 31-Dec-20 31-Dec-20 31-Mar-21
Currency EURO GBP EURO MXN OMR NOK
Exchange rate on the last day of
financial year 89.74 100.75 89.74 3.67 189.79 8.57
Date of Acquisition 15-Dec-17 15-Dec-17 15-Dec-17 01-Mar-17* 01-Jan-05 20-Nov-18*
1 Share capital (including share application
money pending allotment) 0.13 0.01 3.59 0.00 5.69 0.03
2 Other equity/Reserves and surplus (as
applicable) (4.92) (19.29) 0.34 0.84 43.75 4.53
3 Liabilities 13.39 – 14.57 6.32 166.41 46.89
4 Total equity and liabilities 8.60 (19.28) 18.50 7.16 215.85 51.45
5 Total assets 8.60 (19.28) 18.50 7.16 215.85 51.45
6 Investments – – – – – –
7 Turnover 25.13 28.61 27.02 22.48 335.78 94.87
8 Profit before taxation 0.82 (5.44) 0.53 1.24 108.38 4.85
9 Provision for taxation 0.03 (0.88) 0.02 0.47 3.59 1.07
10 Profit after taxation 0.79 (4.56) 0.51 0.77 104.79 3.78
11 Interim dividend - equity – – – – (96.85) –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 74.27 74.27 74.27 74.27 70.00 74.27
Sr. No. 99 100 101 102 103 104
Sr. Particulars Graphene Graphene Graphene L&T L&T Valves L&T Valves USA
no. Solutions PTE Solutions SDN. Solutions Taiwan Hydrocarbon Arabia LLC
Ltd. BHD. Limited International FZE Manufacturing
LLC
Financial year ending on 31-Mar-21 31-Mar-21 31-Dec-20 31-Mar-21 31-Mar-21 31-Mar-21
Currency SGD MYR TWD AED SAR USD
Exchange rate on the last day of
financial year 54.35 17.63 2.60 19.91 19.49 73.11
Date of Acquisition 15-Oct-18 15-Oct-18 15-Oct-18 09-Sep-18* 30-May-19* 28-May-19*
1 Share capital (including share application
money pending allotment) 0.33 0.18 1.15 0.30 1.95 3.66
2 Other equity/Reserves and surplus (as
applicable) 0.31 (0.04) (0.85) (0.78) (3.59) (2.35)
3 Liabilities 1.45 0.03 0.49 0.79 8.11 22.47
4 Total equity and liabilities 2.09 0.17 0.79 0.31 6.47 23.78
5 Total assets 2.09 0.17 0.79 0.31 6.47 23.78
6 Investments – – – – – –
7 Turnover 3.33 – 0.28 – 0.17 13.62
8 Profit before taxation (0.35) (0.02) (0.38) (0.30) (2.87) (2.50)
9 Provision for taxation – – – – (0.57) (0.53)
10 Profit after taxation (0.35) (0.02) (0.38) (0.30) (2.30) (1.97)
11 Interim dividend - equity – – – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 74.24 74.24 74.24 100.00 100.00 100.00

Note: * Date of incorporation

569
salient features of the financial statements of subsidiaries/associate companies/joint ventures    ANNUAL REPORT 2020-21

Statement containing salient features of the financial statements of

subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 105 106 107 108 109 110
Sr. Particulars Nielsen+Partner Nielsen+Partner Nielsen+Partner Nielsen&Partner Nielsen&Partner Ruletronics
no. Unternehmensberater Unternehmensberater Pte Ltd Company Limited Pty Ltd Limited
GmbH AG
Financial year ending on 31-Jan-21 31-Dec-20 31-Dec-20 31-Dec-20 31-Dec-20 28-Feb-21
Currency EURO CHF SGD THB AUD GBP
Exchange rate on the last day of
financial year 88.39 82.93 55.26 2.44 56.30 102.42
Date of Acquisition 01-Feb-19 01-Feb-19 01-Feb-19 01-Feb-19 01-Feb-19 01-Feb-19
1 Share capital (including share application
money pending allotment) 1.81 0.83 0.55 0.24 0.00 0.00
2 Other equity/Reserves and surplus (as
applicable) 13.05 2.30 28.68 (2.00) (1.55) 7.19
3 Liabilities 6.43 5.66 17.93 5.19 13.01 –
4 Total equity and liabilities 21.29 8.79 47.16 3.43 11.46 7.19
5 Total assets 21.29 8.79 47.16 3.43 11.46 7.19
6 Investments – – – – – –
7 Turnover 33.84 24.90 106.68 4.25 11.91 13.45
8 Profit before taxation 0.90 (0.38) 22.11 (1.53) (0.94) (1.39)
9 Provision for taxation (0.33) 0.00 3.24 – (0.64) (0.26)
10 Profit after taxation 1.23 (0.38) 18.87 (1.53) (0.30) (1.13)
11 Interim dividend - equity – – – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 74.27 74.27 74.27 74.27 74.27 74.27
Sr. No. 111 112 113 114 115 116
Sr. Particulars Ruletronics Lymbyc L&T Technology Larsen & Toubro LTI Middle East Orchestra
no. Systems Inc. Solutions Inc. Services Infotech UK FZ-LLC Technology, Inc.
(Shanghai) Co. Limited
Ltd
Financial year ending on 31-Dec-20 31-Mar-21 31-Dec-20 31-Mar-21 31-Mar-21 31-Mar-21
Currency USD USD CNY GBP AED USD
Exchange rate on the last day of
financial year 73.07 73.11 11.20 100.75 19.91 73.11
Date of Acquisition 01-Feb-19 29-Aug-19 06-Aug-19* 17-Aug-20* 25-Nov-20* 03-Oct-20
1 Share capital (including share application
money pending allotment) – 0.68 3.68 0.01 0.02 49.47
2 Other equity/Reserves and surplus (as
applicable) 1.60 (1.10) (2.31) 0.21 2.11 (28.16)
3 Liabilities 3.09 0.42 3.75 9.94 217.39 29.03
4 Total equity and liabilities 4.69 – 5.12 10.16 219.52 50.34
5 Total assets 4.69 – 5.12 10.16 219.52 50.34
6 Investments – – – – – –
7 Turnover 15.85 – 3.17 8.76 48.40 63.22
8 Profit before taxation (1.21) (0.02) (2.24) 0.25 (1.60) (1.05)
9 Provision for taxation 0.03 – – 0.05 – (1.04)
10 Profit after taxation (1.24) (0.02) (2.24) 0.20 (1.60) (0.01)
11 Interim dividend - equity – – – – – –
12 Interim dividend - preference – – – – – –
13 Proposed dividend - equity – – – – – –
14 Proposed dividend - preference – – – – – –
15 % of share holding 74.27 74.27 74.24 74.27 74.27 74.24

Note: * Date of incorporation

570
Statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) v crore
Sr. No. 117 118 119
Sr. Particulars L&T Technology Mindtree Bluefin
no. Services Software Solutions Sdn
(Canada) Ltd (Shanghai) Co. Bhd
Ltd
Financial year ending on 31-Mar-21 31-Mar-21 31-Mar-21
Currency CAD CNY MYR
Exchange rate on the last day of financial year 58.03 11.16 17.63
Date of Acquisition 20-Aug-19* 02-Jul-19 02-Jul-19
1 Share capital (including share application money pending allotment) 0.04 1.40 0.20
2 Other equity/Reserves and surplus (as applicable) 0.04 0.40 –
3 Liabilities 1.05 0.50 –
4 Total equity and liabilities 1.13 2.30 0.20
5 Total assets 1.13 2.30 0.20
6 Investments – – –
7 Turnover 1.04 0.60 –
8 Profit before taxation 0.05 0.20 –
9 Provision for taxation 0.01 – –
10 Profit after taxation 0.04 0.20 –
11 Interim dividend - equity – – –
12 Interim dividend - preference – – –
13 Proposed dividend - equity – – –
14 Proposed dividend - preference – – –
15 % of share holding 74.24 61.03 61.03

Notes:
A) Names of subsidiaries which are yet to commence operations:

a) PT Larsen & Toubro Hydrocarbon Engineering Indonesia

b) L&T Hydrocarbon Caspian LLC

c) L&T Hydrocarbon International FZE

d) Raykal Aluminium Company Private Limited
B) Names of subsidiaries which have been merged/sold/dissolved/struck-off.

(1) Merged:

a) L&T Gulf Private Limited (merged with L&T Hydrocarbon Engineering Limited)

b) L&T Housing Finance Limited (merged L&T Finance Limited)

c) L&T Infrastructure Finance Company Limited (merged L&T Finance Limited)

d) NIELSEN+PARTNER S.A. (merged with Syncordis S.A.)

Note: * Date of incorporation

571
salient features of the financial statements of subsidiaries/associate companies/joint ventures    ANNUAL REPORT 2020-21

Statement containing salient features of the financial statements of

subsidiaries/associate companies/joint ventures
Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.)
(2) Sold:

a) L&T Capital Markets Limited

b) Henikwon Corporation SDN. BHD.

c) Kana Controls General Trading & Contracting Company W.L.L

d) L&T Electrical & Automation FZE

e) L&T Electricals & Automation Saudi Arabia Company Limited LLC

f) PT. Tamco Indonesia

g) Tamco Electrical Industries Australia Pty Limited

h) Tamco Switchgear (Malaysia) SDN BHD

i) Servowatch Systems Limited

j) L&T Capital Markets (Middle East) Ltd

(3) Liquidated/Dissolved/struck-off:

a) L&T Cassidian Limited

b) Sahibganj Ganges Bridge-Company Private Limited

c) Larsen & Toubro Hydrocarbon International Limited LLC

d) L&T Overseas Projects Nigeria Limited

572
Statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part B: ”Associates/Joint ventures”
Sr. No. 1 2 3 4 5 6 7 8
Name of associates/joint ventures L&T-Chiyoda International L&T Camp Larsen & Magtorq Magtorq Indiran Gujarat
Sr. Limited Seaports Facilities LLC Toubro Private Engineering Engineering Leather
No. (Haldia) Qatar & HBK Limited Solutions Projects and Industries
Private Contracting Private Systems Kish Limited
Limited [a] Co. WLL Limited PJSC
1 Latest audited balance sheet date 31-Mar-21 31-Mar-20 31-Dec-20 31-Dec-20 31-Mar-21 31-Mar-21 Refer Note 2
2 Date on which the associate or joint venture
was associated or acquired 26-Oct-94 11-Feb-05 13-Sep-07 28-Jul-04 02-Aug-10 02-Aug-10 31-Oct-09 27-Jun-91
3 Shares of associate/joint ventures held by the
company at the year end
Number 45,00,000 98,30,000 2,450 100 9,000 22,000 875 7,35,000
Amount of investment in associates/joint
venture (R crore) 4.50 9.83 4.87 0.18 4.42 0.22 0.39 –
Total share capital (R crore) 9.00 44.06 9.95 0.40 0.21 0.24 0.78 –
Reserves closing 128.84 28.97 (0.39) (7.90) 10.92 1.01 (0.83) –
Total no. of shares 90,00,000 4,40,58,020 5,000 200 21,003 24,000 1,750 Refer Note 3
Extent of holding % (Effective) 50.00% 14.25% 49.00% 50.00% 42.85% 39.28% 50.00% 50.00%
4 Description of how there is significant influence Refer Note 1
5 Reason why the associate/joint venture is not
consolidated Refer Note 3
6 Net worth attributable to shareholding as per
latest audited balance sheet (R crore) 68.92 10.40 4.68 (3.75) 4.77 0.49 (0.03) –
7 Profit/(Loss) for the year (R crore)
Considered in consolidation 15.44 16.20 0.04 – 0.32 0.13 0.52 –
Not considered in consolidation – – – – – – –
[a]
The company is associate of a subsidiary company under Companies Act, 2013.
Notes:
1. Significant influence is demonstrated by holding 20% or more of the total voting power, or control of or participation in business decisions under an
agreement of the investee.
2. The Incorporated joint venture is not required to be audited as per regulatory laws in Iran. Hence the management certified accounts have been considered
for consolidation.
3. The associate company is under liquidation process and investment is fully provided in the accounts.

S. N. SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)

R. SHANKAR RAMAN M. M. CHITALE

Whole-time Director & Chief Financial Officer Independent Director
(DIN 00019798) (DIN 00101004)

SIVARAM NAIR A
Company Secretary & Compliance Officer
Membership No. FCS3939

Mumbai, May 14, 2021

573
salient features of the financial statements of subsidiaries/associate companies/joint ventures    ANNUAL REPORT 2020-21

574
Fold here

LARSEN & TOUBRO LIMITED

CIN : L99999MH1946PLC004768
Regd. Office : L&T House, Ballard Estate, Mumbai 400 001.
Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893
Email: [email protected], Website: www.larsentoubro.com

Dear Shareholder, Date: 14th May 2021

We are privileged to have you as our shareholder. It has been our constant endeavour to improve the services to our Investors
and in this pursuit, we are once again sending you this Feedback Form, which is a self addressed prepaid Inland letter. We

Fold here
Fold here

request you to kindly spare some time and retum the same to us duly completed. We look forward to your feedback/valuable
suggestions.
Thanking you,
Yours faithfully,
For Larsen & Toubro Limited
Sivaram Nair A
Company Secretary
M. No. F3939

SHAREHOLDER’S FEEDBACK FORM

Name and address of the shareholder

Phone No: (with STD code)

E-maii ID:

Folio No./DP ID & Client ID

Shareholders Satisfaction Survey Questionnaire

(please 3 the appropriate box)
A. Do you perceive the Company as creating shareholder value in the:
(i) Short Term Yes  No 
(ii) Long Term or Yes  No 
(iii) Both Yes  No 
B. Are you satisfied with the growth strategy of the Company?
Yes       No      Not aware 
Excellent Good Poor* Not
experienced
C. Please rate the contents and quality of Annual Report
D. Please rate the contents and quality of the website of the Company
E. Arrangements made at the last AGM
F. Quality and accuracy of response to your queries and complaints:
- by Company
- by Registrar
G. Timeliness of response form
- the Company
- the Registrar
H. Please rate the hospitality and efficiency of the persons attending to you when
you interact with
- Investors Relation Cell
- Office of Registrars
I. Overall quality of service provided by
- the Company
- the Registrar
* Kindly let us know your experience in space provided overleaf
J. Do you have any grievance which has not been redressed   Yes   No

Signature
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BUSINESS REPLY LETTER

Postage No Postage
will be stamp
paid by necessary
addresssee if posted in
India

B. R. PERMIT No.: MBI GPO - 0049

Mumbai G.P.O.
Fold here

Fold here
Mumbai - 400 001.

Larsen & Toubro Limited

Secretarial Department
L&T House, Ballard Estate,
Mumbai - 400 001.

Second Fold

First Fold

* In case your response to any question overleaf is “Poor”, kindly share your experience and let us know the reason/
instances to enable us to investigate the matter.

In case of any queries, kindly contact our Registrar:

KFin Technologies Private Limited
(previously known as Karvy Fintech Pvt. Ltd)
Unit: Larsen & Toubro Limited
Selenium Tower B, Plot number 31 & 32, Financial District Gachibowli, Nanakramguda, Hyderabad, Telangana - 500 032
Tel : (040) 6716 2222 • Toll free number: 1-800-3454-001 • Email: [email protected]
AWARDS & RECOGNITION

Every year, L&T and its people receive a number of national and international awards that
acknowledge its varied accomplishments. Presented by the media, industry associations,
independent bodies and academia, they honour the Company’s contribution in various spheres
of business, technology, financial performance, growth and environmental protection.

For details of recent awards, please visit www.Larsentoubro.com