BOARD'S REPORT - Virk
Transcript of BOARD'S REPORT - Virk
LARSEN & TOUBRO INFOTECH LIMITED
BOARD'S REPORT Your Directors have pleasure in presenting the Annual Report along with the Audited Financial Statements of Larsen & Toubro Infotech
Limited for the year ended March 31, 2016.
FINANCIAL RESULTS (Z Million)
Particulars Unconsolidated Consolidated
2014-15 2014-15
Revenue from operations .S5,5 20 47,444.03 58,470.60 49,780.36
Other Income 3,386.06 887.80 2,959.61 915.00 ..__. Total Income 59,081.26 48,331.83 61,430.21 50,695.36 _ Operating Profit 12,669.79 10,436.79 13,315.76 10,959.57
Less: Finance Cost 103.57 104.18 103.57 104.19
Less: Depreciation and amortization 1,034.48 907.30 1,739.52 1,579.40
Profit before extraordinary items and tax 11,531,74 9,425.31 11,472.67 9,275.98
Extraordinary item 93.95
Profit Before Tax (PBT) 11,531.74 9,425.31 11,472.67 9,369.93
Less: Provision for Tax 2,150.43 1,695.69 2,249.61 1,682.77
Profit for the year before minority interest 9,381.31 7,729.62 9,223.06 7,687.16
Minority Interest _My 1.29 _ 1.90
Profit for the year (PAT) 9,381.31 7,729.62 9,221.77 ---N-
7,685.26
Add: Balance brought forward from previous year 13,453 81 11,445.86 14,193.21 12,229.63
Add: Profit and loss account of ISRC on amalgamation 100.58 _ Add: Transfer due to amalgamation (pertaining to period October 17, 2014 to March 31, 2016)
27.35
Balance available for disposal which Directors appropriate as follows:
22,963.05 19,175.48 23,414.98 19,914.89
Less: Depreciation & Deferred tax charged to retained earnings 10.10 10.10
Interim Dividends (excluding tax) 5,467.30 4,805.25 5,467.30 4,805.25
Proposed Dividend* (excluding tax) 441.52 441.52
Tax on Dividends (interim & proposed) 1,106.73 906.32 1,106.73 906.32
Balance to be carried forward 15,947.50 13,453.81 16,399.43 14,193.22
* The Directors recommend payment of final dividend of T2.60 per equity share of Z 1 each on 169,816,188 equity shares.
PERFORMANCE OF THE COMPANY
STATE OF COMPANY AFFAIRS
On unconsolidated basis, revenue from operations and other income for the financial year under review were 59,081.26 Million as against
48,331.83 Million for the previous financial year registering an increase of 22.2%. The profit before tax was 11,531.74 Million and the profit after
tax was 9,381.31 Million for the financial year under review as against 9,425.31 Million and 7,729.62 Million respectively for the previous
financial year. There were no material changes and commitments affecting the financial position of the company, between the end of the financial
year and the date of the report.
On consolidated basis, revenue from operations and other income for the financial year under review were 61,430.21 Million as against
50,695.36 Million for the previous financial year registering an increase of 21.2%. The profit before tax was 11,472.67 Million and the profit after
tax was 9,221.77 Million for the financial year under review as against 9,369.93 Million and 7,685.26 Million respectively for the previous financial
year. There were no material changes and commitments affecting the financial position of the company, between the end of the financial year and the
date of the report.
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LARSEN & TOUBRO INFOTECH LIMITED
SEGMENTAL PERFORMANCE
During the year, the Company had two Business Segments namely, Services Cluster and Industrials Cluster of which contribution to the
revenue was 52.4% (previous year 51.6%) from Services Cluster and 47.6% (previous year 48.4%) from Industrials Cluster, on unconsolidated
basis. On consolidated basis, the contribution to the revenue was 53.9% (previous year 52.8%) from Services Cluster, 46.1% (previous year
47.0%) from Industrials Cluster and 0.0% (previous year 0.2%) from Telecom (PES Discontinued Business).
The detailed segmental performance is referred in Note No. T(9) of the Notes forming part of the unconsolidated financial statements and
T(6) of the consolidated financial statements provided in this Annual Report.
GEOGRAPHICAL PERFORMANCE
The Revenue contribution of the Company from the various Geographies is mentioned herein below:
Unconsolidated
S. N.
1
Geography
68.6%
2014-15
67.5% North America
2 Europe 17.4% 18.6%
3 Asia Pacific 2.1% 2.5%
India 6.1% 4.4%
Rest of the World 5.8% 7.0%
Consolidated
Revenue from continuing Revenue from discontinued Total Revenue
S. N. Geography business business
2014-15 2015-16 2014-15 2015-16 2014-15
1 North America 69.0% 68.6% 69.0% 68.5%
2 Europe 17.4% 17.9% 100.0% 17,4% 18.0%
3 Asia Pacific 2.0% 2.4% 2.0% 2.4%
4 India 5.8% 4.2% 5.8% 4.2%
5 Rest of the World 5 8% 6.9% 5.8% 6.9%
INITIAL PUBLIC OFFERING OF YOUR COMPANY
During the year ended March 31, 2016, your Company had filed Draft Red Herring Prospectus ('DRHP') with the Securities & Exchange Board
of India (`SEBI') for the proposed Initial Public Offer ('IP0') of your company through an Offer for Sale (`the Offer') by Larsen & Toubro Limited. Due to change in the Offer structure and other considerations, the said DRHP was withdrawn on April 11, 2016 and pursuant to the approval
of the IPO Committee, the Company has filed a revised DRHP on April 12, 2016.
CAPITAL EXPENDITURE
On unconsolidated basis, as at March 31, 2016, the gross fixed and intangible assets stood at 8,419.33 Million (previous year
7,910.24 Million) out of which assets amounting to 1,014.19 Million (previous year 1,377.63 Million) were added during
the year.
On consolidated basis, as at March 31, 2016, the gross fixed and intangible assets stood at 14,209.88 Million (previous year
13,379.21 Million) out of which assets amounting to 1,346.97 Million (previous year 2,243.52 Million) were added during
the year.
DIVIDEND
The Directors recommend payment of final dividend of! 2.60 per equity share of 1 each on the share capital.
The total dividend on equity shares including interim dividend and proposed dividend for the year ended March 31, 2016 would aggregate to
5,908.82 Million (previous year! 4,805.25 Million) and outflow towards dividend distribution tax would aggregate to! 1,106.73 Million (previous
year! 906.32 Million).
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TRANSFER TO RESERVES
The Directors do not propose to transfer any amount to reserve.
DEPOSITS
During the year ended March 31, 2016, the Company has not accepted any public deposits and as such, no amount on account of principal or
interest on public deposits was outstanding as on the date of the Balance Sheet.
PEOPLE
We continue on the journey to make the Company the best place to learn and grow. This year we have laid emphasis on personal
development and growth of our employees, besides focusing on hiring, engaging and retaining key talent. In order to do so, we have
initiated the process of capturing the development needs of employees in our Performance Management System.
The Company has put in efforts to continuously simplify all people policies and make them more current and transparent, by seeking inputs from employees, in order to retain our best talent across the globe and build a pipeline of leaders.
We continue to recruit top talent and also recruit from top Universities. We also focus to foster gender diversity in our recruitment drive.
This year we have launched a program titled - 'Catalyst', to hear the voice of the employees and provide them an opportunity to shape their
workplace.
The Directors express their appreciation to all the employees of the Company for their outstanding contribution to the operations of the
Company during the year.
INFRASTRUCTURE
The Company has been expanding its facilities to keep pace with revenue growth. Emphasis has been on adding capacity in SEZ locations for the new
& incremental business. The new units at Mindspace SEZ- Airoli, Hinjewadi-Pune and DLF SEZ Chennai were made operational during the year ended March 31, 2016. Total capacity at Indian centers stands at 21,585 Seats as on March 31, 2016.
BRANDING
Brand l&T Infotech' has grown steadily across the globe, riding strongly on the value added to its Global clients in terms of enabling them
build innovative business models, enhance operational efficiencies, and creating captivating experiences for their customers. This has significantly
enhanced your Company's visibility across new industry sectors, new prospects, and also with the Analyst Community.
Your Company's ability to solve complex business challenges at the convergence of digital and physical with real-world expertise, leadership in domain and technology, and building the best organization to learn & grow will help create the Company to be No.1 in Client-centricity. This will further enhance your Company's brand value as one of the most recognized IT companies in the world.
QUALITY INITIATIVES
Quality is an all-pervasive commitment of the Company. We translate this commitment into seamless service delivery for our clients. The
vision of improvement in Quality and delivery is driven from top to bottom across the organization. We have added new certifications along
with sustaining existing ones.
The Company was successfully appraised for CMMI SVC Level 5 in September 2015 for Application support and Infrastructure
Management services. The focus for the year was to mature the application support and Infrastructure management services.
Effective tools, techniques and predictive models are built and deployed for estimation and project management decision making. Statistical techniques are deployed for monitoring the key project processes. The Company continues to maintain and is now ready to be re-appraised for CMMI Dev Level 5 in May 2016.
The Company continues to adhere to International quality certifications, namely IS09001:2008, ISO/IEC27001:2013, IS014001:2004 & ISO/
IEC20000-1:2011 through a combined external audit conducted by Bureau Veritas. As per specific client needs and requirements, your
company has sustained the I5AE3402 certification for projects of Insurance domain across Business Units and few specific client engagements.
We continue to deliver value to our clients through continuous improvements and value additions. The company has adopted various
initiatives such as Lean methodology levers and Extreme Automation to optimize delivery execution and improve productivity. These
initiatives are governed and monitored through dashboards and periodic reviews at various levels. On an ongoing basis, we conduct
project level and Leadership level client satisfaction surveys to assess the client expectations. Survey results are analyzed to arrive at action
plans and initiatives to improve client experience.
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CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board has constituted CSR Committee in terms of the requirements of the Companies Act, 2013. The details relating to the same are given in Annexure H.
The Annual Report on CSR is annexed as Annexure A to this Report. CSR Policy of the Company is available on the Company's website http:// www.Intinfotech.com/aboutus/Corporate_social_responsibility.html.
CORPORATE SUSTAINABILITY
Green Initiative
During the year, the Company achieved United States Green Building Council's LEED - Gold Green Building Certification for Powai office in
February 2016. This project helped in energy and water savings, waste and e-waste streamlining and management, switching to green certified products and consumables, and aiding employee comfort.
Occupational Health Safety Initiative
We achieved BS OHSAS 18001:2007 certification for Powai in December 2015. It is aimed at Occupational Health and Safety of all stakeholders
working in Powai.
DIRECTORS & KEY MANAGERIAL PERSONNEL
A. Appointment/ Re-appointment:
During the year, following appointments were made on the Board:
a. Mr. Sanjay Jalona as the Chief Executive Officer & Managing Director of the Company w.e.f. August 10, 2015 to August 09, 2020. Mr.
Jalona, appointed as an Additional Director, will hold office till the ensuing Annual General Meeting (AGM) and is eligible for appointment.
b. Mr. Arjun Gupta as an Independent Director of the Company w.e.f. October 28, 2015 to October 27, 2020, subject to the approval of the shareholders. Mr. Gupta, appointed as an Additional Director, will hold office till the ensuing AGM and is eligible for appointment.
c. Mr. R. Shankar Raman as a Non-Executive Director of the Company w.e.f. October 28, 2015, subject to the approval of the shareholders.
Mr. Shankar Raman, appointed as an Additional Director, will hold office till the ensuing AGM and is eligible for appointment.
Mr. A. M. Naik, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General
Meeting of the Company.
The notice convening the AGM includes the proposal for appointment/ re-appointment of Directors.
B. Cessation:
a. Mr. K. R. L. Narasimham ceased to be an Executive Director of the Company w.e.f. April 08, 2015.
b. Mr. Sunil Pande ceased to be an Executive Director of the Company w.e.f. August 26, 2015.
c. Mr. Chandrashekara Kakal ceased to be an Executive Director of the Company w.e.f. August 27, 2015.
d. Mr. V. K. Magapu ceased to be the Managing Director of the Company w.e.f. September 26, 2015.
e. Mr. R. Shankar Raman ceased to be a Director of the Company w.e.f. September 26, 2015.
The Board places on record valuable contribution made by the Directors during their tenure.
C. Key Managerial Personnel:
The following were the changes in the Key Managerial Personnel:
a. Ms. Angna Arora ceased to be the Company Secretary w.e.f. May 08, 2015.
b. Mr. P. S. Kapoor was appointed as Head-Finance & Accounts & Company Secretary w.e.f. May 08, 2015 and was designated as the Chief
Financial Officer. He ceased to be Head-Finance & Accounts & Company Secretary and also the Chief Financial Officer w.e.f. August 26,
2015.
c. Mr. Ashok Kumar Sonthalia was appointed as Head-Finance & Accounts w.e.f. August 26, 2015 and has been designated as the Chief Financial Officer.
d. Mr. Subramanya Bhatt was appointed as the Company Secretary w.e.f. August 26, 2015.
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DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors hereby confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material
departure;
(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2016 and of the profit of the Company
for the year ended March 31, 2016;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis; and
(v) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
STATUTORY AUDITORS
The Auditors, M/s. Sharp & Tannan, hold office until the conclusion of the ensuing Annual General Meeting. A certificate from them has
been received to the effect that their re-appointment, if made, would be in line with the requirement laid under section 139 & 141 of the
Companies Act, 2013. The Board, based on the recommendation of the Audit Committee, recommends the appointment of M/s. Sharp & Tannan as Auditors of the Company from the conclusion of the ensuing AGM until the conclusion of the next AGM.
The Auditor's Report to the Shareholders does not contain any qualification and therefore does not call for any comments from Directors.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013, prepared in accordance with the Accounting
Standards prescribed by the Institute of Chartered Accountants of India, forms part of this Annual Report. The Auditors report to the
shareholders does not contain any qualification, observation or adverse comment.
SECRETARIAL AUDITOR
The Secretarial Audit Report issued by Ms. Naina Desai, Practicing Company Secretary does not contain any qualification and is annexed as
Annexure B to this Report.
DEPOSITORY SYSTEM
As on March 31, 2016, 99.23% of the Company's total paid-up capital representing 168,511,518 shares are in dematerialized form. In view
of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories.
CHANGES IN SHARE CAPITAL
During the year, the following changes have occurred in the authorised and the paid-up equity share capital of the Company:
a. The authorised share capital of the Company was sub-divided from 32,750,000 equity shares of! 5 each to 163,750,000 equity shares of!
leach, Consequently, the paid up share capital was also sub-divided from 32,250,000 equity shares of 5 each fully paid-up to 161,250,000
equity shares of! 1 each fully paid-up. The sub-division was effected from June 22, 2015.
b. The authorised share capital was increased from! 163.75 Million divided into 163,750,000 equity shares of 1 each to! 200.00 Million
divided into 200,000,000 equity shares of! leach with effect from June 22, 2015.
c. The authorised share capital was further increased to! 240.00 Million divided into 240,000,000 equity shares of! 1 each, pursuant
to the Scheme of Amalgamation of Information Systems Resource Centre Private Limited with the Company becoming effective from September 21, 2015. However, there was no change in the paid-up share capital pursuant to the scheme.
d. During the year 8,566,188 equity shares were allotted on exercise of the vested options under the employees stock options schemes of
the Company. Hence, the paid-up share capital of the Company increased from! 161.25 Million to! 169.82 Million.
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DISCLOSURES UNDER THE COMPANIES ACT, 2013
1. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of annual return is annexed as Annexure C to this Report.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met 6 (six) times during the financial year. The details of the Board meetings and the attendance
of Directors are provided in Annexure H - Report on Corporate Governance Report forming part of this Annual Report.
3. AUDIT COMMITTEE
The Board has constituted the Audit Committee in terms of the requirements of the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure H.
In accordance with the requirements of the Companies Act, 2013, the Company has in place a vigil mechanism framework for directors
and employees to report genuine concerns.
4. RELATED PARTY TRANSACTIONS
The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy and all the related party
transactions have been entered in accordance thereof and were in the ordinary course of business and at arm's length. The details of
material contracts or arrangement or transactions at arm's length basis as per Form A0C-2 as per Companies (Accounts) Rules, 2014 is
annexed as Annexure D to this report.
5. SUBSIDIARY/ ASSOCIATE/ JOINT VENTURE COMPANIES
As at March 31, 2016, the Company has 9 subsidiaries including a Joint Venture. There has been no material change in the nature of the
business of subsidiaries.
During the year ended March 31, 2016, the Company subscribed to/acquired equity shares in subsidiary companies as under:
A) Shares acquired:
No. of shares
Larsen & Toubro Infotech Austria GmbH
Equity
L&T Information Technology Spain SL
Equity
N. A.*
50,000
*Note: The amount of investment made by the Company is EURO 35,000 which is also reflected in Annexure E to this report. As per the local regulations in
Austria, the entity being a limited liability company, no share certificate is required to be issued.
13) Equity shares sold/transferred:
C) Performance and Financial Position of each subsidiary/ associate and joint venture companies:
A statement containing the salient features of the financial statement of subsidiaries/ associate/ joint venture companies as per form
AOC-1 is annexed as Annexure E to this Report.
During the year ended March 31, 2016, operations of following subsidiaries were reviewed and a restructuring process was carried out:
AMALGAMATION OF ISRC WITH THE COMPANY
Pursuant to the Scheme of Amalgamation sanctioned by the Hon'ble High Court of Bombay vide its order dated September 04, 2015,
Information Systems Resource Centre Private Limited (ISRC) was amalgamated with the Company with effect from September 21, 2015. The
appointed date for the Scheme was October 17, 2014. Consequently, the entire business, assets, liabilities, duties and obligations of ISRC have
been transferred to and vested in the Company with effect from October 17, 2014.
ISRC was engaged in the business of software services with respect to application development, information technology support and
maintenance services to OTIS Elevator Company, USA and other companies of UTC group and was acquired by the Company on October
16, 2014.
AMALGAMATION OF GDA TECHNOLOGIES LIMITED WITH THE COMPANY
The Board of Larsen & Toubro Infotech Limited and GDA Technologies Limited in their meetings held on October 17, 2014, respectively,
approved the Scheme of amalgamation of GDA Technologies Limited with the Company under Section 391 to 394 of the Companies Act,
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1956. The Hon'ble High Court of Bombay has sanctioned the Scheme of Amalgamation vide its order dated April 01, 2016. The approval
of the Scheme by the Hon'ble High Court of Madras is awaited. The appointed date for the proposed scheme is April 1, 2016.
6. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED
The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided in the notes forming part of the financial statements provided in this Annual Report.
7. EMPLOYEE STOCK OPTION SCHEMES
The disclosure relating to the Employee Stock Option Schemes of the Company as required under the Companies Act, 2013 and rules made thereunder is annexed as Annexure F to this Report.
Pursuant to the resolution passed by the Board on July 27, 2015 and the shareholders on September 14, 2015, the Company has instituted
the Larsen & Toubro lnfotech Limited Employee Stock Option Scheme, 2015 ("ESOP Scheme, 2015") for issue of options to eligible employees which may result in issue of Equity Shares of up to 8,062,500 equity shares of face value of 1 each. Under the ESOP Scheme 2015, no options have been granted as on the date of this report.
8. COMPANY POLICY ON DIRECTOR APPOINTMENT AND REMUNERATION
The Company has constituted the Nomination and Remuneration Committee (NRC) in accordance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure H.
The Committee has formulated a policy on Director's appointment and remuneration including recommendation of remuneration of key managerial personnel and the criteria for determining qualifications, positive attributes and independence of a Director.
9. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received Declaration of Independence from its Independent Directors as stipulated under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of Independence.
10. INDEPENDENT DIRECTORS MEETING
The meeting of the Independent Directors was held on January 22, 2016, as per schedule IV of the Companies Act, 2013.
11. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.
12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as per Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given in Annexure G to this report,
13. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future.
CORPORATE GOVERNANCE REPORT
A report on Corporate Governance is annexed as Annexure H to this Report.
ACKNOWLEDGEMENTS
The Directors thank the Company's customers, vendors and academic institutions for their support to the Company. The Directors also acknowledge the support and co-operation from the Government of India and the Governments of various countries, the concerned State Governments and other Government Departments and Governmental Agencies. The Directors appreciate and value the contributions made by every member of the L&T Infotech family globally.
For and on behalf of the Board
Sanjay Jalona R. Shankar Raman Chief Executive Officer & Director
Managing Director (DIN: 00019798) (DIN: 07256786)
Place: Mumbai Date: April 26, 2016
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ANNEXURE A TO THE DIRECTORS' REPORT
Annual Report on Corporate Social Responsibility (CSR) Activities for FY16
1. A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to
the web-link to the CSR policy and projects or programs.
The Company's primary focus is on 'Computer Literacy & Education' for employment as part of its CSR programme which includes, amongst
others, the following verticals:
a) Skills Development & Employability - may include but not limited to programmes covering computer literacy and training programmes
for employability for disadvantaged youth.
b) Education - may include but not limited to support to educational institutions, educational programmes & nurturing talent at various
levels for disadvantaged youth.
c) Educational aids - supporting differently-abled and other students by providing IT infrastructure support for specific programmes.
d) Environment - may include but not limited to programmes for conservation and preservation of environment.
e) Women Empowerment - supporting eligible NGOs with infrastructure and facilitating market reach.
During the period under review, the Company's CSR initiative "1Step" organized several projects in the above thrust areas, as per details given
below. But the most important aspect was level of involvement of CSR team and volunteers at every step of these projects that gives us a
close understanding of the community issues and the goals we are trying to meet. This way of working also allowed us to learn a lot on how
to handle projects. The experience from these interactions would help us when we are scaling up projects in FY17.
IT Skills and Education
Overall we now have 45 locations (12 in FY15) from where we impart computer skills —the primary thrust area. From these 45, 18 centers are
set-up and dedicated for youth for employability. From these centers 1,144 (320 From FY15) youth passed out and 123 who were inclined to
take jobs were placed. The balance 27 computer centers were set up in schools for teaching IT curriculum and covered 3,401 school children
(300 during FY15).
Volunteers and partner NGOs taught Science, English and Maths in additional 11 schools-cum-study covering 17,098 children (3,902 during
FY15). Kindly see Table 1 below.
We have added higher level of IT courses covering popular financial package in India and also value added course on computer hardware and
networking.
We have set up projects in 04FY16 which would scale up during subsequent years and thus take us closer to the target spend
on CSR.
These projects launched in Q4FY16 leverage internet, audio / video technologies, open source software and are based on unique
engagement models including community learning, which are aimed at employment through digital literacy. Further the technology
now allows us to do projects in locations away from our office locations where CSR interventions are needed but are otherwise not
possible. But in such locations we do depend and involve the local community.
Women Empowerment
As part of woman empowerment program we have created infrastructure to generate recurring income for 150 women. We also assisted
2,800 women to generate income throughout the year from sale of their products.
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Total Youth
For Financial Year
— 2015
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Visually impaired youth
For visually impaired youth; volunteers record audio books from text books which enables them to access study material through
these audio books. The number of Talking Books recorded so far were 58 (30 in FY15). The audio books reached 4,500 students
who were directly benefitted from it. Volunteers also wrote examination papers of competitive examinations and assisted them in
getting jobs.
Employee volunteering and beneficiaries
During the year 4,576 Volunteers (3,442 in FY15) of 1Step, L&T Infotech employee-volunteering program, participated in all the above
projects. The hours contributed by them were 11,852. Last year we were advised to monitor volunteering hours which we started this year.
1Step projects directly impacted 35,258 (18,282 in FY15) beneficiaries.
Table 1
Particulars
Computer skills Number of computer center locations 12
project t Beneficiaries 620 320
Educational programs covering Science, Maths, and 3,902
English -Beneficiaries
Talking Books for Visually impaired — Number of books
Talking Books for Visually impaired — Number of 4,500
beneficiaries
School
Children.
6
300 —
3,902
30
3,500
Total Beneficiaries
Volunteers
35,258
4,576
18,282
3,442
2. The Composition of the CSR Committee:
(i) Mr. S. N. Subrahmanyan - Chairman
(ii) Mr. Sanjay Jalona - Member
(iii) Mr. M. M. Chitale - Member
3. Average net profit of the Company for last three financial years: 7,473.72 Million
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): 149.47 Million
5. Details of CSR spent during the financial year:
i. Total amount spent for the financial year : 23.45 Million
ii. Amount unspent, if any : 126.02 Million
iii. Manner in which the amount spent during the financial year : attached
6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof,
the Company shall provide the reasons for not spending the amount in its Board report.
The objective of our CSR Policy is to create a visible impact in the focus areas for the beneficiaries and not just spending the requisite
amount. The Company has made efforts to identify projects in line with its CSR focus areas. However, the Company could not spend the
requisite money as considerable time is taken in evaluating and implementing projects that are closer to beneficiaries.
The Company since last year has been working in collaboration with credible partners and other stakeholders and has identified and
built a pipeline of such projects. .
The implementation of initial batch of projects has begun in Q4Fy16. These projects have the potential to scale up during subsequent
years. Further, we will pick up new projects for implementation from the already identified projects in the pipeline. Together it would
help us in meeting to our target spend on CSR.
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR
objectives and Policy of the Company.
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The CSR Committee hereby affirms that:
• The Company has duly formulated a CSR Policy Framework which includes formulation of a CSR Theme, CSR budget and roles and
responsibilities of the Committee, CSR team formed for implementation of the CSR policy;
• The Company has constituted a mechanism to monitor and report on the progress of the CSR programs;
The activities undertaken by the Company as well as the implementation and monitoring mechanisms are in compliance with its CSR
objectives and CSR policy & its Framework.
S. N. Subrahmanyan
Director &
Chairman — CSR Committee
(DIN: 02255382)
Sanjay Jalona
Chief Executive Officer &
Managing Director
(DIN: 07256786)
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LARSEN & TOUBRO INFOTECH LIMITED
5 (iii) Manner in which the amount spent during the financial year is detailed below:
(in Million)
S.N. CSR Project Sector in Projects or programs Amount Direct Overheads Cumulative Amount spent:
or activity which the 1) Local area or other Outlay expenses Expenditure Direct or through
identified project is 2) Specify the State and (Budget) up to the implementing
covered District where project
was undertaken
project or
programs
wise
reporting
period
agency
1 Computer
Skills
Education Mumbai, Navi Mumbai,
Pune, Maharashtra,
Bangalore, Chennai,
Karnataka and Tamil
Nadu
11.76 6.61 0.39 7.00 Direct, Pratham
NGO
_ 2 Educational Education Mumbai, Navi Mumbai,
Maharashtra, Wai,
Mangaon, Bilaspur,
Chennai, Karnataka,
Chhatisgarh and Tamil
Nadu
13.24 8.53 0.39 8.92 Direct, Adhyayan
NGO, Sevalaya
NGO
3 Women
empowerment
I Women
empowerment
Maharashtra and Tamil
Nadu
3.60 0.89 0.39 1.28 Aarambh NGO,
Sevalaya NGO
4 Environment
projects
Environment
projects
Maharashtra, Karnataka,
Tamil Nadu and Rajasthan
1.70 0.10 - 0.10 Say Trees NGO,
Pariyavaran Shala
NGO
5 Nepal
Earthquake
Relief *
Prime
Minister's
National Relief
Fund
- - 6.15 - 6.15 Direct
TOTAL 30.30 22.28 1.17 23.45
NOTE: * The contribution towards Nepal Earthquake Relief fund includes contribution made by Information Systems Resource Centre Private Limited, which
got amalgamated with the Company with effect from September 21, 2015.
S-486
LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE B TO THE DIRECTORS' RE lORT
FORM NO. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration Personnel)
Rules, 2014]
To,
The Members,
LARSEN & TOUBRO INFOTECH LIMITED
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by
LARSEN & TOUBRO INFOTECH LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided me a
reasonable basis for evaluating the corporate conduct/ statutory compliances and expressing my opinion thereon.
Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company
and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit,
I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on March 31, 2016, complied
with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place
to the extent, in the manner and subject to the reporting made hereinafter.
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year
ended on March 31, 2016 according to the provisions of:
(I) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment,
Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (`SEBI Act'), as applicable:-
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; presently, (Prohibition of Insider
Trading) Regulations, 2015;
c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;
d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999; presently, (Share Based Employee Benefits) Regulations, 2014;
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the
Companies Act and dealing with client;
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;
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LARSEN & TOUBRO INFOTECH LIMITED
(vi) Other specific business/industry related laws that are applicable to the company, viz.
The Information Technology Act, 2000.
The Special Economic Zone Act, 2005.
Policy relating to Software Technology Parks of India and its regulations.
The Indian Copyright Act, 1957.
The Patents Act, 1970.
The Trade Marks Act, 1999.
Indian Telegraph Act.
Telecom Regulatory Authority of India (TRAI)/Department of Telecommunication (DOT) Guidelines.
Other Service Provider Guidelines (Governed by DOT)
I have also examined compliance with the applicable clauses of the following:
i. Secretarial Standards issued by The Institute of Company Secretaries of India.
ii. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Listing
Agreements entered into by the Company with Stock Exchange(s), if applicable. This is not applicable.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc.
mentioned above.
I further report that the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive
Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review
were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days
in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting
and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members' views are captured and
recorded as part of the minutes.
I further report that, in my opinion, there are adequate systems and processes in the company commensurate with the size and operations
of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period the following events! actions have taken place which have a major bearing on the Company's
affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc., like -
(i)
Public/Right/Preferential issue of shares / debentures/sweat equity, etc.—
• The Company in its Board meeting held on June 16, 2015 has taken approval for the Offer for Sale by Larsen & Toubro Limited in
the Initial Public Offer of the Company. Pursuant to the same, the Company had filed its Draft Red Herring Prospectus (DRHP) on
September 28, 2015. Due to change in the Offer structure and other considerations, the said DRHP was withdrawn on April 11,
2016 and the revised DRHP filed on April 12, 2016.
(ii) Redemption / buy-back of securities. — NIL.
(iii) Major decisions taken by the members in pursuance to section 180 of the Companies Act, 2013.— NIL.
(iv) Merger / amalgamation / reconstruction, etc.—
• Amalgamation of Information Systems Resource Centre Private Limited with the Company with effect from September 21, 2015;
• Petitions for sanctioning the Scheme of Amalgamation of GDA Technologies Limited with the Company with Appointed Date being
April 1,2016, admitted with the Hon'ble High Courts of Judicature at Bombay and Madras. The Bombay High Court has approved
the Scheme vide its Order dated April 1, 2016, while the approval from Madras High Court is awaited.
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LARSEN & TOUBRO INFOTECH LIMITED
(v) Foreign technical collaborations— NIL.
(vi) Other Event —
• During FY 2015-16, the Company has filed Form ODI with respect to the investment CAD 171,500 made in October 2005 in Larsen
& Toubro Infotech Canada Limited. Also Annual Performance Reports for the said entity for FY 2005-06 till 2014-15 have been filed.
Compounding application, under FEMA regulation for the above mentioned delay in reporting, to be re-submitted, on receipt of
directions from the Reserve Bank of India;
The Board and the shareholders in their meetings held on June 16, 2015 and June 22, 2015, respectively, had approved the
following:
a) Adopted a new set of Articles of Association of the Company in line with the Companies Act, 2013 and Listing Agreement.
b) Sub-division of face value of equity shares from f 5 to f 1 per share;
c) Increase in Authorised Share Capital from equity share capital of f 163.75 Million to f 200.00 Million of face value
1 per equity share.
• The Authorised share capital of the Company was further increased to f 240.00 Million divided into 240,000,000 Equity Shares off
1 each with effect from September 21, 2015, pursuant to the approval of the the Scheme of Amalgamation of Information Systems
Resource Centre Private Limited with the Company, by the Bombay High Court vide its Order dated September 4, 2015.
NAINA R DESAI Practising Company Secretary
Place: Mumbai
Membership No. 1351
Date: April 20, 2016
Certificate of Practice No.13365
This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.
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LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE A TO THE SECRETARIAL AUDIT REPORT
To,
The Members
LARSEN & TOUBRO INFOTECH LIMITED
Our report of even date is to be read along with this letter.
1) Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion
on these secretarial records based on our audit.
2) We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of
the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial
records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3) We have not verified the correctness and appropriateness of financial records and Books of Account of the Company.
4) Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and
happening of events etc.
5) The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of
management. Our examination was limited to the verification of procedures on test basis.
6) The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with
which the management has conducted the affairs of the Company.
NAINA R DESAI
Practising Company Secretary
Place: Mumbai
Membership No, 1351
Date: April 20, 2016
Certificate of Practice No.13365
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LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE C TO THE DIRECTORS' REPORT
FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on March 31, 2016 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS:
1 MIKZEMMIIIIIIIIIIIIIIIIIIIIIIIIIII
CIN U72900MH1996PLC104693
2 Registration Date 23rd December 1996
3 Name of the Company Larsen & Toubro Infotech Limited
Category / Sub-Category of the Company Company limited by shares
Indian Non-Government Company Address of the Registered office and contact details L&T House, Ballard Estate, Mumbai-400001
Tel: +91 22 6776 6138
Email: [email protected] Whether listed Company No
Name, Address and Contact details of Registrar and Transfer Agent,
if any
Link lntime India Private Limited
Address: C-13, Pannalal Silk Mills Compound,
L.B.S. Marg, Bhandup (West),
Mumbai 400078, Maharashtra, India
Tel: +91 22 2594 6970
Fax: +91 22 2594 6969
Email: [email protected]
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:
All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-
NIC Code of the
Product/ service % to total turnover
of the company S. N. Name and Description of main products! services
1 Computer programming, consultancy and related activities
620
100.00
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:
S. N. Name and Address of the Company CIN/GLN
Holding/
Subsidiary/ Associate
%of
shares
held
Applicable
Section
Larsen & Toubro Limited L99999MH1946PLC004768 Holding 94.96 2(46) Add: L&T House, N. M. Marg, Ballard Estate, Company
Mumbai-400001
Larsen & Toubro infotech GmbH - Subsidiary 100.00 2(87)
Add: Euro-Asia Business Center, Messe-Allee
_ 2, 0-04356, Leipzig, Germany
Larsen & Toubro Infotech Canada Limited - Subsidiary 100.00 2(87) Add: 2810, Matheson Blvd East, Suite 500,
Mississauga, ON 14W 4X7, Canada
S-491
LARSEN & TOUBRO INFOTECH LIMITED
Holding/
Subsidiary/
Associate
% of Applicable
shares Section held
S. N. Name and Address of the Company
CIN/GLN
4 Larsen & Toubro Infotech LLC
Add: 1220, N. Market St., Suite 806,
Wilmington, DE 19801, Country of New
Castle, United State of America
- Subsidiary 100.00 2(87)
5 L&T Infotech Financial Services Technologies
Inc.
Add: 2810, Matheson Blvd East, Suite 500,
Mississauga, ON L4W 4X7, Canada
- Subsidiary 100.00 2(87)
6 Larsen And Toubro Infotech South Africa
(Pty) Limited
Add: 6th Floor, 119 Hertzog Boulevard,
Foreshore 8001, South Africa
- Subsidiary 74.90 2(87)
7 L&T Information Technology Services
(Shanghai) Co., Ltd.
Add: Room 1100m Building 2, No.1388,
Xingxian Road, Jaiding District, Shanghai, China
- Subsidiary 100.00 2(87)
8 GDA Technologies Limited
Add: No.9-A, Chinthamani Nagar, K. K. Pudur,
Coimbatore-641 038, India
U72200TZ1997PLC008145 Subsidiary 100.00 2(87)
9 Larsen & Toubro Infotech Austria GmbH
Add: c/o Oberhammer Rechtsanwalte GmbH,
Karlsplatz 3/1, 1010 Vienna, Austria
- Subsidiary 100.00 2(87)
10 L&T Information Technology Spain SL
Add: C/JOSE ABASCAL 56 2nd Floor, Madrid,
Spain
- Subsidiary 100.00 2(87)
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
No. of shares held at the beginning of the year No. of shares held at the end of the year
Category Code
(A)
Category of Shareholder(s)
Shareholding of
Promoter and
Promoter Group
No. of shares in
Dematerilised Form
No. of Total No. of % of No. of No. of Total No. of
shares shares Total shares in shares in shares
in Physical Share Dematerilised Physical
Form Form Form
Change % of Total Share during
the year
(1) Indian
(a) Individuals/ Hindu
Undivided Family
0 0 0 0.00 0 0 0 0.00 0.00
(b) Central Government/
State Government(s)
0 0 0 0.00 0 0 0 0.00
94.96 -4_-----
0.00
(5.04) (c) Bodies Corporate 0 32,250,000 32,250,000 100.00 161,250,000 0 161,250,000
(d) Financial Institutions/
'Banks
0 0 0 0.00 0 0 0 0.00 0.00
(e) Others 0 0 0 0.00 0 0 0 0.00 0.00 SUB TOTAL (Al) 0 32,250,000 32,250,000 100.00 161,250,000 0 161,250,000 94.96 (5.04)
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LARSEN & TOUBRO INFOTECH LIMITED
Category Category of Code Shareholder(s)
(2) Foreign
No. of shares held at the beginning of the year No. of shares held at the end of the year % No. of
shares in Dematerilised
Form
No. of shares
in Physical Form
Total No. of shares
% of Total
Share
No. of shares in
Dematerilised Form
No. of shares in Physkal
Form
Total No. of % of Total Change
shares Share during the
year
(a) Individuals (Non-
Residents Individuals/
Foreign Individuals)
0 0 0 0.00 0 0 0 0.00 0.00
(b) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00
(c) Financial Institutions/
Banks
0 0 0 0.00 0 0 0 0.00 0.00
(d) Others 0 0 0 0.00 0 0 0 0.00 0.00
SUB TOTAL (A2) 0 0 0 0.00 0 0 0 0.00 0.00
TOTAL Shareholding
of Promoter and Promoter Group (Al + A2)
0 32,250,000 32,250,000 100.00 161,250,000 0 161,250,000 94.96 (5.04)
(B) Public Shareholding
(1) Institutions
(a) Mutual Funds/ UTI 0 0 0 0.00 0 0 0 0.00 0.00
(b) Financial Institutions
/ Banks
0 0 0 0.00 0 0 0 0.00 0.00
(c) Central Government/
State Government(s)
0 0 0 0.00 0 0 0 0.00 0.00
(d) Venture Capital
Funds
0 0 0 0.00 0 0 0 0.00 0.00
(e) Insurance Companies 0 0 0 0.00 0 0 0 0.00 0.00
(f) Foreign Institutional
Investors
0 0 0 0.00 0 0 0 0.00 0.00
(g) Foreign Venture
Capital Investors
0 0 0 0.00 0 0 0 0.00 0.00
(j) _ Others 0.00 0 0 0 0.00 0.00
SUB TOTAL (B1) 0 0 0 0.00 0 0 01 0.00 _ 0.00
(2) Non - Institutions
(a) Bodies Corporate -+ (i) Indian 0 0 0 0.00 11,049 0 11,049 0.01 0.01
(ii) Overseas 0 0 0 0.00 0 0 0 0.00 .,.
0.00 -
(b) Individuals
(i) Individual
Shareholders holding
nominal share capital
up to Z 1 Lakh
0 0 0 0.00 4,938,210 443,944 5,382,154 3.17 3.17
(ii) Individual
Shareholders holding
nominal share capital
in excess of Z 1 Lakh
0 0 0 0.00 701,250 0 701,250 0.41 0.41
S-493
S. N. Shareholder's Name
No. of Shares
% of total Shares of
the company
No. of Shares
Cumulative Shareholding during the year _
% of total Shares of
the company
Shareholding at the Beginning of the year
32,250,000 loom I Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc)
Not Applicable*
161,250,000 94.96
S-494
S. N. Particulars
1 At the beginning of the year
At the End of the year
LARSEN & TOUBRO INFOTECH LIMITED
Category Code
Category of Shareholder(s)
No. of shares in
Dematerilised Form
No. of shares
In Physical Form
Total No. of shares
No. of shares held at
No. of shares in Physical
Form
the end of the year %
Total No. of %of Total Change
shares Share during the
year
% of Total
Share
No. of shares in
Dematerilised Form
(c) Others
(i) Directors and their
relatives
0 0 0 0.00 871,875 0 871,875 0.51 0.51
(ii) Non Resident 0
Repatriates
0 0 0.00 634,824 377,670 1,012,494 0.60 0.60
(iii) Non Resident Non Repatriates
0 0 0 0.00 104,310 158,166 262,476 0.15 0.15
(vi) Foreign Nationals 0 0 0 0.00 0 324,890 324,890 0.19 0.19
SUB TOTAL (B2) 0 0 0 0.00 7,261,518 1,304,670 8,566,188 5.04 5.04
TOTAL Public
Shareholding (B1 + B2)
0 0 0 0.00 7,261,518 1,304,670 8,566,188 5.04 5.04
TOTAL (A+B) 0 32,250,000 32,250,000 100.00 168,511,518 1,304,670 169,816,188 100.00 0.00
(C) Shares held by Custodians and
against which
Depository Receipts
have been issued
0 0 0 0.00 0 0 0 0.00 0.00
SUB TOTAL (C) 0 0 0 0.00 0 0 0 0.00 0.00
GRAND TOTAL 0 32,250,000 32,250,000 100.00 168,511,518 1,304,670 169,816,188 100.00 0.00
Note: The equity shares of the Company have been subdivided from face value of 5 each to leach with effect from June 22, 2015.
i) Shareholding of Promoters
Shareholding at the End of the year
32,250,000
32,250,000
No. of Shares
0.001 161,250,000
0.00 161,250,000
% of total Shares of
the company
94.96
94.96
% of Shares Pledged/
encumbered to total shares
0.00
0.00
% change in shareholding
during the Year
(5.04)
(5.04)
Larsen & Toubro Limited
Total
100.00
100.00
Shareholding at the Beginning of the year
No. of % of total % of Shares
Shares Shares of
Pledged/
the encumbered
company
to total shares
Note: The equity shares of the Company have been subdivided from face value of 5 each to leach with effect from June 22, 2015.
ii) Change in Promoters' Shareholding: There was no change in the shareholding during the year
LARSEN & TOUBRO 1NFOTECH LIMITED
*Notes:
While there is no change in the shareholding of the Promoter & Promoter Group, there is a change in the percentage of the total
outstanding shares of the Company due to periodic allotment of shares during the financial year 2015-16 pursuant to exercise of Stock
Options by the employees.
fr The equity shares of the Company have been subdivided from face value of 5 each to 1 with effect from June 22, 2015.
iii) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
S N. For Each of the Top 10 Shareholders
VIJAY KUMAR MAGAPU At the beginning of the year
Shareholding at the Beginning of the year
Cumulative
during Shareholding
the year No. of Shares
% of total Shares of
the company
No. of Shares
-
% of total Shares of
the company
- 1 -
Date wise Increase / Decrease in
Shareholding during the year specifying
the reasons for increase! decrease
(e.g. allotment / transfer / bonus /
sweat equity etc): _
25.11.2015 420,000 0.26 420,000 0.26
At the End of the year - 420,000 — 0.25
2 YESH WANT MORESHWAR DEOSTHALEE At the beginning of the year - _ -
Date wise Increase / Decrease in
Shareholding during the year specifying
the reasons for increase / decrease
(e.g. allotment / transfer / bonus /
sweat equity etc):
15.12.2015 281,250 0.17 281,250 0.17
At the End of the year - 281,250 0.17 _ VINA BADAMI At the beginning of the year - -
Date wise Increase / Decrease in
Shareholding during the year specifying
the reasons for increase / decrease
(e.g. allotment / transfer / bonus /
sweat equity etc):
05.12.2015 140,000 0.08 140,000 0.08
At the End of the year - 140,000 0.08
4 VIVEK SHANTARAM SHIROOR At the beginning of the year - - - - _
Date wise Increase / Decrease in
Shareholding during the year specifying
the reasons for increase / decrease
(e.g. allotment / transfer / bonus /
sweat equity etc):
05.12.2015 127,000 0.08 127000 0.08 25.12.2015 (4,000) (0.00) 123000 0.07
18.01.2016 15,000 0.00 138000
—
0.08
At the End of the year - 1,38,000 0.08
5 MAKARAND G DEOLALKAR At the beginning of the year - - -
Date wise Increase / Decrease in
Shareholding during the year specifying
the reasons for increase / decrease
(e.g. allotment / transfer / bonus /
sweat equity etc):
10.11.2015 128,937 0.08 128,937 0.08
At the End of the year - 128,937 0.08
S-495
LARSEN & TOUBRO INFOTECH LIMITED
Shareholding at the Beginning of the year
Cumulative Shareholding durin the ear
S. N.
6
For Each of the Top 10 Shareholders
SHRINIVASAN VENKATARAMAN At the beginning of the year
No. of Shares
% of total Shares of
the company
No. of % of total Shares Shares of
the company - . -
_ Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):
15.12.2015 125,000 0.07 125,000 0.07
At the End of the year - - 125,000 0.07 7
_
KAVINDRA SHARMA At the beginning of the year - _ . .
Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):
25.11.2015 75,312 0.05 75,312 0.05
15.12.2015 39,375 0.02 114,687 0.07
At the End of the year - - 114,687 0.07 8 HAE RYONG KONG At the beginning of the year - . _ _
Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):
15.12.2015 111,250 0.07 111,250 0.07
At the End of the year - - 111,250 0.07 9 KASUKHELA SITAPATI RAO At the beginning of the year - _ . _
_ Date wise Increase / Decrease in Shareholding during the year specifying
the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):
15.12.2015 110,500 0.07 110,500 0.07
At the End of the year - - 110,500 0.07 10(l) GOPA KUMAR PERIYADAN At the beginning of the year - _ . .
Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus / sweat equity etc):
10.11.2015 100,000 0.06 100,000 0.06
At the End of the year - - 100,000 0.06 10 (ii) RAVIKUMAR R THUMMARUKUDY At the beginning of the year - _ . .
Date wise Increase / Decrease in Shareholding during the year specifying
the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):
15.12.2015 100,000 0.06 100,000 0.06
At the End of the year - - 100,000 0.06
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LARSEN & TOUBRO INFOTECH LIMITED
iv) Shareholding of Directors and Key Managerial Personnel:
For Each of the Directors and KMP
Shareholding at the
Beginning of the year
No. of Shares
Cumulative Shareholding during the year
No. of Shares
% of total Shares of
the company
% of total
Shares of
the company
1 ANILKUMAR MANIBHAI NAIK _
At the beginning of the year - - _
Date wise Increase /Decrease in
_
Shareholding during the year specifying
the reasons for increase / decrease
(e.g. allotment / transfer / bonus /
sweat equity etc):
I 1
_
, 25.11.2015 871,875 0.53 871,875 0.53
_ lAt the End of the year - 871,875 0.51
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(Z Million)
Particulars Secured Loans Unsecured Deposits Total
Excluding deposits Loans Indebtedness
Indebtedness at the beginning of the financial year:
i) Principal Amount 877.78 1,297.48 - 2,175.26
ii) Interest due but not paid 0.85 0.09 0.94 iii) Interest accrued but not due 1.34 0.13 1.47
Total (i+ii+iii) 879.97 1,297.70 2,177.67
Change in Indebtedness during the financial year:
• Addition 1,300.64 1,055.73 2,356.37 • Reduction 1,898.68 2,088.19 3,986.87
Net Change (598.04) (1,032.46) (1,630.50)
Indebtedness at the end of the financial year:
i) Principal Amount 279.74 265.02 544.76
ii) Interest due but not paid 0.14 - 0.14
iii) Interest accrued but not due 0.86 0.07 0.93 Total (i+ii+iii) 280.74 265.09 545.83
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (DURING THE FINANCIAL YEAR 2015-16)
A. Remuneration to Managing Director (MD), Whole-time Directors (WTD) and/or Manager:
Name of MD/ WTD/ Manager (Z Million)
Particulars of Remuneration IVIr. V. K. Magapui
Mr. K. R. L.
Narasimharre
Mr. Chandrashekara
Kakar
Mr. Sunil
Rand&
Mr. Sanjay
Jaionas Total
(MD) (WTD) (Chief Operating (WTD) (Chief Executive Amount
Officer & WTD) Officer & MD)
Gross salary: I
(a) Salary as per provisions contained in
section 17(1) of the Income-tax Act, 1961 0.17 10.85 5.33
. ' 19.56 35.91
(b) Value of perquisites u/s 17(2) of
Income-tax Act, 1961 - -
(c) Profits in lieu of salary under section
17(3) of Income-tax Act, 1961 -
---
-
S-497
LARSEN & TOUBRO INFOTECH LIMITED
Name of MD/ WTD/Manager (Z Million)
Particulars of Remuneration
Mr. V. K.
Magapu'
Mr. K. R. 1.
Narasimharn'
Mr. Chandrashekara
KAM' Mr. Sunil
Panded
Mr. Sanjay
/Mona' Total
(MD) (WTD) (Chief Operating (WTD) (Chief Executive Amount
Officer & WTD) Officer & MD 2
_ Stock Option - - - . _ _
3 Sweat Equity - - - - . _
4 Commission:
- as % of profit
- others,
-
- - -
- -
- -
12.32 -
12.32 -
5 Others (please specify): - - .
1. Portion of Advisory fees charged by
Holding Company
7.35 - - 7.35
. -
2. Contribution to Provident Fund &
Superannuation Fund -
- - - 1.73 1.73
Total (A) 7.35 0.17 10.85 5.33 33.61 57.31 Overall Ceiling as per the Act (Z 1,162.98 Million) 10% of Net Profits of the Company
Notes:
1. Mr. V. K. Magapu receives Advisory fees from Larsen & Toubro Limited (Holding Company) and approx. 80% of the fees is charged to the Company. Mr. V.
K. Magapu ceased to be the Managing Director w.e.f. September 26, 2015.
2. Mr. K. R. L. Narasimham ceased to be an Executive Director w.e.f. April 08, 2015.
3. Mr. Chandrashekara Kakal ceased to be an Executive Director w.e.f. August 27, 2015.
4. Mr. Sunil Pande ceased to be an Executive Director w.e.f. August 26, 2015.
5. Mr. Sanjay Jalona was appointed as the Chief Executive Officer & Managing Director w.e.f. August 10, 2015.
B. Remuneration to other directors:
(Z Million)
S. N
1
Particulars of Remuneration
Independent Directors
Fee for attending Board /
Committee Meetings
Commission Others,
please specify Total Amount
Mr. Samir Desai 0.53 3.57 - 4.10 Mr. M. M. Chitale 0.55 - - 0.55 Ms. Vedika Bhandarkar 0.25 0.83 - 1.08 Mr. Arjun Gupta' 0.10 1.41 - 1.51 Total (1) 1.43 5.81 - 7.24 Other Non-Executive Directors
Mr. A. M. Naik - - _ - Mr. R. Shankar Raman' - - . - Mr. S. N. Subrahmanyan - - _ _
Total (2) - - . .
Total (B)=(1+2) 1.43 5.81 . 7.24 Total Managerial Remuneration - 5.81 . .
Overall Ceiling as per the Act (!116.30 Million) 1% of Net Profits of the Company
Notes: 1. Mr. Arjun Gupta was appointed as an Independent Director w.e.f. October 28, 2015.
2. Mr. R. Shankar Raman was appointed as a Non-Executive Director w.e.f. October 28, 2015.
S-498
Key Managerial Personnel
Mr. Ashok
Kumar
Ms. Angna
Arora
Mr.
Subramanya
Mr. P. S. Kapoor
(CFO & Company
C. Remuneration to Key Managerial Personnel other than MD/Manager/VVTD:
•
LARSEN & TOUBRO INFOTECH LIMITED
(Z Million)
Total ont a la
(CFO)'
a
(Company
Secretary)'
ecretary Company
Secretary)4 Amount
1 Gross salary:
(a) Salary as per provisions contained in section 17(1) of
the Income-tax Act, 1961 5.96 3.12 0.66 0.11 9.85
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 2.42 0.01 0.10 0.00 2.53
(c) Profits in lieu of salary under section 17(3) Income-tax
Act, 1961
- - .
-
2 Stock Option _ - _ 3 Sweat Equity _ -
4 Commission:
- as % of profit
-others,
-
_
_
_ _
Others, please specify:
Contribution to Provident Fund & Superannuation Fund 0.12 0.10 0.08 0.00 0.30 Total (A) 8.50 3.23 0.84 0.11 12.68
Notes:
1. Mr. Ashok Kumar Sonthalia was appointed as Head-Finance & Accounts w.e.f. August 26, 2015 and has been designated as the Chief Financial Officer.
2. Mr. Subramanya Bhatt was appointed as the Company Secretary w.e.f. August 26, 2015.
3. Mr. P. S. Kapoor was appointed as Head-Finance & Accounts & Company Secretary w.e.f. May 08, 2015 and was designated as the Chief Financial Officer. He ceased to be Head-Finance & Accounts & Company Secretary and also the Chief Financial Officer w.e.f.
August 26, 2015.
4. Ms. Angna Arora ceased to be the Company Secretary w.e.f. May 08, 2015.
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
There were no penalties, punishment or compounding of offences during the year ended March 31, 2016.
S-499
LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE D TO THE DIRECTORS' REPORT
Form AOC-2
Related Party Transactions Statement
Details of material contracts or arrangement or transactions at arm's length basis for the year ended March 31, 2016 are as follows:
Nature of contracts/
arrangements/
transactions
Duration of the
contracts/ arrangements/
transactions
Date(s) of
approval by
the Board,
if any:
Amount
paid as
advances,
if any:
S. N. Name(s) of
the related
party
and nature of
relationship
Salient terms of
the contracts or
arrangements
or transactions
Including the
value, if any:
Amount
(Z in Million)
1 Larsen & Sale of Software & 1 yea r As per Not - 1,073.57 Toubro Limited
(Holding
Company)
Other services /
products
commercial
terms in line
with business
practices and
comparable
with unrelated
parties
Applicable
L&T Purchase of Software & 1 year As per Not 694.17 Technology
Services Ltd.
(Fellow
Subsidiary
Company)
Other services /
products
commercial
terms in line
with business
practices and
comparable
with unrelated
parties
Applicable
For and on behalf of the Board
S-500
Sanjay Jalona Chief Executive Officer & Managing Director (DIN: 07256786)
R. Shankar Raman Director (DIN: 00019798)
LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE E TO THE DIRECTORS' REPORT
Form AOC-I
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of Subsidiary Companies
(Amount in Million)
I
3
IlBMW Name of
Subsidiary
Reporting
period for the
subsidiary
concerned, if
different from
the holding
company's
reporting period
1 2
GDA Technologies
Limited
31/03/2016
IIIOIIIIIIIIIICIIII 5 6 7 1111:11111111111111111 Larsen & L&T Toubro Information
Infotech Technology Austria Spain SI.' GmbH'
Larsen & Toubro Infotech
GmbH
31/03/2016
Larsen & Toubro Infotech Canada
Limited
31/03/2016
Larsen & Toubro
Infotech LLC
31/03/2016
L&T Infotech financial
Services Technologies
Inc.'
31/03/2016
Larsen And Toubro South
Africa (Pty) Limited
31/03/2016
L&T
Information Technology
Services
(Shanghai) Co. Ltd.
31/12/2015 31/03/2016 31/03/2016
4 Reporting
currency
EUR CAD INR USD CAD ZAR CNY EUR EUR
Exchange rate as
on the last date
of the relevant
Financial year
in the case
of foreign
subsidiaries
75.10 51.02 - 66.38 51.23 4.50 10.20 75.10 75.10
5 Share capital 1.14 0.00 1.68 - 2,799.97 2.67 10.96 2.60 3.65
6 Reserves &
surplus
280.63 100.34 369.07 112.62 471.06 17.98 (5.99) (0.51) (0.61)
7 Total assets 326.23 165.22 H 370.90 118.99 3,782.56 246.78 24.00 2.46 4.15
8 Total Liabilities 44.47 64.88 0.14 6.37 511.53 226.13 19.03 0.37 1.11
9 Investments - - 361.85 - - - -- ---
- - -
10 Turnover 932.70 675.56 - 133.45 2,296.93 564.09 41.58 - -
11 Profit before
taxation
65.03 40.66 19.06 12.47 270.86 8.24 2.16 (0.51) - (0.85)
12 Provision for
taxation
8.26 9.88 0.69 - 77.38 3.08 - - (0.24)
13 Profit after
taxation
56.76 30.78 18.37 12.47 193.48 5.16 2.16 (0.51) (0.61)
14 Proposed
Dividend
- - - - - - - - -
15 % of
shareholding
100.00 100.00 100.00 100.00 100.00 74.90 100.00 100.00 100.00
Notes:
1. Following Subsidiaries are yet to commence business:
a. Larsen & Toubro Infotech Austria GmbH
b. L&T Information Technology Spain SI
2. L&T Infotech Financial Services Technologies Inc. has paid interim dividends amounting to t 486.69 Million
S-501
LARSEN & TOUBRO INFOTECH LIMITED
ANVEXURE F TO THE DIRECTORS' REPORT
Particulars of Employee Stock Option Scheme
(as per section 62(1)(b) read with Rule 12 of Companies (Share Capital and Debentures) Rules, 2014)
A. Employee Stock Ownership Scheme - 2000 (ESOS Plan)*
ESOP Serie 1 Grant Price per share (Z) 5 2
Options Granted' 2,003,262 10,411,787
3 Options Vested _
82,660 340,666
4 _
Options exercised 1,851,855 6,407,483
5 Total number of shares arising as a result of exercise of option 1,851,855 6,407,483
6 Options lapsed 68,747 1,654,198
Exercise price per share (Z) 5 2
Variation of terms of options No variations have been made in the Scheme since the
date of notification of the Companies Act, 2013 i.e. w.e.f.
April 1, 2014.
9 Money realized by exercise of options Z 9.26 Million Z 12.81 Million
10 Total number of options in force:
Vested 82,660 340,666
Unvested _
0 _ 2,009,440
Total 82,660 2,350,106 _
11 Employee wise details of options granted to:
(i) Key managerial personnel (KMP as per Companies Act, 2013):# Nil Nil
(ii) Any other employee who recieves a grant of options in any one
year of option amounting to 5% or more of options granted
during that year:' , ,
Nil
,_...
Nil
(iii) Identified employees granted option, during any one year, equal
to or exceeding 1% of the issued capital (excluding outstanding
warrants and conversions) of the Company at the time of grant
Nil Nil
Notes:
# No stock options were granted to employees during the year ended March 31, 2016.
* The equity shares of the Company have been sub-divided from the face value of 5 per share to face value of! 1 per share we.f. June 22,2015. Consequently, the adjustment of sub-division is made to the options granted, vested and alloted under the ESOP Schemes.
S-502
LARSEN & TOUBRO INFOTECH LIMITED
B. Employee Stock Ownership Scheme - 2006 U.S. Stock Option Sub-Plan*
111111111111 1 I Grant Price USD 2.4
Options Granted' 5,20,400
Options Vested 1,43,650
4 Options exercised 3,06,850
Total number of shares arising as a result of exercise of option 3,06,850
Options lapsed 69,900
7 Exercise price USD 2.4
Variation of terms of options No variations have been made in the Scheme
since the date of notification of the Companies
Act, 2013 i.e. w.e.f. 1st April 2014.
Money realized by exercise of options 47.20 Million
10 Total number of options in force 1,43,650
11 Employee wise details of options granted to:
(i) Key managerial personnel (KMP as per Companies Act, 2013) during
the year'
Nil
(ii) Any other employee who recieves a grant of options in any one year of
option amounting to 5% or more of options granted during that year'
Nil
(iii) Identified employees granted option, during any one year, equal to or
exceeding 1% of the issued capital (excluding outstanding warrants and
conversions) of the company at the time of grant
Nil
Notes:
# No stock options were granted to employees during the year ended March 31, 2016.
* The equity shares of the Company have been sub-divided from the face value of 15 per share to face value of Z 1 per share w.e.f. June 22, 2015. Consequently, the adjustment of sub-division is made to the options granted, vested and alloted under the ESOP Schemes.
S-503
LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE G TO THE DIRECTORS' REPORT
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
A. CONSERVATION OF ENERGY
(I)
Steps taken or impact on conservation of energy: The Company's operations are not energy-intensive. However, measures have
been taken to reduce energy consumption in the following manner:
1. Replacement of CFL with LED in passage lift/ Toilet Blocks/ Conference rooms.
2. Replacement of Halogen! Metal halide Street light with LED at Powai, Mahape & Bangalore.
3. Installation of Motion sensors to switch off toilets lights when not used in Powai & Bangalore.
4. Installation of Variable frequency drive for AHUs reduce power consumption when loaded partially.
5. Addition of frigitech solution to improve AC efficiency at Airoli.
6. Installation of Electromiser to reduce lighting power consumption.
7. Implementation of LED lights in new office at Hinjewadi.
8. Reducing AC temperature by 1 degree.
9. Maintaining Unity Power factor.
(ii) Steps taken by the company for utilising alternate sources of energy: The Company's operations being not energy-intensive, no steps have been taken by the Company for utilising alternate source of energy.
(iii) Capital investment on energy conservation equipments: 3.08 Million
B. TECHNOLOGY ABSORPTION
(i) Efforts made towards technology absorption: The Company has expanded its services in next generation technologies under
Digital Solutions and Services group since the consolidation during last financial year. The Company operates Centers of Excellence
in emerging technologies such as Digital Experience, Big Data, Machine / Cognitive Intelligence, Business Process Automation,
Cloud, Internet of Things, Analytics, Mobile etc. and existing technologies which collate, disseminate and spread knowledge to
all employees in the Company. Employees are trained using state of the art methodologies for faster onboarding. The Company
has deployed crowdsourcing platform and social collaboration platform for inviting and processing innovation ideas driving new
technology initiatives and new service lines. The Company has invested in automation and digital framework in areas of Internet
of Things, Big Data, Digital Experience, API Management, Application Lifecycle Management and Infrastructure Management, Test
Automation and Business Process Automation to ensure delivery efficiency with highest quality and reliability for its Customers.
(ii) Benefits derived like product improvement, cost reduction, product development or import substitution: Participation in transformation programs led by emerging digital technologies and new platform based service lines driving alternate revenue
sources. Reduced time to market due to availability of ready frameworks and solutions for faster implementation, productivity
improvement through use of latest proprietary and third party automation frameworks and tools.
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): As part of sustained efforts for optimizing operational efficiencies, improving employee engagement and modernizing IT systems and
infrastructure, Company has invested in variety of imported technologies. The details of Technology imported is given below:
Whether the
technology been
fully absorbed
If not fully a
absorption has not taken place, and the
reasons thereof
S.N. Details of Technology imported
Year of
import
Enterprise BI for Analytics and reporting: With
a vision to establishing integrated Information
Management System, Company has implemented BI
solution for dashboard and reporting through IBM
Cognos BI and supported by backed Data warehouse
implemented using Microsoft SQL server 2012.
2014 Fully absorbed
S-504
Year of
import
2015
Whether the
technology been
,fully absorbed
Fully absorbed
LARSEN & TOUBRO INFOTECH LIMITED
If not fully absorbed, areas where
absorption has not taken place, and the
,reasons thereof
S.N. Details of Technology imported
Sales automation: Company has embarked Sales
process and productivity improvement through
modernization of its existing Sales engine by
implementing Microsoft Dynamics CRM 2015. This
is currently rolled out for India Sales, providing
significant improvement in user Experience and
Productivity
Fully absorbed Employee Engagement Portal: Company has
adopted SharePoint as enterprise wide collaboration
and knowledge management portal. Company
recently launched in-house developed integrated
"Gamification Engine" to encourage and motivate
associates to contribute to enhance the systems
and build the knowledgebase, and in return earn
chance to win exciting gift vouchers. Company has
also launched an internal video channel leveraging
in-house developed "Media Hub" solution and cloud
based Microsoft Azure media Service.
Unify Program: Company has embarked on
eliminating all point to point integration through
implementation of unified integration platform using
Oracle Fusion middle ware ESB. The initiative also
includes Business Process Automation leveraging
Oracle Fusion Middleware BPM.
2015
2015 Partially absorbed Unify program got started in Jan 2015.
As of now 52 out of total 92 interfaces are
migrated on to ESB platform. By end of Sep
2016, it's planned to migrate all remaining
interfaces onto ESB.
Business process Employee onboarding
is planned to be rolled out by June 2016
on OFMW BPM platform. Few other
critical processes are being identified for
implementing by Mar 2017.
Fully absorbed
6
Human Capital Management: Company has
implemented SAP HCM, thus streamlining its
Current HCM processes. The implementation aims
at providing automation for self-service processes
across HCM operations.
Connexions: New communication & collaboration
platform based on Facebook at Work was launched
for transforming and fostering culture of innovation
and collaboration at workplace.
Microsoft Dynamics AX: Implemented to make ease
of operation in admin process.
Digite SwiftALM: "Compass" initiative is taken up for
implementing specialized product Digite SwiftALM
for Application Lifecycle Management function
as applicable to growing future business needs of
our organization and it's replacing legacy in-house
developed Splice-M application.
2013
2016 Partially absorbed Program Connexions has been recently
launched and is operational across the
organization, it is expected to be fully
absorbed by end of second quarter of FY17.
2015 Fully absorbed
2015 Partially Absorbed Configuration is done for almost all process
lifecycles. It's already implemented for 30%
of projects. It's planned to be implemented
in phases across entire organization by
Dec-2016
S-505
Year of Whether the
import technology been
fully absorbed
2016 Partially absorbed
If not fully absorbed, areas where
absorption has not taken place, and the
reasons thereof
BPC implemented for all corporate services
BEUs. Planned to implement the same for
BUs by Dec 2016.
122.60
244.00
LARSEN & TOUBRO INFOTECH LIMITED
S.N. Details of Technology imported
SAP BPC: SAP's Budgeting Planning & Control module
is being implemented for setting up, tracking,
monitoring and controlling annual budgets across
entire organization.
(iv) Research and Development:
a. Specific areas in which R&D carried out by the Company: The Company carries out R&D in areas of latest technologies such as
Machine Learning, Internet of Things, Big Data, Analytics, Mobility, Cloud, Next generation User Experience, Service automation,
Manufacturing Execution Systems, etc.
b. Benefits derived as a result of the above R&D: New opportunity creation through over the horizon technologies, creation of ready
frameworks and solutions for faster time to market, Brand positioning, incubation and creation of new service lines.
c. Future plan of action: Proliferation of enterprise social and crowd sourcing platform for collaborative R&D and Innovation.
Technology Governance across business units for sustainable R&D. Investment in new emerging technologies like Cognitive
Computing, Augment Reality and Virtual Reality, Location Services etc., creation of accelerators and solutions in the areas of Digital
Experience, Natural Language Processing, Internet of Things and others.
d. Total Expenditure on R&D:
(!Million)
NMI Expenditure on R&D
a. Capital
b. Recurring
Total R & D expenditure (a+b)
366.60
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company exports IT professional services mainly to North America, Europe, South Africa, Middle East, Japan, Australia and Singapore.
(Z Million)
Particulars 2015-16 2014-15
Foreign Exchange Earned 52,785.78 45,395.45
Foreign Exchange Used 26,471.20 21,819.13
S-506
LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE H TO THE DIRECTORS' REPORT
CORPORATE GOVERNANCE REPORT
Your Company derives its values from the rich legacy of fair and transparent governance and disclosure practices followed by the L&T group. In
line with the group philosophy, the Company constantly endeavors to benchmark itself with the best practices in the IT industry. The Company
will continue to focus its resources, strengths and strategies to achieve its vision of becoming a true global leader in software services, while
upholding the core values of excellence, integrity, responsibility, unity and understanding, which are fundamental to the L&T group.
BOARD OF DIRECTORS
As on March 31, 2016, the Board comprises of 8 Directors, of which, 1 Director is Executive, 3 are Non-Executive and 4 are Independent
Directors. The Board is chaired by Mr. A. M. Naik as a Non-Executive Chairman. The Board meets at least, four times during the financial
year and gap between 2 consecutive meetings is not more than 120 days. Additional meetings are held, if deemed necessary to conduct the
business.
During the year ended March 31, 2016 the Board met 6 (Six) times on May 8, 2015, June 16, 2015, July 27, 2015, August 26, 2015, October 28, 2015
and January 22, 2016. The composition of the Board, and Directors' attendance at the Board Meetings held during the year is as follows:
Cat
Attendant
eetings
Mr. A. M. Naik Non-Executive Chairman
Mr. V. K. Magapui Managing Director 4
Mr. S. N. Subrahmanyan Non-Executive Director
Mr. R. Shankar Raman' Non-Executive Director 4
Mr. Sanjay Jalona3 Chief Executive Officer & Managing Director 3
Mr. Chandrashekara Kakal4 Chief Operating Officer & Executive Director 4
Mr. K. R. L. Narasimharns Executive Director 0
Mr. Sunil Pande6 Executive Director 2
Mr. Samir Desai Independent Director
Mr. M. M. Chitale Independent Director
Ms. Ved ka Bhandarkar Independent Director
Mr. Arjun Gupta' independent Director
Note:
1. Mr. V. K. Magapu ceased to be the Managing Director w.e.f. September 26, 2015.
2. Mr. R. Shankar Raman ceased to be a Director w.e.f. September 26, 2015 and was re-appointed as a Non-Executive Director w.e.f.
October 28, 2015.
3. Mr. Sanjay Jalona was appointed as the Chief Executive Officer & Managing Director wet. August 10, 2015.
4. Mr. Chandrashekara Kakal ceased to be an Executive Director w.e.f. August 27, 2015.
5. Mr. K.R.L. Narasimham ceased to be an Executive Director w.e.f. April 8, 2015.
6. Mr. Sunil Pande ceased to be an Executive Director w.e.f. August 26, 2015.
7. Mr. Arjun Gupta was appointed as an Independent Director w.e.f. October 28, 2015.
BOARD COMMITTEES
The Board currently has 5 Committees: 1) Audit Committee; 2) Nomination and Remuneration Committee; 3) Corporate Social Responsibility
Committee; 4) Stakeholders' Relationship Committee and 5) IPO Committee. Your Company has also constituted a Risk Management
Committee which is chaired by a member of the Board and also comprises of Senior Executives such as the Chief Financial Officer amongst its
members. The Board is responsible for constituting, assigning and appointing the members of the Committees.
AUDIT COMMITTEE
During the year, the Audit Committee was re-constituted and as on March 31, 2016 comprises of 2 Independent Directors and 1 Non-Executive
Director as its members. The Chairman of the Committee is an Independent Director. The role, terms of reference, the authority and power of the Audit
S-507
LARSEN & TOUBRO INFOTECH LIMITED
Committee were also amended/ modified to be in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
During the year ended March 31, 2016, the Audit Committee met 4 (Four) times on May 8, 2015, July 27, 2015, October 27, 2015 and January
21, 2016. The composition of the Committee as on March 31, 2016 is as follows:
Mr. M. M. Chitale Chairman
Independent
Mr. Samir Desai Member
Independent
Mr. S. N. Subrahmanyan' Member
Non-Executive
Note:
(1) Mr. S. N. Subrahmanyan was inducted as a member wet August 26,2015.
(2) Mr. R. Shankar Raman ceased to be Chairman and member wet. July 27, 2015 and August 26, 2015, respectively.
(3) After March 31, 2016 Ms. Vedika Bhandarkar was inducted as a member w.e.f. April 18, 2016.
The terms of reference of the Audit Committee include the following:
1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial
statement is correct, sufficient and credible;
1 Recommendation for appointment, re-appointment and replacement, remuneration and terms of appointment of auditors of the
company;
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
4. Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for
approval, with particular reference to:
a) Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause
(c) of sub-section 3 of Section 134 of the Companies Act, 2013;
b) Changes, if any, in accounting policies and practices and reasons for the same;
c) Major accounting entries involving estimates based on the exercise of judgment by management;
d) Significant adjustments made in the financial statements arising out of audit findings;
e) Compliance with listing and other legal requirements relating to financial statements;
f) Disclosure of any related party transactions;
g) Modified opinion(s) in the draft audit report.
5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue,
preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer document / prospectus /
notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making
appropriate recommendations to the Board to take up steps in this matter;
7. Review and monitor the auditor's independence and performance, and effectiveness of audit process;
8. Approval or any subsequent modification of transactions of the Company with related parties;
9. Scrutiny of inter-corporate loans and investments;
10. Valuation of undertakings or assets of the company, wherever it is necessary;
11. Evaluation of internal financial controls and risk management systems;
12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
S-508
Mr. Samir Desail Chairman Independent
Mr. A. M. Nalk2 Member Non-Executive Chairman
Mr. S. N. Subrahmanyan3 Member Non-Executive
Mr. M. M. Chitalei: Independent mber
ame ector Position in the Committee
LARSEN & TOUBRO INFOTECH LIMITED
13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority
of the official heading the department, reporting structure coverage and frequency of internal audit;
14. Discussion with internal auditors of any significant findings and follow up there on;
15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity
or a failure of internal control systems of a material nature and reporting the matter to the board;
16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to
ascertain any area of concern;
17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-
payment of declared dividends) and creditors;
18. To establish and review the functioning of the Whistle Blower mechanism;
19. Approval of appointment of the chief financial officer (i.e., the whole-time Finance Director or any other person heading the finance
function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate; and
20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee and any other terms of reference as
may be decided by the Board or specified/provided under the Companies Act, 2013 or by the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 or by any other regulatory authority.
NOMINATION AND REMUNERATION COMMITTEE
During the year, the Nomination and Remuneration Committee was re-constituted and as on March 31, 2016 comprises of 2
Independent Directors, 1 Non-Executive Director and the Non-Executive Chairman as its members. The Chairman of the Committee
is an Independent Director. The role, terms of reference, the authority and power of the Nomination and Remuneration Committee
were also amended / modified to be in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
During the year ended March 31, 2016 the Committee met 5 (Five) times on May 8, 2015, July 27, 2015, August 26, 2015, October 27, 2015
and January 22, 2016. The composition of the Committee as on March 31, 2016 is as follows:
Note:
(1) Mr, Samir Desai was appointed as Chairman in place of Mr. M. M. Chitale w.e.f. August 26, 2015.
(2) Mr. A. M. Naik was inducted as a member we.f. August 26, 2015
(3) Mr. S. N. Subrahmanyan was inducted as a member w.e.f. August 26, 2015.
(4) Mr. V. K. Magapu and Mr. R. Shankar Raman ceased to be members w.e.f. August 26, 2015.
Terms of Reference
The terms of reference of the Nomination and Remuneration Committee include the following:
1. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and
recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other
employees;
2. Formulation of criteria for evaluation of Independent Directors and the Board of directors;
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Chairman Mr. S. N. Subrahmanyanl
Mr. Sanjay Jalonal Chief Executive Officer & Managing Director
Mr. M. M. Chitale Member Independent
Mr. S. N. Subrahmanyanl Chairman Non-Executive
Ms. Vedika Bhandarkar' Independent Member
Member Chief Executive Officer & Managing Director
Position in the Committee Category e of Director
Mr. Sanjay Jalonai
LARSEN & TOUBRO INFOTECH LIMITED
3. To consider and approve Employee Stock Option Schemes and to administer and supervise the same;
4. Devising a policy on diversity of Board of Directors;
5. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the
criteria laid down, and recommend to the Board their appointment and removal;
6. To consider whether to extend or continue the term of appointment of the independent director, on the basis of
the report of performance evaluation of independent directors;
7. Performing such other activities as may be delegated by the Board or specified/ provided under the Companies Act, 2013
or by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 or by any other regulatory authority.
CORPORATE SOCIAL RESPONSIBLITY (`CSR') COMMITTEE
During the year, the CSR Committee was reconstituted and as on March 31, 2016 comprises of 1 Independent Director, 1 Non-Executive
Director and the Chief Executive Officer & Managing Director as its members. The Chairman of the Committee is a Non- Executive Director.
The Committee met once during the year on April 7, 2015.
The composition of the Committee as on March 31, 2016 is as follows:
Note:
(1) Mr. S. N. Subrahmanyan and Mr. Sanjay Jalona were inducted as Chairman and member, respectively w.e.f. August 26, 2015.
(2) Mr. V. K. IVIagpau and Mr. Chandrashekara Kakal ceased to be Chairman and member, respectively w.e.f. August 26, 2015.
Terms of Reference
The terms of reference of the Corporate Social Responsibility Committee include the following:
1. To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities
to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013 including any amendments thereto;
2. To recommend the amount of expenditure to be incurred on the CSR activities referred to in the above clause; and
3. To monitor CSR policy of the Company including instituting a transparent monitoring mechanism for implementation of
CSR projects or programs or activities undertaken by the Company.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
During the year, the Company constituted Stakeholders' Relationship Committee which as on March 31, 2016 comprises of a Non-Executive
Director, 1 Independent Director and the Chief Executive Officer & Managing Director as its members. The Chairman of the Committee is a
Non-Executive Director.
The composition of the Committee as on March 31, 2016 is as follows:
Note:
(1) Mr. S. N. Subrahmanyan was appointed as Chairman whilst Ms. Vedika Bhandarkar & Mr. SanjayJalona were inducted as members w.e.f. August 26, 2015.
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LARSEN & TOUBRO INFOTECH LIMITED
(2) Mr. R. Shankar Raman and Mr. V. K. Magapu ceased to be Chairman and member respectively w.e.f. August 26, 2015.
Mr. Subramanya Bhatt, Company Secretary is the Compliance Officer who deals with Shareholders' grievance matters.
There was no meeting of the Stakeholders' Relationship Committee held during the year.
The terms of reference of the Stakeholders' Relationship Committee include the following:
1. To redress grievances of shareholders, debenture holders and other security holders;
2. Investigating complaints relating to allotment of shares, approval of transfer or transmission of shares, debentures or any other
securities;
3. Issue of duplicate certificates and new certificates on split/consolidation/renewal;
4. To consider and resolve grievances related to non-receipt of declared dividends, annual report of the Company or any other documents
or information to be sent by the Company to its shareholders; and
5. Carrying out any other function as may be decided by the Board or specified/ provided under the Companies Act, 2013 or SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 or by any other regulatory authority.
IPO COMMITTEE
IPO Committee was constituted during the year and as on March 31, 2016 comprises of the Non-Executive Chairman as the Chairman of the
Committee, 1 Non-Executive Director and the Chief Executive Officer & Managing Director as its members.
The Committee met 2 (Two) times on August 26, 2015 and September 27, 2015. The composition of the Committee as on March 31, 2016 is
as follows:
JrAlf Mr. A. M. Naik Chairman
Mr. S. N. Subrahmanyani Member
Non-Executive Chairman
Non-Executive
Mr. Sanjay Jalona2 Member
I Chief Executive Officer & Managing Director
Note:
(1) Mr. S. N. Subrahmanyan was inducted ass member wet. August 26, 2015.
(2) Mr. Sanjay Jalona was inducted as a member w.e.f. September 26, 2015.
(3) Mr. V. K. Magapu and Mr. R. Shankar Raman ceased to be members w.e.f. August 26, 2015 and September 26, 2015, respectively.
Terms of Reference
The IPO Committee of the Company was constituted to handle matters related to the IPO of the Company such as the appointment of
various intermediaries including book running lead managers, registrar to the offer, underwriters, legal counsels and bankers to the Offer, to
negotiate, finalise and to execute various agreements such as offer agreement, share and cash escrow agreements and syndicate agreement,
to make applications to statutory and other authorities from time to time, determination of the price band and the offer price and other
aspects related thereto such as settlement of all questions, difficulties or doubts in regard to the Offer and any such matters incidental to the
same.
RISK MANAGEMENT COMMITTEE
The Risk Management Committee as on March 31, 2016 comprises of Mr. S. N. Subrahmanyan, Non-Executive Director as the Chairman and
Mr. Sanjay Jalona, Chief Executive Officer & Managing Director and Mr. Ashok Kumar Sonthalia, Chief Financial Officer as its members. The
majority of members including the Chairman are Board members. The Committee met 3 (Three) times during the year on April 14, 2015, June
18, 2015 and October 27, 2015.
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LARSEN & TOUBRO INFOTECH LIMITED
Terms of Reference
The terms of reference of the Risk Management Committee include the following:
1. Framing, implementing, reviewing and monitoring the risk management plan for the Company;
2. Laying down risk assessment and minimization procedures and the procedures to inform Board of the same;
Oversight of the risk management policy/ enterprise risk management framework (identification, impact assessment, monitoring,
mitigation & reporting);
4. Review key strategic risks at domestic/international, macro-economic & sectoral level (including market, competition, political &
reputational issues);
5. Review significant operational risks; and
6. Performing such other activities as may be delegated by the Board or specified/ provided under the Companies Act, 2013 or by the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 or statutorily prescribed under any other law or by any other
regulatory authority.
RISK MANAGEMENT FRAMEWORK
Overview:
Our objective of Risk Management framework is to address risks in a proactive manner to sustain business growth. The Risk Management
framework is established to ensure that the risk that would impact the key business objectives are minimized through continuous risk
identification, assessment, quantification and its mitigation.
Risk Management — Our Approach:
Risk Management Process comprises of the following steps:
1. Risk Identification: Risks that impact the Company's business objectives are broadly classified into Strategic, Business and Operational
risks:
• Strategic: Strategic risks are the risks arising due to the decisions the management makes w.r.t. market, business growth, delivery
model, etc. which can have adverse effect on the business objectives. Ownership of these risks shall be with the Top Management.
• Business: Business risks are the risks which impose uncertainty in profits or danger of loss that could cause business to fail, e.g.
Client preferences, increased competition, etc. Ownership of these risks shall be with Business Heads.
• Operational: Operational risks are the risks arising from people, systems and processes through which the Company operates.
Ownership of these risks shall be with Operations Teams.
2. Risk Analysis and Evaluation: The risks are analyzed in terms of probability of occurrence and magnitude of impact. 'Impact' and
'Probability' determines the 'Severity of Risk' which aids to prioritize the risks and its mitigation action.
3. Risk Mitigation: Based on the 'Severity of Risk', they are prioritized and mitigation action is planned. Accordingly, the risks are avoided,
reduced, transferred or accepted.
• Risk Avoidance: The risks with high severity are avoided by exiting the activities or situations which give rise to such risks.
• Risk Reduction: The risks are reduced with appropriate mitigations plans.
• Risk Transfer: Transfer the total or partial risk to external third party vendor.
• Risk Acceptance: The risks with low severity are accepted where the cost of risk mitigation is higher than the risk exposure.
4. Risk Monitoring and Review: The risks are revisited at defined frequencies to validate whether the existing mitigation controls are
sufficient and whether any new risks are envisaged.
Risk Governance Structure:
The risk governance structure of the Company is headed by Board of Directors who formed the Risk Management Committee ('RMC').
RMC is responsible for framing, implementing and monitoring the Risk Management framework for the Company. The RMC is responsible
for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of
financial risks and controls. Risk Management Head (`RMH') acts as a nodal point for coordinating risk management activities. RMH also
appraises the Audit Committee with identified risks, its mitigation and effectiveness of mitigation. RMH is supported by Business Heads
who are the Risk Managers and owners to implement the Risk Management framework in their respective Business Units.
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Date and Time
L&T House, Ballard Estate, Mumbai —400 00
L&T House, Ballard Estate, Mumbai —400 001.
L&T House, Ballard Estate, Mumbai —400 001
une 12, 2015 at 10.00 a.m.
September 10, 2014 at 10.00 a.m.
August 26, 2013 at 9.00 a.m.
2014-15
2013-14
2012-13
LARSEN & TOUBRO INFOTECH LIMITED
REMUNERATION OF DIRECTORS
The remuneration of the Directors is based on the Company's size, global presence, its economic and financial position, compensation paid by
peer companies, the qualification of the appointee(s), their experience, past performance and other relevant factors.
The Independent Directors are paid sitting fees of 50,000/- for each Board Meeting and 25,000/- for each Committee Meeting. The details
of remuneration paid / payable to the Directors have been disclosed in Annexure C to the Directors Report.
DETAILS OF SHARES HELD BY NON-EXECUTIVE DIRECTORS AS ON MARCH 31, 2016:
of shares
Mr. A. M. N , 871,875
PERFORMANCE EVALUATION OF BOARD
The Board has voluntarily adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual
Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects
such as Board Composition and its structure, its culture, Board effectiveness, Board functioning, information availability, etc. The results were
discussed in the meeting of the Nomination and Remuneration Committee and the Board.
INFORMATION TO DIRECTORS
Systems, procedures and resources are in place to ensure that every Director is supplied, in a timely manner, with precise and concise
information in a form and of a quality appropriate to effectively enable / discharge his / her duties. The Directors are given time to study
the data and contribute effectively to the Board discussions. The Non-Executive Directors through their interactions and deliberations give
suggestions for improving overall effectiveness of the Board and its Committees.
ANNUAL GENERAL MEETINGS
The details of last three Annual General Meetings of the Company are as under:
No Special Resolutions were passed by the shareholders during the past 3 Annual General Meetings.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013 ('Act'). Internal Complaints Committee VICO has been constituted as per the Act, to redress
the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this
policy.
The ICC team resolved one complaint filed in March 2015 by taking suitable action. During the year under review there was no case reported
under the Act.
COMPLIANCE MONITORING SYSTEM
The Company believes that statutory compliance has become a catalyst for Corporate Governance and that a good statutory compliance
system has become vital for effective conduct of business operations. As a major portion of the Company's business is conducted abroad,
apart from ensuring compliance with Indian statutes, the Company also has to comply with the statutes of the countries where the Company
has presence.
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LARSEN & TOUBRO INFOTECH LIMITED
Keeping this in mind, the Company has instituted a Compliance Monitoring System. Under this system, a certificate is presented to the
Board every quarter, confirming that the Company has complied with all relevant provisions and requirements of various statutes as they
are applicable to the business of the Company in India and abroad as well as with the contractual obligations binding on the Company. The
certificate to the Board is based on back to back certificates received from various compliance owners representing Business Heads, Overseas
Branches, Subsidiary Companies and other support functions. As regards to the services availed from the professional service providers
engaged in various countries, the Company follows a practice of obtaining compliance certificates from them on quarterly basis.
The Compliance Monitoring System which was rolled out by the Company during the year ended March 31, 2010 in form of the
Compliance Portal is being extensively used by all the Compliance owners. The Compliance portal provides the users a web—based
access with access controls based on a defined authorization matrix. Besides connecting all the compliance owners across time
zones to a common platform, the portal is expected to serve as a repository of the compliance exercise yielding substantial
saving in resources and efforts for tracking compliance going forward.
In order to monitor compliances in a more robust way, the Company has initiated deployment of a third party Compliance tool, with advanced
features & enhanced Compliance checklist.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has designed and implemented a process driven framework for Internal Financial Controls ('IFC') within the meaning of the explanation
to Section 134(5)(e) of the Companies Act, 2013. For the year ended March 31, 2016, the Board is of the opinion that the Company has sound IFC
commensurate with the nature and size of its business operations and operating effectively and no material weaknesses exist. The Company has a
process in place to continuously monitor the same and identify gaps, if any, and implement new and/ or improved controls wherever the effect of
such gaps would have a material effect on the Company's operations.
GENERAL SHAREHOLDER INFORMATION
a) Share Transfer System:
The Company's investor services are handled by Link 'mime India Private Limited who are the Company's Registrar and Share Transfer
Agent. The Board has delegated the authority for approving transfer, transmission etc. of the Company's securities to the Transfer
Committee which comprises of the Chief Executive Officer & Managing Director, the Chief Financial Officer and the Company Secretary.
b) Dematerialization Of Shares:
The Company has dematerialized its Equity Shares with NSDL and CDSL and the Company's ISIN is INE214T01019.
The share transfers of dematerialized shares can be made through your Depository Participant.
As on March 31, 2016, 99.23% of the Company's total paid-up capital was held in the dematerialized form with NSDL and CDSL.
The number of shares held in dematerialized and physical mode is as under:
Held in Dematerialized form in NSDL 98.67
Held in Dematerialized form in CDSL 952,581 0.56
Physical 1,,_304,670 0.77
TOTAL 169,816,188 100.00
Members are requested to convert their physical holdings into electronic holdings which will negate risks associated with physical certificates.
Members holding shares in dematerialized form are requested to intimate all changes viz, pertaining to change of address, change in e-mail
id, bank details etc. to their Depository Participants whilst those holding shares in physical form are requested to intimate such changes to
the Company's Registrar and Share Transfer Agent.
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LARSEN & TOUBRO INFOTECH LIMITED
c) Address for Correspondence:
Address of the Registrar and Share Transfer Agent Link ntime India Private Limited
C-13, Pannalal Silk Mills Compound, L.B.S. Marg,
Bhandup (West), Mumbai 400078, Maharashtra, India
Tel: +91 22 2594 6970
Fax: +91 22 2594 6969
E-mail: [email protected]
Address of the Compliance Officer Subramanya Bhatt, Company Secretary
Larsen & Toubro Infotech Limited
L&T Technology Center Gate No.5, Saki Vihar Road,
' Powai, Mumbai 400072, Maharashtra, India
Tel: +91 22 6776 6776
IFax: +91 22 2858 1130
E-mail: [email protected]
d) Shareholder Grievances:
The Company has designated an e-mail id viz. [email protected] to enable shareholders to contact incase of any queries/
complaints.
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LARSEN & TOUBRO INFOTECH LIMITED
INDEPENDENT AUDITOR'S REPORT
To the members of Larsen & Toubro Infotech Limited
Report on the standalone financial statements
We have audited the accompanying standalone financial statements of Larsen & Toubro Infotech Limited ('the Company'), which comprise
the balance sheet as at March 31, 2016, the statement of profit and loss, the cash flow statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
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 and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the
Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included
in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of
the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's
Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended
on that date.
Report on other legal and regulatory requirements
1 As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the central government of India in terms of sub-
section (11) of section 143 of the Act, we give in Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.
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LARSEN & TOUBRO INFOTECH LIMITED
2 As required by section 143 (3) of the Act, 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;
(c) the balance sheet, the statement of profit and loss, and the cash flow statement dealt with by this report are in agreement with
the books of account;
(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133
of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014;
(e) on the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2016 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 B; and
(g) 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, 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 financial statements — refer note R to
the financial statements;
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 — refer note T(2)(ii) to the financial statements; and
iii. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company refer note
7(14) to the financial statements.
Sharp & Tannan
Chartered Accountants
Firm's registration no. 109982W
Firdosh D. Buchia
Partner
Mumbai, 26 April 2016
Membership No. 38332
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LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph (1) under 'Report on other legal and regulatory requirements' of our report of even date)
1 (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets.
(b) We are informed that the Company has formulated a programme of physical verification of all the fixed assets over a period of
two years which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the
physical verification of the fixed assets has been carried out by management during the year and no material discrepancies were
noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the Company.
2 In our opinion and according to the information and explanations given to us, in respect of loans, investments, guarantees and security
the provisions of section 185 and 186 of the Act have been complied with.
3 (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion,
the Company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance,
income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues as
applicable with the appropriate authorities. According to the information and explanations given to us, there were no undisputed
amounts payable in respect of provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty
of excise, cess and other statutory dues outstanding as at March 31, 2016 for a period of more than six months from the date they
became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of
income-tax, sales-tax, service tax, duty of custom, duty of excise or value added tax as at March 31, 2016 which have not been
deposited on account of a dispute pending are as under:
me of the
Statute
, Nature of the disputed dues Amoun
(Z' Million)
Period to which the Forum where disputes
amount relates are pending
Software exports and service income revenue
considered as domestic sales and other classification
disputes
Service tax demand under reverse charge mechanism
on the Agency commission paid in foreign currency
Disallowance of exemption under section 10 A
Disallowance of exemption under section 10 A
11.16 2002-2003
2008-2009 to
2013-2014
2005-2006 and
2008-2009
2006-2007 and
2010-2011
Maharashtra Sales Tax
Tribunal, Mumbai
The Commissioner of
Central Excise (Appeals)
ITAT
Commissioner (Appeals)
Central Sales Tax
and local sales
tax Acts ,
Service tax
Income-tax
Act, 1961
1.99
139.18
45.13
1.21 2010-2011 Disputes regarding calculation of notional interest on
transactions with related party and disallowance of
FTC
Disputes regarding short fall in tax deducted at source
Disputes regarding exclusion of interest income from
section 10A calculation, addition of notional interest
! on transactions with related party and disallowance
of FTC
5.14
3.59
2010-2011 and
2011-2012
2007-2008 and
2008-2009
Deputy Commissioner of
Income Tax (TDS)
Asst. Commissioner Of
Income Tax
Dispute regarding wrong calculation of interest 0.13 2011-2012
*Net of pre-deposit paid in getting the stay/appeal admitted
Deputy Commissioner of
Income Tax
4 According to the records of the Company examined by us and the information and explanations given to us, the Company has not
defaulted in repayment of loans or borrowing to any financial institution, bank, government or debenture holders as at the balance sheet
date.
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LARSEN & TOUBRO INFOTECH LIMITED
5 The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year. In
our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which they
were taken.
6 During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of
material fraud by the Company nor on the Company by its officers or employees, noticed or reported during the year, nor have we been
informed of such case by management.
7 According to the records of the Company examined by us and the information and explanations given to us, 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.
8 According to the records of the Company examined by us and the information and explanations given to us, all transactions with related
parties are in compliance with sections 177 and 188 of the Act and the details have been disclosed in the financial statements as
required by the applicable accounting standards.
9 According to the records of the Company examined by us and the information and explanations given to us, the Company has not
entered into any non-cash transactions with directors or persons connected with them.
10 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.
11 Paragraphs 3(ii), (iii), (v), (vi), (xii) and (xiv) of the Order are not applicable to the Company.
Sharp & Tannan
Chartered Accountants
Firm's registration no. 109982W
Firdosh D. Buchia
Partner
Mumbai, 26 April 2016
Membership No. 38332
ANNEXURE 'B' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2(f) under 'Report on other legal and regulatory requirements' of our report of even date)
Report on the internal financial controls 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 & Toubro lnfotech Limited ('the Company') as of March 31,
2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
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 ('the Guidance Note') issued by the Institute of Chartered Accountants
of India ('the CAI'). 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 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 Act.
Auditor's responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We
conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under
section 143(10) of the Act, to the extent applicable, to an audit of internal financial controls, both applicable to an audit of internal financial
S-519
LARSEN & TOUBRO INFOTECH LIMITED
controls and both issued by the !CAI. 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 involved 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 judgment,
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 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.
Opinion
In our opinion, 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, 2016, 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 issued
by the !CAI.
Sharp & Tannan
Chartered Accountants
Firm's registration no. 109982W
Firdosh D. Buchia
Partner
Mumbai, 26 April 2016
Membership No. 38332
S-520
LARSEN & TOUBRO INFOTECH LIMITED
BALANCE SHEET AS AT MARCH 3/, 2016
CZ Million) , Particulars Note
No. As at
31-03-2015 6 46 al- A666M664 0666666
EOUITY AND LIABILITIES -Shareholders' Funds
Share capital 169 82 161.25 Reserves and surplus 18,462 89 19,093.28
Total Equity 18,632 71 19,254.53 Non-current liabilities
Lo_ag-term borrowings D(I) 138.89_ Deferred tax liabilities (net) 958.53 76484_ Other long-term liabilities Long Term Provisions
E(ii) 1,250 52 538.35 124 29 103.71
2,333.34 857.79 Current liabilities
Short-term borrowings D(ji) 397 53 1,897.48 Current maturities of long-term borrowings D(i) 147.23 138.89 Trade payables Other current liabilities
E(i) E(ii)
3,141.47 2,528.52_ 2,678 38 1,599.53
Short-term provisions 5,049 54 2 791.97 11,414 25 8,956.39
TOTAL EQUITY AND LIABILITIES 32,80.30 29,068.71 ASSETS Non-current assets Fixed assets
Tangible assets 2,649 90 2,617.02 Intangible assets 553 51 755;47 Capital work-in-progress 1_O0, 47.63 Intangible assets under development 187 56 ,195.37
3,391.97 3,615.49 Non-current investments H(i) 3)36.22 3,953.11 Long-term loans and advances 4 249 13 2,387.26
10,797.32 9,955.86 Current assets
67 35 Current investments H(ii) 622.32 Trade receivable 1(i) 10 895.97 10,314.39 Unbilled revenue J(ii) 3,699.69 1A34.59 Cash and bank 1,221.75 1,334.34 Short-term loans and advances 5.698 22 5,407.21
21,582.98 32.380.30
19,112.85 TOTAL ASSETS 29,068„71 Significant accountin_gpolicies Contingent liabilities Commitments (capital and others)
Notes forming part of accounts
As per our report attached SHARP & TAN NAN Chartered Accountants Firm's Registration No. 109982W by the hand of
FIRDOSH D. BUCHIA
Sanjay Jalona
R. Shankar Raman Ashok Kumar Sonthalia
Subramanya Bhatt Partner
Chief Executive Officer
Director Chief Financial Officer
Company Secretary Membership No: 38332
& Managing Director
DIN: 00019798
M. No. F2125 DIN: 07256786
Mumbai
Mumbai
April 26, 2016
April 26, 2016
S-521
LARSEN & TOUBRO INFOTECH LIMITED
STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2016
(Z Million)
Particulars
INCOME:
Revenue from operations
Other income
Total Income
55,695.20
47,444.03
3,386.06
887.80
59,081.26
48,331.83
EXPENSES:
Employee benefit expenses
Operating expenses
Sales, administration and other expenses
Operating profit
Finance cost
Depreciation on tangible assets
Amortisation of intangible assets
Profit before tax
Tax expense
33,838 37
5,670 62
5,902.48
46,411.47
12,669.79
103.57
37,895.04
10,436.79
28,064.72
4,605.35
5,224.97
104,18
654.60, 659.89
379 88
247.41
1,138.05
1,011.48
11,531.74
9,425.31_
Current tax (net)
1,627.13
523.30
2,150.43
9,381.31
1,602.82
Deferred tax
92.87
1,695.69_
7,729.62 NET PROFIT FOR THE YEAR
EARNING PER EQUITY SHARE
Basic
T(7)
Basic earning per equity share
57.23 47.94
Diluted
Diluted earning per equity share
57.10
45.87
Significant accounting policies
A
Notes forming part of accounts
As per our report attached SHARP & TAN NAN Chartered Accountants Firm's Registration No. 109982W by the hand of
FIRDOSH D. BUCHIA Partner Membership No: 38332
Sanjay Jalona Chief Executive Officer & Managing Director DIN: 07256786
R. Shankar Raman Ashok Kumar Sonthalia Director Chief Financial Officer DIN: 00019798
Subramanya Bhatt Company Secretary M. Na. F2125
Mumbai April 26, 2016
S-522
Mumbai April 26, 2016
LARSEN & TOUBRO INFOTECH LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
(Z Million)
Particulars 2014-15
A 11.16,24110332.
Cash flow from operating activities
Net profit before tax '11,531.74 9,425.31
Adjustments for:
Depreciation and amortisation 1,034 48 907.30
Employees stock options amortised (141 59)
Interest (net) 48.98 38.23 .„_ Unrealised foreign exchange loss (gain) (960.22) (558.20)
(Profit)/loss on sale of current investments (47.94) (119.62)
Dividend received from subsidiary (472.38)
Miscellaneous expenditure amortised/(capitalised) 6.35
(Profit)/Loss on sale of fixed assets 26.82 3.16
Operating profit before working capital changes 11,019.89 9,702.53
Changes in working capital
(Increase)/decrease in trade receivables and unbined revenue (2,838.55) (2,226.73)
(Increase)/decrease in other receivables 21.95 (44.55)
Increase/(decrease) in trade & other payables 2,124.08 1,016.45
(Increase)/decrease in working capital (692.52) (1,254.83)
Cash generated from operations 10,327.37 8,447.70
Direct taxes paid (2,633,61) (2,643.01)
Net cash from operating activities 7,693 76 5,804.69
B. Cash flow from investing activities
Purchase of fixed assets (959.74) (1,114.24)
Sale of fixed assets 149.35 24.99
(Purchase)/sale of current investments 673.25 899.41
Investment in subsidiaries (10 07) (806.96)
Dividend received from subsidiary 472 3,8
Interest received 17 17.99
Net cash used in investing activities 342.42 (978.81)
S-523
LARSEN & TOUBRO INFOTECH LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016 (Contd.)
( Million)
Particulars 2014-15
C. Cash flow from financing acivities
Proceeds from issue of share capital 69.28
Proceeds from/(repayment) of borrowings _
(1,662 61) 1,040.09
Interest paid (57 89) (56.22)
Dividend paid (5,467 30) (4,805.25)
Tax on dividend paid (1,048 71) (1,125.56)_
Net cash from financing activities (8,167 23) (4,946.94)
Net increase in cash and cash equivalents (131.05) (121.06)
Cash and cash equivalents at 31 March 2015 1,334.34 1,455.40
Increase in Cash and Cash Equivalents on Amalgamation 18.46 _
Cash and cash equivalents at 31 March 2016 1,221.75 1,334.34
Notes:
1 Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3: "Cash Flow Statements" as specified
in the Companies (Accounting Standards) Rules, 2006.
2 Purchase of fixed assets includes movements of capital work-in-progress during the year.
3 Cash and cash equivalents represent cash and bank balances.
4 Bank balances include revaluation gain of ? 36.70 Mn (Previous year gain 3.44 Mn).
5 Amount of corporate social responsibility related expenses spent during the year in cash 20.79 Mn (Note T (13) (b)).
As per our report attached
SHARP & TAN NAN
Chartered Accountants
Firm's Registration No. 109982W
by the hand of
FIRDOSH D. BUCHIA
Partner Membership No: 38332
Sanjay Jalona
Chief Executive Officer & Managing Director DIN: 07256786
R. Shankar Raman
Director DIN: 00019798
Ashok Kumar Sonthalia
Chief Financial Officer Subramanya Bhatt
Company Secretary M. Na. F2125
Mumbai
Mumbai
April 26, 2016
April 26, 2016
S-524
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS
A. Significant Accounting Policies
1. Basis of accounting
These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India ('Indian
GAAP') to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of
the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. Further the guidance notes/
announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered wherever applicable. The
Company maintains its accounts on accrual basis following the historical cost convention.
The preparation of financial statements in conformity with GAAP requires management of the Company to make estimates and
assumptions that affect the income and expense reported for the period and assets and liabilities reported as of the date of the financial
statements. Examples of such estimates include the useful lives of the fixed assets, provision for doubtful debts, future obligations in
respect of retirement benefit plans, etc. Actual results could vary from these estimates.
2. Presentation of financial statements
The balance sheet and the statement of profit and loss are prepared and presented in the format prescribed in the schedule III to the
Companies Act, 2013.
The cash flow statement has been prepared and presented as per the requirements of Accounting Standard (AS) 3 "Cash Flow
Statements". The disclosure requirements 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 accounts along with the other notes required to be disclosed
under the notified Accounting Standards.
3. Revenue recognition
a) Revenue from contracts priced on time and material basis are recognised when services are rendered and related costs are
incurred.
Revenue from services performed on "fixed-price" basis is recognised using the proportionate completion method.
Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.
b) Other income
I. Interest income is accrued at applicable interest rate.
ii. Dividend income is accounted in the period in which the right to receive the same is established.
iii. Other items of income are accounted as and when the right to receive arises.
4. Employee benefits
a) Short term employee benefits
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee
benefits. The benefits like salaries, wages, short term compensated absences and performance incentives are recognised in the
period in which the employee renders the related service.
b) Post-employment benefits
i) Defined contribution plan:
The Company's superannuation fund and state governed provident fund scheme are classified as defined contribution plans.
The contribution paid / payable under the schemes is recognised during the period in which the employee renders the
related service.
ii) Defined benefit plans:
The provident fund scheme managed by trust, employees gratuity fund scheme managed by [IC and post-retirement medical
benefit scheme are the Company's defined benefit plans. Wherever applicable, the present value of the obligation under such
defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes
S-525
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to
build up the final obligation.
The obligation is measured at the present value of the estimated future cash-flows. The discount rates used for determining
the present value of the obligation under defined benefit plans, is based on the market yields on government bonds as at the
balance sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are
recognised immediately in the profit and loss account. In case of funded plans, the fair value of the plan assets is reduced from
the gross obligation under the defined benefit plans to recognize the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement
occurs. Past service cost is recognised as expense on a straight-line basis over the average period until the benefits become
vested.
(iii) Long term employee benefits:
The obligation for long term employee benefits like long term compensation absences is recognised in the similar manner as
in the case of defined benefit plans as mentioned in (b) (ii) above.
5. Fixed assets
Tangible
Fixed assets are stated at cost less accumulated depreciation.
Intangible
Computer software, internally developed software is capitalised at cost.
6. Leases
Finance lease
Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases.
Such assets are capitalised at the inception of the lease at the lower of the fair value and the present value of minimum lease payments
and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to
obtain a constant periodic rate of interest on the outstanding liability for each period.
Operating lease
Assets acquired under lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Lease rentals are charged to the profit and loss account on accrual basis.
7. Depreciation
Tangible - owned assets
Depreciation on assets has been provided based on useful life prescribed in schedule II to the Companies Act, 2013 except for the
leasehold improvements which is depreciated over the lease period.
Tangible - leased assets
Assets acquired under finance leases are depreciated at the rates applicable to similar assets owned by the Company as there is
reasonable certainty that the Company shall obtain ownership of the assets at the end of the lease term.
• Leasehold land Over the residual period of the lease
Intangible assets
The basis of amortization of intangible assets is as follows:
• Computer software 33.33%
• Intellectual Property Rights (IPR) 33.33%
• Business Rights Over a period of five years
S-526
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMAG PART OF ACCOUNTS (Contd.)
Depreciation / amortization on additions / disposals are calculated pro-rata from Ito the month of additions / disposals.
8. Investment
Trade investments comprise investments in subsidiary companies.
Long-term investments including trade investments are stated at cost, less provision for other than temporary diminution in value, if any.
Current investments are stated at the lower of cost or market value, determined on the basis of specific identification.
Investments, which are readily realisable and are intended to be held for not more than one year from the date of acquisition, are
classified as current investments. All other investments are classified as long term investments.
9. Employee stock ownership schemes
In respect of stock options granted pursuant to the Company's stock option schemes, the excess of fair value of the share over the
exercise price of the option is treated as discount and accounted as employee compensation cost over the vesting period.
10. Foreign currency transactions
a) Foreign currency transactions are initially recorded at the rates prevailing on the date of the transaction. At the balance sheet
date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost
denominated in foreign currency are reported using the exchange rate at the date of the transaction.
Translation of foreign currency transaction of overseas branches is as under:
Revenue items at the average rate for the period;
Fixed assets and investments at the rates prevailing on the date of the transaction; and
• Other assets and liabilities at year end rates
Exchange difference on settlement / year end conversion is adjusted to profit and loss account.
b) Forward contracts other than those entered into to hedge foreign currency risk on unexecuted firm commitments or of highly
probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange differences
arising on such contracts are recognised in the period in which they arise and the premium paid / received is accounted as expense
/ income over the period of the contract. Profit or loss on such forward contracts is accounted as income or expense for the
period.
c) All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on unexecuted firm commitments and highly probable forecast transactions are recognised in the financial statements at fair value as on the balance
sheet date. In pursuance of the announcement of the Institute of Chartered Accountants of India (ICA!) dated March 29, 2008
on accounting of derivatives, the Company has adopted Accounting Standard 30 for applying the test of hedge effectiveness of
the outstanding derivative contracts. Accordingly, the resultant gains or losses on fair valuation of such contracts are recognised
in the profit and loss account or balance sheet as the case may be.
11. 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 based on the expected outcome of assessments/appeals.
Deferred tax is recognised on timing differences between the income accounted in financial statements and the taxable income for the year,
and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets can be realised.
S-527
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
12. Borrowing costs
Borrowing costs include interest, commitment charges, finance charges in respect of assets acquired on finance lease and exchange
differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs.
13. Provisions, contingent liabilities and contingent assets
Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if
a) the Company has a present obligation as a result of a past event;
b) a probable outflow of resources is expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated
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 the case of
a) a present obligation arising from a past event when it is not probable that an outflow of resources will be required to settle the obligation; or
b) a possible obligation unless the probability of outflow of resources is remote
Contingent assets are neither recognised nor disclosed.
Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.
14. Segment accounting
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 income directly identifiable with/allocable to the segment.
Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. Expenditure
which relate to the Company as a whole and not allocable to segments are included under "unallocable corporate expenditure".
iii. Income which relates to the Company as a whole and not allocable to segments is included in "unallocable corporate income".
iv. Fixed assets used and liabilities contracted for performing the Company's business have not been identified to any of the above
reported segments as the fixed assets and services are used interchangeably among segments.
15. Cash flow statement
Cash flow statement is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from operating
activities is reported using indirect method. Under the indirect method, the net profit is adjusted for the effects of:
i. transactions of a non-cash nature
ii. any deferrals or accruals of past or future operating cash receipts or payments and
iii. items of income or expense associated with investing or financing cash flows.
Cash and cash equivalents (including bank balances) are reflected as such in the cash flow statement.
S-528
240.00 240,000,000 guJy shares of! 1 each
(Previous year 32,750,000 of! 5 each)
Issued, paid up and subscribed
169,816,188 equity shares for! 1 each
(Previousiear 32,250,000 of! 5 each)
EQUITY SHARE CAPITAL
163.75 _
169.82 161 25
169.82 161.25
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
B. Share capital
B(i) Share capital authorised, issued, subscribed and paid up: (Z
As at
31-03-2016
As at
31-03-2015
Authorised:
Notes:
a) The board of directors at their meeting held on June 16, 2015 approved sub-division of the equity shares of face value of 5 each to face value of
1 each. The shareholders approved the sub-division on June 22, 2015 at the extraordinary general meeting.
b) The authorised share capital of the Company was increased by! 36.25 Mn comprising 36,250,000 equity shares of! 1 each at the board meeting
held on June 16, 2015 and approved by the shareholders at the extraordinary general meeting held on June 22, 2015.
c) In accordance with the order of the Hon'ble High Court of Judicature at Bombay for amalgamating Information Systems Research Centre Private
Limited (refer note T(7)), the authorised share capital of the Company was increased by! 40.00 Mn comprising 40,000,000 equity shares of! 1
each on amalgamation.
B(ii) Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of! 1 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividend in Indian rupees.
BOO Shareholders holding more than 5% of equity shares as at the end of the year:
Name of shareholder
As at 31-03-2016
As at 31-03-2015
Number of shares* Shareholding % Number of shares** Shareholdin %
Larsen & Toubro Limited 161,250,000 94.96% 32,250,000 100%
* Face value of 1
** Face value of 5
B(iv) Reconciliation of the number of equity shares and share capital
Due to allotment of shares on exercise of stock options by employees, there was a movement in share capital for the year ended
March 31, 2016.
Issued, subscribed and fully paid up equity shares outstandinj at the beginning
Add: shares issued on exercise of employee stock options
Issued, subscribed and fullypaid up equity shares outstanding at the end
As at
31-03-2016
161,250,000
8,566,188
169,816,188 161,250,000
As at
31-03-2015
161,250,000
B(v) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital:
Particulars As at 31-03-2016 As at 31-03-2015
Exercise price *Number of equity
shares to be issued
as fully paid
82,660
Exercise price
5
-r-
** Number of'
equity shares to be
issued as full • aid
# Employee stock options granted and 393,003 25
outstanding under Employee Stock Ownership
Scheme "ESOS Plan" 2,350,106 2 1,873,467 10
Employees Stock Ownership Scheme — 2006
U.S. Stock Option Sub-Plan ('Sub-Plan') 143,650 $2.4 90,100 $12
IS Refer note no.B(ix)
* Face value of 1
** Face value of 5
S-529
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
B(vi) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March
31, 2016 are Nil (previous period of five years ended March 31, 2015- Nil)
B(vii)The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding
five years ended March 31, 2016— Nil (previous period of five years ended March 31, 2015 - Nil)
B(viii)(a) During the year ended March 31, 2016, the amount of interim dividend distributed to equity shareholder was! 32.65 per share at face value of 1 (Previous year! 149 per share at face value of! 5)
(b) The Directors recommended payment of final dividend of Z2.60 per equity share of! 1 each on the number of shares outstanding
on the record date.
Provision for final dividend has been made in the books of account for 169,816,188 equity shares outstanding as at March 31, 2016
amounting to! 441.52 Mn.
B(ix) Stock option plans
1. Employee Stock Ownership Scheme ('ESOS Plan')
Under the Employee Stock Ownership Scheme (ESOS) 2,432,766 options are outstanding as at March 31, 2016. The grant of
options to the employees under ESOS is on the basis of their performance and other eligibility criteria. Each option entitles the
holder to exercise the right to apply for and seek allotment of one equity share of! 1 each.
All vested options can be exercised on the first exercise date. The Nomination & Remuneration Committee had decided September
28, 2015 as the first exercise date. The details of the grants under the aforesaid scheme are summarised below:
ESOP Series 1,11 & Ill IV-XXI
2014-15 2014-15
1 Face value (Z) 5
Grant Price (Z) 25 10
Options granted and outstanding at the
__ beginning of the year 1.,965,0ir., 393,003 9,367,335 1,880,484
4 Options reinstated during the year * 3,500 454,580
5 _
Options granted during the year
6 Options cancelled/ lapsed during the year _ 34,000 1,064,326 7,017
7 Options exercised and shares allotted during
the year 1,851,855 6,407,483
8 Options granted and outstanding at the end
of the year of which - , _82,660 393,003 2,350,106 1,873,467_
Options vested 82,660 393,003 340,666 970,917
Options yet to vest 2,009,440 902,550
* The Company had lapsed unvested options with the employees who had resigned from the Company. Based on the legal advice, the Company has exercised its discretion in determining that the former employees in the United States will be allowed to exercise their deferred options
and accordingly, 268,080 options at face value of! 1 (51,616 options at face value of! 5) exercisable by such former employees have been re-
instated and vested.
*The Company had erroneously lapsed 200,000 options at face value of 1 140,000 options at face value of Z5). Subsequently, the Company has
decided that these options be restored and vested.
S-530
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FOCWING PART OF ACCOUNTS (Contd.)
2. Employees Stock Ownership Scheme — 2006 U.S. Stock Option Sub-Plan (`Sub-Plan')
The Company had instituted the Employees Stock Ownership Scheme — 2006 U.S. Stock Option Sub-Plan ('Sub-Plan') for the
employees and Directors of its erstwhile subsidiary, GDA Technologies Inc, USA. The term of option was 5 years from the date
of grant. As per vesting schedule, the options had to vest over a period of five years, subject to fulfilment of certain conditions
specified in the respective Option agreement. Each option entitles the holder to exercise the right to apply for and seek allotment
of one equity share of 1 each at an exercise price of USD 2.4 per share. Under the said plan, options granted and outstanding as
at the end of the year are 143,650 options, all of which are vested.
3. Employees Stock Options granted and outstanding as at the end of the year on unissued share capital represent options 2,576,416
(previous year 11,782,850) at face value of 1.
C. Reserves & surplus
(!Million)
016 As at 31-03-2015 D.Ratan.A0.1.1111•MM060081M1080,
C(i) General reserve
As per last balance sheet 4,485 78
56 4
4,486.78 Add: general reserve of ISRC on amalgamation {refer note T (11)}
Less: amalgamation adjustment {refer note T (11)) (771 96)
Add: transferred from employee stock options outstanding 005
3,771.27 _
4,486.78 C(ii) Capital reserve
As per last balance sheet
0.42 Add: capital reserve of ISRC on amalgamation {refer note T (11)}
0.42
C(iii) reserve (net of tax) _Hedging (366 96)
(2,328 06)
Opening balance (2,923.11) Deduction/(Addition) during the year (net 2,556.15
(2,695.02) (366.96)
C(iv) Securities premium account 1,181 24 Opening balance 1,181.24
Addition during the year 204 16
1,385 40 1,181.24
C(v) Surplus statement of profit and loss
Opening balance 13,453 81 11,445.86 Add: profit and loss account of ISRC on amalgamation {refer note T (11)) 100 58
Add: transfer due to amalgamation (pertaining to period 17 October 14 to 31
March 2015 {refer note T(11)} 27.35
Add: Profit for the year _9,381.31
-
-
7,729.62
Less: Depreciation charged against retained earnings (12.27)
Add : Deferred tax charged against retained earnings 2.17
22,963.05 19,165.38 Less: Appropriations
441.52 (a) Proposed dividend
(b) Interim dividend 5,467.30
1,048,71
58.02
4,805.25_
(c) Tax on dividend 906.32
(d) Additional tax on dividend
15,947.50
338,41
13,453.81 C(vi) Employee stock options outstanding
As per last balance sheet 338.41
Less : deductions during the year (285.04)
Less: transferred to general reserve (0.05)
53.32 338.41 RESERVES & SURPLUS 18,462.89 19,093.28
S-531
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
D. Borrowings
(Z Million)
As at 31-03-2016 As at 31-03-2015
Non-current Current Total Non-current Current Total
D(i) Long-term borrowings
Secured loans*
Term loans from bank
Refer note D(iii) 147.23 147.23 138.89 138.89 277.78
147.23 147.23 138.89 138.89 277.78
D(ii) Short-term borrowings
Secured loans *
Other loans from banks 132,51 132.51 600.00 600.00
Unsecured loans
Other loans from banks 265.02 265.02 1,297.48 1,297.48
397.53 397.53 1,897.48 1,897.48
Total 544.76 544.76 138.89 2,036.37 2,175.26
* The secured loans from banks are secured against hypothecation of the Company's movable assets and accounts receivables.
Details of term loans
Rate of interest
USD LIBOR
(3 months) + 2.5%
Nature of term loan Million
147.23
Terms of repayment of term loan
Repayable in equal half-yearly instalments of USD 1.11 million
each commencing from 19 October 2012 and ending on 14
October 2016.
External commercial
borrowings (ECB)
Previous Year (277.78)
E. Liabilities
(Z Million)
. . .
Current
.
Non-current Total Non-current Current , Total
E(i) Trade payables
Due to holding company - - - - 174.23 174.23
Due to others 3,141.47 3,141.47 - 2,354.29 2,354.29
3,141.47 3,141.47 - 2,528.52 2,528.52
E(ii) Other payables Forward contract payable 1,148.52 1,574.11 2,722.63 447.46 89.22 536.68
Interest accrued but not due
on borrowing,s_ 1.08 1.08 - 2.41 2.41
Unclaimed dividend - 0.62 0.62 - -
Other payables 102.00 1,102.57 1,204.57 90.89 1,507.90 1,598.79
1,250.52 2,678.38 3,928.90 538.35 1,599.53 2,137.88
Total . _ 1,250.52 5,819.85 _ 7,070.37 538.35 4,128.05 4,666.40
S-532
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
F. Provisions
(T Million)
Non-current
As at 31-03-2016
Current Total
As at 31-03-2015
--
Non current - r -
Current Total
F(i) Provisions for employee
benefits
Gratuity 86.76 86.76 92.42 92.42
Compensated absences 507.16 507.16 453.57 453.57
Post-retirement medical
benefits 124.29 0.24 124.53 103.71 0.24 103.95
Others - 3,945.24 3,945.24 2,235 04 2,235.04
124.29 4,539.40 4,663.69 103.71 2,781.27 2,884.98
F(ii) Other provisions _
Proposed equity dividend 441.52 441.52 - .
Additional tax on dividend 58.02] 58.02 - _
Others * 10.70 10.70 10.70 10.70
_ ._ - 510.24 510.24 10.701 10.70
Total 124.29 5,049.64 5,173.93 103.71 2,791.97 2,895.68
F (iii)* Disclosure pursuant to Accounting Standard (AS) 29 "Provisions, Contingent Liabilities and Contingent Assets"
Movement in provisions:
(Z Million)
Sr
No
1
Particulars
Balance as at 1-4-2015
Class of provisions
Total Sales Tax Others
4.00 6.70 10.70
2 Additional provision during the year _ -
3 Provision used during the year _ -
4 Provision reversed during the year _ -
5 Balance as at 31-03-2016 4.00 6.70 10.70
Nature of provisions:
i) Provision for sales tax pertains to claim made by the authorities on certain transaction of capital nature for the year 2002-03.
ii) Provision for others represents liabilities relating to matters in dispute
S-533
LAR
SE
N &
TO
UB
RO
INF
OT
EC
H L
IMIT
ED
NO
TE
S F
OR
MIN
G PA
RT O
F A
CC
OU
NTS
(Co
ntd
.)
G - Fixed Assets 01
(!Million)
Fixed and Intangible Assets
Gross Block Depreciation/Amortisation Net Block Net Block Mat
01-Apr-15 Pursuant to
acquisition of subsidiary Refer note
('I111)
Additions Deductions As at
31-Mar-16 As at
01-Apr-15 Pursuant to
acquisition of subsidiary Refer note
(7)(11)
For the year
On Deductions
As at As at
31-Mar-16 31-Mar•16 As at
31-Mar-15
Tangible Assets
leasehold Land 12.27 - - . 12,27 2.63 • 0.13 • 2.76 931 9.64 Buildings 207.38 - - - 207.38 81.61 - 8 40 - 90.01 11737 125.77 Leasehold Improvements 281.10 15.10 68.32 15.95 34837 46.82 15.10 35.65 3.22 94.35 254.22 234.28 Plant and machinery 987.76 - 95.14 229.06 853.84 343.73 - 89.67 130.50 302.90 550.94 644.03 Computers
a. Owned 1,890.33 104.56 371.81 65.44 2,30126 1,450.87 87.87 249.53 64.38 1,723.89 577.37 439.46 b. Leased 22.61 - - 22.61 • 22.61 - - 22.61 - - •
Office Equipments 882.63 12.93 119.22 126.26 88852 588.71 11.98 110.72 123.76 587.65 300.87 29332 Furniture and fixtures 1,189.61 10.66 93.10 161.45 1,131.92 606.32 5.69 104.01 138.27 577.75 554.17 583.29 Vehicles 445.04 1.72 92.08 70.76 468.08 158.41 0.37 56.49 32.64 182.63 285.45 286.63 Capital Work in Progress 1.00 47.63 Total Of Tangible Assets 5,918.73 144.97 839.67 69153 6,211.84 3,301.71 121.01 654.60 515.38 3,561.94 2,650.90 2,664.65 Total Of Tangible Assets (Previous Year) 5,601.21 • 706.95 389.44 5,918.72 2,990.85 • 672.16 361.31 3,30170 2,664.65 2,698.48
Intangible Assets Software 1,893.47 47.28 174.52 5.83 2,109.44 1,138.00 43.87 379.88 5.82 1,555.93 55331 755.47 Business Rights 98.05 - - - 98.05 98.05 - • - 98.05 . • .
Intangible Assets under Development 18736 195.37 Total of intangible Assets 1,991.52 47.28 174.52 5.83 2,207.49 1,236.05 43.87 379.88 5.82 1,653.98 741.07 950.84 Total Of Intongible Assets (Previous Year) 1,48169 - 670.68 161.85 1,991.52 1,150.48 -
, 247.41 161.83 1,23606 950 84 750.48
Notes: 1. Impairment up to 31-03-2016 - NIL
2. Additions during the year & capital work-in-progress include! Nil (previous year! Nil) being borrowing cost capitalised in accordance with Accounting Standard (AS) 16 on "Borrowing Costs" prescribed under section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014.
3. Consequent to the adoption of schedule II to the Companies Act, 2013, the depreciation for the year ended March 31, 2015 is higher and the profit before tax is lower by 1' 70.30 Mn. Further, an amount of ? 12.27 Mn (net of tax of! 10.10 Mn) representing the carrying amount of assets with revised useful life as nil, has been charged to the opening reserves as on April 1,2014 pursuant to the provisions of the Companies Act, 2013.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
H. Investments
(Z Million)
As at 31-03-2016 As at 31-03-2015 H(i) Non-current investments
Trade investments (at cost)
Long term investment in subsidiaries
1, fully paid equity share of Euro 25,000 in Larsen & Toubro Infotech GmbH 1.14 1.14 100, fully paid equity shares of CAD 1 each in Larsen & Toubro Infotech Canada
Limited 6.61 6.61
168,197 equity shares of Z 10 each in GDA Technologies Limited 323.00 323.00
1,000,000, equity shares at no par value in L&T Infotech Financial Services Technologies Inc. _ 2,806.32 2,806.32 332,350, equity shares at no par value in Larsen And Toubro Infotech South Africa
(Proprietary) Limited 2.01 2.01
Investment in L&T Information Technology Services (Shanghai) Co. Limited* 10.89 7.07 3,500,000 equity shares of 10 each in Information Systems Resource Centre Private
Limited (refer note 1(11)) 806.96
Investment in Larsen & Toubro Infotech Austria GmbH # 2.60
50,000 equity shares of Euro 1 in L&T Information Technology Spain, Sociedad
Limitada $ 3.65
Total non-current investments 3,156.22 3,953.11
• Investment in this entity is not denominated in number of shares as per laws of the People's Republic of China.
44 The Company has formed a new entity "Larsen & Toubro Infotech Austria GmbH" in Austria on June 18, 2015. Investment in this entity is not denominated in number of shares as per the local laws of Austria.
$ The Company has formed a new entity "L&T Information Technology Spain, Sociedad Limitada" in Spain on February 1, 2016.
H (ii) Current Investments
(Z Million)
Particulars/ Scheme name Face Value per
unit
Units as at
31-03-2016
Amount as at
31-03-2016
Amount as at
31-03-2015 Liquid investments — quoted
Birla Sun Life Cash Plus — DDR 100 369,518.38 37.02 -
Reliance Medium Term Fund — MDR 10 2,794,062.26 30.33 -
L&T Liquid Super IP DDR 1000 - - 202.13
Templeton India Ultra Short Bond Fund- Super IP-D 10 100.00
Templeton India TMA - Super IP- DDR 1000 - 100.15
Religare Invesco Liquid Fund - DDR 1000 _ 100.04
IDFC Ultra Short Term Fund - Reg - DDR 10 100.00
Total (A) 3,163,580.64 67.35 602.32
Fixed maturity plans — quoted
UTI Fixed Term Income Fund Series XVIII - X (366 days)-Growth 10 - 20.00
Total (B) - 20.00
Total (A+B) 3,163,580.64 67,35 622.32
S-535
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
Details of quoted investments:
(? Million)
Amount As at
31-03-2016 Amount As at
31-03-2015 (a) Aggregate amount of quoted current investments and market value thereof;
Book Value 67.35
622.32 Market Value 67.51
623.96
I. Deferred tax assets/liabilities
(T Million)
Particulars Deferred tax asset/
(liability) as at
March 31,2015
Deferred tax asset/
(liability) pursuant
to amalgamation
Current year
(charge) / credit (Charge) / credit to
Hedging Reserve Deferred tax asset/
(liability) as at
March 31, 2016
Deferred tax liabilities
Depreciation /
amortisation (15.34) 5.72 41.86 - 32.24 Gain on derivative
transactions (304.09) - - 121.16 (182.93)
Branch profit tax (323.40) - (103.53) - (426.93) _ Premia on derivative
transactions - - (570.42) - (570.42)
Others - - (1.41) - (1.41)
TOTAL (642.83) 5.72 , (633.50) 121.16 (1,149.45)
Deferred tax assets
Provision for doubtful
debts and advances 7.19 - 24.07 - 31.26 Provision for employee
benefits 60.50 2.43 34.80 - 97.73 Loss on derivative
transactions 498.30 - - (487.70) 10.60 Realised gain on
derivative transactions - - 41.36 41.36
Others 9.97 - 9.97
TOTAL 565.99 2.43 110.20 (487.70) 190.92 Net deferred tax
assets/(liabilities) (76.84)j 8.15 (523.30)_ (366.54) (958.53)
S-536
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
J. Trade receivables and unbilled revenue
(Z Million)
Amount As at 31-03-2016
Amount As at 31-03-2015
.I(i) Trade receivables
Unsecured
Debts outstanding for a period exceeding six months
Considered good
325.46 64.46 Considered doubtful
156.56 69.27
482.02 133.73 Other debts
Considered good
- Due from holding company 450.38
- Due from subsidiaries 160.22 195.22 - Due from fellow subsidiaries
55.34 84.67
- Others
9,904.57 9,970.04
10,570.51 10,249.93 Less : Allowance for bad & doubtful debts (156.56)
10,895.97
(69.27)
10,314.39
J(ii) Unbilled revenue
Unbilled revenues comprise revenue recognised in relation to services performed in accordance with contract terms but not billed.
K. Cash and bank balances
(Z Million)
Amount As at 31-03-2015
Amount As at
31-03-2016
Cash and cash equivalent
Cash on hand 0.62 0.65 Balances with bank
- in current accounts
Overseas 872.93 650.14
Domestic 223.45 217.48
Remittances in transit 94.82 221.58 Fixed deposits (maturity less than 3 months) 4.28 125.12
1,196.10 1,214.97
Other bank balance
- in deposit accounts
Earmarked balances with banks-unclaimed dividend 0.62
*Cash and bank balance not available for immediate use 25.03 119.37
1,221.75 1,334.34
* Other bank balance not available for immediate use being in nature of security for guarantees issued by bank on behalf of the Company, collaterals etc.
S-537
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
L. Loans and advances
(!Million)
Non-current Current
- ... ,.•-,,,.-........., Total Non-current Current Total
Unsecured - _ Considered good
Loans against mortgage of house property - 0.10 0.10
Premia on forward
contracts 1,280.43 2,385.73 3,666.16 874.90 1,723.63 2,598.53
Interest receivable - 0.80 0.80 - 6.67 6.67
Deposits 393.14 _ 150.55 543.69 359.38 123.96 483.34 ___ - Capital advances 1,25 1.25 6.64 - 6.64
Advance tax current year
(net of provision) 82.13 82.13 159.95 159.95
Advances recoverable in
cash or in kind 2,574.31 3,079.01 5,653.32 1,146.34 3,392.90 4,539.24
- Considered doubtful - 6.06 6.06 .. _ Less : Provision for bad &
doubtful loans & advances _ - - - (6.06) (6.06)
4,249.13 5,698.22 9,947.35 2,387.26 5,407.21 7,794.47
M.
N.
Revenue
(T Million)
2015-16 2014-15
Overseas 52,295.01 45,368.13
Domestic 3,400.19 2,075.90
55,695.20 47,444.03
Other income
(Z Million)
201546 2014-15 Income from current investment in mutual funds 47.94 119.62. -- Interest received 17.25 17.99
Foreign exchange gain 2,776.13 685.56
Provision no longer required for doubtful debts 1.08
Dividend from subsidiary 472.38
Miscellaneous income 71.28 64.63
3,386.06 887.80
S-538
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
0. Expenses (Z Million)
2015-16 2014-15 0(i) Employee benefit expenses
Salaries including overseas staff expenses 32,491.86 26,889.46 Staff welfare 863.72 790.11 Contribution to provident and other funds 344.99 247.01 Contribution to superannuation fund 52.05 44.71 Contribution to gratuity fund 85.75 93.43
33,838.37 28,064.72
(Z Million)
2015-16 2014-15
Dperatirig expenses Communication expenses 177.38 151.27 Consultancy charges 4,133.23 3,366.86 Cost of software packages for own use 386.62 344.47 Cost of bought-out items for resale 1,973.39 742.75
6,670.62 4,605.35
(Z Million)
2015-16 2014-15 ojiiit Sales, administration and other expenses
Travelling and conveyance 1,387.88 1,155.63 Rent and establishment expenses 1,525.22 1,381.30 Telephone charges and postage 362.22 330.87 Legal and professional charges 536.15 517.62 Printing and stationery 24.94 28.06 Advertisement 112.19 89.94 Entertainment 70.26 54.43 Recruitment expenses 143.09 129.61 Repairs to building 199.36 134.90 Repairs to computers 60.26 85.02 General repairs and maintenance 317.69 250.51 Power and fuel 347.83 287.19 Equipment hire charges 12.90 10.15 Insurance charges 159.51 161.64 Rates and taxes 194.91 330.67 Allowance for doubtful debts and advances 86.13 74.07 Bad debts 4.90 39.13 Less: Provision written back (4.90) (39.13) Commission paid 6.99 0.62 Books, periodicals and subscriptions 17.80 27.43 Directors fees 1.43 0.93 Commission to directors 5.81 3.60 Loss on sale of fixed assets 26.82 3.16 Miscellaneous expenses 303.09 161.27 Amortisation of cost of long term projects * 6.35
5,902.48 5,224.97
* Cost incurred for long term projects mainly comprise of legal and employee related costs to secure long term projects. These costs are amortised over a period of two years commencing from the date of securing the project.
S-539
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
P. Finance cost
P(i) Interest expenses
On others
P(ii) Exchange loss on borrowings (net)
Q. Provision for taxation
31.91
25 9/3
57 89
45 68
103.57
(Z. Million)
2014-15
46.94
9.28
56.22
47.96
104.18
(Z Million)
2014-15
2,117.82 Current tax 2,676.97
(1,086.70)
36.86
1,627.13
MAT credit entitlement for current year
(505.04)
Provision for earlier years
(9.96)
Total current taxes
1,602.82
a) The current year tax charge includes 616.76 Mn (previous year! 405.29 Mn) payable outside India.
b) The Central Board of Direct Taxes (CBDT) has notified the Income Computation and Disclosure Standards (ICDS) with effect from April 1, 2015
and shall accordingly apply for assessment year 201617 onwards. Accordingly, the Company has accounted for the impact of ICDS in its tax
computation.
R. Contingent liabilities -
(Z
2014-15
1. Income tax liability that may arise in respect of which the Company is in appeal* 1,338 80 1,164.82
2. Corporate guarantee given on behalf of subsidiary** 5,998 76 5,395.70
Service tax refund disallowed, in respect of which the Company is in appeal # 12.48 4.52
4.
5.
Sales tax liability in respect of which the Company is in appeal 128
Legal notice served by vendor for unpaid dues, disputed by the Company. 0.02
7,35134 6,565.04
* Out of contingent tax liability disclosed above, 1,280.69 Mn (including interest of! 202.48 Mn), pertains to the tax demand arising on account of disallowance of exemption under section 10A on profits earned by STPI Units on onsite export revenue. Company is pursuing appeal against these
demands before the relevant Appellate Authorities.
The Company believes that its position is likely to be upheld by appellate authorities and considering the facts, the ultimate outcome of these
proceedings is not likely to have material adverse effect on the results of operations or the financial position of the Company.
** The Company has given a Corporate guarantee on behalf of its wholly owned subsidiary, L&T Infotech Financial Services Technologies Inc., Canada. The guarantee is for performance of all obligations by L&T Infotech Financial Services Technologies Inc. in connection with the long term annuity
services contracts obtained by them. The obligation under this guarantee is limited in aggregate to the amount of CAD 70,000,000.
The Company has given a Corporate guarantee on behalf of its subsidiary, Larsen And Toubro Infotech South Africa (Proprietary) Limited. The guarantee
is for performance of all obligations by Larsen And Toubro Infotech South Africa (Proprietary) Limited in connection with the Application Testing Service
contract. The obligation under this guarantee is limited in aggregate to the amount of USD 31,414,785.
The Company has given a corporate guarantee on behalf of its subsidiary, Larsen And Toubro Infotech South Africa (Proprietary) Limited. The guarantee is for performance of all obligations by Larsen & Toubro Infotech South Africa (Proprietary) Limited in connection with software development services & related services. The obligation under this guarantee is limited in aggregate to USD 5,000,000.
S-540
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
# The Company had filed refund of accumulated service tax credit in accordance with relevant CENVAT Credit Rules. However, the department has disallowed
certain portion of such refunds considering the same as ineligible as not related with export and output services. The Company is in appeal against these
disallowances before the relevant Authorities and hopeful of getting a favourable order.
S. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for: 131.87 Mn
(previous year: 310.76 Mn)
T (1) Employee benefits
a) The amounts recognised in balance sheet are as follows
(? Million)
Present value of defined benefit obligation as on March
31, 2016
As at March 31, 2016 (March Post retirement
medical benefit
plan
31,2015)
Self-managed
provident fund
plan
Gratuity plan
- Wholly funded 579.76 - 4,253.92
(497.01) (3,776.10) - Wholly unfunded 124.53 -
(-) (103.95) (-) 579.76 124.53 4,253.92
(497.01) i (103.95) (3,776.10) b) Fair value of plan assets as on March 31, 2015 492.99* - 4,264.26 *
(409.85) i ( -) (3,778.70) Amount to be recognised as liability or (asset) (a-b) 86.77 124.53 (10.34)
(92.42) (103.95) (2.60) B Amounts reflected in the balance sheet
Liability 86.77 124.53 55.66
(92.42) (103.95) (46.59)
Assets - - _ (-) (-) I (-)
Net liability/(asset) 86.77 124.53 55.66 #
(92.42) (103.95) (46.59)
Net liability/(asset)-current 86.77 I 0.24 55.66
(92.42) (0.24) (46.59) Net liability/(asset)- non current 124.29 -
I_ 14 (103.71) (-)
* Asset is not recognised in the balance sheet.
# Employer's and employee's contribution for March 2016 paid in April 2016.
S-541
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
b) The amounts recognised in statement of profit and loss are as follows:
(Z Million)
Current service cost
Gratuity plan
91.34
Post retirement
medical benefit
plan
21.99
Self-managed
provident fund
plan
257.11
(77.00) (18.66) (232.40) Interest cost 43.07 9.94 315.53
(40.67) (9.66) (252.26) 3 Expected return on plan assets -27.86 - -315.53
(-26.67) (-) (-252.26) 4 Actuarial losses/(gains) -15.48 -11.13 -
(10.62) (-12.94) (-42.43) Total expense for the year included in staff cost 91.07 20.80 257.11
(101.62) (15.38) (189.97)
c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof
are as follows:
(Z Million)
Opening balance of the present value of defined benefit obligation
Gratuity plan
497.01
Post retirement
medical benefit
plan
103.95
Self-managed
provident fund
plan
3,776.10
(408.57) (88.79) (3,412.68) Add : Current service cost 91.34 21.99 257.11
(77.00) (18.66) (232.40) Add : Interest cost
_
43.07 9.94 315.53 (40.67) (9.66) (252.26)
Add : Contribution by plan participants 580.57
(-) (-) (456.33)
Add/(Less) : actuarial (gains)/losses -2.39 -11.13
(16.09) (-12.94) (-42.43) Less: other adjustments (refer note below (d)) - 181.75
- (-) Add : Liabilities assumed on acquisition/(settled on divestiture) 5.12
(-) (-) (-221.93)
493.64 Less : Benefits paid 54.39 0.22
(45.32) (0.22) (313.21) Closing balance of the present value of defined benefit obligation 579.76 124.53 4,253.92
(497.01) (103.95) (3,776.10)
S-542
2015-16 (2014-15) Gratuity plan Self-managed
provident fund
plan
25.3%
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
(d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:
(!Million)
Opening balance of the fair value of the plan assets
2015-16
Gratuity plan
404.59
(2014-15)
Self-managed
provident fund
plan
3,778.70
(379.19) (3,352.80)
315.53
(252.26)
Add : expected return on plan assets _ 27.86
(26.67) Add/(Less) : actuarial gains/(losses)
_
13.09 26.56
(5.45) (19.) 23 Add : Contribution by the employer _ 96.73 244.32
(38.60) (228.83) Less: other adjustments (refer note below (d)) 181.75
(-) Less : Assets acquired on acquisition/(distributed on divestiture) 5.12
(-) (215.38) Add : Contribution by plan participants
_...6_
574.54
H (454.17) Less : Benefits paid 54.39 493.64
(45.32) (313.21) Closing balance of the plan assets 492.99 4,264.26
(404.59)1 (3,778.70)
The Company expects to contribute 86.76 Mn (previous year 92.42 Mn) towards its gratuity.
The Company's share of defined benefit obligation/fair value of plan assets adjusted by the Trust of the holding company.
e) The major categories of plan assets as a percentage of total plan assets are as follows:
Government of India securities
State government securities
Corporate bonds
(24.7%)
15.8%
Scheme
with
10.3%
L1C
(7.6%)
Fixed deposits under Special Deposit Scheme framed by Central Government for provident
funds
Public sector bonds
9.3%
(10.3%)
39.3%
(42.3%)
S-543
Effect on the aggregate of the service cost and interest cost 7.93 -6.06
(6.85) (-5.24)
Effect on defined benefit obligation
(19.22) (-15.01)
22.86 -17.85
2013-14 2012-13 2011-12 2014-15 2015-16
Defined benefit obligation 124.53 103.95 88.79 90.81 42.19
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
2015-16 2014-15
1 Discount rate as at March 31
For gratuity
7.75%
7.90%
For post-retirement medical benefits
7.75%
7.90%
2 Annual increase in healthcare costs (see note below)
5.0%
5.0%
3 Attrition rate
Varies between 2% Varies between 2%
to 18% for various to 18% for various
age groups age groups
4 Salary growth rate
5.0% 5.0%
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.
Although the obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits, assumed
healthcare cost trend rates may affect the amounts recognised in the statement of profit and loss. At present, healthcare costs, as
indicated in the principal actuarial assumption given above, are expected to increase at 5% p.a. A one percentage point change in
assumed healthcare cost trend rates would have the following effects on the aggregate of the service cost and interest cost and defined
benefit obligation:
(Z Million)
Effect of
1% increase
1% decrease
a) The amounts pertaining to defined benefit plans for the current year are as follows:
Post-retirement medical benefit plan (non-funded) (T Million)
Gratuity plan
(? Million)
2015-16 2014-15 2013-14 2012-13 i 2011-12
Defined benefit obligation 579.76 497.01 408.57 384.12 297.59
2 Plan assets 492.99 404.59 379.19 296.11 156.90
3 (Surplus)/deficit 86.77 92.42 29.38 88.01 140.69
Self-managed provident fund plan
(? Million)
2015-16 2014-15 , 2013-14 , 2012-13 _
2011-12
Defined benefit obligation 4,253.92 3,776.10 3,412.68 2,710.62 2,178.30
2 Plan assets 4,264.26 3,778.70 3,352.80 2,685.76 2,142.59
3 (Surplus)/deficit (10.34)_ (2.60) 59.88 24.86 35.71
S-544
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
Experience adjustments Gratuity
(Z Million)
015-1.6 2014-15 2013-14 2012-13 2011-12
Defined benefit obligation 57976 497.01 408.57 384.12 297.59
Plan assets 492.99 404.59 379.19 296.11 156.90_
(Surplus) / deficit 8677 92.42 29.38 88.01 140.69
Experience adjustments on plan
liabilities (7.53) (14.36) (6.21) 5.05 95.81
Experience adjustments on plan
assets 13.09 5.45 8-19 8.56 2.34
General descriptions of defined benefit plans:
a) Gratuity plan
The Company makes contributions to the Employees' Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation
of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to employees
at retirement, death while in employment or termination of employment of an amount equivalent to 15 days salary for every
completed year of service or part thereof in excess of six months, provided the employee has completed five years in service.
b) Post-retirement medical benefit 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 limit sanctioned at the time of retirement. The ceiling limits are
based on cadre of the employee at the time of retirement.
c) Self-managed provident fund plan
The Company's provident fund plan is managed by its holding company through a Trust permitted under the Provident Fund Act,
1952. The plan envisages contribution by employer and employees and 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 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 arising out of the investment risk and actuarial risk associated with the
plan is also recognised as expense in the period in which such loss occurs. Further, on amount off Nil has been provided based on
actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan.
T.(2) (i) In line with the Company's Financial Risk Management Policy, financial risks relating to changes in the exchange rates, are hedged
by forward contracts, besides the natural hedges. The loss on fair valuation of the derivative contracts which are designated and
are effective as hedges, amounting to Z 2,695.02 Mn (net of deferred tax) (Previous year Z 366.96 Mn (net of deferred tax)) has
been accounted in retained earnings in balance sheet. The loss/ (gain) off (1,297.52 Mn) (Previous year gain off 243.04 Mn) on
settlement of the forwards is recognised in statement of profit and loss.
The particulars of derivative contracts entered into for hedging foreign currency risks outstanding as at March 31, 2016 are as under:
(Z Million)
Sr. Category of derivative instruments
Forward contracts for receivables
Notional amount
March 31, 2016
Notional amount
March 31, 2015
43,470.51 58,583.85
S-545
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
Un-hedged foreign currency exposures as at March 31, 2016 are as under:
(Z Million)
Sr. Un-hedged foreign currency exposures March 31, 2016 March 31, 2015
1 Receivables including firm commitments and highly probable forecast transactions 41,271.25 30,001.71
2 Payables including firm commitments and highly probable forecast transactions 28,796.36 24,474.66
T.(2) (ii) The Company has made provision, as required under the applicable law or accounting standard for material foreseeable losses on
long term derivative contracts.
T(3) Income/expenditure in foreign currency
T.(3) (i) Expenditure in foreign currency:
(!Million)
2015-16 2014-15
Overseas staff costs 19,650.52 16,661.19
Foreign travel 330.66 305.56
Agency commission 6.96 0.62
Subcontracting expenses 3,776.21 2,923.75
Overseas office expenses (including others) 2,706.86 1,928.01
26,471.21 21,819.13
T.(3) (ii) Earnings in foreign currency:
(Z Million)
2015-16 2014-15
Software exports 52,295,01 45,368.13
Other income 490.77 27.32
52,785.78 45,395.45
T.(4) Auditors' remuneration (excluding service tax) charged to the accounts include:
(Z Million)
2015-/6 2014-15
Audit fees _ 1.65 1.65
Tax audit fees 0.65 0,65
Other services 2.32 3.58
Expense reimbursement 0.09 0.05
4.71 5.93
T.(5) Value of imports on C.I.F. basis
(Z Million)
2015-16 2014-15
Capital goods 64.13 1.81
Others 41.72 20.98
105.85 22.79
T.(6) Leases
Finance leases
In accordance with Accounting Standard 19 "Leases" issued by the Institute of Chartered Accountants of India, the assets acquired
under finance leases on or after April 1, 2001 are capitalised and a loan liability is recognised for an equivalent amount. Consequently
S-546
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
depreciation is provided on such assets. Lease rentals paid are allocated to the liability and the interest is charged to statement of profit
and loss.
Operating leases
The Company has taken employee used cars under non-cancellable operating leases. The rental expense in respect of operating leases
was 0.06 Mn (previous year 1.21 Mn) and the future rentals payable are as follows:
(!Million)
2015-16 2014-15 Minimum lease payments
- Payable not later than 1 year 0.16 - Payable after 1 year but not later than 5 years
0.16
T.(7) Basic and diluted earnings per share (EPS) at face value of! 1
201546 2014-15 Profit after tax (!Million) 9,381.31 7,729.62 Weighted average number of shares outstanding 163,914,663 161,250,000
Basic EPS (Z) 57.23 47.94
Weighted average number of shares outstanding 163,914,663 161,250,000
Add : weighted average number of potential equity shares on account of employee
options 392,052 7,270,100
Weighted average number of shares outstanding 164,306,715 168,520,100
Diluted EPS (Z) 57.10 45.87
EPS for the previous year is after considering sub-division of equity shares from face value of 5 each to face value of! leach per equity share (refer note B(1)).
T.(8) Related party disclosure:
T.(8) (i) List of related parties over which control exists/exercised:
Name
Larsen & Toubro Infotech GmbH
Relationship
Wholly owned subsidiary
Larsen & Toubro Infotech Canada Limited Wholly owned subsidiary
GDA Technologies Limited Wholly owned subsidiary
Larsen & Toubro Infotech LLC Wholly owned subsidiary
L&T Infotech Financial Services Technologies Inc Wholly owned subsidiary
Larsen & Toubro Infotech South Africa (Proprietary) Limited _ Subsidiary
L&T Information Technology Services (Shanghai) Co. Limited Wholly owned subsidiary
Information Systems Resource Centre Private Limited (Refer note T (11)) Wholly owned subsidiary Larsen & Toubro Infotech Austria GmbH Wholly owned subsidiary
L&T Information Technology Spain, Sociedad Limitada. Wholly owned subsidiary
S-547
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
T.(8) (ii) Key Management personnel:
Mr. V. K. Magapu Managing Director*
Mr. Sanjay Jalona
Mr. Chandrashekara Kakal
Mr. K. R. L. Narasimham
Chief Executive Officer & Managing Director **
Chief Operating Officer & Executive Director ***
Executive Director #
Mr. Vivek Chopra
Dr. Mukesh Aghi
Mr. Sunil Pande
Chief Executive (Industrials Cluster) & Executive Director $
Chief Executive (Services Cluster) & Executive Director
Executive Director AA
Ceased to be Director w.e.f, the close of working hours of September 25, 2015
Appointed as Chief Executive Officer & Managing Director w.e.f. August 10, 2015
Ceased to be Director w.e.f. the close of working hours of August 26, 2015
# Ceased to be Director w.e.f. the close of working hours of April 7, 2015
$ Ceased to be Director w.e.f. the close of working hours of December 31, 2014 A Ceased to be Director w.e.f. the close of working hours of February 28, 2015
^^ Ceased to be Director w.e.f, the close of working hours of August 25, 2015
T.(8) (iii) List of related parties with whom there were transactions during the year:
Larsen & Toubro Limited
!Holding Company
Wholly owned subsidiary
Larsen & Toubro Infotech Canada Limited
Wholly owned subsidiary
Wholly owned subsidiary
Wholly owned subsidiary
L&T Infotech Financial Services Technologies Inc
L&T Information Technology Services (Shanghai) Co. Limited
Larsen & Toubro Infotech South Africa (Proprietary) Limited
Information Systems Resource Centre Private Limited (Refer note T (11))
Larsen & Toubro Infotech Austria GmbH
L&T Information Technology Spain, Sociedad Limitada
Larsen & Toubro (East Asia) SDN.BHD
Wholly owned subsidiary
Wholly owned subsidiary
Subsidiary
Wholly owned subsidiary
Wholly owned subsidiary
Wholly owned subsidiary
Fellow Subsidiary
Larsen & Toubro Infotech GmbH
Larsen & Toubro Infotech LLC
GDA Technologies Limited
L&T Hydrocarbon Engineering Limited Fellow Subsidiary
L&T Electricals and Automation Saudi Arabia Company LLC
L&T Finance Limited
Fellow Subsidiary
Fellow Subsidiary
L&T General Insurance Company Limited Fellow Subsidiary
L&T Infrastructure Development Projects Limited Fellow Subsidiary L&T Power Development Limited
Larsen & Toubro Kuwait Construction General Contracting Company, With Limited Liability
L&T Infrastructure Finance Company Limited
L&T Metro Rail (Hyderabad) Limited
L&T Technology Services Limited
L&T Valves Limited
L&T Investment Management Limited
L&T Construction Equipment Limited _ Larsen & Toubro LLC
Nabha Power Limited
iFellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
Fellow Subsidiary
j Fellow,. Subsidiary
L&T Electrical & Automation FZE
Spectrum Infotech Private Limited
S-548
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
Family Credit limited
PT. Tamco Indonesia
j Fellow Subsidiary
Fellow Subsidiary
L&T Special Steels and Heavy Forgings Private Limited
Fellow Subsidairy
Larsen & Toubro ATCO Saudi LLC
Fellow Subsidiary
L&T Thales Technology Services Private Limited
Fellow Subsidiary „ry L&T Capital Markets Limited
Fellow Subsidiary
L&T Housing Finance Limited
Fellow Subsidiary
Larsen & Toubro Electromech LLC
Fellow Subsidiary__
Tamco Electrical Industries Australia PTY Limited
Fellow Subsidiary
L&T Technology Services LLC
Fellow Subsidiary
T.(8) (iv). Related Party Transactions
(7 Million)
ansactio
Sale of services / products
o mg, o pany
1,101.09 1,499.50 423.59
(352.00) (1,500.90) (324.91)
- L&T Metro Rail (Hyderabad) Limited 63.60
- L&T Technology Services Limited 50.50
- L&T Hydrocarbon Engineering Limited 78.80
- L&T Thales Technology Services Private Limited 95.70 - Larsen & Toubro Infotech GmbH 493.31 _ - L&T Infotech Financial Services Technologies Inc. 330.55
- Larsen And Toubro Infotech South Africa (Proprietary) Limited 391.73
Larsen & Toubro Infotech Canada Limited 278.03
Sale of assets
- L&T Technology Services Limited
108.62 7.70
- 7.70
Purchase of services
- Larsen & Toubro Infotech LLC
- Larsen & Toubro Infotech Canada Limited
- L&T Technology Services Limited
275.43 347.68 694.17
(1,034.96) (454.97)
133.45
(686.46)
_ 193.64
694.17 Overheads charged by
- Larsen & Toubro Infotech GmbH
- Larsen & Toubro (East Asia) SDN.BHD
- L&T Electrical & Automation FZE
- Larsen & Toubro Kuwait Construction General Contracting
Company, With Limited Liability
_ 635.01 21.78 38.11
(125.82) (163.58) , (44.45)
19.55
24.03
7.19
6.23
Overheads charged to
- Larsen & Toubro Infotech Canada Limited
- Larsen & Toubro Infotech GmbH
- Larsen & Toubro Infotech South Africa (Proprietary) Limited
- L&T Technology Services Limited
82.49 i 145.54 422.61
(60.77) (99.64) (613.95)
51.64
64.49
20.91
421.30
S-549
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
Transaction
Commission charged to
- Larsen & Toubro Infotech South Africa (Proprietary) Limited
- L&T Technology Services Limited
Holding Company Subsidiaries
3.62
Fellow Subsidiaries
5.26
(-) (-) (11.81)
3.62
- 5.26 Lease rent - 0.07
(-) (-) (0.52) Commission - _ -
(-) (-) (0.62) Trademark fees 104.89 - .
(-) (-) (-) Investments
- Larsen &Toubro Information Technology Services (Shanghai)
Co. Limited
- Larsen & Toubro Infotech Austria GmbH
- Larsen & Toubro Information Technology Spain, Sociedad
Limitada _
10.07 -
(806.96)
3.82 _ 2.60
- 3.65
Trade receivable 450.38 160.22 55.34
- (195.22) (84.67) Trade payable - - -
(174.23) - - Interim dividend 5,264.81 - -
(4,805.25)
Dividend received - 472.38 - L&T Infotech Financial Services Technologies Inc. 472.38 -
T.(8) (v) Managerial remuneration
(!Million)
Particular 2015-16 2014-15 Total managerial remuneration 57.31 183.69 Amount for major parties
Salaries, commission and perquisites :- _____ Mr. V K Magapu 7-35 15.12 Mr. Sanjay Jalona 33.61
Mr. Chandrashekara Kakal 10.85 10.48 Mr. Vivek Chopra 68.52 Dr. Mukesh Aghi 68.56
T.(9) Segmental reporting
The Company had 2 business segments. Services Cluster includes Banking & Financial services, Insurance, Media & Entertainment,
Travel & Logistics and Healthcare. Industrials Cluster includes Hi Tech and Consumer Electronics, Consumer, Retail & Pharma, Energy &
Process, Automobile & Aerospace, Plant Equipment & Industrial Machinery, Utilities and E&C.
S-550
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORAIDIG PART OF ACCOUNTS (Contd.)
1.(9)(i) Revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements.
The revenue and operating profit by segment is as under:
(!Million)
Revenue
Semmes Cluster
29,190.68 _ _
ndustrials Cluster
_ 26,504.52
Total ,
55,695.20
(24,468.34) (22,975.69) (47,444.03)
Segmental operating profit 6,513.66 6,701.72 13,215.38
(5,521.28) (5,966.68) (11,487.96)
Una lloca ble expenses (net) 3,931.65
(1,938.97)
Other income 3,386.06
(887.80)
Operating profit 12,669.79
(10,436.79)
Finance cost
_ _ _______........ _ _
103.57
_ (104.18)
Depreciation 654.60
(659.89)
Amortization of intangible assets 379.88
(247.41)
Profit before tax 11,531.74
(9,425.31)
T.(9) (ii) Segmental reporting of revenues on the basis of the geographical location of the customers and is as under:
(Z Million)
Geography FY15
North America 32,024.48
Europe 9,702 52 8,839.21
India 3,400 19 2,075.90
APAC 1,188 61 1,198.13
ROW 3,21254 3,306.31
Total 55,695.20 47,444.03
Fixed assets used and liabilities contracted for performing the Company's business have not been identified to any of the above reported
segments as the fixed assets and services are used interchangeably among segments.
T.(10)Based on the information and records available with the Company, there are no amounts payable to micro and small enterprises as
defined in the Micro, Small and Medium Enterprises Development Act, 2006.
1.(11) On October 16,2014, the Company acquired entire share capital of Information Systems Resource Centre Private Limited ('ISRC'), thereby
making it a wholly owned subsidiary. Larsen & Toubro Infotech Limited is engaged in software development & related services. ISRC is
engaged in software services with respect to application development, information technology support and maintenance services to
OTIS Elevator Company Inc. (OTIS) and certain other group companies of OTIS, which are part of United Technologies Corporation (UTC)
group. The Company believes that acquisition will strengthen its relationship with UTC group. The acquisition was executed through a
share purchase agreement for a consideration of 806.96 Mn.
The Board of Directors of the Company and ISRC have approved the scheme of amalgamation of ISRC with the Company on October
17, 2014 and December 4, 2014, respectively, with October 17, 2014 as the appointed date. Accordingly, a petition for sanctioning the
scheme of amalgamation had been filed with the Hon'ble High Court of Judicature at Bombay.
S-551
806.96
35.00 _ 771.96
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF ACCOUNTS (Contd.)
The Scheme has been sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated September 4, 2015. The
Scheme was filed with the Registrar of the Companies on September 21, 2015 and came into effect on that day with appointed date being October 17, 2014. Pursuant thereto, the entire business and all the assets and liabilities, duties and obligations of ISRC have been
transferred to and vested in the Company with effect from October 17, 2014. In accordance with the Scheme, the investment held in
the subsidiary has been cancelled and ISRC being a wholly owned subsidiary of the Company, no equity shares were exchanged to effect
the amalgamation in respect thereof.
The amalgamation is accounted in accordance with 'pooling of interest method' as per Accounting Standard 14 'Accounting for
Amalgamations' and in accordance with scheme approved by the Hon'ble High Court of Bombay.
1) All assets and liabilities (including contingent liabilities),reserves, benefits under income-tax, benefits for under special economic
zone registrations, duties and obligations of ISRC have been recorded in the books of account of the Company at their carrying
amounts.
2) The amount of share capital of ISRC has been adjusted against the corresponding investment balance held by the Company in the
amalgamating company and the excess of share capital over the investment has been adjusted against general reserve.
3) Accordingly, the amalgamation has resulted in transfer of assets and liabilities as on October 17, 2014 in accordance with the terms
of the Scheme at the following summarised values:
(Z Million)
Particulars Amount Amount Non-current Assets
Fixed assets (net) 37.58 Deferred tax asset (set-off against deferred tax liabilities) 6.07 Long-term loans and advances 23.09_
Current assets Trade receivables 120 39
Cash and cash equivalents 35 89
Short-term loans and advances 22 43 178.71 Total assets 245.45 Non-current liabilities
Long-term provisions 6.29, Current Liabilities
Trade payables 26 54
Other current liabilities 2 21
46.75 53.04
Short-term provisions 18 00
Total liabilities NET ASSETS 192.41
The following balances as on October 17, 2014 have been added to the respective opening balances of the Company:
(? Million)
Capital reserve
General reserve
Profit & loss balance
The amount charged against general reserve of the Company pursuant to amalgamation is as follows:
0.42 56.40
100,58.,
g
Investment in the amalgamating company
Share capital taken over from the amalgamating company
Amount charged against general reserve
Pursuant to scheme of amalgamation, the appointed date of amalgamation being October 17, 2014, net profit after tax of ISRC for the
period October 17, 2014 to March 31, 2015 has been transferred to statement of profit & loss account in the books of the company
upon amalgamation.
S-552
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FOPMING PART OF ACCOUNTS (Contd.)
Profit and loss account for the period October 17, 2014 to March 31, 2015 is as below:
(Z Million)
Revenue from services 191.00 — Other income 2.77_
Total revenue 193.77
Expenses:
(a) Employee benefits expense 81.32
(b)Operating and other expenses 66.99
6.06 (c) Depreciation and amortisation expense
Total expenses 154.37
Profit before tax 39.40
Tax expense:
Current tax _(a) 14.12
(b) Deferred tax (2.07)
Net profit after tax 27.35
As the scheme has become effective from September 21, 2015, the figures for the year ended March 31, 2016 are after giving effect to
the merger, hence are not comparable with corresponding period of earlier year as well as for the year ended March 31, 2015.
T.(12)The Board of Directors of the Company and GDA Technologies Limited (GDA) have approved the scheme of amalgamation of GDA with
the Company on October 17, 2014, respectively, with April 1, 2016 as the appointed date. Accordingly, a petition for sanctioning the
scheme of amalgamation has been filed with the Hon'ble High Court of Judicature at Bombay & the Hon'ble High Court of Judicature at
Madras.
The Scheme has been sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated April 1, 2016. The approval of
the Scheme by the Hon'ble High Court of Madras is awaited.
T.(13)(a) Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year 149.22 Mn.
(b) The amount recognised as expense in the statement of profit & loss on CSR related activities during the year ended March 31, 2016
is 23.45 Mn, which comprises of:
General purposes Miscellaneous expenses in Note 000 20.79 II—
T.(14)The Company is not required to transfer any amount to Investor Education & Protection Fund.
T.(15)The Company in its board meeting held on June 16, 2015 has taken approval for the Offer for Sale ('the Offer') by Larsen & Toubro
Limited in the Initial Public Offering of the Company. Pursuant to the same, the Company had filed its Draft Red Herring Prospectus
('DRHP') on September 28, 2015. Owing to change in the Offer structure and other considerations, the said DRHP was withdrawn on
April 11, 2016 and pursuant to the approval of the IPO Committee, the Company filed a revised DRHP on April 12, 2016.
T.(16) Previous year's figures have been regrouped / reclassified wherever necessary.
As per our report attached SHARP & TAN NAN Chartered Accountants Firm's Registration No. 109982W
by the hand of
FIRDOSH D. BUCHIA
Sanjay Jalona
R. Shankar Raman Ashok Kumar Sonthalia
Subramanya Bhatt
Partner
Chief Executive Officer
Director Chief Financial Officer
Company Secretary
Membership No: 38332
& Managing Director
DIN: 00019798
M. No. F2125 DIN: 07256786
Mumbai
Mumbai
April 26, 2016
April 26, 2016
S-553
LARSEN & TOUBRO INFOTECH LIMITED
INDEPENDENT AUDITOR'S REPORT
To the members of Larsen & Toubro lnfotech Limited
Report on the audit of the consolidated financial statements
We have audited the accompanying consolidated financial statements of Larsen & Toubro Infotech Limited ('the Holding Company') and its
subsidiaries (the Holding Company and its subsidiaries together referred to as 'the Group') which comprise the consolidated balance sheet
as at March 31, 2016, and the consolidated statement of profit and loss and the consolidated cash flow statement for the year then ended,
and notes to the consolidated financial statements, including a summary of the significant accounting policies ('the consolidated financial
statements').
Management's responsibility for the consolidated financial statements
The Holding Company's board of directors is responsible for the preparation of these consolidated financial statements in terms of the
requirements of the Companies Act, 2013 ('the Act') that give a true and fair view of the consolidated financial position, consolidated
financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted
in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts)
Rules, 2014. The respective board of directors of the companies included in the Group are responsible for maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and
detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the 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 Holding
Company, as aforesaid.
In preparing the consolidated financial statements, the respective board of directors of the companies included in the Group are responsible
for assessing the ability of the Group 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 Group or to cease operations, or has no realistic
alternative to do so.
The respective board of directors of the companies included in the Group are responsible for overseeing the financial reporting process of
the Group.
Auditor's responsibilities 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 Standards on Auditing 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.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, and to the best of our information and according to the explanations given to us, 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 accounting principles generally accepted in India, of their consolidated state of affairs of the Company as at March 31,
2016, of consolidated profit and its consolidated cash flows for the year then ended.
LARSEN & TOUBRO INFOTECH LIMITED
Other matters
We did not audit the financial statements of nine subsidiaries, whose financial statements reflect total assets of 4,920.18 Mn as at March
31, 2016, total revenues of 4,338.76 Mn and net cash outflows amounting to 474.73 Mn for the year ended on that date, as considered in
the consolidated financial statements. These financial statements have been audited by other auditors whose reports have been furnished to
us by 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 and our report in terms of section 143(3) and (11) of the Act, in so far as it relates to the aforesaid subsidiaries
is based solely on the reports of the other auditors.
Our opinion on the consolidated financial statements, 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.
Report on other legal and regulatory requirements
1. As required by section 143(3) of the Act, 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, and the consolidated cash flow statement 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 Accounting Standards specified under section 133
of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014;
(e) on the basis of the written representations received from the directors of the Holding Company as on March 31, 2016 taken on
record by the board of directors of the Holding Company and the reports of the statutory auditors of its subsidiary companies
incorporated in India, none of the directors of the Group companies, incorporated in India is disqualified as on 31 March 2016 from
being appointed as a director in terms of section 164(2) of the Act;
(f) with respect to the adequacy of the internal controls over financial reporting of the Holding Company and the operating
effectiveness of such controls, refer to our separate report in Annexure 'A'; and
(g) 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, in our opinion and to the best of our information and according to the explanations given to us:
(1) the consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the
Group - refer note R of the consolidated financial statements;
(2) 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 — refer notes T(2) (ii) of the consolidated financial
statements; and
(3) there are no amounts required to be transferred to the Investor Education and Protection Fund by the Holding Company and
its subsidiary company incorporated in India— refer notes 1(10) of the consolidated financial statements.
Sharp & Tannan
Chartered Accountants
Firm's registration no. 109982W
by the hand of
Firdosh D. Buchia
Partner
Mumbai, 25 April 2016
Membership No. 38332
LARSEN & TOUBRO INFOTECH LIMITED
ANNEXURE A' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2(f) under 'Report on other legal and regulatory requirements' of our report of even date)
Report on the internal financial controls 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 & Toubro Infotech Limited ('the Holding Company')
and its subsidiary company which is incorporated in India as of March 31, 2016 in conjunction with our audit of the standalone financial
statements of the Company for the year ended on that date.
Management's responsibility for internal financial controls
The respective board of directors of the Holding company and its subsidiary company which is incorporated in India, are 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 (the 'Guidance Note') 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 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 Act.
Auditor's responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit.
We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under section 143(10) of the Act, to the extent applicable, to an audit of internal financial controls, both applicable
to an audit of internal financial controls and both issued by the CAI. 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 involved 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 judgment,
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 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,
LARSEN & TOUBRO INFOTECH LIMITED
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.
Opinion
In our opinion, 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, 2016, 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 issued
by the 'CAI.
Sharp & Tannan
Chartered Accountants
Firm's registration no. 109982W
by the hand of
Firdosh D. Buchia
Partner
Mumbai, 26 April 2016
Membership No. 38332
Tangible assets Intangible assets Capital work-in-progress Intangible assets under development
Non-current investments Deferred tax assets Long-term loans and advances
2,791.89 3,583.23
6.95 188.41
6.570.48
2.37 4,249.13
10.821.98
2,749.82 4,084.52
53.33 198.45
7,086.12
10.29 2,439.79 9,536.20
H(0
LARSEN & TOUBRO INFOTECH LIMITED
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2016
(Z Million)
Note No.
Particulars As at
31-03-2016
As at 31-03-2015
EQUITY AND LIABILITIES Shareholders funds
Share capital Reserves and surplus
Total Equity Minority interest Non-current liabilities
169.82 20,057.02 20,226.84
5.18
161.25 20,102.23 20,263.48
3.88
Long-term borrowings Deferred tax liabilities Other long term liabilities Long term provisions
DLO
600 1,206.25 1,250.52
124.29 2,581.06
138.89 238.03 538.35 103.71
1,018.98 Current liabilities
Short-term borrowings Current maturities of long-term borrowings Trade payables Other current liabilities Short-term provisions
D(ii) D(j) E(1) E(ii)
397.53 147.23
3,276.40 2,764.95 5,170.88
11,756.99
1,897.48 138.89
2 719.47 1 723.48 2 815.44 9,294.76
TOTAL EQUITY AND LIABILITIES ASSETS
34,570.07 30,581.10
Non-current assets Fixed assets
Current assets Current investments Trade receivable Unbilled revenue Cash and bank Short-term loans and advances
429.20 11,659.87
3,787.89 2,033.66 5,837.47
23,748.09
1 035.51 10,901.16 1 544.50 2 009.21 5,554.52
21,044.90
TOTAL ASSETS 34,570.07 30,581.10
Significant accounting policies
A Contingent liabilities Commitments (capital and others) Notes formiquarty ascounts
As per our report attached SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of
FIRDOSH D. BUCHIA
Sanjay lalona
R. Shankar Raman Ashok Kumar Sonthalia Subramanya Bhatt Partner Chief Executive Officer Director
Chief Financial Officer Company Secretary
Membership No: 38332
& Managing Director
Mumbai April 26, 2016
Mumbai April 26, 2016
Particulars
INCOME: Revenue from operations
58,470.60
49,780.36 Other income
2,959.61
915.00 Total income
61,430.21
50,695.36 EXPENSES: Employee benefit expenses Operating p( enses Sales, administration and other ex enses
35,346.58 6,710.80 6,057.07
48,114.45
29,242.73 4,885.63 5,607.43
39,735.79
OPERATING PROFIT Finance cost Depreciation on tangible assets Amortisation of intangible assets
13,315.76 103.57 736.67
1,002.85 1,843.09
10,959.57 104.19 741.55 837.85
1,683.59
Profit before extraordinary items and tax Profit from continuing operations before tax Extraordinary item T(8)
11,472.67 11,472.67
9,275.98 9,266.26
93.95 Profit from continuing operations before tax
11,472.67
9,360.21 Tax expense for continuing operations
Current tax (net) Deferred tax
1,649.17 600.44
2,249.61
1,645.32 35.76
1,681.08
Profit from continuing operations after tax Profit from discontinued operations before tax Tax expense for discontinued operations
T(8)
T(8)
T(4)
9,223.06 7,679.13 9.72
Current tax Profit from discontinued operations after tax PROFIT FOR THE YEAR BEFORE MINORITY INTEREST
Minority Interest PROFIT FOR THE YEAR EARNING PER EQUITY SHARE
9,223.06 1.29
9,221.77
1.69 8.03
7,687.16 1.90
7,685.26
Basic Basic earning per equity share before extraordinary items
56.26
47.17 Basic earning per equity share after extraordinary items
56.26
47.66 Diluted Diluted earning per equity share before extraordinary items
56.13
45.14 Diluted earning per equity share after extraordinary items
56.13
45.60 Face value per equity share
1.00
1.00 Significant accounting policies
A
LARSEN & TOUBRO INFOTECH LIMITED
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
(Z Million)
Notes forming part of accounts
As per our report attached SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of
FIRDOSH D. BUCHIA
Sanjay Jalona
R. Shankar Raman Ashok Kumar Sonthalia Subramanya Shaft Partner
Chief Executive Officer
Director Chief Financial Officer Company Secretary Membership No: 38332
& Managing Director
Mumbai
Mumbai April 26, 2016
April 26, 2016
LARSEN & TOUBRO INFOTECH LIMITED
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
(Z Million)
A.
Particulars 2014-15
Cash flow from operating activities
Net profit before tax (excluding extraordinary items) 11,472.67 9,275.98
Adjustments for:
Depreciation and amortisation 1,739.52 1,579.41
Employees stock options amortised (141.59)
Interest (net) 41.17 33.42
Unrealised foreign exchange loss/(gain) (901.57) (568.72)
(Profit)/loss on sale of current investments (68.44) (141.26)
Miscellaneous expenditure amortised/(capitalised) 6.35
(Profit)/loss on sale of fixed assets 27.28 7.18
Translation Reserve 56.65 (80.26)
Operating profit before working capital changes 12,225.69 10,112.10
Changes in working capital
(Increase)/decrease in trade receivables and unbilled revenue (3,069.79) (1,979.71)
(Increase)/decrease in other receivables 11.08 (107.57)
Increase/(decrease) in trade & other payables 2,123.04 1,164.84
(Increase)/decrease in working capital (935.67) (922.44)
Cash generated from operations 11,290.02 9,189.66
Direct taxes paid (2,656.99) (2,767.12)
Net cash from operating activities (excluding extraordinary items) 8,633.03 6,422.54
B. Cash flow from investing activities
Purchase of fixed assets (1,290.54) (1,964.04)
Sale of fixed assets 149.38 25.13
(Purchase)/sale of current investments 674.75 793.52
Interest received 25.06 22.81
Net cash used in investing activities (before extraordinary items) (441.35) (1,122.58)
Extraordinary item
Proceeds from sale of PES Business(net) 93.95
Net cash used in investing activities (after extraordinary items) (441.35) (1,028.63)
LARSEN & TOUBRO INFOTECH LIMITED
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
(Z Million)
Particulars 2014-15
C. Cash flow from financing activities
Issue of share capital (including share application) 69 28
Proceeds from/(repayment) of borrowings (1,662.61) 1,013.23
Interest paid (57.89) (56.23)
Dividend paid (5,467.30) (4,805.25)
Dividend tax (1,048.71) (1,125.56)
Net cash from financing activities (8,167.23) (4,973.81)
Net increase in cash and cash equivalents 24.45 420.10
Cash and cash equivalents at 31 March 2015 2,009.21 1,589.11
Cash and cash equivalents at 31 March 2016 2,033.66 2,009.21
Notes:
1 Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3: "Cash Flow Statements" as specified in
the Companies (Accounting Standards) Rules, 2006.
2 Purchase of fixed assets includes movements of capital work-in-progress during the year.
3 Cash and cash equivalents represent cash and bank balances.
4 Bank balances include revaluation gain of Z45.13 Mn (Previous year loss! 2.73 Mn).
As per our report attached SHARP & TAN NAN Chartered Accountants Firm's Registration No. 109982W by the hand of
FIRDOSH D. BUCHIA
Sanjay Jalona
R. Shankar Raman Ashok Kumar Sonthalia Subramanya Matt
Partner
Chief Executive Officer
Director Chief Financial Officer Company Secretary Membership No: 38332
& Managing Director
Mumbai
Mumbai
April 26, 2016
April 26, 2016
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS
A. Significant Accounting Policies
1. Basis of accounting
These financial statements have been prepared in
accordance with the Generally Accepted Accounting
Principles in India ('Indian GAAP') to comply with the
Accounting Standards specified under Section 133 of the
Companies Act, 2013, read with Rule 7 of the Companies
(Accounts) Rules, 2014 and the relevant provisions of
the Companies Act, 2013. Further the guidance notes/
announcements issued by the Institute of Chartered
Accountants of India (ICA!) are also considered wherever
applicable. The Company maintains its accounts on
accrual basis following the historical cost convention.
The preparation of financial statements in conformity
with GAAP requires the management of the Company to
make estimates and assumptions that affect the income
and expense reported for the period and assets and
liabilities & disclosures relating to contingent liabilities
reported as of the date of the financial statements.
Examples of such estimates include carrying value of
tangible & intangible fixed assets, provision for doubtful
debts, future obligations in respect of retirement benefit
plans, etc. Difference, if any, between the actual results
and estimates is recognised in the period in which the
results are known.
The accounts of Indian subsidiaries have been prepared
in compliance with the Accounting Standards specified
under Section 133 of the Companies Act, 2013, read
with Rule 7 of the Companies (Accounts) Rules, 2014 and
the relevant provisions of the Companies Act, 2013, and
those of the foreign subsidiaries have been prepared in
compliance with the local laws and applicable Accounting
Standards. Necessary adjustments for differences in the
accounting policies, wherever applicable, have been
made in the Consolidated Financial Statements.
2. Presentation of financial statements
The balance sheet and the statement of profit and loss
are prepared and presented in the format prescribed in
the schedule III to the Companies Act, 2013. The cash
flow statement has been prepared and presented as per
the requirements of Accounting Standard (AS) 3 "Cash
Flow Statements". The disclosure requirements 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 accounts along with the other notes required to be
disclosed under the notified Accounting Standards.
3. Principles of consolidation
a) The financial statements of the Parent Company
and its subsidiaries have been consolidated on
line-by-line basis by adding together the book
values of the like items of the assets, liabilities,
income and expenses, after eliminating intra-group
balances and the unrealised profits/losses on
intra-group transactions, and are presented to the
extent possible, in the same manner as the Parent
Company's independent financial statements.
b) Minority interest in the net assets of subsidiaries
consists of the amount of equity attributable to
the minority shareholders at the date on which
investment is made by company in the subsidiary
Company and further movements in their share in
the equity, subsequent to the date of investment.
c) Goodwill on consolidation represents the difference
between the Group's share in the net worth of a
subsidiary and the cost of acquisition at each point
of time of making the investment in the subsidiary
as per Accounting Standard (AS) 21 "Consolidated
Financial Statements". For this purpose, the
Group's share of net worth is determined on the
basis of the latest financial statements, prior to the
acquisition, after making necessary adjustments
for material events between the date of such
financial statements and the date of respective
acquisition. Goodwill arising on consolidation as
per Accounting Standard (AS) 21 "Consolidated
Financial Statements" is tested for impairment at
every balance sheet date. In the event of cessation
of operations of a subsidiary, the unimpaired
goodwill is written off fully.
4. Extraordinary items
Income or expenses that arise from events or transactions
that are clearly distinct from the ordinary activities of the
Company are classified as extraordinary items. Specific
disclosure of such events/transactions is made in the
financial statements. Similarly, any external event beyond
the control of the Company, significantly impacting
income or expense, is also treated as extraordinary item
and disclosed as such.
5. Revenue recognition
a) Revenue from contracts priced on time and material
basis are recognised when services are rendered
and related costs are incurred.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
Revenue from services performed on "fixed-
price" basis is recognised using the proportionate
completion method.
Unbilled revenue represents value of services
performed in accordance with the contract terms
but not billed.
b) Other income
i. Interest income is accrued at applicable
interest rate.
Dividend income is accounted in the period
in which the right to receive the same is
established.
iii. Other items of income are accounted as and
when the right to receive arises.
6. Employee benefits
a) Short term employee benefits
All employee benefits falling due wholly within
twelve months of rendering the service are
classified as short term employee benefits. The
benefits like salaries, wages, and short term
compensated absences and performance incentives
are recognised in the period in which the employee
renders the related service.
b) Post-employment benefits
i) Defined contribution plan:
The Company's superannuation fund and
state governed provident fund scheme are
classified as defined contribution plans. The
contribution paid! payable under the schemes
is recognised during the period in which the
employee renders the related service.
ii) Defined benefit plans:
The provident fund scheme managed by
trust, employees gratuity fund scheme
managed by LIC and post-retirement medical
benefit scheme are the Company's defined
benefit plans. Wherever applicable, the
present value of the obligation under such
defined benefit plans is determined based on
actuarial valuation using the Projected Unit
Credit Method, which recognizes each period
of service as giving rise to additional unit of
employee benefit entitlement and measures
each unit separately to build up the final
obligation.
The obligation is measured at the present
value of the estimated future cash-flows.
The discount rates used for determining the
present value of the obligation under defined
benefit plans, is based on the market yields
on government bonds as at the balance sheet
date, having maturity periods approximating
to the terms of related obligations. Actuarial
gains and losses are recognised immediately
in the profit and loss account. In case of
funded plans, the fair value of the plan assets
is reduced from the gross obligation under
the defined benefit plans to recognize the
obligation on net basis.
Gains or losses on the curtailment or
settlement of any defined benefit plan
are recognised when the curtailment or
settlement occurs. Past service cost is
recognised as expense on a straight-line basis
over the average period until the benefits
become vested.
(iii) Long term employee benefits:
The obligation for long term employee
benefits like long term compensation
absences is recognised in the similar manner
as in the case of defined benefit plans as
mentioned in (b) (ii) above.
7. Fixed assets
Tangible
Fixed assets are stated at cost less accumulated
depreciation.
Intangible
Assets like customer relationship, computer software,
and internally developed software are stated at cost, less
accumulated depreciation & amortisation.
Goodwill on acquisition represents the cost of
acquired businesses in excess of the fair value of net
identifiable assets acquired. Goodwill is not amortised
but is tested for impairment if events or changes
in circumstances indicate that an impairment loss
may have occurred.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
8. Investments
Long-term investments are stated at cost, less provision for
other than temporary diminution in value, if any. Current
investments are stated at the lower of cost or market
value, determined on the basis of specific identification.
9. Leases
Finance lease
Assets acquired under leases where the Company has
substantially all the risks and rewards of ownership are
classified as finance leases. Such assets are capitalised at
the inception of the lease at the lower of the fair value
and the present value of minimum lease payments and a
liability is created for an equivalent amount. Each lease
rental paid is allocated between the liability and the
interest cost, so as to obtain a constant periodic rate of
interest on the outstanding liability for each period.
Operating lease
Assets acquired under lease where a significant portion
of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Lease rentals are
charged to the profit and loss account on accrual basis.
10. Depreciation
A. Indian Companies:
I. Tangible - owned assets
Depreciation on assets has been provided
based on useful life prescribed in schedule
Ito the Companies Act, 2013 except for the
leasehold improvements which is depreciated
over the lease period.
Depreciation / amortization on additions /
disposals are calculated pro-rata from / to the
month of additions / disposals.
II. Tangible - leased assets
Assets acquired under finance leases are
depreciated at the rates applicable to similar
assets owned by the Company as there is
reasonable certainty that the Company shall
obtain ownership of the assets at the end of
the lease term.
Leasehold land - Over the residual period of
the lease
B. Foreign Subsidiaries
Depreciation has been provided on methods and at
the rates required/permissible by the local laws so
as to write off the assets over their useful life.
11. Intangible Assets and amortization
The basis of amortization of intangible assets is as follows:
• Computer software Over a period of 3 years
• Intellectual property rights Over a period of 3 years (IPR)
• Acquired software Over a period of 10 years
• Internally developed Over a period 1. to 5 years software
• Business rights Over a period of 5 years
• Customer contracts Over a period of 10 years
12. Employee stock ownership schemes
In respect of stock options granted pursuant to the
Company's stock option schemes, the excess of fair
value of the share over the exercise price of the option
is treated as discount and accounted as employee
compensation cost over the vesting period.
13. Foreign currency transactions
a) Foreign currency transactions are initially
recorded at the rates prevailing on the date of the
transaction. At the balance sheet date, foreign
currency monetary items are reported using the
closing rate. Non-monetary items which are carried
at historical cost denominated in foreign currency
are reported using the exchange rate at the date of
the transaction.
Translation of foreign currency transaction of
overseas branches & subsidiaries is as under:
Revenue items at the average rate for the
period;
Fixed assets and investments at the rates
prevailing on the date of the transaction; and
Other assets and liabilities at year end rates
Exchange difference on settlement / year
end conversion is adjusted to profit and loss
account.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
b) Forward contracts other than those entered into
to hedge foreign currency risk on unexecuted
firm commitments or of highly probable forecast
transactions are treated as foreign currency
transactions and accounted accordingly. Exchange
differences arising on such contracts are recognised
in the period in which they arise and the premium
paid / received is accounted as expense / income
over the period of the contract.
Profit or loss on such forward contracts is accounted
as income or expense for the period.
c) All the other derivative contracts, including
forward contracts entered into to hedge foreign
currency risks on unexecuted firm commitments
and highly probable forecast transactions are
recognised in the financial statements at fair value
as on the balance sheet date. In pursuance of
the announcement of the Institute of Chartered
Accountants of India (ICAO dated March 29, 2008
on accounting of derivatives, the Company has
adopted Accounting Standard 30 for applying the
test of hedge effectiveness of the outstanding
derivative contracts. Accordingly, the resultant
gains or losses on fair valuation of such contracts
are recognised in the profit and loss account or
balance sheet as the case may be.
14. 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 based on the expected outcome of
assessments/appeals.
Deferred tax is recognised on timing differences between
the income accounted in financial statements and the
taxable income for the year, and quantified using the tax
rates and laws enacted or substantively enacted as on
the Balance Sheet date.
Other deferred tax assets are recognised and carried
forward to the extent that there is a reasonable
certainty that sufficient future taxable income will be
available against which such deferred tax assets can be
realised.
Foreign Subsidiaries
Foreign Subsidiaries recognise current tax/ deferred tax
liabilities and assets in accordance with the applicable
local laws.
15. Borrowing costs
Borrowing costs include interest, commitment charges,
finance charges in respect of assets acquired on finance
lease and exchange differences arising from foreign
currency borrowings, to the extent they are regarded as
an adjustment to interest costs.
16. Provisions, contingent liabilities and contingent assets
Provisions are recognised for liabilities that can
be measured only by using a substantial degree of
estimation, if
a) the Company has a present obligation as a result of
a past event;
b) a probable outflow of resources is expected to
settle the obligation; and
c) the amount of the obligation can be reliably
estimated
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 the case of:
a) a present obligation arising from a past event when
it is not probable that an outflow of resources will
be required to settle the obligation; or
b) a possible obligation unless the probability of
outflow of resources is remote
Contingent assets are neither recognised nor
disclosed.
Provisions, contingent liabilities and contingent
assets are reviewed at each balance sheet date.
17. Segment accounting
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:
a) Segment revenue includes sales and other income
directly identifiable with/allocable to the segment.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
b) Expenses that are directly identifiable with/
allocable to segments are considered for
determining the segment result. Expenditure which
relate to the Company as a whole and not allocable
to segments are included under "unallocable
corporate expenditure".
c) Income which relates to the Company as a whole
and not allocable to segments is included in
"unallocable corporate income".
d) Fixed assets used and liabilities contracted for
performing the Company's business have not been
identified to any of the reported segments as the
fixed assets and services are used interchangeably
among segments.
18. Cash flow statement
Cash flow statement is prepared segregating the cash
flows from operating, investing and financing activities.
Cash flow from operating activities is reported using
indirect method. Under the indirect method, the net
profit is adjusted for the effects of:
transactions of a non-cash nature
ii any deferrals or accruals of past or future operating
cash receipts or payments and
iii. items of income or expense associated with
investing or financing cash flows.
Cash and cash equivalents (including bank balances) are
reflected as such in the cash flow statement.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
A (II) Basis of preparation
The Consolidated financial statements (CFS), comprising the Company and its subsidiaries, are prepared in accordance with
Accounting Standard (AS) 21 — "Consolidated Financial Statements" as specified by the Companies (Accounting Standards) Rules,
2014. Reference in these notes to "the Company" shall mean Larsen & Toubro Infotech Limited and "the Group" shall mean the
Company and its subsidiaries.
A (Ill) The list of subsidiaries included in the consolidated financial statements are as under:-
Name of the subsidiary company Country of incorporation Proportion of ,
ownership as at
March 31, 2016
(%)
Proportion of
ownership as at
March 31, 2015
(°{0) 1 Larsen & Toubro Infotech Canada Limited Canada 100 100 2 Larsen & Toubro Infotech GmbH Germany 100 100 3 Larsen & Toubro Infotech LLC USA 100 100 4 L&T Infotech Financial Services Technologies Inc. Canada 100 100 5 Larsen And Toubro Infotech South Africa (Proprietary)
Limited
South Africa 74.9 74.9
L&T Information Technology Services (Shanghai) Co. Limited China 100 100 GDA Technologies Limited India 100 100 Information Systems Resource Centre Private Limited* India - 100 Larsen & Toubro Infotech Austria GmbH** Austria 100 -
10 L&T Information Technology Spain, Sociedad Limitada*** Spain 100 . ..
Refer note T(7)
The Company has formed a new entity "Larsen 84 Toubro Infotech Austria GmbH" in Austria on June 18, 2015. Investment in this entity is not denominated in number of shares as per the local laws of Austria.
The Company has formed a new entity "L&T Information Technology Spain, Sociedad Limitada in Spain on February 1, 2016.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
A (IV) Additional disclosure as per schedule III of the Companies Act, 2013:
(!Million)
Net assets, i.e total assets minus total liabilities _
Share in profit
Name of the entity
As% of consolidated net
assets
Amount
As%of consolidated profit I
or loss
Amount
A - Parent Larsen & Toubro Infotech Limited 92.12% 18,632.71 _ 101.73% 9,381.31
Subsidiaries • I
B - Indian
GDA Technologies Limited 1.83% 370.75 0.20%! 18.37
Sub Total 1.83% 370.75 0.20% ' 18.37 C-Foreign I 1. Larsen & Toubro Infotech GmbH 1.39% 281.77 0.62% 56.76 2. Larsen & Toubro Infotech Canada Limited 0.50% 100.34 0.33% • 30.78 3. Larsen & Toubro Infotech LLC 0.56% 112.62 0.14% 12.47 4. L&T Infotech Financial Services
Technologies Inc.
16.17% 3,271.03 2.10% • 193.48 i
5. Larsen And Toubro South Africa (Proprietary) Limited
0.10% 20.65 0.06% ! 5.16
6. L&T Information Technology Services (Shanghai) Co. Limited
0.03% 5.24 0.03% 2.91 1
7. Larsen & Toubro Infotech Austria GmbH 0.01% 2.08 (0.01)% l
(0.51)
8. L&T Information Technology Spain,
Sociedad Limitada
0.02% 3.05 (0.01)%' (0.61)
Sub Total 18.77% 3,796.78 3.26% 300.44 Total A+B+C 112.72% 22,800.24 105.19% 9,700.11 Less : CFS adjustments and eliminations (12.72)% (2,573.40) (5.19)% I (478.34)
Total 100% 20,226.84 100% , 9,221.77
B. Share capital
B. (0 Share capital authorised, issued, subscribed and paid up:
As at 31-03-2016
As at 31-03-2015
Authorised:
240,000,000 equity shares of I each
240.00
163.75 (Previous year 32,750,000 of 5 each)
Issued, paid up and subscribed
169,816,188 equity shares for 1 each 169.82 161.25 (Previous year 32,250,000 of Z5 each)
EQUITY SHARE CAPITAL
169.82 161.25
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
Notes:
a) The board of directors at their meeting held on June 16, 2015 approved sub-division of the equity shares of face value of 5 each to
face value of 1 each. The shareholders approved the sub-division on June 22, 2015 at the extraordinary general meeting.
b) The authorised share capital of the Company was increased by 36.25 Mn comprising 36,250,000 equity shares of l each at the board
meeting held on June 16, 2015 and approved by the shareholders at the extraordinary general meeting held on June 22, 2015.
c) In accordance with the order of the Hon'ble High Court of Judicature at Bombay for amalgamating Information Systems Research Centre
Private Limited (refer note T(7)), the authorised share capital of the Company was increased by 40.00 Mn comprising 40,000,000
equity shares of l each on amalgamation.
B(ii) Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of 1 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividend in Indian rupees.
B(iii) Shareholders holding more than 5% of equity shares as at the end of the year
Name of shareholder
As at 31-03-2016
As at 31-03-2015
Number of shares* Shareholding % Number of shares** Shareholdin %
Larsen & Toubro Limited 161,250,000 94.96% 32,250,000 100
" Face value of Z
s• Face value of 5
B(iv) Reconciliation of the number of equity shares and share capital
Due to allotment of shares on exercise of stock options by employees, there was a movement in share capital for the year ended
March 31, 2016.
As at
31-03-2016
As at
31-03-2015
Issued, subscribed and fully paid up equity shares outstanding at the beginning
Add: Shares issued on exercise of employee stock options
Issued, subscribed and fully paid up equity shares outstanding at the end
161,250,000
8,566,188
169,816,188
161,250,000
161,250,000
13(v) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital:
Particulars As at 31-03-2016 r-
* Number of Exercise price
equity shares to be issued as fully
paid
As at 31-03-2015
Number of
Exercise price equity shares to be issued as fully
aid
# Employee stock options granted and outstanding
under Employee Stock Ownership Scheme "ESOS
Plan"
82,660
2,350,106
393,003
2
1,873,467
25
10
143,650 $2.4 90,100 $12 Employees Stock Ownership Scheme — 2006 U.S.
Stock Option Sub-Plan ('Sub-Plan')
# Refer note no. B (ix)
* Face value of 1
** Face value of 15
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
B(vi) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended
March 31, 2016 are Nil (previous period of five years ended March 31, 2015- Nil)
B(vii)The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding
five years ended March 31, 2016 — Nil (previous period of five years ended March 31, 2015- Nil)
B(viii)(a) During the year ended March 31, 2016, the amount of interim dividend distributed to equity shareholder was 32.65 per share at
face value of 1 (Previous year Z149 per share at face value of! 5).
(b) The Directors recommended payment of final dividend of 2.60 per equity share of! 1 each on the number of equity shares
outstanding on the record date.
Provision for final dividend has been made in the books of account for 169,816,188 equity shares outstanding as at March 31, 2016
amounting to! 441.52 Mn.
B(ix) Stock option plans
1. Employee Stock Ownership Scheme ('ESOS Plan')
Under the Employee Stock Ownership Scheme (ESOS) 2,432,766 options are outstanding as at March 31, 2016. The grant of
options to the employees under ESOS is on the basis of their performance and other eligibility criteria. Each option entitles the
holder to exercise the right to apply for and seek allotment of one equity share of 1.
All vested options can be exercised on the first exercise date. The Nomination & Remuneration Committee had decided September
28, 2015 as the first exercise date. The details of the grants under the aforesaid scheme are summarised below:
ESOP Series 1,11 & Ill IV-XXI
01546 2014-15 5
2014-15 5 Face value (Z)
2 Grant Price (!) 25 2 10 3 Options granted and outstanding at the
beginning of the year
1,965,015 393,003 9,367,335 1,880,484
4 Options reinstated during the year * 3,500 454,580
5 Options granted during the year
6 Options cancelled/ lapsed during the year 34,000 1,064,326 7,017
7 Options exercised and shares allotted during
the year
1,851,855 6,407,483
8 Options granted and outstanding at the end
of the year
82,660 393,003 2,350,106 1,873,467
of which -
Options vested 82,660 393,003 340,666 970,917
Options yet to vest 2,009,440 902,550,
* The Company had lapsed unvested options with the employees who had resigned from the Company. Based on the legal advice, the Company has exercised its discretion in determining that the former employees in the United States will be allowed to exercise their deferred options
and accordingly, 258,080 options at face value of Z1 (51,616 options at face value of Z5) exercisable by such former employees have been re-
instated and vested.
The Company had erroneously lapsed 200,000 options at face value of Z1 (40,000 options at face value of Z5). Subsequently, the Company has decided that these options be restored and vested.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
2. Employees Stock Ownership Scheme —2006 U.S. Stock Option Sub-Plan (`Sub-Plan')
The Company had instituted the Employees Stock Ownership Scheme — 2006 U.S. Stock Option Sub-Plan ('Sub-Plan') for the
employees and Directors of its erstwhile subsidiary, GDA Technologies Inc, USA. The term of option was 5 years from the date
of grant. As per vesting schedule, the options had to vest over a period of five years, subject to fulfilment of certain conditions
specified in the respective Option agreement. Each option entitles the holder to exercise the right to apply for and seek allotment
of one equity share of 1 each at an exercise price of USD 2.4 per share. Under the said plan, options granted and outstanding as
at the end of the year are 143,650 options, all of which are vested.
3. Employees Stock Options granted and outstanding as at the end of the year on unissued share capital represent options 2,576,416
(previous year 11,782,850) at face value of 1.
C. Reserves & surplus
(T Million)
As at 31-03-2015
C(i) General reserve
As per last balance sheet 4,490 26 4,490.26
Add: transferred from employee stock options outstanding 005
4,490.31 4,490.26
C(ii) Hedging reserve (net of tax) : [Note I]
Opening balance (366.97) (2,923.11)
Deduction/(addition) during the year (net) (2,328 06) 2,556.14
(2,695.03) (366.97)
C(iii) Securities premium account
Opening balance 1,181.24 1,181.24
Addition during the year 204.16
1,385.40 1,181.24
C(iv) Surplus statement of profit and loss
Opening balance 14,193,21 12,229.63
Add: Profit for the year 9,221.77 7,685.26
Less: Depreciation charged against retained earnings 12.27
Add : Deferred tax credit on depreciation charged to retained earnings 2.17
23,414.98 19,904.79
Less: Appropriation
(a) Proposed dividend 441.52
(b) Interim dividend 5,467.30 4,805.25
(c) Tax on dividend 1,048.71 906.32
(d) Additional tax on dividend 58.02
16,399.43 14,193.22
C(v) Foreign currency translation reserve
Opening balance 266.07 631.60
AddAless):for the year 157.52 (365.53)
423.59 266.07
C(vi) Employee stock options outstanding
As per last balance sheet 338.41 338.41
Less : deductions during the year 285.04
Less: transferred to general reserve 0.05
53.32 338.41
RESERVES & SURPLUS 20,057.02 20,102.23
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
D. Borrowings
(!Million)
-211.
Non current Current Total Non current Current Total
D(1) Long-term borrowings
Secured loans*
Term loans from bank
(Refer note D(iii)) - 147.23 147.23 138.89 138.89 277.78
- 147.23 147.23 138.89 138.89 277.78
D(ii) Short-term borrowings _ Secured loans *
Other loans from banks - 132.51 132.51 - 600.00 600.00
Unsecured loans
Other loans from banks - 265.02 265.02 - 1,297.48 1,297.48
- 397.53 397.53 - 1,897.48 1,897.48
Total - 544.76 544.76 138.89 2,036.37 2,175.26
* The secured loans from banks are secured against hypothecation of the Company's movable assets and accounts receivables.
D(iii) Details of term loans
Rate of interest
Terms of repayment of term loan ature of term loan
Million
External commercial borrowings (ECB) 147.23 USD LIBOR (3 months) + Repayable in equal half-yearly instalments
2.5% of USD 1.11 million each commencing
from 19 October 2012 and ending on 14
October 2016.
Previous year (277.78)
E. Liabilities
(T Million)
As at 31-03-2016
As at 31-03-2015
Non-current Current Total Non-current Current Total
E(i) Trade payables
Due to holding company - - - 174.22 174.22
Due to others 3,276.40 3,276.40 - 2,545.25 2,545.25
3,276.40 3,276.40 - 2,719.47 2,719.47
E(ii) Other payables
Forward contract payable 1,148.52 1,574.11 2,722.63 447.46 89.22 536.68
Interest accrued but not due
on borrowings
- 1.08 1.08 - 2A1 2A1
Unclaimed dividend - 0.62 0.62 - - _
Other payables 102.00 1,189.14 1,291.14 90.89 1,631.85 1,722.74
1,250.52 2,764.95 4,015.47 538.35 1,723.48 2,261.83
1,250.52 6,041.35 7,291.87 538.35 4,442.95 4,981.30
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
F. Provisions:
F(i) - Provisions for employee benefits
(!Million)
Non-current
As at 31-03-2016 Current
86.76
As at 31-03-2015 Total Non-current Current Total
F(i) Gratuity - 86.76 - 97.33 97.33 Compensated absences - 507.16 507.16 - 455.72 455.72 Post-retirement medical 124.29
benefits
0.24 124.53 103.71 0.24 103.95
Others - 4,046.57 4,046.57 - 2,236.75 2,236.75 124.29 4,640.73 4,765.02 103.71 2,790.04 2,893.75
F(ii) Other provisions
Proposed equity dividend 441.52 441.52 - - _
Additional tax on dividend 58.02 58.02 - - - Income tax 19.91 19.91 - 14.70 14.70 Others * 10.70 10.70 10.70 10.70
- 530.15 530.15 - 25.40 25.40 Total 124.29 5,170.88 5,295.17 103.71 2,815.44 2,919.15
F (iii) * Disclosure pursuant to Accounting Standard (AS) 29 "Provisions, Contingent Liabilities and Contingent Assets"
Movement in provisions:
(T Million)
Sr. No
1
Particulars
Balance as at 1-4-2015
Class of provisions _ . Others Total
4.00 6.70 10.70 2 Additional provision during the year - - 3 Provision used during the year - - 4 Provision reversed during the year - _ - 5 Balance as at 31-03-2016 4.00 6.70 10.70
Nature of provisions:
i) Provision for sales tax pertains to claim made by the authorities on certain transaction of capital nature for the year 2002-03.
ii) Provision for others represents liabilities relating to matters in dispute.
CI3
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G. Fixed Assets
(T Million)
Fixed and Intangible Assets
Gross Block Depreciation/Amortisation Net Block Net Block Mat
01•Apr-15 Additions Deductions Foreign
currency translation
reserve
As at 31-Mar-16
Mat 01-Apr-15
For the year
On Deductions
Foreign currency
translation reserve
Mat 31-Mar-16
As at Mat
31-Mar-16 31-Mar-15
Tangible Assets
Leasehold Land 12.27 • - • 12.27 2.63 0.13 - • 2.76 9.51 9.64 Buildings 207.38 - - - 207.38 81.61 8.40 • - 90.01 117.37 125.77 Leasehold Improvements 296.19 68.32 15.95 • 348.56 61.91 35.65 3.22 - 94.34 254.22 23418 Plant and machinery 987.76 96.41 229.06 - 855.11 343.72 89.69 130.50 - 302.91 552.20 644.04 Computers
a. Owned 2,296.88 478.61 95.18 12.02 2,692.33 1,754.27 323.45 94.08 10.02 1,993.66 698.67 542.61 b. Leased 22.61 - 22.61 - - 22.61 - 22.61 • - • -
Office Equipments 896.47 119.22 127.00 - 888.69 601.28 110.74 124.21 - 587.81 300.88 295.19 Furniture and fixtures 1,239.67 97.98 162.11 1.73 1,177.27 629.36 112.12 138.75 0.95 603.68 57339 610.31 Vehides 446.76 92.08 70.76 • 468.08 158.78 56.49 32.64 - 182.63 285.45 287.98 Capital Work in Progress - - - - - - - - • 6.95 53.33 Total Of tangible assets 6,405.59 952.62 722.67 13.75 6,649.69 3,656.17 736.67 546.01 10.97 3,857.80 2,798.84 2,803.15 Total of tangible assets (Previous year) 6,133.30 722.29 416.85 32.75 6,405.99 3,308.67 753.83 385.62 (20.71) 3,656.17 2,803.15 2,889.08
Intangible Assets
Goodwill on acqusition 334.55 - - 14.99 34934 - • - - - 349.54 334.55 Goodwill on consolidation 628.05 - - - 628.05 • - • - - 628.05 628.05 Software 4,897.11 394.35 5.83 137.95 5,423.58 2,359.08 899.34 5.83 69.31 3,32190 2,101.68 2,538.03 Customer contracts 1,015.46 - - 4531 1,060.97 431.57 103.51 - 21.93 557.01 503.96 583.89 Business Rights 98.05 - • - 9&05 98.05 • - • 98.05 - - Intangible assets under development - - • - - - - - - 188.41 198.45 Total of intangible assets 6,973.22 394.35 5.83 198.45 7,560.19 2,888.70 1,002.85 5.83 91.24 3,976.96 3,771.64 4,282.97 Total of intangible assets (Prevkius year) 6,123.56 1,521.23 200.12 (471.44) 6,973.22 2,424.51 837.85 199.04 (174.62) 2,888.70 4,282.97 4,165.85
1. Impairment upto 31-03-2016 - NIL
2. Additions during the year & capital work-in-progress include Nil (previous year Nil) being borrowing cost capitalised in accordance with Accounting Standard (AS) 16 on "Borrowing Costs" prescribed under section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014.
3. Consequent to the adoption of schedule II to the Companies Act, 2013, the depreciation for the year ended March 31, 2015 is higher and the profit before tax is lower by 69.21 Mn. Further, an amount of ? 12.27 Mn (additional deferred tax charge of! 0.73 Mn) representing the carrying amount of assets with revised useful life as nil, has been
charged to the opening reserves as on April 1, 2014 pursuant to the provisions of the Companies Act, 2013.
4. During the previous year ended March 31, 2015, a subsidiary company changed the useful life of an intangible asset named as Pendo system from 5 years to 1 year. Owing to change in the useful life, the amortisation for the year ended March 31, 2015 is higher and profit before tax is lower by! 19.84 Mn and for the year ended March 31, 2016 is higher and profit before tax is lower by 10.70 Mn.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
H. Investments
(Z Million)
As at 31-03-2015
As at 31-03-2016
H(i) Non-current investments
Trade investments (at cost)
Long term investment
100,000 fully paid equity shares of USD 1 (T 53) each in Pan Health, U.S.A.
Total non-current investments
H(ii) Current investments
(Z Million)
Particulars/ Scheme name Face Value
per unit
Units as at 31-03-2016
Amount as at 31-03-2016
_ Amount as at
31-03-2015
Liquid investments - quoted
Birla Sun Life Cash Plus — DDR 100 369,518.38 37.02
Reliance Medium Term Fund — MDR 10 2,794,062.26 30.33 -
L&T Liquid Super IP DDR 1000 - 202.13 Templeton India Ultra Short Bond Fund- Super IP-D 10 - 100.00 Templeton India TMA - Super IP- DDR 1000 - 100.14 Religare Invesco Liquid Fund - DDR 1000 100.04 IDFC Ultra Short Term Fund - Reg - DDR 10 100.00 L&T Ultra Short Term Fund - Daily Dividend
Reinvestment Plan
10.1660 - 60.26
L&T Liquid Fund - Daily Dividend Reinvestment Plan 1,011.6349 - 10.08 Franklin India Savings Plus Fund 11.0640 0.01 _
Franklin Templeton IUSFB-Super IP 61.28 57.61 L&T Liquid Fund- DDR 300.56 285.24 Total (A) 429.20 1,015.51
Fixed maturity plans - quoted
UTI Fixed Term Income Fund Series XVIII - X (366 days)-
Growth
10 20.00
Total (B) - 20.00
Total (A+B) 429.20 1,035.51
Less : Diminution in value of investments - _
Grand total 429.20 1,035.51
Market value of investments 429.36 1,037.02
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
I. Deferred tax liabilites/ assets
I(i) Deferred tax liabilities
Million Particulars Deferred tax asset
/ (liability) as at March 31, 2015
Current year (charge) / credit
(Charge) / credit to Deferred tax asset/
hedging reserve (liability) as at March 31, 2016
Deferred tax liabilities
Depreciation / amortisation (411.15) 130.50 _ - (280.65) Gain on derivative transactions (304.09) - 121.16 (182.93) Branch profit tax (323.40) (103.53) - (426.93) Premia on derivative transaction - (570.42) - (570.42) Others _ - (1.41) (1.41) Total (1,038.64) (544.86) 121.16 (1,462.34) Deferred tax assets _ Non capital losses and deferred expenses 234.65 (169.43) - 65.22 Provision for doubtful debts and advances 7.19 24.07 - 31.26 Provision for employee benefits 60.50 37.23 - 97.73 Loss on derivative transactions 498.30 - (487.70) 10.60 Realised gain on derivative transaction - 41.36 - 41.36 Others (0.03) 9.95 9.92 Total 800.61 (56.82) (487.70) 256.09 Net deferred tax assets/(liabilities)14 (238.03) (601.68)_ (366.54) (1,206.25)
I(ii) Deferred tax assets
Million Particulars Deferred tax asset/
(liability) as at March 31, 2015
Current year (charge) / credit
(Charge) / credit to Deferred tax asset/
hedging reserve (liability) as at
, March 31, 2016
Deferred tax liabilities
Depreciation / amortisation 0.69 (0.69) - . Allowance on income received in advance (2.27) - (2.27) Total (1.58) (0.69) - (2.27) Deferred tax assets
Provision for employee benefits 3.53 (1.49) - 2.04 Income received in advance 2.34 - 2.34 Depreciation / amortisation 5.72 (5.72) . Others 0.28 (0.02) - 0.26 Total 11.87 (7.23) 4.64 Net deferred tax assets/(liabilities)(B) 10.29 (7.92) - 2.37 Net deferred tax assets/(liabilities)(A+8) (227.74) (609.60) (366.54) (1,203.88) Exchange (gain)/loss on translation (9.16)
Net deferred tax assets/(liabilities) as per
statement of profit and loss
(600.44) .
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
J. Trade receivables and unbilled revenue
(T Million)
As at 31-03-2016 As at 31-03-2015
J(i) Trade receivables
Unsecured
Debts outstanding for a period exceeding six months
Considered good 327.30 65.16
Considered doubtful 160.69 175.30
487.99 240.46
Other debts
Considered good
- Due from holding company 450.38
- Due from fellow subsidiaries 53.40 87.91
- Others 10,828.79 10,748.08
11,332.57 10,836.00
Less: Provision for doubtful debts (160.69) (175.30)
11,659.87 10,901.16
J(ii) Unbilled revenue
Unbilled revenues comprise revenue recognised in relation to services performed in accordance with contract terms but not billed.
K. Cash and bank
(Z Million)
As at 31-03-2016 As at 31-03-2015
Cash and cash equivalent
Cash on hand 0.62 0.67
Balances with bank
- in current accounts
Overseas 1,120.98 1,078.30
Domestic 223.49 235.72
Remittances in transit 94.82 221.58
Fixed deposits (maturity less than 3 months) 322.09 125.57
1,762.00 1,661.84
Other bank balance
- in deposit accounts
Fixed deposit with bank with more than 3 months but less than 12 months maturity 245.90
- Earmarked balances with banks-unclaimed dividend 0.62
*Cash and bank balance not available for immediate use 25.14 347.37
2,033.66 2,009.21
*Other bank balance not available for immediate use being in nature of security for guarantees issued by bank on behalf of the Company, collaterals etc.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
L. Loans and advances (Z Million)
Non-current
As at 31-03-2016
Current As at 31-03-2015
Total Non-current Current Total
Unsecured
Considered good
Loans against mortgage of house
property - - - 0.10 0.10
Premia on forward contracts 1,280.43 2,385.73 3,666,16 874.90 1,723.63 2,598.53
Interest receivable 1.81 1.81 - 6.86 6.86
Deposits 393.14 155.20 548.34 372.39 126.43 498.82
Capital advances 1.25 - 1.25 6.64 - 6.64
Advance tax (net of provision) - 88.68 88.68 35.65 163.04 198.69
Advances recoverable in cash or 2,574.31
in kind
3,206.05 5,780.36 1,150.21 3,534.46 4,684.67
- Considered doubtful - 6.06 6.06
Less : Provision for bad & doubtful - loans & advances
(6.06) (6.06)
4,249.13 5,837.47 10,086.60 2,439.79 5,554.52 7,994.31
M.
N.
0.
Revenue (Z Million)
2015-16 2014-15
Overseas 55,070.41 47,704.46
Domestic 3,400.19 2,075.90 58,470.60 49,780.36
Other income (Z Million)
2014-15
141.26 Income from current investment in mutual funds 68.44
Interest received 25.06 22.81
Foreign exchange gain/(loss) 2,795.57 667.81
Provision no longer required for doubtful debts 1.08
Miscellaneous income 69.46 83.12 2,959.61 915.00
Expenses (Z Million)
2015-16 2014-15
0(i) Employee benefit expenses
Salaries including overseas staff expenses 33,997,84 28,056.30
Staff welfare 865.95 799.93
Contribution to provident and other funds 344.99 249.93
Contribution to superannuation fund 52.05 44.71
Contribution to gratuity fund 85.75 91.86 35,346.58 29,242.73
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
(7 Million)
2014-15
0(ii) Operating expenses
Communication expenses 191.68 168.11
Lease finance charges 53,97 112.16
Consultancy charges 4,032.97 3,458.95
Cost of software packages for own use 450.06 403.65
Cost of bought-out items for resale 1,982.12 742.76
6,710.80 4,885.63.
(7 Million)
015- 2014-15
0(iii) Sales, administration and other expenses
Travelling and conveyance 1,409.02 1,202.05
Rent and establishment expenses 1,591.39 1,459.43
Telephone charges and postage 377.84 344.52
Legal and professional charges 585.27 562.58
Printing and stationery 25.88 29.21
Advertisement 115.49 92.69
Entertainment 72.37 57.29
Recruitment expenses 147.69 132.70
Repairs to building 199,36 135.43
Repairs to computers 65.97 93.16
General repairs and maintenance 320.36 253.51
Power and fuel 347.92 290.26
Equipment hire charges 12.90 10.19
Insurance charges 162.91 165.74
Rates and taxes 204.40 358.46
Allowance for doubtful debts and advances 30.29 190.47
Bad debts 51.93 39.13
Less: Provision written back (50.95) (39.13)
Commission paid 6 99 0.62
Books, periodicals and subscriptions 19.79 29.09
Directors fees 1.43 0.93
Commission to directors 5.81 3.60
Loss on sale of fixed assets 27.28 7.18
Miscellaneous expenses 325.80 181.98
Amortisation of cost of long term projects* 6.35
6,057.07 5,607.43
* Cost incurred for long term projects mainly comprise of legal and employee related costs to secure long term projects. These costs are amortised over a period of two years commencing from the date of securing the project.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
P. Finance cost
(Z Million)
2014-15
P(i) Interest expenses 31.90 46.94
On others 25.99 9.29
57.89 56.23 P(ii) Exchange loss on borrowings (net) 45.68 47.96
103.57 104.19
Q. Provision for taxation
(Z Million)
2014-15
Current tax L,097.81 2,141.09
MAT credit entitlement for current year (1,086.70) (505.04)
Capital gains tax on sale of PES Business Unit 14.87
Provision for earlier years 38.06 (5.60)
Total current taxes 1,649 17 1,645.32
The Central Board of Direct Taxes (CBDT) has notified the Income Computation and Disclosure Standards (ICDS) with effect from April 1,
2015 for companies resident in India and shall accordingly apply for assessment year 2016-17 onwards. Accordingly, the Company has
accounted for the impact of ICDS in its tax computation.
R. Contingent liabilities
1. Income tax liability that may arise in respect of which the Company is in appeal *
2. Corporate guarantee given on behalf of subsidiary **
3. Service tax refund disallowed, in respect of which the Company is in appeal #
4. Sales tax liability, in respect of which the Company is in appeal
5. Legal notice served by a vendor for unpaid dues, disputed by the Company
1,343.99 1,167.47
5,998 76 5,395.70
12.48 4.52
1 28 1.28
0 02 0.02
7,356.53 6,568.99
* Out of contingent tax liability disclosed above, 1,280.69 Mn (including interest of! 202.48 Mn), pertains to the tax demand arising on account of
disallowance of exemption under section 10A on profits earned by STPI Units on onsite export revenue. Company is pursuing appeal against these demands before the relevant Appellate Authorities.
The Company believes that its position is likelyto be upheld by appellate authorities and considering the facts, the ultimate outcome of these proceedings
is not likely to have material adverse effect on the results of operations or the financial position of the Company.
Out of the total income tax liability, 5.19 Mn (including interest of Z0.65 Mn) pertains to a wholly owned subsidiary incorporated in Canada. The Canada
Revenue Agency ("CRA") had conducted a tax audit for the three years ending March 31, 2013 and has disallowed/reallocated certain expenses due to which
carry forward non-capital losses have been reduced. Since the company has carry forward losses, the taxable income should have been offset against the
carry forward losses resulting in nil taxable income and no interest payable.
A notice of objection ("N00") has been filed with Chief of Appeals, Canada Revenue Agency and the company is confident that the disallowed expenses will
be allowed as a deductible expense. Consequently income tax may not be payable for the three years ending March 31, 2013.
** The Company has given a corporate guarantee on behalf of its wholly owned subsidiary L&T Infotech Financial Services Technologies Inc. The guarantee is for performance of all obligations by L&T Infotech Financial Services Technologies Inc. Canada in connection with the long term annuity services contracts obtained by them. The obligation under this guarantee is limited in aggregate to the amount of CAD 70,000,000.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
The Company has given a corporate guarantee on behalf of its subsidiary Larsen And Toubro Infotech South Africa (Proprietary) Limited.
The guarantee is for performance of all obligations by Larsen And Toubro Infotech South Africa (Proprietary) Limited in connection with
the Application Testing Service contract. The obligation under this guarantee is limited in aggregate to the amount of USD 31,414,785.
The Company has given a corporate guarantee on behalf of its subsidiary, Larsen And Toubro Infotech South Africa (Proprietary) Limited.
The guarantee is for performance of all obligations by Larsen And Toubro Infotech South Africa (Proprietary) Limited in connection with
software development services & related services. The obligation under this guarantee is limited in aggregate to USD 5,000,000.
# The Company had filed refund of accumulated service tax credit in accordance with relevant CENVAT Credit Rules. However, the
department has disallowed certain portion of such refunds considering the same as ineligible as not related with export and output
services. The Company is in appeal against these disallowances before the relevant Authorities and is hopeful of getting a favourable
order.
S. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for: 131.87 Mn
(previous year: 310.76 Mn)
1(1) Employee benefits
a) The amounts recognised in balance sheet are as follows
(!Million)
A. a)
Present value of defined benefit obligation as on March 31, 2016
As at March Gratuity plan
312016 (March Post retirement medical benefit
plan
31,2015) Self managed
provident fund
plan
- Wholly funded 589.94 - 4,253.92 (507.19) (-) (3,776.10)
- Wholly unfunded - 124.53 -
(-) (103.95) (-) 589.94 124.53 4,253.92
(507.19) (103.95) (3,776.10) b) Fair value of plan assets as on March 31, 2016 498.26* - 4,264.26 *
(409.85). (-) (3,778.70) Amount to be recognised as liability or (asset) (a-b) 91.68 124.53 (10.34)
(97.34) (103.95) (2.60) B. Amounts reflected in the balance sheet
Liability 91.68 124.53 55.66 (97.34) (103.95) (46.59)
Assets -
(-) (-) (-) Net liability/(asset) 91.68 124.53 55.66 #
(97.34) (103.95) (46.59) Net liability/(asset)-current 91.68 0.24 55.66
(97.34) (0.24) (46.59)
Net liability/(asset)- non current 124.29 .
(-) (103.71) _ (-)
* Asset is not recognised in the balance sheet. # Employer's and employee's contribution for March 2016 paid in April 2016.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
b) The amounts recognised in statement of profit and loss are as follows:
(!Million)
. Current service cost
Gratuity plan Post-retirement
medical benefit
plan
21.99
Self-managed , provident fund
plan 91.34 257.11
(79.09) (18.66) (232.40) 2. Interest cost 43.07 9.94 315.53
(4/.55) (9.66) (252.26) 3. Expected return on plan assets -27.86 -315.53
(-27.20) (-) (-252.26) 4. Actuarial losses / (gains) -15.48 -11.13 -
(11.11) (-12.94) (-42.43) 5. Total expense for the year included in staff cost 91.07 20.80 257.11
(104.55) (15.38) (189.97)
c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof
are as follows:
(Z Million)
Opening balance of the present value of defined benefit obligation
Gratuity plan
507.19
Post-retirement
medical benefit
plan
103.95
Self-managed
provident fund
plan
3,776.10 (408.57) (88.79) (3,412 68)
Add : current service cost 91.34 21.99 257.11 (77.00) (18.66) (232.40)
Add : interest cost 43.07 9.94 315.53 (40.67) (9.66) (252.26)
Add : contribution by plan participants 580.57
(-) (-) (456.33)
Add/(Less) : actuarial (gains)/losses -2.39 -11.13 -
(16.09) (-12.94) (-42.43) Add : business combination/acquistion
(10.20) (-) (-) Less: other adjustments (refer note below (d)) 181.75
(-) (-) (-) Add : liabilities assumed on acquisition/(settled on divestiture) 5.12
(-) (-) (-221.93) Less : benefits paid 54.39 0.22 493.64
(45.34) (0.22) (313.21) Closing balance of the present value of defined benefit obligation 589.94 124.53 4,253.92
(507.19) (103.95) - 13,776.10)
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:
(Z Million)
Opening balance of the fair value of the plan assets
Gratuity plan
20154612014-15)
Self-managed provident fund
plan
409.85 3,778.70
(379.19) (3,352.80) 315.53 Add : expected return on plan assets 27.86
(26.67) (252.26) Add/(Less) : actuarial gains/(losses) 13.09 26.56
(5.47) (19.23) Add : contribution by the employer 96.73 244.32
(38.60) (228.83) Add: business combination/acquistion -
(5.26) (-1 Less: other adjustments (refer note below (d)) 181.75
(-) (-) Add : assets acquired on acquisition/(distributed on divestiture) 5.12
(-) (215.38) Add : contribution by plan participants 574.54
(-) (454.17) Less : benefits paid 54.39 493.64
(45.34) (313.21) Closing balance of the plan assets 498.26 4,264.26
(409.85) (3,778.70)
The Company expects to contribute 86.76 Mn (previous year: 97.33 Mn) towards its gratuity.
The Company's share of defined benefit obligation/fair value of plan assets adjusted by the Trust of the holding company.
e) The major categories of plan assets as a percentage of total plan assets are as follows:
2015-16 (2014-15) Gratuity plan Self-managed
provident fund plan
Government of India securities
25.3%
(24.7%) State government securities
15.8%
Scheme
with
LIC
Corporate bonds
Fixed deposits under Special Deposit Scheme framed by Central Government for provident funds
(15.1%) 10.3%
(7.6%)
9.3%
(10.3%) 39.3% Public sector bonds
(42.3%)
Effect on the aggregate of the service cost and interest cost
Effect on defined benefit obligation
7.93
(6.85)
22.86
(19.22)
-6.06
(-5.24)
-17.85
(-15.01)
2015-16 2014-15
Defined benefit obligation
124.53
103.95
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
2015-16 2014-15
1 Discount rate as at March 31
For gratuity
7.75%
7.90%
For post -retirement medical benefits
7.75%
7.90%
2 Annual increase in healthcare costs (see note below)
5.0% 5.0%
3 Attrition rate: Varies between 2% Varies between 2%
to 18% for various to 18% for various
age groups age groups
4 Salary growth rate 5.0% 5.0%
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.
Although the obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits, assumed
healthcare cost trend rates may affect the amounts recognised in the statement of profit and loss. At present, healthcare costs, as
indicated in the principal actuarial assumption given above, are expected to increase at 5% p.a. A one percentage point change in
assumed healthcare cost trend rates would have the following effects on the aggregate of the service cost and interest cost and defined
benefit obligation:
(7 Million)
Effect of 1% Increase
1% decrease
a) The amounts pertaining to defined benefit plans for the current year are as follows:
Post-retirement medical benefit plan (non-funded)
(7 Million)
2011-12
42.19
Gratuity plan
(7 Million)
2015-16 2014-15 2013-14 2012-13 2011-12
1 Defined benefit
obligation
589.94 507.19 408.57 384.12 297.59
2 Plan assets 498.26 409.85 379.19 296.11 156.90
3 (Surplus)/deficit 91.68 97.34 29.38 88.01 140.69
2013-14
88.79
2012-13
90.81
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
Self-managed provident fund plan
(Z Million)
6 2014-15 2013-14 2012-13 2011-12
1 Defined benefit
obligation
4,t53.92 3,776.10 3,412.68 2,710.62 2,178.30
2 Plan assets 4,264.26 3,778.70 3,352.80 2,685.76 2,142.59
(Surplus)/deficit (10.34) (2.6011 59.88 24.86 35.71
Experience adjustments Gratuity
(Z Million)
589 94
2014-15 2013-14, 2012-13, 2011-12
Defined benefit obligation 507.19 408.57 _ 384.12 297.59
Plan assets 498 7.:6 409.85 379.19 296.11 156.90
(Surplus) / deficit 9166 97.34 29.38 . 88.01 140.69
Experience adjustments on
plan liabilities (7.53) (13.91) (6.21) _ 5.05 _ 95.81
Experience adjustments on
plan assets 13.09 6.04 8.19 8.56 2.34
General descriptions of defined benefit plans:
a) Gratuity plan
The Company makes contributions to the Employees' Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation
of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to employees
at retirement, death while in employment or termination of employment of an amount equivalent to 15 days salary for every
completed year of service or part thereof in excess of six months, provided the employee has completed five years in service.
b) Post-retirement medical benefit 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 limit sanctioned at the time of retirement. The ceiling limits
are based on cadre of the employee at the time of retirement.
c) Self-managed provident fund plan
The Company's provident fund plan is managed by its holding company through a Trust permitted under the Provident Fund Act,
1952. The plan envisages contribution by employer and employees and 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 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 arising out of the investment risk and actuarial risk associated with the
plan is also recognised as expense in the period in which such loss occurs. Further, on amount of Z Nil has been provided based on
actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan.
T(2)(i) In line with the Company's Financial Risk Management Policy, financial risks relating to changes in the exchange rates are hedged
by forward contracts, besides the natural hedges. The loss on fair valuation of the derivative contracts which are designated and
are effective as hedges, amounting to Z 2,695.02 Mn (net of deferred tax) (Previous year Z 366.96 Mn (net of deferred tax)) has
been accounted in retained earnings in balance sheet. The loss/(gain) of Z (1,297.52) Mn (Previous year gain of Z 243.04 Mn) on
settlement of the forwards is recognised in statement of profit and loss.
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
The particulars of derivative contracts entered into for hedging foreign currency risks outstanding as at March 31, 2016 are as under:
(Z Million)
Sr. Category of derivative instruments Notional amount March 31, 2015
a) Forward contracts for receivables 58,583.85
Notional amount March 31, 2016
43,470.51
Un-hedged foreign currency exposures as at March 31, 2016 are as under:
Sr. Un-hedged foreign currency exposures
1 Receivables including firm commitments and highly probable forecast transactions
2 Payables including firm commitments and highly probable forecast transactions
March 31, 2016
41,271.25
28,796.36
March
(!Million)
31, 2015
30,013.24
24,474.93
1(2) (ii) The Company has made provision, as required under the applicable law or accounting standard for material foreseeable losses on
long term derivative contracts
T(3) Leases
Finance leases
In accordance with Accounting Standard 19 "Leases" issued by the Institute of Chartered Accountants of India, the assets acquired
under finance leases on or after April 1, 2001 are capitalised and a loan liability is recognised for an equivalent amount. Consequently
depreciation is provided on such assets. Lease rentals paid are allocated to the liability and the interest is charged to statement of profit
and loss.
Operating leases
The Company has taken certain premises, office equipments and employee cars under non-cancellable operating leases. The rental
expense in respect of operating leases was 54.02 Mn (previous year 134.79 Mn) and the future rentals payable are as follows:
(Z Million)
2015-16 2014-15
Minimum lease payments
- Payable not later than 1 year 62.12 73.43
- Payable after 1 year but not later than 5 years 389.52 474.16
Total 451.64 547.59
1(4) Basic and diluted earnings per share (EPS) at face value of Z 1
Before extraordinary items
2015-16 2014-15
Profit after tax (Z Million) 9,221.77 7,606.18
Weighted average number of shares outstanding 163,914,663 161,250,000
Basic EPS (Z) 56.26 47.17
2015-16 2014-15
161,250,000 Weighted average number of shares outstanding 163,914,663
Add : weighted average number of potential equity shares on account of employee options 392,052 7,270,100
Weighted average number of shares outstanding 164,306,715 168,520,100
Diluted EPS (Z) 56.13 45.14
2015-16
9,221.77
163,914,663
56.26
2014-15
7,685.26
161,250,000
47.66
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
After extraordinary items
Profit after tax (Z Million)
Weighted average number of shares outstanding
Basic EPS (?)
2015-16 2014-15
Weighted average number of shares outstanding
163,914,663
161,250,000
Add : weighted average number of potential equity shares on account of employee options
392,052
7,270,100
Weighted average number of shares outstanding
164,306,715
168,520,100
Diluted EPS (?)
56.13
45.60
Earnings per share for the year 2014-15 include results of discontinued operations up to date of its transfer.
EPS for the previous year is after considering sub-division of equity shares from face value of ? 5 each to face value of ? l each per equity
share (refer note B(1)).
1(5) Related party disclosure:
(i) Key Management Personnel:
Name
Mr. V. K. Magapu
Status
Managing Director*
Mr. Sanjay Jalona Chief Executive Officer & Managing Director**
Mr. Chandrashekara Kakal Chief Operating Officer & Executive Director***
Mr. K. R. L. Narasimham Executive Director#
Mr. Vivek Chopra Chief Executive (Industrials Cluster) & Executive Director$
Dr. Mukesh Aghi Chief Executive (Services Cluster) & Executive Director^
Mr. Sunil Pande Executive Director^^
Ceased to be Director w.e.f. the close of working hours of September 25, 2015
** Appointed as Chief Executive Officer & Managing Director w.e.f. August 10, 2015
*** Ceased to be Director w.e.f. the close of working hours of August 26, 2015
Ceased to be Director w.e.f. the close of working hours of April 7, 2015
$ Ceased to be Director w.e.f. the close of working hours of December 31, 2014 A Ceased to be Director w.e.f. the close of working hours of February 28, 2015 AA Ceased to be Director w.e.f. the close of working hours of August 25, 2015
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
(ii) List of related parties with whom there were transactions during the year:
Larsen & Toubro Limited Holding Company
L&T Hydrocarbon Engineering Limited Fellow Subsidiary
Larsen & Toubro (East Asia) SDN.BHD Fellow Subsidiary
L&T Electricals and Automation Saudi Arabia Company LLC Fellow Subsidiary
L&T Finance Limited Fellow Subsidiary
L&T General Insurance Company Limited Fellow Subsidiary
L&T Infrastructure Development Projects Limited Fellow Subsidiary
L&T Power Development Limited Fellow Subsidiary
Larsen & Toubro Kuwait Construction General Contracting Company, With Limited Liability Fellow Subsidiary
L&T Infrastructure Finance Company Limited Fellow Subsidiary
L&T Metro Rail (Hyderabad) Limited Fellow Subsidiary
L&T Technology Services Limited Fellow Subsidiary
L&T Valves Limited Fellow Subsidiary
L&T Investment Management Limited Fellow Subsidiary
L&T Construction Equipment Limited Fellow Subsidiary
Larsen & Toubro LLC Fellow Subsidiary
Nabha Power Limited Fellow Subsidiary
L&T Electrical & Automation FZE Fellow Subsidiary
Spectrum Infotech Private Limited Fellow Subsidiary
Family Credit Limited Fellow Subsidiary
PT. Tamco Indonesia Fellow Subsidiary
L&T Special Steels and Heavy Forgings Private Limited Fellow Subsidiary
Larsen & Toubro ATCO Saudi LLC Fellow Subsidiary
L&T Thales Technology Services Private Limited Fellow Subsidiary
L&T Capital Markets Limited Fellow Subsidiary
L&T Housing Finance Limited Fellow Subsidiary
Larsen & Toubro Electromech LLC Fellow Subsidiary
Tamco Electrical Industries Australia PTY Limited Fellow Subsidiary
L&T Technology Services LLC Fellow Subsidiary
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
A summary of transactions with related parties is given below:
Sale of services / products
- L&T Metro Rail (Hyderabad) Limited
- L&T Technology Services Limited
- L&T Hydrocarbon Engineering Limited
- L&T Thales Technology Services Private Limited
1,101.01
(352.00)
-
-
-
-
423.59
(324.91)
63.60
50.50
78.80
95.70
Sale of assets 108.62 7.70
H H -L&T Technology Services Limited _ 7.70
Purchase of services 275.43 694.17
(1,034.96) (788.45)
- L&T Technology Services Limited - 694.17
Overheads charged by 635.01 38.36
(125.82) (44.84)
- Larsen & Toubro (East Asia) SDN.BHD - 24.03
- L & T Electrical & Automation FZE 7.19
- Larsen & Toubro Kuwait Construction General Contracting Company, With Limited 6.23
Liability
Overheads charged to 82.49 441.42
(65.57) (715.18)
- L&T Technology Services Limited 440.12
Commission charged - 5.26
H (18.40)
Lease rent - 0.07
H (0.52)
Commission - -
H (0.62)
Trademark fees 104.89
H H Trade receivable 450.38 53.40
(0.01) (88.80)
Trade payable
(174.23)_ (0.89)
Interim dividend 5,264.81 -
(4,805.25)_ ( )
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
1(6) Segmental reporting
The Group has 2 business segments. Services Cluster includes Banking, Financial services, Insurance, Media & Entertainment, Travel &
Logistics and Healthcare. Industrials Cluster includes Hi Tech and Consumer Electronics, Consumer, Retail & Pharma, Energy & Process,
Automobile & Aerospace, Plant Equipment & Industrial Machinery, Utilities and E&C.
T(6)(i)Revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements.
The revenue and operating profit by segment is as under:
(Z Million)
Revenue
Services Cluster
31,533.04
Industrial Cluster
26,937.56
Telecom (PES
Discontinued
Business)
Total
58,470.60 -
(26,289.89) (23,391.05) (99.42) (49,780.36)
14,336.12 Segmental operating profit 7,439.75 6,896.37 -
(5,456.21) (6,123.58) (9.72) (11,589.51)
Unallocable expenses (net) 3,979.97
(1,544.93)
2,959.61 Other income
(915.00)
Operating profit 13,315.76
(10,959.58)
Finance cost 103.57
(104.19)
Depreciation 736.67
(741.55)
Amortization of intangible assets 1,002.85
(837.85)
Profit before tax 11,472.67
(9,275.98)
1(6) (ii) Segmental reporting of revenues on the basis of the geographical location of the customers is as under:
(Z Million)
Geography Revenue from Continuing Business Revenue from Discontinued
Business Total Revenue
2015-16 2014-15 2015-16 2014-15 2015-16 2014-15
North America 40,370.47 34,097.77 40,370.47 34,097.77
Europe 10,124.59 8,862.74 99.42 10,124.59 8,962.16
India 3,400.19 2,075.90 3,400.19 2,075.90
APAC 1,190.47 1,199.12 1,190.47 1,199.12
ROW 3,384.88 3,445.41 3,384.88 3,445.41
Total 58,470.60 49,680.94 99.42 58,470.60 49,780.36
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
Fixed assets used and liabilities contracted for performing the Company's business have not been identified to any of the above reported
segments as the fixed assets and services are used interchangeably among segments.
T(7) On October 16, 2014, the Company acquired entire share capital of Information Systems Resource Centre Private Limited ('ISRC'),
thereby making it a wholly owned subsidiary. ISRC is engaged in software services with respect to application development, information
technology support and maintenance services to OTIS Elevator Company Inc. (OTIS) and certain other group companies of OTIS, which
are part of United Technologies Corporation (UTC) group. The Company believes that acquisition will strengthen its relationship with
UTC group. The acquisition was executed through a share purchase agreement for a consideration of 806.96 Mn.
The Board of Directors of the Company and ISRC have approved the scheme of amalgamation of ISRC with the Company on October
17, 2014 and December 4, 2014, respectively, with October 17, 2014 as the appointed date. Accordingly, a petition for sanctioning the
scheme of amalgamation has been filed with the Hon'ble High Court of Judicature at Bombay.
The Scheme has been sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated September 4, 2015. The
Scheme was filed with the Registrar of the Companies on September 21, 2015 and came into effect on that day with appointed date
being October 17, 2014. Pursuant thereto, the entire business and all the assets and liabilities, duties and obligations of ISRC have been
transferred to and vested in the Company with effect from October 17, 2014. In accordance with the Scheme, the investment held in
the subsidiary has been cancelled and ISRC being a wholly owned subsidiary of the Company, no equity shares were exchanged to effect
the amalgamation in respect thereof.
The excess of purchase consideration paid over the net assets acquired is accounted as goodwill amounting to 614.56 Mn. (Also refer
note A (3) (c)).
T(8) (i)As part of business restructuring undertaken within Larsen &Toubro Group in 2013-14, Product Engineering Services (PES) Business Unit
was transferred to L&T Technology Services Limited (LTTS) effective January 1, 2014 by way of slump sale for total purchase consideration
of 4,895.27 Mn based on fair valuation. GDA Technologies Inc., USA (GDA Inc.), a wholly owned subsidiary of the Company was a part
of PES business. The performance of GDA Inc. was affected due to the recession and subsequent to the transfer of PES business, it was
therefore decided to wind up this subsidiary. The Indian subsidiary of GDA Inc. called GDA Technologies Ltd., India was taken over by
the Company in 2013-14 based on fair valuation carried out by external chartered accountants. Consequently GDA Inc. was wound up
in USA with effect from March 28, 2014.
The Company's subsidiary, Larsen & Toubro Infotech GmbH, also had PES business. PES business transfer in Germany was dependent
upon LTTS registering its branch in Germany. The German branch of LTTS became operational in the month of May 2014. Since valuation
of PES business in Germany is required to be carried out as per German laws, Business Transfer Agreement was signed between Larsen
& Toubro Infotech GmbH and LTTS, for transfer of PES business in Germany effective September 1, 2014.
The PES business was transferred by way of slump sale for total purchase consideration of 129.20 Mn based on fair valuation carried
out by external valuer based in Germany. The purchase consideration was determined based on the Discounted Cash Flow (DCF) method
of valuation of business.
Larsen & Toubro Infotech GmbH has transferred the following assets and liabilities to L&T Technology Services Limited:
(Z Million)
Current assets
Trade receivables 45.79
Short term loans and advances 0.17
45.96
Current liabilities and provisions
Other current liabilities 10.71
Net current assets 35.25
Net Assets transferred 35.25
Total revenues
Total expenses
Profit before taxes
Income taxes
Profit after tax
99.42
(89.70)
9.72
(1.69)
8.03
LARSEN & TOUBRO INFOTECH LIMITED
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (Contd.)
The results of discontinued business are as under:
(Z Million)
1(8) (ii) Extra -ordinary item
The above has given rise to extraordinary gain of 93.95 Mn being recognised in the financial statements.
1(9) The Board of Directors of the Company and GDA Technologies Limited have approved the scheme of amalgamation of GDA Technologies
Limited with the Company on October 17, 2014, with April 1, 2016 as the appointed date. Accordingly, a petition for sanctioning the
scheme of amalgamation has been filed with the Hon'ble High Court of Judicature at Bombay and the Hon'ble High Court of Judicature
at Madras.
The Scheme has been sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated April 01, 2016. The approval
of the Scheme by the Hon'ble High Court of Judicature at Madras is awaited.
1(10) The Company is not required to transfer any amount to Investor Education and Protection Fund.
1(11) The Company in its board meeting held on June 16, 2015 has taken approval for the Offer for Sale (`the Offer') by Larsen & Toubro
Limited in the Initial Public Offering of the Company. Pursuant to the same, the Company had filed its Draft Red Herring Prospectus
('DRHP') on September 28, 2015. Owing to change in the Offer structure and other considerations, the said DRHP was withdrawn on
April 11, 2016 and pursuant to the approval of the !PO Committee, the Company filed a revised DRHP on April 12, 2016.
1(12) Previous year's figures have been regrouped / reclassified wherever necessary.
As per our report attached SHARP & TAN NAN Chartered Accountants Firm's Registration No. 109982W
by the hand of
FIRDOSH D. BUCHIA
Sanjay Jalona
R. Shankar Raman Ashok Kumar Sonthalia Subramanya Bhatt Partner
Chief Executive Officer
Director Chief Financial Officer Company Secretary Membership No: 38332
& Managing Director
Mumbai
Mumbai
April 26, 2016
April 26, 2016