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Directors' Report

FY 2016-17  

Dear Members,

The Directors have pleasure in presenting their 72nd Annual Report and Audited Financial Statements for the year ended March 31, 2017.

FINANCIAL RESULTS
Particulars 2016-17 ₹crore 2015-16 ₹crore
Profit Before Depreciation, exceptional
items & tax
7079.06 6692.74
Less: Depreciation, amortisation, impairment and obsolescence
1215.19
997.40
Profit : before exceptional items and tax 5863.87 5695.34
Add : Exceptional Items
893.97 560.28
Profit : before tax
6757.84 6255.62
Less: Provision for tax
1304.10
1256.04
Profit for the period carried to Balance
Sheet
5453.74 4999.58
Add: Balance brought forward from previous year
7710.27
4522.65
Less: Dividend paid during the year (Including dividend distribution
tax)
1842.71
1647.02
Add: Gain/(loss) on remeasurement of the net
defined benefit plans
(8.02) (8.44)
Balance available for disposal
(which the Directors appropriate as follows)
11313.28 7866.77
Debenture Redemption Reserve 87.75 156.50
Balance to be carried forward
11225.53 7710.27

The Directors recommend
payment of final dividend of
₹21 per share of ₹2/- each on
93,29,65,803 shares.

 

CAPITAL & FINANCE

During the year under review, the Company allotted 14,86,958 equity shares of ₹ 2/- each upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes.

The Company reduced long-term borrowings during the year under review by way of repayment of Non- Convertible Debentures (NCD) worth ₹ 550 crore and External Commercial Borrowings (ECB) worth US$126 million on scheduled due dates. The Company did not raise any long-term borrowings during FY2016-17. CRISIL Limited has assigned AAA (Stable) rating for L&T’s long-term debt facilities. In addition, ICRA Limited also has assigned AAA (Stable) rating for certain borrowings of the Company.

HIVE-OFF OF COIMBATORE UNDERATKING:

Subsequent to the year under review, on April 20, 2017 the Company has received order of National Company Law Tribunal for hive-off of its Coimbatore undertaking engaged in valves manufacturing through a scheme of Arrangement between Larsen & Toubro Limited and L&T Valves Limited, a wholly-owned subsidiary of the Company and their respective shareholders and creditors under the provisions of section 230 to 232 of the Companies Act, 2013. The appointed date of the scheme was April 1, 2016 and the effective date of the scheme was April 22, 2017.

BONUS :

The Board of Directors of your Company at its Meeting held on May 29, 2017, has recommended for approval of the shareholders issue of bonus shares to the holders of the equity shares of the Company in the ratio of 1: 2 (i.e 1 (One) Bonus Equity Share of ₹ 2/- for every 2 (Two) fully paid-up Equity Shares of ₹ 2/- each held) by capitalisation of its Reserves. The approval of the shareholders will be sought through Postal Ballot.

CAPITAL EXPENDITURE :

As at March 31, 2017 the gross property, plant and equipment, investment property and other intangible assets including leased assets, stood at ₹ 9820.17 crore and the net property, plant and equipment, investment property and other intangible assets, including leased assets, at ₹ 7548.37 crore. Capital Expenditure during the year amounted to ₹ 749.02 crore.