L&T Technology Services Ltd Directors Report.
Your Directors have pleasure in presenting the 7th Annual Report along with the Audited Financial Statements of L&T Technology Services Limited for the year ended March 31, 2019.
|Profit Before Depreciation, exceptional and extra ordinary items & tax||10,145||7,387|
|Less: Depreciation, amortization and obsolescence||731||576|
|Profit / (Loss) before exceptional items and tax||9,414||6,811|
|Add: Exceptional Items||-||-|
|Profit / (Loss) before tax||9,414||6,811|
|Less: Provision for tax||2,413||1,917|
|Profit for the period carried to the Balance Sheet||7,001||4,894|
|Add: Balance brought forward from previous year||7,240||3,554|
|Less: Dividend paid for the year (Including dividend distribution tax and deemed dividend)||2,449||1,208|
|Add: Gain / (Loss) on re-measurement of the net defined benefit plans||-||-|
|Less: Impact of Ind AS 115 and ECL on contract asset in opening reserve||22||-|
|Balance available for disposal (which directors appropriate as follows)||11,770||7,240|
|Debenture Redemption Reserve||-|
|Balance to be carried forward||11,770||7,240|
Performance of the Company State of Company Affairs
The gross sales and other income for the financial year under review were 48,632 million as against 36,947 million for the previous financial year registering an increase of 31.63%. The profit before tax from continuing operations including extraordinary and exceptional items was 9,414 million and the profit after tax from continuing operations including extraordinary and exceptional items of 7,001 million for the financial year under review as against 6,811 million and 4,894 million respectively for the previous financial year, registering an increase of 38.22% and 43.06% respectively.
The Company has five Business Segments, namely Transportation, Process Industry, Industrial Products, Medical Devices and Telecom & Hi-Tech. During the year, the contribution to the revenue from various business segments were as follows:-
|Revenue for 2018-19||Revenue for 2017-18|
|Telecom & Hi-Tech||12,273||8,513|
The detailed segmental performance is referred in Note No. 39 of the Notes forming part of the standalone financial statements.
The Revenue contribution of the Company from various Geographies is mentioned herein below:
|4.||Rest of the World||6,045||4,355|
Capital & Finance
During the year under review, the Company had allotted 15,57,278 Equity Shares of 2 each upon exercise of stock options by the eligible employees under the Employee Stock Option Scheme - 2016.
As on March 31, 2019 the total paid up equity share capital of the Company was 20,80,26,650/- consisting of 10,40,13,325 equity shares of 2 each, fully paid up. Pursuant to Regulation 38 of the LODR to achieve minimum public shareholding requirement of 25%, our Promoter- Larsen & Toubro Limited (L&T) - sold 87,71,569 equity shares between April 1, 2018 till March 31, 2019. The Promoters stake thus reduced by 9.93% between April 1, 2018 till March 31, 2019 to 78.88%.
As at March 31, 2019 the gross fixed and intangible assets including leased assets, stood at 8,087 million (previous year 7,310 million) and the net fixed and intangible assets, including leased assets, at 5,654 million (previous year 5,530 million). Capital Expenditure during the year is NIL (previous year 1 million).
During the year ended March 31, 2019, the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed thereunder. Hence the Company does not have any unclaimed deposits as on date.
The MCA vide its notification dated January 22, 2019 has amended the Companies (Acceptance of Deposits) Rules, 2014 and as per this notification, the Company is required to file with Registrar of Companies a one-time return in Form DPT-3 for outstanding receipt of money/loan by the Company, which are not considered as deposits outstanding as on March 31, 2019 and for a period from April 1, 2014 to March 31, 2019.
The Company would be complying with this requirement once the form is deployed on MCA portal.
As the members are aware, the Companys shares are compulsorily tradable in electronic form. As on March 31, 2019, 99.99% of the Companys total paid up capital representing 10,40,02,473 shares are in dematerialized form. Pursuant to the provisions of the LODR w.e.f. April 1, 2019 all transfer of shares except transmission and transposition shall be carried out only in dematerialised form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, Members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. The Company has sent intimation to Shareholders who are holding shares in physical form, advising them to get the shares dematerialized.
Transfer to Investor Education and Protection Fund
There are no amounts that are due to be transferred to Investor Education and Protection Fund by the Company.
The Company has sent adequate communication to members whose dividends are unclaimed requesting them to provide/ update bank details with the RTA Company, so that dividends paid by the Company are credited to the investors account on timely basis.
The Company has sent communication to Shareholder(s) holding shares in physical form for collecting details of their bank account such as Bank name, Bank Branch, MICR number, IFSC Code for payment of dividend to such shareholders, whose dividend remained unclaimed/unpaid. The Company hereafter will be crediting the dividend through electronic mode instead of revalidating and issuing fresh warrants/DDs to the shareholders.
Subsidiary/ Associate/ Joint Venture Companies
During the year under review, the Company acquired Graphene Semiconductor Services Private Limited along with its three overseas subsidiaries and one Indian subsidiary Company. Graphene Semiconductor Services Private Limited provides end-to-end solutions right from chip design, embedded software, all the way through providing support to mass manufacturing, thereby being a one-stop service and solution provider. The details of investments in the said Company during the year are as under:
A. Shares acquired during the year: -
|Name of the Company||Type of shares/units||No of shares/ units|
|Graphene Semiconductor Services Private Limited||Equity shares||13,64,601|
1. The Company acquired 1364601 shares of 10 each from Graphene Semiconductor Services Private Limited along with its subsidiaries Graphene Solutions PTE ltd (Singapore), Graphene Solution SDN. BHD (Malaysia), Graphene Solutions Taiwan Limited (Taiwan) and Seastar Labs Private Limited (India)
Post the said acquisition, the Company has three subsidiaries namely L&T Technology Services LLC, L&T Thales Technology Services Private Limited and Graphene Semiconductor Services Private Limited. Further the Company also has following step down subsidiaries namely Esencia Technologies Inc., Esencia Technologies India Private Limited, Graphene Solutions PTE Ltd (Singapore), Graphene Solution SDN. BHD (Malaysia), Graphene Solutions Taiwan Limited (Taiwan) and Seastar Labs Private Limited.
B. 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 and their contribution to the overall performance of the Company is annexed to this Report at page no. 240 of the Annual Report.
The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16 (c) of the LODR and the same is placed on the website at http://www.ltts.com/investors/ . The Company does not have any material subsidiaries.
Particulars of loans given, Investments made, Guarantees given or Security Provided by the Company
The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Act and Regulation 34(3) read with Schedule V of the LODR in Note 37 forming part of the financial statements.
Particulars of Contracts or Arrangements with Related Parties
The Audit Committee and Board of Directors have approved the Related Party Transaction Policy along with threshold limits and the same has been uploaded on the Companys website http://www.ltts.com/investors
The Company has a process in place of periodically reviewing and monitoring Related Party Transactions.
All the related party transactions were in the ordinary course of business and at arms length. The Audit Committee has approved all the Related Party Transactions for the FY 201819 and estimated transactions for FY 2019-20 as required under the provisions of Section 177 of the Act.
There are no materially significant related party transactions that may have conflict with the interest of the Company.
Amount to be Carried to Reserves
The Company has not transferred any amount to the reserves during the current financial year.
The Board at its meeting held on October 25,2018 declared an interim dividend of 7.5 per equity share amounting to 780 million /- (the total payout including Dividend Distribution Tax amounted to 940 million). The dividend was paid on November 12, 2018. Further, the Board, in its meeting held on May 3, 2019, has recommended a final dividend of 13.50 per equity share of 2 each for the financial year ended March 31, 2019. The proposal is subject to the approval of shareholders at the ensuing AGM to be held on July 20, 2019.
The final dividend on equity shares, if approved by the members, would involve a cash outflow of 1,404 million (the total payout including Dividend Distribution Tax is expected to be 1,694 million.)
The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company on May 3, 2017 which is in line with regulation 43A of the LODR. The Policy is provided as Annexure A forming a part of this Board Report and also uploaded on the Companys website at http://www.ltts.com/ investors/
Material changes and commitments affecting Financial position of the Company, between the end of the Current Financial Year and the date of the Report
Other than stated elsewhere in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the current financial year and the date of this report.
Conservation of energy, Technology absorption, Foreign Exchange earnings and outgo
Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure B forming part of this Board Report.
Risk Management Policy
The Risk Management Committee comprises of Mr. S. N. Subrahmanyan, Dr. Keshab Panda and Mr. P. Ramakrishnan. Mr. S. N. Subrahmanyan is the Chairman of the Committee.
The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment, including cyber security and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. The details of the same are given in Annexure D forming part of this Report.
A detailed note on risk management and the internal controls with reference to the financial statement is given under the financial review section of the Management Discussion and Analysis on page no. 101 of the Annual Report.
Corporate Social Responsibility
The Corporate Social Responsibility (CSR) Committee comprises of Mr. Arjun Gupta, Mr. Sudip Banerjee and Dr. Keshab Panda as its Members. Mr. Arjun Gupta is the Chairman of the Committee.
The disclosures required to be given under Section 135 of the Act read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are provided in Annexure C to Board report.
The CSR Policy framework is available on its website http:// www.ltts.com/media/32150/csr-policy-ltts.pdf .
Directors and Key Managerial Personnel Appointed/Resigned during the Year
The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Act and are placed on the website of the Company https//www.ltts. com/investors/corporategovernance.
The notice convening the AGM includes the proposal for appointment / reappointment of Directors.
A. Appointment/Re-appointment of Directors & key Managerial Personnel:
During the year, the following appointments/re- appointments were made on Board:-
a. Mr. Samir Desai was appointed as Independent Directors of the Company with effect from April 30, 2014 to April 29, 2019. Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on January 17, 2019 has approved the re-appointment of Mr. Samir Desai as an Independent Director of the Company for further term of five years with effect from April 30, 2019 upto and including April 29, 2024, subject to approval of the shareholders through special resolution.
Special Resolution for the continuation of Mr. Samir Desai as an Independent Director, who would attain the age of 75 years during his current tenure forms part of the Notice being sent to the shareholders.
Based on his skills, experience, knowledge and report of their performance evaluation, the Board was of the opinion that his association would be of immense benefit to the Company and it would be desirable to avail his services as Independent Director.
b. Mr. Amit Chadha and Mr. A.M.Naik, Directors, retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment.
The notice convening the AGM includes the proposal for appointment / re-appointment of Directors.
B. Resignation of Directors & key Managerial Personnel:
a. Mr. Bhupendra Bhate resigned as Chief Operating Officer & Whole- time Director of the Company on May 3, 2019. Mr. Bhate has taken up a role as Chief Innovation Officer in the Company.
The Board places on record its appreciation of the contribution by Mr. Bhate as Director of the
Company and conveyed its good wishes for his new role in the Company.
The Company has also disclosed on its website http://www.ltts.com/investors/ details of the familiarization programs formulated to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.
Number of Meetings of the Board of Directors
This information is given in Annexure D Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 52 of this Annual Report.
The Company has in place an Audit Committee in terms of the requirements of Section 177 of the Act read with rules made thereunder and Regulation 18 of the LODR.
The Committee comprises of 1 Non-Executive Director and 3 Independent Directors.
The current members of the Audit Committee are Mr. N. Kumar-Chairman, Mr. Samir Desai, Ms. Renuka Ramnath and Mr. S.N. Subrahmanyan. During the year under review 4 meetings were held on May 22, 2018, July 25, 2018, October 25, 2018 and January 17, 2019.
The details relating to the same are given in Annexure D Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 55 of this Annual Report.
Company Policy on Directors Appointment and Remuneration
The Company has in place a Nomination and Remuneration Committee (NRC) in accordance with the requirements of Section 178 of the Act read with rules made thereunder and Regulation 19 of the LODR.
The details of the same are given in Annexure D - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 57 of this Annual Report.
NRC Committee has formulated a policy on directors appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees and the criteria for determining qualifications, positive attributes and independence of a Director and also disclosed the policy on the Companys website http:// www.ltts.com/ and is also enclosed to the Board report as Annexure I
The Committee has formulated a policy on Board diversity.
Stakeholders Relationship Committee
The Company has in place a Stakeholders Relationship Committee in terms of the requirements of the Act read with the rules made thereunder and Regulation 20 of the LODR.
The details of the same are given in Annexure D - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 60 of this Board Report.
Declaration of Independence
The Company has received Declarations of Independence from Independent Directors as stipulated under Section 149(7) of the Act confirming that he/she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the website of the Company http://www.ltts . com/investors/investor-download/.The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.
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 Act. For the year ended March 31, 2019, 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 Companys operations.
Directors Responsibility Statement
The Board of Directors of the Company confirms:
a. I n the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b. 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 at the end of the financial year and of the profit of the Company for that period;
c. The Directors have taken proper and sufficient care for the 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 fraud and other irregularities;
d. The Directors have prepared the Annual Accounts on a going concern basis;
e. The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently;
f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.
Performance Evaluation of Board, Its Committees and Directors
The Nomination and Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Chairman and individual directors has to be made.
It includes circulation of questionnaires to all Directors for evaluation of the Board and its Committees, Board composition and its structure, its culture, Board effectiveness, Board functioning, information availability, adequate discussions etc. These questionaries also cover specific criteria and the grounds on which all directors in their individual capacity will be evaluated. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committee, Individual Directors and the Chairman. The Chairperson of NRC analyses the reports on the questionnaires to arrive at an unbiased conclusion.
The inputs given by all the directors including areas of improvement, for the Directors, Board processes etc. were discussed in the meeting of the Independent Directors held in accordance with Schedule IV of the Act on May 3, 2019 and in the subsequent meetings of Nomination and Remuneration Committee and Board.
Suggestions from the Board Evaluation exercise of FY 201718 has been suitably implemented such as improving board processes, more time for strategy discussion, Directors familiarization program etc.
Disclosure of Remuneration
The details of remuneration as required to be disclosed under the Act and the rules made thereunder are given in the Annexure E forming part of this Board Report.
The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure F forming part of this Board Report.
In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the registered office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.
Compliance with Secretarial Standards on the Board and General Meetings
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
Protection of Women at Workplace
The Company has constituted an Internal Complaints Committee (ICC) - in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The ICC has been constituted as per the Act to redress the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year under review, 5 cases of sexual harassment were received by the ICC. The same were resolved and wherever necessary appropriate action was taken by the Company.
Awareness workshops/training programmes are conducted across the Company to sensitize employees to uphold the dignity of their colleagues at work place especially with respect to prevention of sexual harassment.
Consolidated Financial Statements
Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Act and Regulation 34 of the LODR and prepared in accordance with the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI), in this regard.
The Auditors report to the shareholders does not contain any qualification, observation or comment or adverse remark(s).
In view of the mandatory rotation of auditors requirement and in accordance with the provisions of Act Sharp & Tannan, (firm registration number 109982W) Chartered Accountants, were appointed as Statutory Auditors for a period of 4 continuous years from the conclusion of 6th Annual General Meeting (AGM) till the conclusion of 10th Annual General Meeting of the Company, in the AGM held on August 22,2018.
The requirement to place the matter relating to appointment of Auditor for ratification by members at every AGM is done away with vide notification dated May 7, 2018 issued by MCA. Accordingly, no resolution is proposed for ratification of appointment of Auditors in the notice of 7th AGM.
The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI.
The Auditors have also furnished a declaration confirming their independence as well as their arms length relationship with the Company as well as declared that they have not taken up any prohibited non-audit assignments for the Company.
The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process.
The Auditors attend the AGM of the Company. Also see page no. 62 forming part of Annexure D of this Board Report.
Secretarial Audit Report
The Board had appointed Mrs. Naina Desai, (M. No.1351), Practicing Company Secretary, to carry out Secretarial Audit under the provisions of Section 204 of the Act for the financial year 2018-19.
The Secretarial Audit Report issued by Mrs. Naina Desai, Practicing Company Secretary is attached as Annexure G to this Board Report.
The Secretarial Auditors Report to the shareholders does not contain any qualification or reservation or adverse remark.
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 Companys operations in future.
Extract of Annual Return
As per the provisions of Section 92(3) of the Act an extract of the Annual Return in Form MGT -9 is provided in Annexure H to this Board Report. The Annual Return is also available on the website of the Company http://www.ltts.com/investors/.
1. Corporate Governance Report
Pursuant to Regulation 34 read with Schedule V of the LODR, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure D forming part of this Board Report.
2. Employee Stock Option Scheme
There has been no material change in the Employee Stock Option Scheme - 2016 (ESOP Scheme - 2016) during the current financial year. The ESOP Scheme -2016 is in compliance with the SBEB Regulations.
The disclosure relating to the ESOP Scheme - 2016 required to be made under the Act and rules made thereunder and the SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company http://www.ltts.com/investors/ .
The Statutory Auditors certificate confirming compliance with the Act and the SBEB Regulations is reproduced below:
Independent Auditors certificate on Employee Stock Option Scheme
1 This certificate is issued in accordance with the terms of our engagement letter dated 30 August 2018
2 We have examined Employees Stock Option Scheme (the Scheme) of L&T Technology Services Limited (the Company), books of accounts and other relevant records to determine whether the Scheme is in accordance with the rules specified under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (as amended) ("the Regulations") and in accordance with the resolutions passed in the general meeting held on January 21, 2016 (the General Meeting) and as per postal ballot dated 15 December 2016.
3. Management is responsible for maintaining the information and documents, which are required to be kept and maintained under the relevant laws and regulations and implementing the Scheme in accordance with the Regulations and the resolutions passed at the General Meeting.
4. Management is also responsible for design, implementation and maintenance of internal control relevant to the implementation of Scheme in accordance with the Regulations and the resolutions passed at the General Meeting and for providing all information in this regard.
5. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring implementation of the Scheme in accordance with the Regulations and the resolutions passed at the General Meeting. It is neither audit nor expression of opinion on the financial statements of the Company.
6. We have examined the books of accounts and other relevant records and documents maintained by the Company for the purpose of providing reasonable assurance on the implementation of the Scheme by the Company in accordance with the Regulations and the resolutions passed at the General Meeting.
7. We have carried out an examination of the Scheme, books of accounts and other relevant records of the Company in accordance with the Guidance Note on Reports or Certificates for Special Purpose (Revised 2016) issued by the Institute of Chartered Accountants of India (the ICAI), which requires that we comply with the ethical requirements of the Code of Ethics issued
by the ICAI.
8. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and related services engagements.
Criteria and Scope
9. The criteria against which the information is evaluated are the following:
a. the Regulations;
b. the Scheme;
c. special resolution passed by the shareholder for the Scheme; and
d. written representation from management.
10. Based on our examination of the relevant records and according to the information and explanation provided to us and representations provided by management, we certify that the Company has implemented the Schemes in accordance with the Regulations and the resolutions passed at the general meeting held on January 21, 2016 and as per postal ballot dated 15 December 2016.
Restriction on use
11. The certificate is addressed to and provided to the members of the Company solely for the purpose of compliance with clause 13 of the Regulations. This certificate should be used solely for the purpose of complying with the Regulations and may not be suitable for any other purpose. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing.
|SHARP & TANNAN|
|Firms registration no.109982W by the hand of|
|FIRDOSH D. BuCHIA|
|Mumbai, May 3, 2019||Membership no. 038332|
3. No disclosure is required under Section 67(3)(c) of the Act in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.
4. Credit Rating
The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations. The Company has received CRISIL AA+/Positive rating and CRISIL A1+ rating for its the long term and short term financial instruments of the Company respectively.
5. Vigil Mechanism
As per the provisions of Section 177(9) of the Act the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns.
The Company has a Whistle-Blower Policy in place since 2014 to encourage and facilitate employees to report concerns about unethical behaviour, actual/ suspected frauds and violation of Companys Code of Conduct. The policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. The Policy also establishes adequate safeguards to enable employees report instances of leak of unpublished price sensitive information.
The Company has disclosed information about the establishment of the Whistle-Blower Policy on its website http://www.ltts.com/investors/. During the year, no personnel has been declined access to the Audit Committee, wherever desired.
6. Reporting of Frauds
The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under section 143(12) of the Act.
7. Business Responsibility Reporting
As per Regulation 34 of the LODR a separate section on Business Responsibility Reporting forms a part of the Annual Report (refer pages 110 to 118) describing initiatives taken by the Company from an environmental, social and governance perspective. The activities carried out by the Company as a part of its CSR initiatives during 2018-19 are covered in the same.
8. Statutory Compliance
The Company complies with all applicable laws, rules and regulations and ensure taking care of all its stakeholders.
The Ministry of Micro, Small and Medium Enterprises vide their Notification dated 2nd November 2018 has instructed all the Companies registered under the Companies Act, 2013, with a turnover of more than Rupees Five Hundred crore to get themselves onboarded on the Trade Receivables Discounting system platform (TReDS), set up by the Reserve Bank of India. In compliance with this requirement, the Company would be registering itself on TReDS soon through one of the service providers.
The Company would be complying with the requirement of submitting a half yearly return to the MCA within the specified timelines.
Your Directors take this opportunity to thank the customers, vendors, academic institutions, Financial Institutions, Regulatory authorities and Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company. Your 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 the significant contributions made by the employees of the Company and its subsidiaries during the year under review and value the contributions made by every member of the LTTS family globally.
|For and on behalf of the Board|
|DR. KESHAB PANDA||s. n. Subrahmanyan|
|CEO & Managing Director||Vice Chairman|
|(DIN: 05296942)||(DIN: 02255382)|
|Date : May 3, 2019|
Dividend Distribution Policy INTRODUCTION
As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, prescribed Listed Companies are required to frame a Dividend Distribution Policy.
The purpose of this Policy is to regulate the process of dividend declaration and its pay-out by the Company which would ensure a regular dividend income for the shareholders and long term capital appreciation for all stakeholders of the Company.
This Policy has been adopted by the Board of Directors of L&T Technology Services Limited (the Company) at its Meeting held on May 3, 2017. The Policy shall also be displayed in the annual reports and also on the website of the Company.
FORMS OF DIVIDENDS
The Companies Act provides for two forms of Dividend:
The final dividend is paid once for the financial year after the annual accounts are prepared. The Board of Directors of the Company has the power to recommend the payment of final dividend to the shareholders for their approval at the general meeting of the Company. The declaration of final dividend shall be included in the ordinary business items that are required to be transacted at the Annual General Meeting.
This form of dividend can be declared by the Board of Directors one or more times in a financial year as may be deemed fit by it. The Board of Directors shall have the absolute power to declare interim dividend during the financial year, as and when they consider it fit, in line with this policy. The Board should consider declaring an interim dividend after finalization of quarterly/ half yearly financial results.
QUANTUM OF DIVIDEND AND DISTRIBUTION
Dividend payout in a particular year shall be determined after considering the operating and financial performance of the Company and the cash requirement for financing the Companys future growth. In line with the past practice, the payout ratio is expected to grow in accordance with the profitable growth of the Company under normal circumstances.
DECLARATION OF DIVIDEND
Dividend shall be declared or paid only out of-
1) Current financial years profit:
a) after providing for depreciation in accordance with law;
b) after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion
c) after appropriating any other item as mandated by prescribed accounting standards
2) The profits for any previous financial year(s) after providing for depreciation in accordance with law and remaining undistributed; or
3) Out of 1) & 2) both.
The circumstances under which shareholders may not expect dividend/or when the dividend could not be declared by the Company shall include, but are not limited to, the following:
A. Due to operation of any other law in force;
B. Due to losses incurred by the Company and the Board considers it appropriate not to declare dividend for any particular year;
C. Due to any restrictions and covenants contained in any agreement as may be entered with the Lenders and
D. Because of any default on part of the company.
FACTORS AFFECTING DIVIDEND DECLARATION:
The Dividend pay-out decision of any company, depends upon certain external and internal factors-
Legal/ Statutory Provisions: The Board should keep in mind the restrictions imposed by Companies Act, any other applicable laws with regard to declaration and distribution of dividend. Further, any restrictions on payment of dividend by virtue of any regulation as may be applicable to the Company may also impact the declaration of dividend.
State of Business Environment: The Board will endeavor to retain larger part of profits to build up reserves to absorb future shocks in case of uncertain or recessionary economic conditions.
Nature of Industry: The nature of industry in which a company is operating, influences the dividend decision, like stability of earnings will influence stable dividend.
Taxation Policy: The tax policy of a country also influences the dividend policy of a company. The rate of tax directly influences the amount of profits available to the company for declaring dividends.
Capital Markets: In case of unfavorable market conditions, the Board may resort to a conservative dividend pay-out in order to conserve cash outflows and reduce the cost of raising funds through alternate resources.
Apart from the various external factors, the Board shall take into account various internal factors including the financial parameters while declaring dividend, which inter alia will include -
Magnitude and Stability of Earnings: The extent of stability and magnitude of the companys earnings will directly influence the dividend declaration. Thus, the dividend is directly linked with the availability of the earnings (including accumulated earnings) with the company.
Liquidity Position: A companys liquidity position also determines the level of dividend. If a company does not have sufficient cash resources to make dividend payment, then it may reduce the amount of dividend pay-out.
Future Requirements: If a company foresees some profitable investment opportunities in near future including but not limited to Brand/ Business Acquisitions, Expansion of existing businesses, Additional investments in subsidiaries/associates of the Company, Fresh investments into external businesses, then it may go for lower dividend and vice-versa.
Leverage profile and liabilities of the Company.
Any other factor as deemed fit by the Board.
The portion of profits not distributed among the shareholders but retained and used in business are termed as retained earnings. It is also referred to as ploughing back of profit. The Company should ensure to strike the right balance between the quantum of dividend paid and amount of profits retained in the business for various purposes. These earnings may be utilized for internal financing of its various projects and for fixed as well as working capital. Thus the retained earnings shall be utilized for carrying out the main objectives of the Company and maintaining adequate liquidity levels.
PARAMETERS THAT SHALL BE ADOPTED WITH REGARD TO VARIOUS CLASSES OF SHARE
The Company does not have different classes of shares and follows the one share on vote principle.
REVIEW & AMENDMENT
The Policy shall be reviewed as and when required to ensure that it meets the objectives of the relevant legislation and remains effective. The Board has the right to change/amend the policy as may be expedient taking into account the law for the time being in force.
a. Conservation of Energy:
The Company being a Technology driven Company, has always adapted new technologies in its office infrastructure setup. Conservation of Energy is one of the most important factors while designing the office infrastructure.
The office zones are created and provided with occupancy sensors to automatically sense presence/ absence of humans. The Company in its offices has Energy management technology installed which re-estimate the maximum demand and changes accordingly thereby saving electricity consumption. Some of the conservation measures incorporated are as follows:
Double glazing fagade, thereby having less transfer of heat. Advantage is less usage of HVAC
Increased chilled water temperature by 1 deg to have energy savings
Occupancy sensors in work areas, to switch off lights when there are no employees
Water cooled Chillers which consume lesser power as compared to Air cooled chillers
Installed VRF units for 24x7 operation which will consume much less power as compared to conventional Split A/c
Utilizing free cooling during winter (Making use of Ambient temperature to cool office areas)
|Comparison||2018-19 (LED)||2017-18 (CFL)||2016-17 (CFL)|
|Unit Consumed per Annum (in KWH)||276074.4||378539||388925.3|
|Saving in terms of power consumption ( KWH)||102464.6||112850.9|
|AVG per unit Rate per Annum in INR||6.76||6.76||6.76|
|Savings in terms of INR||692661||762872|
Using treated water for flushing, Road wash and for gardening and having rain water sump and using rain water for raw water usages like hand wash etc
Rain water percolation pits to recharge ground water and to have minimum runaways
Installed pressmatic taps which will close automatically after usages
Installed aerators in all taps to reduce usage of water
Terrace runaway water is collected in UG sumps and reusing
b. Technology absorption:
The Company being a Technology driven and has always adopted the latest technology trends and best practice. To Drive open innovation in solving industry challenge working with Academia, an unique cloud based platform TECHgium has been developed and rolled. This platform helps to share customer challenge in a structured manner and process, covering all domain areas, latest technology, functional areas, complying with protecting Intellectual Property materials reaching out to more than 270+ leading engineering Institutions covering more than 19000 + students participating and coming out Proof of Concepts, which is evaluated through a rigorous review by industry experts, academic experts etc., and demonstrating to the customer to take it to next level adoption. This has received overhelming response and also positive impact on the engineering students to make them industry ready, through a structured online mentoring process as part of the overall initiative.
At LTTS, our HR digital transformation impetus revolves around alignment and drive across people, processes and product with integrated stack as foundational element.
We continue to disrupt and reformulate digitization. With the decision taken to have an integrated HR stack, In a short span 20 months today we operate on one single system, dismantling the 15 stand-one modules that we previously worked on. We have the following modules in place and work in progress to complete the rest in Qtr1 FY20.
Migration from multiple stand-alone systems to one system
Enhanced Employee Lifecycle Management Processes
Enhanced Career Development and Succession Planning Automation
Enriching Employee Continuous Feedback and Development Experience
We believe Automation and Artificial Intelligence / Machine Learning is backbone for our operational efficiency. With introduction of ASK GENIE, employees can use the bot to complete all transactional activities as Leave Application, Attendance Regularisation, Updating Personal Information, Knowing Policies etc. anywhere, anytime on their mobile while on the move. Work is in progress on introducing Voice Bot, Robotic Process Automation (RPA) and adding Artificial Intelligence to Talent Acquisition module.
These digital technology developments are taking place with two objectives in mind
1. Provide a stellar employee experience &
2. Increased productivity
c. Foreign exchange earnings and outgo:
The Company exports engineering and designing services mainly to North America, Europe, Middle East, Japan, Korea and other APAC countries.
The total foreign exchange earned and used for the period under review is as under:
|Foreign exchange earned||40,260|
|Foreign exchange used||21,491|