MIRA
INFORM REPORT
|
Report Date : |
04.07.2007 |
IDENTIFICATION DETAILS
|
Name : |
LARSEN AND TOUBRO
LIMITED |
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Registered
Office : |
L & T House,
Ballard Estate, Mumbai – 400 001 |
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Country : |
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Financials (as
on) : |
31.03.2006 |
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Date of
Incorporation : |
07.02.1946 |
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Com. Reg. No.: |
11-4768 |
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CIN No.: [Company
Identification No.] |
L99999MH1946PLC004768 |
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TAN No.: [Tax Deduction
& Collection Account No.] |
MUML04455D |
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PAN No.: [Permanent
Account No.] |
AAACL0140P |
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Legal Form : |
A public limited
liability company. The company’s
shares are listed on the Stock Exchanges. |
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Line of
Business : |
Manufacturers and
Sellers of earthmoving machinery including bulldozers, dumpers, scrappers,
loaders, shovels, vibratory compactors and drag lines. |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 185000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established, diversified and highly respectable company. It is a
professionally managed company having fine track. Fundamentals of the company
are very strong. Trade relations are fair. Financial position is healthy and
comfortable. The company is progressing well. The company's payments are
always correct and as per commitments. The company can
be considered for any normal business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered
Office / Head Office : |
L & T House,
Ballard Estate, Mumbai – 400 001, |
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Tel. No.: |
91-22-22618181,
22618182, 22685656 |
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Fax No.: |
91-22-22620223, 22617480,
22685893, 67525858 |
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E-Mail : |
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Website : |
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Regional
Office : |
Tel. No. :
91-44-2232 6348 Fax No. :
91-44-2234 2317 E-mail : itcg@giasmd01.vsnl.net.in NCL Bandra
Premises, Plot No. C/6, Bandra – Kurla Complex, P. O. Box No.
8119, Bandra (East), Mumbai - 400 051, 2, 1/FL,
Laxminarayan Complex, 10/1, Also located at |
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Overseas Office : |
·
·
·
Sultanate
of ·
·
·
·
·
·
·
UAE |
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Factory : |
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Branches : |
·
L
& T Limited, Tel. No. 91-33-2282
8406/8413/8439 Also located at
Jaipur, Bhopal, Nagpur, Durgapur, Jamshedpur, Guwahati, Bhubaneswar,
Vishakhapatnam, Coimbatore, Kochi, Madurai and Surat |
DIRECTORS
|
Name : |
Mr. A. M. Naik |
|
Designation : |
Chairman & Managing Director |
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Name : |
Mr. Jagadish
Pandurang Nayak |
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Designation : |
Whole-time Director & President – Operations |
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Name : |
Mr. Y. M.
Deosthalee |
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Designation : |
Whole-time Director & Chief Financial Officer |
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Name : |
Mr. K.
Venkataramanan |
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Designation : |
Whole-time Director & President – Operations |
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Name : |
Mr. R. N. Mukhija |
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Designation : |
Whole-time Director & Senior Vice President – Operations |
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Name : |
Mr. K V Rangaswami |
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Designation : |
Director |
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Name : |
Mr. S Rajgopal |
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Designation : |
Nominee (UTI) |
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Name : |
Mr. B. P.
Deshmukh |
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Designation : |
Nominee (GIC) |
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Name : |
Ms. Kranti Sinha |
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Designation : |
Nominee (LIC) |
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Name : |
Mr. S N Talwar |
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Designation : |
Nominee (LIC) |
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Name : |
Mr. M M Chitale |
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Designation : |
Director |
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Name : |
Mr. A B Saharya |
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Designation : |
Director |
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Name : |
Mr. Surinder Nath |
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Designation : |
Director |
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Name : |
Mr. U Sundararajan |
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Designation : |
Director |
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Name : |
Mr. V. K. Magapu |
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Designation : |
Executive Director |
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Name : |
Mr. A K Shukla |
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Designation : |
Director |
KEY EXECUTIVES
|
Name
: |
Mr. H Holck –
Larsen |
|
Designation
: |
Chairman Emeritus |
|
Age
: |
93 years |
|
Qualification
: |
Master’s Degree
in Chemical Engineering |
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Date of
Joining : |
30th
December, 1989 |
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Name : |
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Designation : |
Company Secretary |
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Name
: |
Mr. A M Naik |
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Designation
: |
Managing Director
& Chief Executive Officer |
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Age
: |
60 years |
|
Qualification
: |
B E Mechanical |
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Experience
: |
37 years |
|
Date of
Joining : |
15th
March, 1965 |
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Previous
Employment : |
Engineer in
Charge-Fab Shop, Nestler Boiler Private Limited |
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Name
: |
Mr. Jagadish
Pandurang Nayak |
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Designation
: |
Senior Vice
President |
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Age
: |
58 years |
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Qualification
: |
B E Mechanical and
Post Graduate Diploma in Production Engineering |
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Experience
: |
37 years |
|
Date of
Joining : |
1st
October, 1975 |
|
Previous
Employment : |
Production
Manager in L&T Drilling Equipment Limited |
|
Other
Directorship : |
Ø
LTM
Limited Ø
Narmada
Cement Company Limited Ø
L&T
Finance Limited Ø
L&T
Information Technology Limited Ø
L&T
Equipment Leasing Company Limited Ø
L&T
Cement Limited Ø
Tractor
Engineers Limited Ø
Audco
India Limited Ø
Ewac
Alloys Limited Ø
Gujarat
Leather Industries Limited Ø
L&T
–Komatsu Limited Ø
L&T
–John Deere Limited Ø
L&T
–Case Equipment Limited Ø
L&T
–Demag Plastics Machinery Private Limited |
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|
|
|
Name
: |
Mr. Yeshwant
Moreshwar Deosthalee |
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Designation
: |
Senior Vice
President |
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Age
: |
55 years |
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Qualification
: |
B.Com, LLB, ACA |
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Experience
: |
32 years |
|
Date of
Joining : |
4th
February, 1974 |
|
Previous
Employment : |
Junior Officer in
Crompton Greaves |
|
Other
Directorship : |
Ø
Narmda
Cement Company Limited Ø
L&T
Finance Limited Ø
L&T
Information Technology Limited Ø
L&T
Infocity Limited Ø
L&T
Capital Company Limited Ø
L&T
Trade.Com Limited Ø
L&T
Cement Limited Ø
Bhilai
Power Supply Company Limited Ø
L&T
–Komatsu Limited Ø
L&T
–John Deere Limited Ø
Dhamra
Port Company Limited Ø
L&T
–Case Equipment Limited Ø
L&T
Communications Limited Ø
International
Seaports Pte Limited Ø
Larsen
& Toubro Ceylinco (Private) Limited |
|
|
|
|
Name
: |
Mr. D V Kapur |
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Designation
: |
Director |
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Age
: |
73 years |
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Qualification
: |
B E Electrical |
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Other
Directorship : |
Ø
Reliance
Industries Limited Ø
Reliance
Power Limited Ø
Reliance
Salgaocar Power Company Limited Ø
Reliance
Utilities & Power Limited Ø
Jacobs
H&G Limited Ø
GKN
Driveshafts ( Ø
Tata
Chemicals Limited Ø
Honda
Seil Power Products Limited Ø
Zenith
Limited Ø
DLF
Power Limited Ø
DCM
Hyundai Limited Ø
Drivetech
Accessories Limited |
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|
Name |
Mr. S S Marathe |
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Designation |
Director |
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Age |
79 years |
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Qualification |
M A Economics |
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Other
Directorship |
Ø
Sandvik
Asia Limited Ø
Automotive
Axles Limited Ø
Bajaj
Tempo Limited Ø
Bharat
Forge Limited Ø
Deepak
Fertilisers & Chemicals Limited Ø
Finolex
Industries Limited Ø
Glaxo
India Limited Ø
Indian
Organic Chemicals Limited Ø
Kinetic
Motors Limited Ø
Kirloskar
Brothers Limited Ø
Kirloskar
Electric Limited Ø
Mandovi
Pellets Limited Ø
Tata
Assets Management Company Limited Ø
P P
Holding Private Limited Ø
Accord
Solutions Private Limited Ø
GDA
Trust Management Private Limited Ø
Pan
Gulf Group Limited |
SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of Holding |
|
Financial
Institutions |
34696667 |
25.25 |
|
Nationalised
Insurance Companies |
8448720 |
6.15 |
|
Foreign
Institutional Investors |
26285578 |
19.13 |
|
Shares underlying
GDRs |
7141298 |
5.20 |
|
Mutual Funds |
6631402 |
4.83 |
|
Bodies Corporate |
3630534 |
2.64 |
|
Directors &
Relatives |
1174851 |
0.86 |
|
L&T Employees
Welfare Foundation |
18598068 |
13.54 |
|
General Public |
30778659 |
22.40 |
|
TOTAL |
137385777 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers and
Sellers of earthmoving machinery including bulldozers, dumpers, scrappers,
loaders, shovels, vibratory compactors and drag lines. |
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Products : |
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PRODUCTION STATUS
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
Scrapper,
bulldozer, ripper and loader attachments |
Nos. |
250 |
250 |
-- |
|
Road Rollers, hot
mix plants and other road construction and bridge construction machinery |
Nos. |
150 |
150 |
-- |
|
Dairy machinery
and equipment – various items in aggregate |
Nos. |
35584 |
35584 |
-- |
|
Chemical plant and
machinery including pharmaceutical, dyestuff, distillery, brewery and solvent
extraction plants, evaporators and crystalliser plants and pollution control
equipment in aggregate |
Tones |
6067 |
6567 |
5052 |
|
Equipment for
food processing industry |
Tones |
65 |
65 |
-- |
|
Complete cement
making machinery including rotary kilns and fluxo packers in aggregate |
Nos. |
2 |
2 |
-- |
|
Sugarcane and
beet diffusion, beet preparation and beet pulp dehydration plants |
Nos. |
2 |
2 |
-- |
|
Nuclear purpose equipment,
deaerators, ultra high pressure vessels including multiwall vessels, high
pressure heat exchangers and high pressure heaters in aggregate |
Tonnes |
5000 |
3950 |
110 |
|
Plant and equipment
and modules for nuclear power projects, heavy water projects, nuclear and
space research and allied projects including items for chemical, oil and gas,
etc., industries |
Tones |
10000 |
10000 |
10877 |
|
Complete high
speed bottling plants |
Nos. |
6 |
6 |
-- |
|
Pulp and paper
making plants |
Nos. |
2000 |
800 |
-- |
|
Suspended
particles drying plants |
Nos. |
6 |
6 |
-- |
|
Containers for
liquefied gases and chemicals |
Nos. |
Not Applicable |
1000 tones carrying capacity |
-- |
|
Steel plant valves |
Nos. |
40 |
40 |
-- |
|
Ship auxiliaries
and components of mechanised sailing vessels |
Tones |
1000 |
1000 |
-- |
|
Rubber Processing
Machinery |
Nos. |
109 |
109 |
211 |
|
Switchgear, all
types |
Nos. |
2678500 |
3174750 |
3666597 |
|
Miscellaneous electrical
items |
Nos. |
1049100 |
1039100 |
-- |
|
Petrol dispensing
and metering pumps |
Nos. |
4800 |
4800 |
6906 |
|
Press tools,
jigs, fixtures, dies for pressure, castings, moulds for plastic injection and
bakelite |
Rs./Nos. |
22.00 millions |
29.50 millions |
47.100 Nos. |
|
Glass bottles and
jars |
Nos. in Million |
Not Applicable |
400 |
107.9 |
|
Portland Cement |
Tones |
2.218 millions |
15.00 millions |
11.741 millions |
|
Industrial
Machinery |
Tones |
12000 |
12000 |
10585 |
|
Industrial
Electronic Control Panels |
Nos. |
2500 |
2500 |
459 |
|
Electronic
Devices |
Nos. |
30000 |
30000 |
936 |
|
Electro surgical
unit and accessories |
Nos. |
Not Applicable |
1250 |
556 |
|
Ultrasound
equipment and accessories |
Nos. |
1000 |
900 |
715 |
|
Patient
monitoring system and accessories |
Nos. |
5500 |
5500 |
4704 |
|
Relays |
Nos. |
Not Applicable |
55000 |
48583 |
|
Control &
relay panels |
Nos. |
Not Applicable |
100 |
-- |
|
Electricity
meters |
Nos. |
Not Applicable |
480000 |
412741 |
|
Transmission line
tower |
Tones |
54000 |
54000 |
65333 |
|
Steel structural
fabrication |
Tones |
18000 |
18000 |
32277 |
|
Steel re-rolling |
Tones |
40000 |
40000 |
25584 |
|
Ready mix
concrete |
M3 |
660400 |
3128000 |
2017662 |
GENERAL INFORMATION
|
No. of Employees : |
22,922 |
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Bankers : |
˜
State
Bank of ˜
Bank
of ˜
Central
Bank of and several other banks. |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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|
Name : |
Sharp & Tannan Chartered
Accountants |
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|
|
|
Associates: |
˜
Ewac
Alloys Limited ˜
Audco
India Limited ˜
L&T
Niro Limited ˜
L&T
Chiyoda Limited ˜
L&T
Sargent & Lundy Limited ˜
L&T
Komatsu Limited ˜
International Seaports Pte. Limited ˜
L&T
John Deere Private Limited ˜
L&T
Ramboll Consulting Engineers Limited ˜
Larsen
& Toubro ( ˜
L&T
Crossroads Private Limited ˜
L&T
Case Equipment Private Limited ˜
Sharp
Business Systems ( ˜
L&T
Infocity-Ascendas Private Limited ˜
The
Dhamra Port Company Limited ˜
Voith
Paper Technology India Limited ˜
Larsen
& Toubro ( ˜
Desbuild
– L&T Joint Venture ˜
Larsen
& Toubro Limited – Shapoorji Pallonji & Company Limited Joint Venture ˜
L&T
Hochtief Seabird Joint Venture ˜
HCC-L&T
Purulia Joint Venture ˜
L&T
Demag Plastics Machinery Private Limited ˜
L&T
HCC Joint Venture ˜
Bauer-L&T
Diaphragm Wall JV ˜
International
Metro Civil Contractors ˜
L&T
Joshi Technologies Inc. Joint Venture |
|
|
|
|
Subsidiaries : |
˜
Tractor
Engineers Limited ˜
L&T
Finance Limited ˜
L&T
Capital Company Limited ˜
L&T
Trade.com Limited ˜
Larsen
& Toubro Infotech Limited ˜
Larsen
& Toubro Infotech ˜
LTM
Limited ˜
L&T
Transportation Infrastructure Limited ˜
HPL
Cogeneration Limited ˜
Narmada
Cement Company Limited ˜
Narmada
Infrastructure Construction Enterprise lt ˜
L&T
Western Indai Tollbridge Limited ˜
L&T
Equipment Leasing Company Limited ˜
India
Infrastructure Developers Limited ˜
L&T
Netcom LIMITED ˜
Larsen
and Toubro Ceylinco (Private) Limited ˜
L&T
Cement Limited ˜
Dakshin
Cements Limited ˜
Larsen
& Toubro ˜
Larsen
& Toubro International FZE, Sharjah ˜
L&T
Holdings Limited ˜
L&T
Infocity Limited ˜
Hyderabad
International Trade Expositions Limited ˜
Andhra
Pradesh Expositions Private Limited ˜
L&T
ECC Construction (M) SDN BHD, ˜
Bhilai
Power Supply Company Limited ˜
L&T
Power Investments Private Limited ˜
Cyberpark
Development & Construction Limited |
|
|
|
|
Membership : |
Confederation of
Indian Industry |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
325,000,000 |
Equity Shares |
Rs.10/- each |
Rs.3250.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
27480000 |
Equity Shares |
Rs.10/- each |
Rs. 274.800 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share Capital |
274.800 |
259.800 |
248.800 |
|
|
3] Reserves &
Surplus |
46126.900 |
33431.500 |
27501.600 |
|
NETWORTH
|
46401.700 |
33691.300 |
27750.400 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
4657.900 |
7937.200 |
10452.500 |
|
|
2] Unsecured
Loans |
9877.800 |
10653.400 |
2791.000 |
|
TOTAL BORROWING
|
14535.700 |
18590.600 |
13243.500 |
|
|
DEFERRED TAX LIABILITIES |
2097.900 |
0.000 |
0.000 |
|
|
|
|
|
|
|
TOTAL
|
63035.300 |
52281.900 |
40993.900 |
|
|
|
|
|
|
|
APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
13207.300 |
10172.400 |
9901.800 |
|
Capital work-in-progress
|
2838.900 |
658.200 |
262.300 |
|
|
|
|
|
|
|
INVESTMENT
|
19195.200 |
9609.300 |
9658.800 |
|
DEFERREX TAX ASSETS
|
1325.100 |
0.000 |
0.000 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS &
ADVANCES
|
|
|
|
|
|
|
Inventories
|
22102.700
|
23108.400
|
18123.000 |
|
|
Sundry Debtors
|
48141.600
|
39636.000
|
33145.800 |
|
|
Cash & Bank Balances
|
5832.000
|
8280.200
|
3752.700 |
|
|
Other Current
Assets |
172.600
|
0.000
|
0.000 |
|
|
Loans & Advances
|
19116.300
|
18597.200
|
14216.800 |
Total Current Assets
|
95365.200
|
89621.800
|
69238.300 |
|
Less :
CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
58962.500
|
50232.300
|
41726.600 |
|
|
Provisions
|
10153.700
|
7946.400
|
6802.800 |
Total Current Liabilities
|
69116.200
|
58178.700
|
48529.400 |
|
Net Current Assets
|
26249.000
|
31443.100
|
20708.900 |
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
219.800 |
398.900 |
462.100 |
|
|
|
|
|
|
|
TOTAL
|
63035.300 |
52281.900 |
140993.900 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other
income]
|
151986.300 |
141015.300 |
107401.400 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
13136.500 |
12853.900 |
7681.300 |
Provision for Taxation
|
3015.100 |
3015.400 |
2353.800 |
Profit/(Loss) After Tax
|
10121.400 |
9838.500 |
5327.500 |
|
|
|
|
|
|
Export Value |
31779.900 |
26673.700 |
NA |
|
|
|
|
|
|
Import Value |
14597.600 |
14813.700 |
NA |
|
|
|
|
|
Total Expenditure
|
138849.782 |
126001.900 |
97679.200 |
SUMMARISED RESULTS
|
PARTICULARS |
|
|
31.03.2007 [Full Year] |
|
Sales Turnover |
|
|
175788.400 |
|
Other Income |
|
|
4622.900 |
|
Total Income |
|
|
180411.300 |
|
Total Expenditure |
|
|
158323.000 |
|
Operating Profit |
|
|
22088.300 |
|
Interest |
|
|
339.300 |
|
Gross Profit |
|
|
21749.000 |
|
Depreciation |
|
|
1700.100 |
|
Tax |
|
|
6275.000 |
|
Reported PAT |
|
|
14030.200 |
|
Dividend (%) |
|
|
6500.000 |
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
0.42 |
0.52 |
0.72 |
|
Long Term Debt-Equity Ratio |
0.31 |
0.35 |
0.51 |
|
Current Ratio |
1.35 |
1.35 |
1.20 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
6.90 |
6.64 |
2.44 |
|
Inventory |
6.71 |
6.48 |
5.94 |
|
Debtors |
3.39 |
3.67 |
3.11 |
|
Interest Cover Ratio |
7.85 |
7.79 |
7.10 |
|
Operating Profit Margin(%) |
9.74 |
8.33 |
9.84 |
|
Profit Before Interest And Tax Margin(%) |
9.02 |
7.67 |
9.04 |
|
Cash Profit Margin(%) |
6.48 |
5.82 |
6.19 |
|
Adjusted Net Profit Margin(%) |
5.76 |
5.16 |
5.39 |
|
Return On Capital Employed(%) |
24.16 |
22.34 |
16.77 |
|
Return On Net Worth(%) |
21.74 |
22.69 |
16.99 |
STOCK PRICES
|
Face Value |
Rs. 10.00/- |
|
High |
Rs. 1698.00/- |
|
Low |
Rs. 1624.00/- |
LOCAL AGENCY FURTHER INFORMATION
History
Subject was
incorporated on 7th February 1946 as a private limited company to
take over the partnership business of `Larsen & Toubro'. It was converted
into a public limited liability company in 1950.
The company was
founded in 1938 by two Danish engineers, Henning Holk Larsen and Soren Kristian
Toubro, as a partnership firm, Larsen & Toubro became a private limited
company in 1946 and a public limited one in 1950. It manufactures a wide range
of engineering products like earthmoving, industrial and chemical machinery,
switchgears, valves, welding alloys and cement machinery, L & T diversified
into shipping, acquiring two bulk carriers from
The company is one
of the largest engineering conglomerates in
The company has
four major divisions – Engineering and Construction (59 % of FY 2000-01 sales),
Cement (28 %), Electricals and diversified products (9 %). It also has a 100 %
subsidiary – L & T Information Technology Services (to be renamed L & T
Infotech)
The company has
promoted a 50:50 venture with Komatsu Asia and
In 1999-2000, the
company acquired the Chowgule-promoted Narmada Cement Company at a cost of Rs.
2430 millions. Today it is the
With the completion
of the cement grinding unit of 1 million tonne capacity at
In June 2001, name
of L & T Information Technology Limited was changed to Larsen & Toubro
Infotech Limited, subsequently the equity shares of LTIL were sub divided into
fully paid up equity shares of Rs. 5/- each.
During 2001-02, the
Construction division has executed major projects viz. a) Coal Handling Plant
(4400 MTPA) for Paradip Port Trust b) 21 MW Power projects at Mithapur for Tata
Chemicals.
Much awaited,
extensively deliberated demerger of Cement business to Ultra Tech Cemco has
been effective from 1st April, 2003 and now Larsen and Toubro is
purely a EPC contractor with interests in electrical and electronics, ready mix
concrete and power (through subsidiary).
The Cement division
of the L & T has been demerged and transferred to Ultra Tech effective from
1st April, 2003. Accordingly, for every 10 shares of Rs. 10/- each
held in Larsen and Toubro (before demerger), the shareholders will get (a) 5
shares of Rs. 2 each of demerged L and T (residual entity) and 4 shares of Rs.
10 each of Ultra Tech.
Before demerger, L
and T has a paid up capital of Rs. 2487.100 millions, which has been reduced to
Rs. 248.800 millions. The company feels this is necessary as it is no longer
represented by assets. Such reduction is being effected by reducing the face
value of the equity shares of the company from Rs. 10 per equity share to Re. 1
per equity share. Subsequently, the company will consolidate 248.800 millions
equity shares of L & T of the reduced value of Rs. 1 into 124.400 millions
equity shares of Rs. 2 each fully paid up. Simply put, for every 10 shares of
Rs. 10 each of L & T, the shareholders will get 5 shares of Rs. 2 each in
the residual entity.
L & T holds 20%
stake in Ultra Tech as of 31st March, 2004. However, as per the
scheme of arragement, subject will divest 8.5% stake in Ultra Tech to Grasim
Industries. The demerger of cement division into Ultra Tech has become
effective from 14th May, 2004. The shares of Ultras Tech will be
listed in bourses within 40 days from the above effective date. Meanwhile,
Grasim has made an open offer to shareholders of Ultra Tech to acquire 30%
stake amounting to 3,73,19,587 equity shares of Rs. 10 each of Ultra Tech for
Rs. 342.60 per share.
Grasim has already
deposited the entire open offer consideration in an escrow account. The open
offer opened on 7th June, 2004 and closed on 21st June,
2004.
Some of the
initiatives to demerge are:
˜
A
Subsidiary company, L & T Cement Limited to be formed.
˜
L &
T shareholders to receive about 25 % stake in LTCL.
˜
Narmada
Cement company to be merged with LTCL.
˜
L &
T would invite a strategic financial partner in LTCL.
˜
The
strategic partner would have the same level of shareholding with L & T
through a combination of secondary purchases and infusion of capital in LTCL
over a period of time.
Year in
Retrospect
The gross sales and other income for the financial year under report were Rs.
154290.000 millions as against Rs. 139530.000 millions for the previous
financial year registering an increase of 11%. The Profit before tax and
extraordinary items (after interest and depreciation charges) was Rs. 13140.000
millions and the Profit after tax (before extraordinary items) was Rs. 9420.000
millions for the financial year under report as against Rs. 12860.000 millions
and Rs. 9840.000 millions respectively for the previous financial year.
Dividend
The Directors recommend
payment of dividend of Rs. 22/- per equity share of Rs. 2/- each. Equity Shares
that may be allotted on exercise of options granted under the Employee Stock
Option Schemes as also on conversion of outstanding Foreign Currency
Convertible Bonds before the Book Closure for payment of dividend will be
entitled to receive full dividend.
Capital & Finance
During the year under report, the Company allotted 22,86,496 equity shares of Rs.
2/- each upon exercise of stock options by the eligible employees under the
Employee Stock Option Schemes.
The Company also allotted 51,75,099 underlying equity shares in respect of
Global Depository Receipts issued upon conversion of US $ 128,270,000 Bonds out
of US $ 150 mn - 1.25% Foreign Currency Convertible Bonds (due 2009) issued in
November 2004.
During the year, the Company raised funds aggregating Rs. 10210.000 millions
through privately placed debentures and redeemed debentures including those
allotted earlier, aggregating Rs. 11480.000 millions.
The Company issued at par, Zero Coupon Foreign Currency Convertible Bonds
aggregating to JPY 11.57 bn (US $ 100 mn equivalent), comprising 1157 Bonds of
JPY 10,000,000 each (INR value: Rs. 4353.800 Millions) to finance ongoing
capital expenditure and acquisitions. The Bonds have a tenor of 5 years and
will be redeemed at 103.30% of the principal amount on Maturity Date. The Bonds
are convertible into Global Depository Shares, at the option of Bondholders at
an initial conversion price of Rs. 2498.45 per equity share.
The above Bonds are listed on the Singapore Exchange Securities Trading
Limited.
Management
Discussion and Analysis
Review of Economy
The Indian GDP grew at 8.4% in 2005-2006, surpassing the high of 7.5% achieved
in 2004-2005. On the back of healthy monsoon, Agriculture bounced back with a
growth of 3.9% as compared to 0.7% in 2004-2005. In the last few years, both
the industry and services have acted as the twin engines propelling the growth
of the economy, contributing about 20% and 61% of the GDP respectively.
Industry achieved a growth of 7.6% (7.4 in 2004-2005) while Services grew by
10.3% (10.2% in2004-2005). Substantial progress was witnessed in attracting
private investment in several sectors including infrastructure sectors like
roads, ports and airports.
During the year 2005-2006, the Fiscal deficit was at 4.1% of GDP on account of
containment of the revenue deficit at 2.6% of GDP. The spurts in oil and gas
prices were effectively countered with significant increase in forex inflows,
thereby not allowing the deficit to adversely impact the floating rupee.
Inflation has been maintained at 5% despite the hike in crude oil and commodity
prices. As per the latest study of FDI confidence index survey,
There was a renewed activity in the Gulf and South East Asian economies. The
hardening of oil prices has had a two fold impact; one on the oil rich
economies with a boom in construction and infrastructure sectors, another on
the developing economies to bring efficiencies in the oil and gas mid stream
and down stream activities, besides pursuing oil exploration with renewed
vigour and urgency. It is heartening to note that during 2005-2006, the trade
amongst the Asian countries surpassed the amount of trade Asian countries had with
the rest of the world. This augurs well for the Indian industry in general and
the Company in particular, in the years ahead.
Company
Performance
The booming Indian economy has had a distinctive and favourable impact on the
business of the Company for the year 2005-2006. Development activities in the
Company's core sectors of operation such as transportation infrastructure,
hydrocarbon upstream, power and industrial equipments & utilities have
endowed the Company with excellent opportunities. Right moves toward
capitalizing these opportunities have enabled the Company's encouraging
performance during the year under report.
The Company's businesses have bees classified into 6 Operating Divisions, vi;
(i) Engineering Construction & Contract; Division (ECCD) (ii) Engineering
& Construction Projects Division (E&C. Projects) (iii) Heavy
Engineering Division (HED) (iv) Electrical & Electronics Division (EBG) (v)
Machinery & Industrial Products Division (MIPD) and (vi) Technology
Services Division.
All the major businesses of the Company reported improved performance during
2005-2006. Most of the Subsidiary & Associate companies, operating in
varied sectors, directly or indirectly related to the parent Company's core
businesses, had performed well during the year under report. The performance
highlights of some of the key Subsidiary & Associate companies are covered
in the later part of this report.
The Company has launched Programme Lakshya, a five year strategic plan for
charting its growth path. It aims at enhancing shareholder value by achieving
profitable growth in scalable high end businesses, expanding international
operations, achieving operational excellence and through effective talent
management.
Critical initiatives of this programme include (i) achieving cost efficiencies,
(ii) thrust on engineering and IT services, (iii) risk management, (iv) supply
chain management, (v) shared services, (vi) exploring the inorganic route for
bridging competency gaps, achieving scale, etc.
All the Operating Divisions have launched implementation programmes to monitor
the Programme Lakshya initiatives.
During the year 2005-2006, the Company has divested its stake in two of its
Associate companies, namely, L&T-John Deere Private Limited and
L&T-Niro Limited. The Company also exited the Dairy & Milk Processing
equipment business forming a part of the Engineering & Construction
Projects Division and Glass container business forming part of the Machinery
& Industrial Products Division during the year under report.
These initiatives are a part of the regular review of business portfolio of the
Company, which is focused on profitable growth of its core and scalable
businesses.
The management of Larsen & Toubro Limited presents the analysis of Division
wise performance of the Company for the year 2005-2006 and its outlook for the
future. This outlook is based on assessment of the current business
environment. It may vary due to future economic and other developments, both in
Outlook
On the domestic front, progressive policies impacting the Infrastructure,
Manufacturing and core sectors of the economy have opened up a large vista of
opportunities for the Division. The continuing resilience and buoyancy in the
Oil producing countries augurs well for the Division's penetration in the
IPU Sector: The booming market has seen new players entering the markets.
However the capability of providing turnkey solutions for EPC projects, timely
completion and the excellent performance of L&T supplied equipment have
provided the competitive edge to the Company's business in this sector. The
growth envisaged in Power & Port sectors, should provide attractive opportunities
to the Bulk Material Handling business.
With the successful awarding of an industrial water project through the PPP
route in the state of Andhra Pradesh, the sector now looks forward to repeat
opportunities for such projects in other states. Since water supply projects
are a point of focus for almost all State Governments due to the enormous
demand supply gap, large value orders involving Water Treatment process will be
the order of the day Investments in Steel plants by private players will
continue to be buoyant.
HC&P Sector: Major expansion plans by the refineries and petrochemical
industry from public and private sectors provide good opportunities for the
Division. Opportunities such as (i) development of total five Thermal Power
Plants with a planned investment outlay of Rs. 800000.000 Millions, (ii)
expected BOOT projects in the transmission lines and (iii) investments by the
State Electricity Boards are expected to provide the much needed fillip to the
power sector. Continuing inflow of funds to the Power Grid for establishing 765
kV and 400 kV Switchyards enhance the business prospects of HC&P sector.
Continued thrust on Hydropower development by the government for generation of
050000 MW Hydroelectric Power' will create business opportunities for the
sector. The Government's clearance for implementation of four Nuclear Power
Projects in the near future and the recent Indo-US agreement on Nuclear Energy
co-operation is expected to expedite growth of Nuclear Energy. The above
opportunities portend well for the sector as a whole in the coming years.
B&F Sector: The growth potential of the business under this sector is
expected to improve with rapid urbanization of tier-II cities, and increased
awareness about health and recreation. There is a huge scope for modernization
of airport terminal buildings and other related developments.
TI Sector: The renewed focus of the Government on Infrastructure will result in
more opportunities during 2006-2007 in Roads, Airports, Bridges and Ports. Six
expressways are identified to be developed through an international competitive
bidding process. Major allocations have been planned for urban infrastructure
projects, including Mumbai and
Global Engineering Solutions (GES), recently established as an arm of ECCD's
Engineering Design Research Centre, has made good forays into the international
markets of Engineering & Design consultancy, expecting to emulate the
success of Indian software companies.
Thus, with the accelerated growth in the economy, backed by the initiatives of
the various business sectors, the Division is optimistic about its growth
prospects over the next few years.
Year
2005-2006 at a Glance
v New Order Inflow
Rs.223050.000 Million (Previous Year Rs. 149420.000 Million) - Growth 49%
v Order Backlog Rs.246460.000
Millions (Previous Year Rs. 177280.000 Millions) - Growth 39%
v Gross Sales
Rs.148840.000 Million (Previous Year Rs. 132550.000 Million) - Growth 12%
v Export Sales
Rs.26420.000 Million constituting 18% of Total Sales.
v Segment-wise
composition of revenue:
Engineering &
Construction Segment 82.3%
Electrical & Electronics
Segment 10.4%
Others" Segment 7.3%
v PBDIT Rs.15730.000
Millions (Previous Year Rs. 14340.000 Million) - Growth 9.7%
v PAT Rs.10120.000
Million (Previous Year Rs.9840.000 Million) - Growth 2.8%
v
Debt Equity ratio of 0.32:1 (Previous Year 0.56:1)
It is in trade
terms with:-
˜
A S
Enterprises
˜
Dipti
corrugating Industries Private Limited
˜
Dyna
Hitech Power Systems Limited
˜
Apollo
Soyuz Electricals Private Limited
˜
Adhithiya
Gears Private Limited
˜
Afmc
Lubrication Private Limited
˜
Ambattur
Heat Treaters Private Limited
˜
Are Vee
Engineering Works
˜
Acumac
Machine Tools Private Limited
˜
Adithya
Castings Private Limited
˜
D C
Metal Corporation
˜
Chennai
Hydro-Maatics Private Limited
˜
D’Souza
Metal Cutting Private Limited
˜
Dwarkesh
Engineering Works Private Limited
˜
Excellent
Products of
˜
Industrial
Controls & Drives (
˜
J &
J Biotech and Speciality Chemical (Private) Limited
˜
Empee
Engineers (Private) Limited
˜
Tamilnadu
Heat Treatment and Fetting
˜
Sargam
Metals Private Limited
˜
Kabra
Engineers
˜
Ujwal
Plastic Industries Private Limited
˜
Victory
Timber & Plywood
˜
Venus
Technical Services
˜
Vita
Technology Private Limited
˜
Wadhwa
Brothers Engineering
˜
Yashvin
Filters
˜
Young (
˜
Yojana
Udyog Private Limited
˜
Swastik
Heavy Structural Private Limited
˜
Shree
Jalaram Wood Works
˜
Setwel
Industries
˜
Union
Abrasives
˜
Toughedge
Industrial Tools Private Limited
˜
Vanjax
Sales Private Limited
Technical Tie-ups with Overseas Companies
˜
BTR
Plc,
˜
Caterpillar
Inc,
˜
Chiyoda
Corporation,
˜
E &
C,
˜
Niro
A/S,
˜
Precious
Shipping Public Company Limited,
˜
˜
SSA
International Inc.,
˜
Zubair
Enterprises LLC, Sultanate of
The company's fixed
assets of important value include goodwill, freehold and leasehold land, mining
lease, ships, buildings, railway sidings, plant & machinery, furniture
& fixtures, vehicles, aircraft and Jetties
AS PER
WEBSITE
Founded in 1938, Larsen
& Toubro Limited (L&T) is one of
Serving the core sectors and infrastructure of the
economy, L&T has pioneered spectacular achievements in Indian industry.
Many of the engineering and construction projects executed by L&T have set
new benchmarks in terms of scale, sophistication and speed. So do many
buildings, ports, highways, bridges and civil structures around the country, which
are widely regarded as landmarks.
Indian Multinational
In line with its strategy of aligning capabilities to
meet emerging trends, L&T recently initiated a mega-transformation process,
internally to ensure that it emerges, as a knowledge-based Indian
multinational. Over the years the company has proactively created the necessary
infrastructure for its global initiative with office locations in
The Engineering and Construction (E&C) Division
forms the biggest segment of its parent group Larsen
and Toubro's Business Portfolio. This division is capable of
carrying out turnkey projects in core sector of Industry on EPC basis.
The Engineering and Construction Division has
integrated its strengths in process technology, basic and detailed Engineering,
modular fabrication, procurement, project management, construction and
commissioning to offer single point responsibility under stringent delivery
schedules, having offices at various locations in
Modular Fabrication Facility (MFF) at Hazira, one of
the largest of its kind in
The Engineering & Construction Division made
significant progress during the year in increasing its presence in the overseas
markets. The Division secured orders from international clients located at
Malaysia, USA, UK, Brazil, Saudi Arabia, UAE, Qatar, Bangladesh, Sri Lanka,
etc. The export earnings of the Division amounted to Rs. 24600 million during
the year 2005-06. The customer profile includes leading names such as Samsung,
Chevron, Bechtel, Kvaerner,
The Electrical & Electronics Division too has
increased its thrust on exports and the share of export revenues during the
year ended March 31, 2006 increased to 11 % as compared to 8% in the previous
year.
L&T believes that progress must necessarily be
achieved in harmony with the environment. A commitment to community welfare and
environmental protection constitute an integral part of the Corporate Vision.
Press Release:
L&T fabricates 8,000-t platform for
ONGC
Hazira , Nov. 4
A 1400-TONNE structure, part of the 8,000-tonne mega
process platform for Oil and Natural Gas Corporation, has already been loaded
on a floating deck on the Tapti shore of Larsen & Toubro's Hazira facility,
the finishing touches being given to it.
"This is the largest process platform that
has ever been constructed in
The other sections of the mega platform are also
almost ready. The 1665-tonne East deck, which will complement the 1400-tonne
west deck which has been already loaded, is also ready for transfer to the
floating deck. This will be done by means of hydraulic cranes and ramps, a moving
event indeed for the project team and the workers who had worked on the
platforms for over a year now. Both the decks will then be towed down the river
Tapti and out its mouth into the
There are the other sections too - the
1200-tonne living quarter deck, topped by a helideck, which will accommodate 50
persons who would be working on the offshore well nearly 200 km off the coast,
the 1500-t turbo generator module which will generate 30 MW of electricity and
a 1100-tonne process gas compressor module. Then there are desalination units
as well.
All these will be installed on an 8-legged support structure - the jacket -
which sits on the seabed, with the modules installed one after the other using
a derrick barge with a lifting capacity of 2,400 tonnes. L&T has outsourced
this work to J Ray McDermott Eastern Hemisphere Limited.
One of the platform's main functions is to draw
seawater at a depth of 30 metres below sea level, filter, deoxygenate and raise
the pressure so as to be suitable for injection whose pressure will force out
the crude from Bombay High North (BHN) wells. (The project is part of ONCG's
redevelopment facility to enhance output of oil and gas from Bombay High.) The
water will be transported to the BHN platform through a pipeline over a bridge
which is also constructed by L&T. In fact, the entire platform will be
connected to the existing BHN platform in mid-sea.
The extracted natural gas received from the BHN
platform will be received by the newly installed deck and compressed and sent
back to BHN for dehydration and later, transportation to the onshore terminal.
Almost 3,000 workers each working 12 hours a day for 30 days a month have been
employed on the project, says Mr. Desai. The size of the project has called for
varying labour requirements, a lot of which has been outsourced to certified
labour contractors, he says. ONGC had awarded the contract to Engineers India
Limited as Rs 8210.000 Million which in turn subcontracted the platform
construction and commissioning to L&T at Rs 6060.000 millions.
Construction boom lifts L&T net 68%
to Rs 71
Buoyed by robust performance from its
engineering and construction business, Larsen & Toubro, the diversified
engineering and cement major, has reported a 68% rise in net profit for the
second quarter ended September 30, '03 to Rs 710.000 Millions, up from Rs
422.000 Millions during the corresponding period last year.
Net sales during the three-month period surged
to Rs 24978.000 Millions up from Rs 19181.000 Millions, while other income more
than doubled to Rs 1246.000 Millions during the period. Profit before tax shot
up from Rs 453.000 Millions to Rs 906.000 Millions.
For the first half of the fiscal, L&T
clocked a 73% rise in net profit to Rs 1503.000 millions up from Rs 868.000
Millions in the same period last year. Net sales rose from Rs 3864 millions to
Rs 46336.000 millions, while other income shot up from Rs 952.000 Millions to
Rs 1961.000 Millions during the period. "Other income has shown a steady
rise during the last quarter, mainly due to receipts from integrated joint
ventures, exchange gains and treasury operations," L & T's CFO, YM
Deostalee, said.
For L&T, the E&C segment, which reported
a 44% growth in revenues during the three-month period, has been the main
driver. Although operating margins were lower, gross revenues from the segment
jumped to Rs 17260.000 millions. Domestic order booking in this business surged
by 49% to Rs 2131 Millions, while export orders more than doubled to Rs 1,082
Millions during the period. The total order backlog position has risen 32% to
Rs 15697 Millions.
The L&T scrip shot up 3.5% to close at Rs
406.8 on the Bombay Stock Exchange, ahead of the announcement of quarterly
results. The cement business, which is in the process of being hived off with
the Aditya Birla group in the driver's seat, has reported a modest 5% rise in
revenues during the last quarter to Rs 629 Millions. With average realization
down by 3.8%, the division's operating margin fell from 12.7% to 10.9% during
the period.
On the contrary, the company's electrical and
electronics business shored up revenues by 26% to Rs 254 Millions during the
quarter, driven by a pick-up in sales of switchgear standard products,
switchboards and petrol dispensing pumps. However, operating margins declined
from 14.5% to 11.4% following wage settlement at the Powai works.
"The E&C business maintained the growth
momentum in order booking and revenues for the quarter. While domestic order
booking reflects the leadership position of the company, the export orders
booked increasingly underscore the company's ability to secure orders against
stiff international competition," L&T said.
L&T-Demag's New
Manufacturing Facility In Chennai
Chennai, October 1, 2005: The new manufacturing facility of plastics machinery major
L&T-Demag Plastics Machinery Limited, located at Chembarambakkam in
Chennai, will be inaugurated jointly by Mr. A. M. Naik, Chairman & Managing
Director of Larsen & Toubro Limited (L&T), and Mr. Pepyn René Dinandt,
Chairman of Mannesmann Plastics Machinery Group, on
October 2, 2005
Established
in 2001, L&T-Demag is a 50:50 joint venture of L&T and Demag Ergotech
GmbH (a part of Mannesmann Plastics Machinery Group),
The
new factory was set up at an investment of around Rs. 25 Millions. It is equipped with advanced technology
for design, manufacture and testing of plastics injection moulding machines.
Its 600 machines per year capacity will be soon expanded to 1000 machines in
the near future. A significant portion of the expected revenue of around Rs.
300 Millions will be earned from exports.
&T Group Company
Bags Rs. 165 Millions
Order From
Mumbai, September 26, 2005: Larsen & Toubro Electromech LLC (LTEM),
The
order is valued at Rs. 165 Millions (US $37.15
million) and has been bagged against stiff competition from local and
international players. The scope of work involves construction of 293 km of 132
kV overhead transmission lines interconnecting various existing substations,
construction of new transmission lines and additional substations in the oil
fields of interior
LTEM,
formerly known as Zubair Kilpatrik LLC, is a recent acquisition of L&T as
part of its efforts to accelerate business in the
LTEM,
where L&T has a shareholding of 65%, is operating with four key Business
Units, viz., MEP Services, Electrical and Instrumentation for Oil and Gas,
Engineering and Maintenance Contracts for Electrical and Instrumentation, and
Facilities Management. It will also complement and supplement LTO in projects
involving facilities management and building utility works.
L&T Wins Rs.
4300.000 Million Orders
For Export Of Process Plant Equipment
Mumbai, September 21, 2005: Continuing its thrust on high-tech
engineering exports, Larsen & Toubro Limited has recently bagged a slew of
orders valued over Rs. 430 Millions for plant
and equipment to countries ranging from
L&T
will engineer, fabricate and supply stainless steel heat exchangers and
pressure vessels for an LNG plant in
In
an export breakthrough to
The
Gulf continues to be a major market for L & T's engineering and
construction expertise. L&T won orders for Heat Exchangers in Stainless
Steel and Incoloy through
Mr.
M.V. Kotwal, Member of the Board and Senior Vice President in charge of Heavy
Engineering Division, said "the orders from international EPC contractors
affirmed L&T's status as a significant global player in the fabricated
process plant equipment market. L&T will continue to strengthen its engineering
capabilities with a view to maintaining its competitive edge in the
international market, while simultaneously enhancing its quality and
manufacturing technologies."
L&T Consortium To
Restore
Mumbai, September 19, 2005: Acting swiftly to restore the output lost due to the
recent fire at Bombay High North (BHN) Platform, the Oil & Natural Gas
Corporation (ONGC) has entrusted a fast-track job of installation of
diversionary pipelines and associated platform modifications to a consortium
led by Larsen & Toubro Limited (L&T) with Global Industries Offshore
LLC,
L&T
will engineer, supply and commission offshore facilities worth around Rs. 325 Millions, in addition to the main order of Rs.930 Millions for pipeline replacement including platform
modifications received earlier this year. The additional scope involves 12 new
submarine pipelines and 24 platforms to be modified, with ambitious completion
target of pre-monsoon 2006.
While
the loss of BHN platform had reduced output by about 0.120 Millions barrels of oil and about 4.4 million cubic
metres of gas a day, ONGC plans to recover a major part of this by diverting
the production through alternative routes. The installation of these additional
pipelines and platform modifications by the L&T Consortium will help to
achieve this in the shortest possible time.
Mr.
K. Venkataramanan, President (Engineering & Construction Projects) and
Member of the Board, L&T, said, "this repeat order is a demonstration
of L&T's heightened response to client needs to meet emergency
requirements, using their well established global project delivery
network".
L&T and
SapuraCrest Petroleum In USD100 Million Joint Venture
Mumbai, June 8, 2006: Leading regional
offshore oil and gas services providers Larsen & Toubro Limited (L&T)
and SapuraCrest Petroleum Berhad (SapuraCrest) today announced the formation of
a joint venture to build, own and operate a derrick cum pipelaying barge valued
at USD100 million.
The 270-person vessel, to be completed in the fourth
quarter of 2008, will allow the companies to better address the growing global
demand for oil and gas engineering, procurement, installation, construction and
services. The 130-metre conventional vessel is capable of lifting heavy loads
of up to 1600 tones revolving, and 2400 tones in fixed mode. It will provide
offshore installation services including sub-sea pipelaying, platform
installation opportunities across
“Quality and delivery in their work has always been
SapuraCrest's key focus in ensuring that they continually grow their
shareholder's value and enhance their competitive advantage while delivering
their primary focus – customer satisfaction,” said Datuk Shahril Shamsuddin,
Executive Vice-Chairman, SapuraCrest Petroleum Berhad. “This joint venture is
the latest in a line of similarly strategic efforts that they have undertaken
over the last two years to ensure that they possess the right technology,
infrastructure, reach and human capital to address the needs of their clients
from
L&T is a technology-driven engineering and
construction organisation, and one of the largest companies in
“Today's partnership further strengthens their ability
to meet the needs of their customers in EPC projects and services for the oil
and gas industry. SapuraCrest is an acknowledged regional leader in its field
and their partnership strengthens both their companies while allowing their
customers greater satisfaction and their shareholders greater returns,” said
Mr. A. M. Naik, Chairman and Managing Director, L&T. “To L & T's
existing capabilities of EPC, this new company will add a vital new dimension –
the power of I – Installation,” he added.
SapuraCrest will own 40 per cent of the yet to be
named joint venture company with 60% being held by L&T.
L&T Declares 1:1
Bonus
Mumbai, June 7, 2006: L&T has
declared a 1:1 bonus issue to its existing shareholders. The last issue of
bonus shares in the ratio of 3:5 was declared in 1986.
The present 1:1 Bonus Issue, i.e., one additional
equity share for every one existing equity share held by the members, being
issued by capitalising a part of the reserves, is being declared in deference
to a longstanding shareholder expectation. It will increase L&T's capital
base to a level that will better reflect its current scale of operations. The
issue will add depth and eventually create a larger market float in terms of
the number of L&T shares, and will thus increase liquidity and turnover of
L&T shares on the Stock Market.
The bonus issue is subject to the approval of the
Shareholders in the Annual General Meeting.
L&T's first issue of bonus shares was in 1973,
when one bonus share was issued for every three shares. Subsequently, bonus
issues were made in 1977 (1:2), 1982 (3:5) and 1986 (3:5).
The presence of the company in almost all the core
sectors of the economy has made investment in the L&T stock a surrogate
investment in the growing infrastructure sector in
It also stands to gain substantially from the capex
plans of companies setting up capacities to meet growing demand in sectors such
as petroleum exploration and refining, steel, cement, power, petrochemicals,
etc. It is also playing an increasing role in supply of equipment to the
defense and aerospace sectors.
L &T and Toyo
Consortium Wins IOCL Naphtha Cracker Contract
Mumbai, May 30, 2006: The
consortium of Larsen & Toubro Limited ( L&T) – India's leading
engineering and construction organization – and Toyo Engineering Corporation
(Toyo), Japan, has won a large scale turnkey contract valued over Rs. 2600
crore from Indian Oil Corporation Limited (IOCL). This contract is for project
management, engineering, procurement and construction of naphtha cracker and
associated units at IOCL's Panipat petrochemical complex in Haryana.
Toyo, the leader of the consortium, would undertake
work for the cracker plant section on EPC basis and overall project management,
while L&T would undertake work for the cracker heaters and associated
units, namely C4 hydrogenation, pyrolysis gasoline hydrogenation, and benzene
extraction units, also on EPC basis. The share of L&T's Petrochemical
Business Unit in the contract is Rs. 9000.000 Millions.
Once operational, this naphtha cracker would be one of
the largest and world-scale capacity plants in
The technology for the cracker is licensed by IOCL
from ABB Lummus of USA.
L&T:
Performance for the year ended March 31, 2006
- PAT for the
year up at Rs. 1012 crore
- 40% increase
in PAT for the quarter ended March 31, 2006
- Group profits
for the year up by 25%
- Dividend
declared at Rs. 22.00 per equity share
Mumbai, May
25, 2006: Larsen & Toubro Limited (L&T) reported a 12%
increase in Gross Revenues from operations of Rs. 14884 crore for the financial
year ended March 31, 2006 as against Rs. 132550.000 Million for the previous
year. The share of revenues from international operations constituted 18% of the
total gross revenues.
Inclusive
of extraordinary items and gains from divestments, Profit after Tax
["PAT"] for the quarter and year ended March 31,2006 has increased to
Rs. 4670.000 Million and Rs. 10120.000 Million respectively.
PAT,
excluding extraordinary items and gains from divestments at Rs. 8630.000
Million for the year ended March 31, 2006 increased by 37% over the previous
year. Similarly, the PAT for the quarter ended March 31, 2006, excluding
extraordinary items and gains from divestments has increased by 37 % over the
corresponding quarter of the previous year.
The
provision for current tax is higher at Rs. 3650.000 Million as compared to the
previous year's provision of Rs. 3210.000 Million, the increase attributed to
increase in share of taxable earnings from business operations.
The Board
of Directors has recommended a dividend of Rs. 22.00 per equity share.
Engineering & Construction
(E&C) Segment
For the year ended March 31, 2006, E&C Segment recorded a substantial
growth of 51% in order booking at Rs. 196090.000 Million. International orders
at Rs. 37860.000 Million constituted 19% of the total value of orders.
A major
share of orders booked relate to the hydrocarbon and infrastructure sectors.
The significant increase in order booking reflects the company's superior
execution skills and resource mobilizing capability to successfully complete
orders of large value and technical complexities.
The details
of the major orders secured during the year ended March 31, 2006 are given in
Annexure I
below.
The segment
recorded revenues of Rs. 125700.000 Million during the year ended March 31,
2006, representing an increase of 10% over previous year. Export sales for the
year at Rs. 24600.000 Million, constituted 20% of the total segment revenue.
The segment result ["Segment PBIT"] for the year ended March 31,2006
at Rs. 9490.000 Million posted an impressive increase of around 24% over the
previous year.
The order
backlog as at March 31, 2006 is healthy at Rs. 241690.000 Million. Capacity
augmentation by way of expansion of the heavy engineering fabrication facility
at Hazira and proposed new facilities at Coimbatore and Middle East are some of
the key initiatives being taken up to address the growth prospects.
Electrical
& Electronics Segment
The segment revenues for the year ended March 31,2006 at Rs. 15820.000 Million
showed a 30% growth over the previous year, reflecting the underlying buoyancy
in the various businesses and re-affirming the segment's dominant status as a
market leader in many of its product ranges in the country. The share of export
revenues during the year ended March 31, 2006 increased to 11 % as compared to
8% in the previous year. The Segment PBIT for the year ended March 31, 2006 at
Rs. 232 crore, posted a smart growth of 60% over the previous year.
Several
internal initiatives like procurement optimization, lean manufacturing,
contemporary product range etc., and supported by a healthy market demand have
had a visible and favorable impact on the performance of the segment. The
segment is augmenting capacity at Ahmednagar and
Other
Diversified Businesses
Total revenues from the Company's other businesses for the year ended March 31,
2006 was Rs. 1111 crore, posting a healthy increase of 33% over the previous
year. Large investments in the domestic infrastructure and construction sectors
have benefited the businesses with higher sales growth witnessed in ready mix
concrete, construction equipment and welding systems/products.
Consolidated Financials
The
consolidated Gross Revenues for the year ended March 31, 2006 of the Group
amounted to Rs. 166660.000 Million, registering a growth of 14% over the
previous year. The net profit accruing to the Group, excluding extraordinary
items and gains from divestitures at Rs. 10510.000 Million, posted an
impressive growth of 51% over the previous year comparative of Rs. 6960.000
Million.
Most of the
entities comprising the Group have reported good performances, both in terms of
revenue growth and profitability, leading to an improved consolidated financial
position for 2005-2006.
Outlook
Sound economic fundamentals and capacity creation prospects across all core
sectors are positive factors facilitating the Company's growth potential in the
near term. The Company's ability to optimize its resources and utilize the
conducive business environment would be a key determinant to its growth and
profitability.
Given the substantial order backlog, the Company expects to sustain its good
performance and meet investor expectations in the medium term.
Annexure I
Major Orders Secured During the
Year Ended March 31, 2006
(April 05-March 06)
|
Domestic |
Rs. millions |
|
Booster compressor platform and modification of existing platforms in the
Bassein Gas Field, north west of Mumbai for Oil and Natural Gas Corporation
Limited |
13000 |
|
Modification of existing facilities, testing, pre-commissioning, and
commissioning of entire facilities (wherever applicable) for Mumbai High North
and Bassein Field for Oil and Natural Gas Corporation Limited |
10000 |
|
Engineering, procurement, onshore fabrication and transportation of
the critical booster and high pressure compression modules approximately 80 km
west, north west of Mumbai for ONGC (Vasai East Development Project) in
consortium with Samsung Heavy Industries Limited., Korea |
7760 |
|
Construction of Blast Furnace "H" of 2.5 MTPA capacity and
electrification works at |
7140 |
|
Construction of buildings, utilities and electrification, airside and
landside work of |
4950 |
|
Construction of Krishnagiri - Thoppur road in Tamil Nadu for L&T Krishnagiri
Thopur Toll Road Private Limited |
4500 |
|
Execution of Parbati hydro electric project stage III, on the river
Sainj, Himachal Pradesh, in consortium with Patel Engineering Limited |
4280 |
|
Development of port facilities at Gangavaram : breakwater (package I)
and marine-onshore civil works (package 3) for Gangavaram Port Limited |
4080 |
|
Overseas |
Rs. millions |
|
Engineering, procurement and commissioning of Vaccum Distillation Unit
(VDU) , off-sites and utilities for Petronas Melaka Group 3 (9MG3) lube base
oil plant, |
5930 |
|
Engineering, procurement, construction and commissioning of facilities
for New Depot project at |
5800 |
|
Manufacture and supply of Column, Regenerator, Reactor and HP Heat
Exchangers for Reliance Industries Limited (Special Economic Zone - |
3840 |
|
Construction of residential buildings at |
3280 |
Larsen &
Toubro Limited
Performance for
the quarter ended 30.09.2006
PAT for the
quarter, up by 41%
Mumbai, 19.10.2006: Larsen & Toubro Limited (L&T)
reported Gross Sales from operations at Rs 38040.000 Million for the quarter
ended 30.09.2006 as against Rs. 33820.000 Million for the corresponding quarter
of the previous year. The share of revenues from international operations
constituted 19% of the gross revenues reported for the quarter. The Company
reported a 41 % growth in Profit after Tax [“PAT”] at Rs. 2010.000 Million for
the quarter ended 30.09.2006 as compared to the PAT of Rs. 1430.000 Million for
the corresponding quarter of the previous year. PAT for the current quarter at
Rs. 1830.000 Million, excluding extra ordinary and other non-recurring items
shows an impressive growth of 53%, when compared to the similar PAT of Rs.
1200.000 Million, recorded during the corresponding quarter of the previous
year.
Engineering & Construction
[“E&C”] Segment
The segment recorded a 15% growth in order
booking at Rs. 46310.000 Million during the current quarter, when compared to
the same for the corresponding quarter of the previous year. The cumulative order
booking during the year till date at Rs. 109550.000 Million, however, shows a
healthy growth of 59% over the same period of the previous year and reflects
the Company’s superior contracting and execution strengths across all industry
segments, most notable being in the infrastructure, hydrocarbon and power
sectors. Segment revenues at Rs. 27490.000 Million for the current quarter
posted an increase of 9%, when compared to revenues for the corresponding
quarter of the previous year. Export sales for the current quarter constituted
20% of the total segment revenue.
Segment profits [“PBIT”] for the current
quarter at Rs. 2150.000 Million showed an improvement of 54% over the
corresponding quarter of the previous year, mainly due to better selection of
jobs, close monitoring and control of contract execution costs and a more
uniform spread-out of jobs crossing the threshold levels for margin
recognition. The order backlog as at 30.09.2006 is healthy at Rs. 292700.000
Million.
Electrical & Electronics Segment
The segment recorded a 23% growth in revenue
at Rs. 4670.000 Million for the current quarter, with higher sales seen in
almost all product categories. Sustained productivity improvement initiatives coupled
with higher volumes also resulted in a 32% growth in segment profits at Rs
740.000 Million, accrued during the quarter under review.
Machinery
& Industrial Products Segment
Segment revenues
for the current quarter at Rs. 4350.000 Million shows an impressive growth of
24% when compared to the corresponding quarter of the previous year. The
increase in revenues was witnessed across the entire business portfolio
comprising both, manufactured and traded products. Increased volumes, higher
price differentials and improved
manufacturing efficiency contributed to a 49% increase in segment profit
at Rs. 630.000 Million during the quarter.
Un-audited Group Financials for the six
months ended September 30,2006
The total income of
the Group for the six months ended 30.09.2006 amounted to Rs. 89380.000
Million, registering a growth of 20% over the corresponding period of the
previous year. The net profit accruing to the Group during the six months
period ended 30.09.2006 stood at Rs. 9250.000 Million which includes net gain
of Rs. 3260.000 Million on dilution / divestments of stakes in group companies.
The net profit for the current period is higher by 83%, when compared to Rs.
5050.000 Million, being the profit for the corresponding period of the previous
year, which included Rs. 1880.000 Millions, being the profit on divestitures.
Most of the entities comprising the Group have reported good performances, both
in terms of revenue growth and profitability.
Outlook
The prevailing
conducive business climate across all sectors in the domestic market and large
investment allocations proposed in the hydrocarbons sector in the Gulf region
present an encouraging array of opportunities for the various business segments
of the Company. Given the comfortable order backlog position, the Company
envisages a higher sales growth in the second half of the current fiscal as
well as in the medium term.
L&T Declares Special Dividend of Rs. 2 per Share on
Birth Centenary of its Co-founder
Mumbai, July 3, 2007: To
commemorate the birth centenary of its co-founder Mr. Henning Holck-Larsen, the
Board of Directors of Larsen & Toubro Limited (L&T) decided to pay a
special dividend of Rs. 2 per equity share of Rs. 2 each.
The company founded by Mr. Henning
Holck-Larsen and Mr. Soren Toubro in 1938, has grown over the years to become
The values he instilled have
become an integral part of the company which continues to maintain a
customer-focussed approach, and the constant quest for top-class quality has
enabled it to achieve and sustain a leadership position in all the business
areas that it operates in.
Mr. Holck-Larsen received several
distinguished awards that included the Padma Bhushan, the Ramon Magsaysay Award
for International Understanding, Knighthood from the Queen of Denmark amongst
others.
Background:
L&T is a 5 billion USD
technology, engineering and construction company, with global operations. It is
one of the largest and most respected companies in
A strong, customer-focussed
approach and the constant quest for top-class quality have enabled L&T to
attain and sustain leadership in its major lines of business across seven
decades. L&T has a distinguished record of achievements including the
world's largest coal gasifier made in India and exported to China, India's
first indigenous hydrocracker reactor, oil and gas platform projects executed
to global benchmarks and the world's largest Continuous Catalyst Regeneration
reactor.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.49 |
|
|
1 |
Rs.81.77 |
|
Euro |
1 |
Rs.55.18 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
10 |
|
PAID-UP CAPITAL |
1~10 |
10 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
10 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
10 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
86 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|