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BEST PRACTICES / CASE STUDIES |
A. ENVIRONMENTAL |
Processes in PlaceThe strategic mission of the Group is to continually boost stakeholder satisfaction, project profitability as well as the effectiveness and efficiency of processes.Towards this, 'Project Prithvi' was instituted as our umbrella initiative to measure, monitor, document and report our economic, environmental and social performance as per Global Reporting Initiatives (GRI)-G3 guidelines. One of our prime objectives is to manage the environmental performance of our Operating Units in line with the requirements of the ISO 9001 and ISO 14001 standards. This is further complemented by integrating certifications and standards like OHSAS 18001 and Six Sigma for business processes across many of our locations. We have strengthened our environmental stewardship through material, energy and water conservation initiatives, recycling and use of renewable energy. We have decentralised our governance mechanisms to benchmark performance against predetermined targets, review impacts, risks and challenges, besides identifying and implementing corrective and preventive action plans. To achieve profitable growth, on a sustainable basis, we charted a strategic plan through 2005-10 named 'PROJECT LAKSHYA'. Its objective is to generate sustainable growth by progressively upgrading our capabilities, systems, processes and services. |
Code of Conduct and Risk Management Framework |
L&T adheres to a set of principles that underpin every practice. These are, prescribed in a code of conduct for all its Board members and Senior Management personnel (one level below the Executive Directors including functional heads) of the Company. This code is our framework for conducting an economically sound, responsible and ethical business. The annual declaration about its compliance by the Company is also given by the CMD.
In addition to the code of conduct, we have in place a comprehensive series of policies, procedures and guidelines that are applicable across the Company. |
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We strictly adhere to Section 299 of the Companies Act, 1956, under which every Director of a company who is in any way concerned or interested in a contract or arrangement, is required to disclose the nature of his concern or interest at a meeting of the Board of Directors. A general notice is given once in a year to the Board by a director to the effect that he is a director or a member of a specified body corporate or is a member of a specified firm and is to be regarded as concerned or interested in any contract or arrangement which may, after the date of the notice, be entered into with that body corporate or firm.
Any change in directorship is also reported to Board immediately. This information is shared with the accountants of all the Operating Divisions to ensure that no transactions are entered with such companies. Also the statutory auditors report is provided on the compliance of this provision. In line with the provisions of Clause 49 of Listing Agreement, every person covered by this code, needs to confirm, on a yearly basis, that he has complied with the Company's Code of Conduct as applicable to Board Members and Senior Management of the Company. Senior officers of the Company are required to confirm whether they or any of their specified relatives have entered into any transaction with the Company. |
GHG Emissions as per Current Scope |
 Green Buildings The built environment is globally responsible for nearly 40% of CO emissions, 40% of solid 2 waste generation and up to 40% of energy use. As nation builders it is our prime responsibility to build a future on a more eco-friendly foundation. EDRC - the Engineering Design and Research Centre of L&T's ECC Division has adopted "Green Buildings" as one of the thrust areas for its development work. A 'Green Building' is one which is designed with sustainability in mind and adopts a holistic approach to design construction, where special attention is given to use of eco-friendly construction materials and energy conservation.Engineering Design and Research Centre of L&T, Chennai - A LEED certified building (silver rating) from US Green Building Council |
 Completed in June 2008 our Hazira Manufacturing Complex demonstrates an intense focus on efficient utilization of resources, and minimal impact on the environment. It has been awarded the highest possible Platinum certification under the Leadership in Energy & Environmental Design (LEED) program.To enhance occupant comfort, energy efficiency, and environmental stewardship a host of features were incorporated at the design stage and various responsible practices were adopted in its construction. |
Design and Construction Highlights |
Sustainable Site
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Water |
 Water is amongst the most vulnerable resources on the planet and its pollution has a serious detrimental impact on the environment. Water availability is on the wane and water pollution on the rise. Water therefore is an issue that must be addressed with utmost care by all members of the industry on an urgent basis.Water gains even deeper significance when it comes to the construction industry. It is a deeply 'embedded' ingredient in the construction industry and the core sustenance of the industry would be in jeopardy without water availability. We constantly measure and monitor water usage and wastewater discharge across locations. During the reporting period our major locations consumed 2,515,592.56 cum of water. During the course of our reporting period we have realised that simple changes to the way our businesses use water can reduce its consumption and minimise wastewater production. |
Water Conservation Initiatives |
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Water Conservation Targets |
| In an endeavour to enhance our water conservation efforts various specific targets have been formulated across the organisation: |
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B. SOCIAL |
| Welfare of Workmen |
In the construction Industry a large number of workmen relocate and many of them stay together in makeshift temporary accommodations with compromised living conditions near the construction site. The welfare of our workmen is a prime responsibility for L&T and we therefore ensure that our workmen across major sites are provided comfortable living facilities and a safe, healthy and engaging environment. Delhi International Airport (P) Ltd. (DIAL) is one of our major project sites, which employs approximately 20,000 workmen. We have constructed a colony for these workmen comprising of all basic amenities like sewerage, sanitation, electricity, drinking water and medical services.
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Facilities provided in the colony include: |
| Medical Centre: A full-fledged 10 bed medical centre with qualified doctors, 5 ambulances and paramedical staff has been provided to take care of the workers' health. Round-the-clock free health check-up facility and medicines are made available. Drinking Water: 24x7 supply of drinking water is provided at sufficient places across the colony and the water quality is checked regularly. General Stores: 10 general stores have been opened where workers can shop for their daily requirements within the colony itself. Solid Waste: The solid waste generated from the colony is collected in special plastic containers and recyclable materials are subsequently segregated. Electricity: Round-the-clock electricity facility is available in the colony. Safety: Fire extinguishers & fire buckets are installed at all strategic locations. Safety marshals too have been deployed at prominent locations. Security: The colony is fenced and security guards are deployed at entry and exit points. Identity cards have been provided to all the workers. Public announcement systems are available for any emergency use. Environment: Ambient air, drinking water and noise are regularly monitored. Waste Water Treatment: Three Sewage Treatment Plants have been constructed to treat the wastewater generated from the colony. This treated water is reused for dust suppression within the project area. |
Key Benefits |
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Dispersion Study for Stack Emissions |
 Stringent environmental norms meeting global standards began to be adopted by the domestic sector as well. Air Dispersion Analysis & Modeling for Stack Emission, which were required for a few international projects until recently, have also become mandatory for projects in India.In response, L&T Engineering, Vadodara has enhanced its capabilities to carryout Air Dispersion Analysis & Modeling of Stack Emissions, with a specific focus on Fired Heater Stacks to ensure that the pollutant Ground Level Concentrations (GLC) meet project norms and environmental standards. An illustrative study undertaken for a Refinery Project is given here. The table compares emission output at Engineering Stage (March 2006) and at Performance Run Stage (Jan 2009) against the limits specified in the project guidelines. The analysis helped to confirm that existing emissions comply with the local requirements, and are well within the limits specified in the project guidelines. |
Technology Block |
| L&T HAZIRA MANUFACTURING COMPLEX |
 Completed in June 2008 our Hazira Manufacturing Complex demonstrates an intense focus on efficient utilization of resources, and minimal impact on the environment. It has been awarded the highest possible Platinum certification under the Leadership in Energy & Environmental Design (LEED) program. To enhance occupant comfort, energy efficiency, and environmental stewardship a host of features were incorporated at the design stage and various responsible practices were adopted in its construction. |
Design and Construction Highlights |
Sustainable Site
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Vocational Training for School Dropouts |
| Unemployment of youth is a serious socio-economic problem. Uneducated or school drop-out youth in the age group of 18 to 25 years is the most vulnerable segment of the society. Larsen & Toubro Public Charitable Trust has therefore started imparting skill training to such youth for increasing their employability. Scientific Need Assessment Surveys are conducted for finding out locally viable trades and also details of potential employers. So far the Trust has established 13 vocational training institutes in partnership with reputed NGOs in the states of Maharashtra, Gujarat and Tamil Nadu. The courses range from masonary to fashion designing and from formwork to quantity cooking. 950 trainees have passed out through these institutes and all of them are either employed or self employed. Kharel in South Gujarat is one such location where the Trust in partnership with the Kharel Education Society, runs a vocational training institute which offers two courses ‘Agro Mechanic’ and ‘Rural Electrician’ of 6 months duration each. The trainees mainly belong to scheduled castes & scheduled tribes. No fees are charged for training instead, trainees are paid a stipend of Rs. 700 per month. The institute is supported by the Trust for the payment of stipends to trainees, salaries for trainers and other staff, training related expenses etc. Hazira works provides the furniture as well as equipment and materials required for the practical shops. Our CMD, Mr. A.M. Naik has contributed significantly from his personal account for revamping the old hostel building to an institute with classrooms, practical workshops and adequate green cover. The 800-hour curriculum has been designed by L&T Hazira and comprises of classroom, practical and attitudinal training. |
Building a healthier society by combating malnutrition |
 Childhood malnutrition is a major public health problem across the developing world. The data for Gujarat reveals that not only are 50% children underweight but more than 70% are anaemic.Our Vadodara unit took up the challenge of combating this statistics. One of the key causes of malnutrition is the poor nutritional state of the mother during pregnancy. Therefore interventions were targeted towards enhancement of nutritional status of children as well as of pregnant & lactating mothers. The project was jointly undertaken with the ICDS corporation schools and various departments of M.S. University. The war against malnutrition was fought through integrated health, nutrition and education activities, which supplement government nutrition and health programs. These initiatives included: |
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Beneficiaries: |
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Outcomes |
The haemoglobin count of the children has improved and the prevalence of iron deficiency and associated anaemia has decreased. The implications of improved iron status are profound viz. increased attention span, immunity, appetite, growth, decreased morbidity, and improved overall growth and development.
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C. ECONOMIC |
Training is a powerful tool that we employ to increase the value of national production, and transform lives.
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Economic Value Retained |
Market capitalisation as on March 31, 2009 stood at Rs. 393.73 Bn as compared to Rs. 884.15 Bn as on March 31, 2008. However, due to pick up in growth momentum, our market capitalisation has surpassed Rs. 968.57 Bn as on September 30, 2009.
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Earnings per Share |
The Earnings Per Share (EPS) increased to Rs. 59.50 in FY 2008-09 from Rs. 37.80 in FY 2007-08 and dividend increased from Rs. 8.50 per equity share (Rs. 2 each) in FY 2007-08 to Rs. 10.50 in FY 2008-09 (dividend is on the expanded share capital post bonus issue of 1:1 during the year).
 Our interest and debt obligations were met as per schedule. Confidence to pursue new growth initiatives for existing and emerging businesses in hydrocarbons, infrastructure, power, railways and ship building was strengthened by our robust cash flow position at the year end.  Despite a sharp increase in the cost of resource commodities like steel and cement, we maintained our manufacturing, construction and operating expenses at 75.7% of total income at near previous year levels through efficient project execution, improved logistics management, wider product range and enhanced realisations. |
Enriching Stakeholders |
L&T consistently invests in human resource development, social upliftment, environment protection, technology upgradation and the timely discharge of its obligations towards its investors and financial institutions.
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Energy Conservation |
At L&T, we view energy conservation as a double benefit activity. It enables us to be ecologically responsible and economically efficient. We have thus been rigorously stepping up the adoption of energy conserving best practices; across systems and processes.
During the last two years we have conserved 31,992 GJ of energy. In FY 2007-08, our first year of sustainability reporting, we conserved 15,099 GJ and this year we added an impressive 16,893 GJ to our energy conservation. Most of our Operating Divisions have shown an ascending trend in energy conservation. |
Major Energy Conservation Initiatives: |
A host of initiatives have resulted in considerable energy savings.
  Solar Panel at Engineering Design and Research Centre of L&T, ECC Division, Chennai Our Powai facility has put in place an effective energy conservation plan. Rs. 2.8 million were invested across various energy efficient practices to achieve annual savings of 1.3 million kWh, translating to Rs. 8 million. |
Energy conservation initiatives in lighting and utilities |
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Energy conservation initiatives in manufacturing processes |
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Steam Turbine Generator |
Supercritical boilers and turbines are key elements of the total EPC solution that L&T Power offers to the power sector. The turbines are manufactured in a joint venture with Mitsubishi Heavy Industries - a global leader with over five decades of experience in the field. Supercritical technology is a major step ahead in L&T's efforts towards balancing the need to augment generation with environmental concerns. Supercritical parameters decrease turbine cycle heat rate, thereby increasing operating efficiency. This leads to reduced fuel consumption and helps in conservation of conventional resources. Supercritical technology also reduces emissions - especially of green house gases. A supercritical power plant can reduce CO emissions 2 by approximately 2.5 %.
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Emissions |
We are aligning our operations to reduce, or better still negate any emissions from our operations, processes, products and services. To this end, we have ensured that we discontinue the use of ozone depleting substances and enhance efficiency of on-site storage management. We are also working to reduce the need for travel wherever possible. The results were encouraging as we achieved a decline in our GHG emissions on two fronts.
 Our direct emissions are generated from the usage of plant & machinery, furnaces, fabrication activities that use diesel, LPG, etc; while indirect emissions are those generated by purchased electricity.  |
Dispersion Study for Stach Emissions |
 Stacks at Melaka Refinery, MalaysiaStringent environmental norms meeting global standards began to be adopted by the domestic sector as well. Air Dispersion Analysis & Modeling for Stack Emission, which were required for a few international projects until recently, have also become mandatory for projects in India.In response, L&T Engineering, Vadodara has enhanced its capabilities to carryout Air Dispersion Analysis & Modeling of Stack Emissions, with a specific focus on Fired Heater Stacks to ensure that the pollutant Ground Level Concentrations (GLC) meet project norms and environmental standards. An illustrative study undertaken for a Refinery Project is given here. The table compares emission output at Engineering Stage (March 2006) and at Performance Run Stage (Jan 2009) against the limits specified in the project guidelines. The analysis helped to confirm that existing emissions comply with the local requirements, and are well within the limits specified in the project guidelines.  |
D. PRODUCT RELATED |
Product Labelling |
Detailed product knowledge leads to enhanced value for owners and superior safety for users. We therefore follow a highly disciplined labelling process that adheres to relevant codes & specifications:
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| Safety is integral to design and L&T's projects business is engaged in the design and commissioning of custom-built solutions. Precautionary labelling is incorporated on all fabricated and supplied equipment. We also ensure that documentation relating to the product is sent to the customer at the time of equipment dispatch. Regular customer surveys are conducted to measure satisfaction levels backed by procedures to address complaints in a timely manner. |
Marketing Communications |
The corporate communications practices of L&T conform to the laws and acts that govern corporate advertising, promotion and sponsorship. During the reporting period there were no complaints received from outside parties on the subject of misleading marketing communication.
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Compliance |
L&T adheres to the law of the land in letter and spirit, and a structured system is in place to ensure and report compliance. We do not deal in any product which contravenes statutory regulation. During the reporting period, there were no incidents of non-compliance with regulations or voluntary codes regarding products and services and no monetary fines were imposed.
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Reducing GHG Emission |
 By eliminating fuel firing L&T‘s systems ensure minimal to nil pollutants in complying with international regulations of emissions
In a recent international project involving Sour Gas Processing, L&T Engineering Baroda proposed that lowering the temperature (240 C instead of 340 C given in process package) of the Tail Gas Hydrogenation Reactor would significantly reduce capital as well as operating cost of the unit, without affecting either the operation or performance parameters. At the same time it would also improve its environmental performance by eliminating fuel gas firing in the Fired Heater.
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This solution was a part of our unsolicited offer to the client's proposal and helped improve efficiency along with added environmental benefits.
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Fuel Efficient Design of Fired Heaters |
Lobs Project, Hindustan Petroleum
 3D model of Lube Oil Base Stock (LOBS) Plant for HPCL-Mumbai Refinery. L&T's E&C Division has developed in-house thermal design capabilities that enable us to generate fuel efficient designs for cylindrical and box type heaters. The thermal design capability is backed by expertise in Computational Fluid Dynamics (CFD) simulations on fired heaters, whereby simulations are carried out for the fired heater to develop, refine and test the designs. The CFD capability is also utilised to predict NOx, CO and un-burnt hydrocarbon emissions in the furnace of the fired heaters. These sophisticated energy efficient designs thus not only lead to lower fuel consumption and but also reduced emissions. This design prowess was demonstrated in the Hindustan Petroleum Corporation Limited (HPCL) LOBS project at Mumbai Refinery, Maharashtra where in we were the Lump Sum Turnkey contractors. Our scope included the thermal design guarantee of the three fired heaters for HDT, MSDW & the Vacuum Fractionator unit. Fuel efficiency of the heater is directly related to process fluid inlet temperature and to deliver an extremely high fuel efficiency the approach temperature was kept as low as 12°C and the heat transfer area was significantly enlarged. |
The resulting fuel efficiencies of the heaters were in the range of 82-87% |
 Reinforcing Sustainability Through Technology - SCADA The Supervisory Control and Data Acquisition (SCADA) system supplied by L&T for offshore operations to ONGC |
SCADA Primer |
Supervisory Control and Data Acquisition (SCADA) systems are used for automated plant control. They consist of a Programmed Logic Controller (PLC) with the field instrumentation and actuators wired to it, and the SCADA being the human interface.
SCADA is commonly used in wide-area industrial applications, such as electrical power generation & distribution and water distribution, which require supervisory control of remote stations. SCADA systems not only impart operational efficiency but are also vital in protecting lives, assets and the environment. |
ONGC |
L&T EBG Division's Control & Automation business unit successfully executed the prestigious SCADA contract for Onshore Control Centres (OCC) for offshore operations of Oil & Natural Gas Corporation (ONGC). The contract, worth Rs. 747 million, was completed within the stipulated 11months.
The SCADA system connects 133 well head platforms, 13 process complexes and 9 drilling rigs to the OCC. In case of an exigency the system will be the first line of defense and will be used to issue Emergency Shut Down (ESD) commands to these platforms and drilling rigs. The system's 24x7 monitoring capabilities ensure the safety of offshore operations and operating people while taking ONGC's emergency preparedness to the next level. This system is also geared for disaster recovery in case of natural calamites. |
Public Health Engineering Department, Jaipur |
The Control & Automation business unit of L&T EBG Division also executed a SCADA system for the Public Health Engineering Department of Jaipur.
The system has increased the monitoring and regulating efficiency of the water transmission at the Bisalpur dam and helped in providing a reliable and quality supply of water to about 5.3 million people of Jaipur. Consumers are able to lodge their requests and complaints online under this system. Modern computers and software installed at the control room helps assess demand and supply of water to the city. |
Clean Energy Equipment |
 The world‘s largest coal-gasifier manufactured by L&T and supplied to China
The increasing energy needs of our fast developing world and the rising stakeholder pressure to address climate change is driving up the demand for environmentally clean energy generation. To address the challenge of GHG mitigation and to cater to this accelerated demand, L&T HED has enhanced its product portfolio and made significant contribution to ‘Ultra Low Sulphur Diesel’ projects and ‘Fuel Quality Upgradation Projects’ in India and around the world.Clean Energy Reactors
These reactors find application in refineries and bring down Sulphur levels in processed crude. We have supplied more than 60 such clean energy reactors globally. Coal Gasifiers We are a world leader in the supply of key gasification equipment of Shell technology, and have already supplied seven Coal Gasifiers to China, including the world's largest Coal Gasifier. Coal Gasifiers are significantly more environment friendly as they use coal more efficiently as compared to conventional power plants. Supercritical Power Plants L&T manufactures equipment for new generation supercritical thermal power plants which are more fuel efficient as compared to the conventional power plants. The division is currently supplying key equipment for the first Ultra mega supercritical power plant of Tata Power at Mundra, Gujarat. |
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