Larsen & Toubro Chairman AM Naik and other board members of the IT firm have taken up to a 53 per cent pay cut in the wake of coronavirus pandemic. Naik himself has taken a 24.2 per cent pay cut, while CEO and managing director N Subrahmanyam took a pay cut of 43.9 per cent. Chief Financial Officer R Shankar Raman saw a 47.3 per cent cut in his remuneration.
The pay cuts have been taken voluntarily by executive directors while keeping in mind the dent the coronavirus pandemic has left on the economy.
Naik, in the company's annual report released on Monday, said the Covid-19 pandemic and its fallout have made it difficult to forecast the future with any degree of certainty. "While we are hopeful that the 2nd half of FY 2020-21 will herald better economic and business activity in terms of tendering, good liquidity and revival of labour and supply chains, it would be premature to predict the company's business outcomes for FY 2020-21."
He said the company is putting in enormous efforts to mitigate the impact of the pandemic and register enhanced performance in FY 2021-22. "At this point in time, we see prospects in the areas of government buildings, data centres, healthcare infra, airports, metro railways, water projects including wastewater treatment and irrigation, hydel projects, expressways as well as onshore and offshore hydrocarbon projects."
He said the company was uncertain, however, of the timelines for when these projects will take off. "We are all passing through a crisis of unprecedented magnitude, and I would like to thank Team L&T as well as our customers, vendors and other stakeholders for the confidence and trust they have reposed in us," he said.
The overall impact of the coronavirus pandemic on the company's revenues has been pegged at Rs 1,800 crore, and on net profit at Rs 400 crore. The salaries of employees in average percentage, excluding the managerial personnel, rose by 4.7 per cent, while those at managerial posts saw a 42.21 per cent decline in their pay.
L&T Technology Services (LTTS), engineering services arm of Larsen and Toubro Group, on June 16 had reported 42.5 per cent decline in consolidated net profit at Rs 117.3 crore for the first quarter ended June 30, 2020, as against Rs 203.9 crore in the same period last year. On the quarter-on-quarter basis, the profit fell 42.7 per cent from Rs 204.8 crore in the March quarter of FY20.