Sufficient liquidity at present; no asset impacted by COVID-19: L&T
The engineering and construction conglomerate has recently raised Rs 9,000 crore through long-term debt in April.
It has assessed Rs 1,800 crore impact on its revenue due to COVID-19 during the quarter ended March 31. It had shut down operations from March 25 in the wake of coronavirus pandemic.
"The company has access to sufficient liquidity at present, having raised over Rs 9,000 crore of long-term debt in April 2020. The company also has unutilised credit lines from the Financial Institutions to supplement its liquid resources," as per a company document.
The short-term investments are in such instruments that can be encashed on need, it said, adding "its strong order book of over Rs 3 trillion provides multi-year revenue and cashflow visibility".
About ability to service debt and other financing arrangements, L&T said it has a relatively low debt equity ratio of 0.49:1 as on March 31, 2020.
On assets, it said none of the assets of the company have been impacted by COVID-19.
"The company does not foresee any impairment requirement to the carrying values of its asset due to the pandemic," it added.
About internal financial reporting and control, the firm said it has sound internal control measures for all its processes and working remotely has not diluted the well-established and evaluated internal financial and information technology controls.
It has a regular system of addressing the requirements of its MSME vendors as they are critical partners, L&T added.
While short term disruptions to the company's supply chain needs to be factored in, it does not expect any drastic or permanent impact of the pandemic on the supply chain eco-system, it said.
Though there is a possibility that some of the clients will face financial constraints, there are others who want to accelerate the progress with respect to certain critical projects being executed by the company, it said.
L&T said it is confident of fulfilling its obligations under the various existing contracts/arrangements. The delay in completion including the catch-up plans, on account of COVID-19, are under discussions with the clients.
"The company has issued force majeure intimations to customers in accordance with the terms of the contracts. At present, the company does not foresee any significant impact due to the non-fulfilment of its contractual obligations to the customers or any other counter party arising out of COVID-19 pandemic," it added.
Larsen & Toubro is an Indian multinational engaged in technology, engineering, construction, manufacturing and financial services with over USD 21 billion in revenue. NAM BAL