larsen & toubro ltd share price Directors report


Dear Members,

The Directors have pleasure in presenting their 78th Annual Report and Audited Financial Statements for the year ended 31st March 2023.

FINANCIAL RESULTS:

Rs. crore

Particulars

2022-23

2021-22
Profit before depreciation, exceptional items & tax

11204.34

10913.91
Less: Depreciation, amortization, impairment and obsolescence

1371.64

1172.50
Profit before exceptional items and tax

9832.70

9741.41
Add: Exceptional Items

290.06
Profit before tax

9832.70

10031.47
Less: Provision for tax

1983.73

2152.02
Net Profit after tax

7848.97

7879.45
Add: Balance brought forward from the previous year

31131.14

25722.05
Less: Dividend paid for the previous year

3091.42

2528.38
Add/(Less): Gain/(Loss) on remeasurement of the net defined benefits plans

(25.37)

58.02
Balance to be carried forward

35863.32

31131.14

PERFORMANCE OF THE COMPANY:

The total income for the financial year under review was

? 1,14,535.93 crore as against ? 1,04,613.06 crore for the previous financial year, registering an increase of 9.49%. The profit before tax excluding exceptional items was

? 9,832.70 crore for the financial year under review as against ? 9,741.41 crore for the previous financial year. The profit after tax excluding exceptional items was ? 7,848.97 crore for the financial year under review as against

? 7,612.16 crore for the previous financial year, registering an increase of 3.11%.

AMOUNT TO BE CARRIED TO GENERAL RESERVE:

The Company has not transferred any amount to the general reserve during the current financial year.

DIVIDEND:

The Directors recommend payment of dividend of ? 24 (1200%) per equity share of face value of ? 2/- each on the share capital amounting to ? 3,373 crore, working out to a payout ratio of 43%.

The Dividend payment is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Policy is uploaded on the Companys website at https://www.larsentoubro.com/corporate/about-lt-group/ corporate-policies/.

CAPITAL & FINANCE:

During the year under review, the Company allotted 453,067 equity shares of ? 2/- each upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes.

During the year, the Company repaid Non-convertible Debentures of ? 5,281 crore and short-term External Commercial Borrowings of USD 107 million, as per the repayment schedule.

The Company has issued and allotted on private placement basis, Unsecured, Rated, Listed, Redeemable Non-convertible Debentures (NCDs) aggregating ? 2,000 crore during FY 2023. These NCDs are listed on the Wholesale Debt Market Segment of National Stock Exchange of India Limited. During FY 2023, the Company also received ? 450 crore (? 2.5 lakh each on 18,000 Debentures) towards the second call on partly paid-up Debentures issued by the Company in FY 2021. The funds raised through issuance of NCDs were utilized as per the objects stated in the Information Memorandum of the respective NCDs.

The Company has issued Commercial Papers amounting to ? 30,475 crore during FY 2023. As on date, the outstanding amount of Commercial Papers is ? 8,725 crore. The Company has not defaulted on payment of any dues to the financial lenders.

The Companys borrowing programmes have received the highest credit ratings from CRISIL Ratings Limited, ICRA Limited and India Ratings and Research Private Limited. The details of the same are given on page 340 in Annexure ‘B – Report on Corporate Governance forming part of this Board Report and is also available on the website of the Company.

SALE OF CARVED-OUT BUSINESS OF SMART WORLD & COMMUNICATION:

During FY 2023, the Company entered into Business Transfer Agreement with L&T Technology Services Limited (LTTS), a listed subsidiary of the Company, for sale of its carved-out Business of Smart World and Communication Business Unit to LTTS for a consideration of ? 800 crore, subject to customary working capital adjustments as set out in the Business Transfer Agreement. The approval of the shareholders was received on 14th February 2023 and the sale was completed on 1st April 2023. The valuation report with the details of valuation metrics and cash flow projections was made available for inspection of the shareholders during the Postal Ballot.

AMALGAMATION OF MINDTREE LIMITED WITH LTIMINDTREE LIMITED (ERSTWHILE LARSEN & TOUBRO INFOTECH LIMITED):

During the year under review, the Scheme of

Amalgamation of Mindtree Limited with Larsen & Toubro Infotech Limited (LTI), listed subsidiaries of the Company, was approved by the Honble National Company Law Tribunal, Mumbai Bench and Bangalore Bench and became effective from 14th November 2022. The name of LTI has been subsequently changed to ‘LTIMindtree Limited with effect from 15th November 2022. As on 31st March 2023, the shareholding of the Company in the merged entity is 20,31,69,279 equity shares of face value ? 1 each representing 68.68% of the total share capital of LTIMindtree Limited.

CAPITAL EXPENDITURE:

As at 31st March 2023, the gross value of property, plant and equipment, investment property and other intangible assets including leased assets, were at ? 19,937.14 crore and the net value of property, plant and equipment, investment property and other intangible assets, including leased assets were at ? 11,710.73 crore. Capital Expenditure during the year amounted to ? 2,396.90 crore.

DEPOSITS:

During the year under review, the Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the rules framed thereunder. The requisite return for FY 2022 with respect to amount(s) not considered as deposits has been filed. The Company does not have any unclaimed deposits as of date.

SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES:

During the year under review, the Company subscribed to_/ acquired equity / preference shares in various subsidiary_/ associate / joint venture companies. The details of investments / divestments in subsidiary companies during the year are as under:

A) Shares subscribed/ acquired during the year:

Name of the Company Type of Shares No. of shares
L&T Infrastructure Developers Limited Preference (Bonus Issue) 1,13,500
L&T Network Services Private Limited Equity 90,00,000
L&T Metro Rail (Hyderabad) Limited Equity 220,00,00,000*
PT. Larsen Toubro (Indonesia) Equity 25,700
L&T Seawoods Limited Equity (Bonus Issue) 4,19,91,050
L&T Energy Hydrocarbon Engineering Limited Equity 45,00,000
(Formerly known as L&T Chiyoda Limited)

* Subscribed to equity shares of face value ? 10 each and paid ? 6 per share on application. Balance ? 4 per share was paid on April 28, 2023 towards call money.

B) Companies Struck off/liquidated:

The approval is still awaited with respect to the application to the Ministry of Corporate Affairs for strike off under the provisions of Companies Act, 2013 of Kesun Iron and Steel Company Private Limited made on 15th December 2021.

Larsen & Toubro LLC (Delaware, USA) was liquidated on 13th September 2022.

C) Equity shares sold / transferred / reduced during the year:

Pursuant to the Order dated 13th January 2023, passed by the National Company Law Tribunal,

Mumbai bench, the equity share capital of L&T Power Development Limited, a wholly owned subsidiary was reduced by 82,30,36,795 shares aggregating to

? 823.04 crore by way of return of cash amounting to ? 220.09 crore and adjustment of ? 602.95 crore against capital not represented by assets.

The Company has signed an agreement on 16th December 2022 to divest its 51% stake in L&T Infrastructure Development Projects Limited (L&T IDPL) to a portfolio company of Infrastructure Yield Plus II, an infrastructure fund managed by Edelweiss Alternatives. The sale would be completed on meeting the closing conditions as per the agreement.

A statement containing the salient features of the financial statement of subsidiary / associate / joint venture companies and their contribution to the overall performance of the Company is provided on pages 682 to 692 of this Integrated Annual Report. The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is placed on the Companys website at https://www.larsentoubro.com/corporate/about-lt-group/corporate-policies/. The Company does not have any material subsidiaries as on the date of this report.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY:

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Companies Act, 2013, Regulation 34(3) and Schedule Rs. of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in Note 57 forming part of the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Pursuant to the amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has revised its existing Related Party Transactions Policy to align it with the requirements of the said Regulations.

The updated Related Party Transactions Policy has been uploaded on the Companys website https://www.larsentoubro.com/corporate/about-lt-group/ corporate-policies/.

The Company has a process in place to periodically review and monitor Related Party Transactions.

All related party transactions entered during FY 2023 were in the ordinary course of business and at arms length. The Audit Committee has approved the related party transactions for FY 2023 and the estimated related party transactions for FY 2024.

There were no Related Party Transactions that have conflict with the interest of the Company.

The Company is seeking an enabling approval for certain material related party transactions at the ensuing Annual General Meeting (AGM). Shareholders are requested to refer to the AGM notice at pages 285 to 305 of this Integrated Annual Report, for details of the proposed material related party transactions.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

Other than stated elsewhere in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information as required to be given under

Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure ‘A forming part of this Board Report.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/RETIRED:

Mr. J. D. Patil ceased to be a Whole-time Director of the Company with effect from 30th June 2022 on account of superannuation from the services of the Company. Mr. D. K. Sen ceased to be a Whole-time Director of the Company with effect from 7th April 2023 on account of superannuation from the services of the Company. The Board places on record its appreciation towards the valuable contribution made by them during their tenure as Directors of the Company.

Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC), the Board and shareholders have approved the appointment of Mr. Anil Rs.. Parab as Whole-time Director for a period of five years with effect from 5th August 2022.

Mr. A. M. Naik has decided to step down as Non-Executive Chairman of the Company with effect from 30th September 2023. He has been conferred the status of "Chairman Emeritus" by the Board.

The Board, pursuant to the recommendation of the NRC, appointed Mr. S.N Subrahmanyan as Chairman and re-designated as Chairman and Managing Director of the Company with effect from 1st October 2023.

Based on the recommendation of the NRC, the Board at its Meeting held on 10th May 2023, has approved the appointment of Mr. Jyoti Sagar as Independent Director of the Company with effect from 10th May 2023 upto 18th March 2028 and Mr. Rajnish Kumar as Independent Director with effect from 10th May 2023 upto 9th May 2028, subject to the approval of shareholders through special resolution. The NRC considered the appointment of Mr. Jyoti Sagar and Mr. Rajnish Kumar as Independent Directors after evaluating the skills, knowledge and experience required on the Board as per the approved skill matrix.

Mr. A. M. Naik, Mr. Hemant Bhargava and Mr. M. Rs.. Satish, retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment.

The notice convening the AGM includes the proposal for appointment/ re-appointment of Directors.

The terms and conditions of appointment of the

Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company https://investors.larsentoubro.com/listing-compliance-disclosuresunderstatutes.aspx.

The Company has also disclosed on its website https://investors.larsentoubro.com/listing-compliance-disclosuresunderstatutes.aspx details of the familiarization programs to educate the Independent Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

This information is given in Annexure ‘B - Report on Corporate Governance forming part of this Report. Members are requested to refer to page 320 of this Integrated Annual Report.

AUDIT COMMITTEE:

The Company has constituted an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure ‘B - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 324 to 326 of this Integrated Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Company has constituted a Stakeholders Relationship Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure ‘B - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 330 and 331 of this Integrated Annual Report.

NOMINATION AND REMUNERATION COMMITTEE:

The Company has constituted a Nomination and Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure ‘B - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 326 to 330 of this Integrated Annual Report.

RISK MANAGEMENT COMMITTEE:

The Company has constituted a Board Risk

Management Committee in terms of the requirements of Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable provisions, if any. The details relating to the same are given in Annexure ‘B - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 332 and 333 of this Integrated Annual Report.

COMPANY POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The NRC has formulated a policy on Directors appointment and remuneration including recommendation of remuneration of the key managerial personnel and senior management personnel, and the criteria for determining qualifications, positive attributes and independence of a Director. Nomination and Remuneration Policy is provided as Annexure ‘F forming part of this Board Report and also disclosed on the Companys website at https://www.larsentoubro.com/corporate/about-lt-group/ corporate-policies/. The NRC has also formulated a separate policy on Board Diversity.

DECLARATION OF INDEPENDENCE:

The Company has received Declarations of Independence as stipulated under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from Independent Directors confirming that he/she is not disqualified from being appointed/re-appointed/continue as an Independent Director as per the criteria laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same are also displayed on the website of the Company https://investors.larsentoubro.com/listing-compliance-disclosuresunderstatutes.aspx. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013. The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs (IICA). In terms of Section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, all Independent Directors are exempted from undertaking the online proficiency self-assessment test conducted by the IICA.

PERFORMANCE EVALUATION:

The Nomination and Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Individual Directors, Chief Executive Officer & Managing Director (CEO & MD) and the Chairman has to be made. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, Individual Directors, CEO & MD and the Chairman.

As in the previous years, an external consultant was engaged to receive the responses of the Directors and consolidate/ analyze the responses. The same external consultants IT platform was used for the entire board evaluation process. This ensured that the process was transparent and independent of involvement of the Management or the Companys IT system. This has enabled unbiased feedback.

The Board Performance Evaluation inputs, including areas of improvement for the Directors, Board processes and related issues for enhanced Board effectiveness were discussed in the meetings of the Nomination and Remuneration Committee and the Board of Directors held on 10th May 2023.

DISCLOSURE OF REMUNERATION:

The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder, are given in Annexure ‘D forming part of this Board Report.

The information in respect of employees of the Company pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure ‘G forming part of this report. In terms of Section 136(1) of the Companies Act, 2013 and the rules made thereunder, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms: a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) The Directors have prepared the Annual Accounts on a going concern basis; e) The Directors have laid down an adequate system of Internal Financial Controls to be followed by the Company and such Internal Financial Controls are adequate and operating efficiently; f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013. For the year ended 31st March 2023, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Companys operations.

DEPOSITORY SYSTEM:

As the members are aware, the Companys shares are compulsorily tradable in electronic form. As on 31st March 2023, 99.02% of the Companys total paid up capital representing 1,39,16,53,296 shares are in dematerialized form.

Pursuant to amendments in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requests for effecting transfer of securities in physical form, shall not be processed by the Company and all requests for transmission, transposition, issue of duplicate share certificate, claim from unclaimed suspense account, renewal/exchange of securities certificate, endorsement, sub-division/split of securities certificate and consolidation of securities certificates/folios need to be processed only in dematerialized form. In such cases, the Company will issue a letter of confirmation, which needs to be submitted to Depository Participant(s) to get credit of the securities in dematerialized form. Shareholders desirous of availing these services are requested to refer to the detailed procedure for availing these services provided on the website of the Company at https://investors.larsentoubro.com/shareholder-services.aspx. The Company has availed a special contingency insurance policy towards the risks arising out of the requirements relating to issuance of duplicate securities, pursuant to SEBI Circular dated 25th May 2022.

In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical form are advised to avail of the facility of dematerialization from either of the Depositories.

In adherence to SEBIs circular to enhance the due-diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company has been regularly sending communications to members whose dividends are unclaimed requesting them to provide/update bank details with Registrar and Transfer Agents (RTA)/Depository Participants/Company, so that dividends paid by the Company are credited to the investors account on time. Efforts are also made by the Company in co-ordination with the RTA to locate the shareholders who have not claimed their dues.

Despite these efforts, an amount of ? 10.84 crore which was due and payable and remained unclaimed and unpaid for a period of seven years, was transferred to Investor Education and Protection Fund (IEPF) as provided in Section 125 of the Companies Act, 2013 and the rules made thereunder.

Cumulatively, the amount transferred to the said fund was

? 57.64 crore as on 31st March 2023.

In accordance with the provisions of the Section 124(6) of the Companies Act, 2013 and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules), the Company has transferred 2,83,301 equity shares of ? 2 each (0.02% of total number of shares) held by 2,141 shareholders (0.15% of total shareholders) to IEPF. The said shares correspond to the dividend which had remained unclaimed for a period of seven consecutive years from the financial year 2014-15. Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules. The detailed procedure for claiming shares/dividend transferred to IEPF is made available on the Companys website at https://investors.larsentoubro.com/Investor-FAQ.aspx. The Company sends specific advance communication to the concerned shareholders at their address registered with the Company and also publishes notice in newspapers providing the details of the shares due for transfer to enable them to take appropriate action. All corporate benefits accruing on such shares viz. bonus shares, etc. including dividend except rights shares shall be credited to IEPF.

CORPORATE SOCIAL RESPONSIBILITY:

The Company has constituted a Corporate Social Responsibility (CSR) Committee in terms of the requirements of Section 135 of the Companies Act, 2013 read with the rules made thereunder.

The CSR policy framework is available on the Companys website at https://www.larsentoubro.com/corporate/ about-lt-group/corporate-policies/ and the Annual Action Plan is available on the Companys website at https://investors.larsentoubro.com/listing-compliance-disclosuresunderstatutes.aspx. A brief note regarding the Companys initiatives with respect to CSR and the composition of the CSR Committee is given in Annexure ‘B - Report on Corporate Governance forming part of this Board Report. Please refer to Pages 331 and 332 of this Integrated Annual Report.

The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure ‘C forming part of this Board Report.

The Chief Financial Officer of the Company has certified that CSR funds so disbursed for the projects have been utilized for the purposes and in the manner as approved by the Board.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

PROTECTION OF WOMEN AT WORKPLACE:

The Company believes that every woman employee should have the opportunity to work in an environment free from any conduct which can be considered as Sexual Harassment.

The Company is committed to treating every employee with dignity and respect. The Company has formulated a policy on ‘Protection of Womens Rights at Workplace as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules, 2013 (POSH Act and Rules). The policy is applicable to all L&T establishments located in India. The policy has been widely disseminated. The Company has constituted Internal Complaints Committees to ensure implementation and compliance with the provisions of the aforesaid Act and the Rules.

This Policy encompasses the following objectives:

• To define Sexual Harassment;

• To lay down the guidelines for reporting acts of Sexual Harassment at the workplace; and

• To provide the procedure for the resolution and redressal of complaints of Sexual Harassment.

A detailed procedure for making a Complaint, initiating an enquiry, redressal process and preparation of report within a stipulated timeline is laid out in the Policy document. The Policy also covers Disciplinary Action for Sexual Harassment. The Policy is uploaded on the Companys website at https://www.larsentoubro.com/corporate/ about-lt-group/corporate-policies/.

Training programs and workshops for employees are organised throughout the year. The orientation programs for new recruits include awareness sessions on prevention of sexual harassment and upholding the dignity of employees. Specific programs have been created on the digital platform to sensitize employees to uphold the dignity of their colleagues and prevention of sexual harassment. During FY 2023, about 12,473 employees have undergone training through the programs/ workshops including the awareness sessions held on digital platform. There were 2 complaints received during the FY 2023. Both the complaints were redressed as per the provisions of the POSH Act and Rules.

OTHER DISCLOSURES:

• ESOP Disclosures: There has been no material change in the Employee Stock Option Schemes (ESOP schemes) during the current financial year.

The disclosure relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the Securities and Exchange Board of India (Share Based Employee Benefit and Sweat Equity) Regulations, 2021 (SBEB Regulations) is provided on the website of the Company https://investors.larsentoubro.com/listing-compliance-agm.aspx.

A certificate obtained from the Secretarial Auditors, confirming that the ESOP Schemes of the Company are in compliance with the SBEB Regulations and that the Company has complied with the provisions of the Companies Act, 2013 is also provided in Annexure ‘B forming part of this Report.

• Corporate Governance: Pursuant to

Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance with Corporate Governance requirements provided in the aforesaid Regulations, are provided in Annexure ‘B forming part of this Report.

• Business Responsibility and Sustainability Reporting: As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility and Sustainability Report forms a part of this Integrated Annual Report (refer pages 240 to 284).

• Integrated Reporting: The Company is complying with the applicable requirements of the Integrated Reporting Framework. The Integrated Report tracks the sustainability performance of the organization and its interconnectedness with the financial performance, showcasing how the Company is adding value to its stakeholders. The Integrated Report forms a part of this Integrated Annual Report.

• Annual Return: The Annual Return of the Company for the FY 2023 is available on our website https://investors.larsentoubro.com/listing-compliance-agm.aspx.

• Statutory Compliance: The Company has adequate systems and processes in place to comply with all applicable laws and regulations, pay applicable taxes on time and ensures statutory CSR spend.

• MSME: The Company has registered itself on Trade Receivables Discounting System platform (TReDS) through the service provider Receivables Exchange of India Limited. The Company complies with the requirement of submitting a half yearly returns to the Ministry of Corporate Affairs within the prescribed timelines.

• IBC: There are no proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016.

• KYC registration for holders of physical securities: As per SEBI circular dated 16th March 2023, the Company has sent notice to all holders of physical securities asking them to furnish their PAN, details of

Nomination, Contact details (viz. address, mobile and E-mail), Bank Account details and specimen signature ("KYC information") to KFin Technologies Limited (RTA) on or before 30th September 2023. In case the shareholders fail to update KYC Information on or before 30th September 2023, their folios shall be frozen by the RTA as per above SEBI Circular and such shareholders will be eligible for payment of dividend or lodging any grievance or availing any service request from the RTA only after furnishing the KYC information as specified above.

All shareholders of the Company holding shares in physical form are requested to update their KYC information with RTA at the earliest. The relevant forms for updating the KYC information are provided on the website of the Company at https://investors.larsentoubro.com/ DownloadableForms.aspx.

• Reporting of fraud: The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013.

• Remuneration received by Whole time Director from subsidiary company: Mr. D. K. Sen, Whole-time Director of the Company (till 7th April 2023) is also the Managing Director of L&T Infrastructure Development Projects Limited (L&T IDPL), a subsidiary of the Company. During the year 2022-23, part of the remuneration paid to Mr. Sen was charged to L&T IDPL. Accordingly, the Company has recovered an amount of ? 2 crore from L&T IDPL for remuneration paid to Mr. Sen.

VIGIL MECHANISM:

The Company has a Whistle Blower Policy in place since 2004. The Policy has been modified to meet the requirements of Vigil Mechanism under the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Whistle Blower Policy is available on the Companys website https://www.larsentoubro.com/corporate/about-lt-group/ corporate-policies/.

Also see pages 333 and 334 forming part of Annexure ‘B of this Board Report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.

CONSOLIDATED FINANCIAL STATEMENTS:

Your Directors are pleased to attach the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS).

AUDIT REPORT:

The Auditors report to the Shareholders does not contain any qualification, observation or disclaimer or adverse remark.

SECRETARIAL AUDIT REPORT:

The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian & Co., Company Secretaries is attached as Annexure ‘E forming part of this Board Report. The Secretarial Audit Report does not contain any qualification, reservation or disclaimer or adverse remark.

AUDITORS:

M/s. Deloitte Haskins & Sells LLP are the Statutory Auditors of the Company and shall hold office till the conclusion of 80th Annual General Meeting of the Company.

The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI. The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process.

The Auditors attend the Annual General Meeting of the Company. Also see pages 334 and 335 forming part of Annexure ‘B of this Board Report.

COST AUDITORS:

The provisions of Section 148(1) of the Companies Act, 2013 are applicable to the Company and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended 31st March 2023.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, at its meeting held on 10th May 2023, has approved the appointment of M/s. R. Nanabhoy & Co., Cost Accountants, as the Cost Auditors for the Company for the financial year ending 31st March 2024 at a remuneration of ? 17 lakhs plus taxes and out of pocket expenses.

A proposal for ratification of remuneration of the Cost Auditor for the FY 2024 is placed before the Shareholders for approval in the ensuing Annual General Meeting.

The Report of the Cost Auditors for the financial year ended 31st March 2023 is under finalization and shall be filed with the Ministry of Corporate Affairs within the prescribed period.

ACKNOWLEDGEMENT:

The Directors take this opportunity to thank the Members, Customers, Supply Chain Partners, Employees, Financial Institutions, Banks, Central and State Government authorities, Regulatory Authorities, Stock Exchanges and various other stakeholders for their continued co-operation and support to the Company. Your Directors also wish to record their appreciation for the continued co-operation and support received from the Joint Venture Partners and Associates.

For and on behalf of the Board

A.M. NAIK

Group Chairman

(DIN: 00001514)

Date : 10th May 2023 Place : Mumbai