lt technology services ltd Directors report


Dear Members,

The Board of Directors are pleased to present the 11th Annual Report along with the Audited Financial Statements of L&T Technology Services Limited (LTTS or the Company) for the year ended March 31, 2023.

1. FINANCIAL RESULTS:

(Rs. million)

Particulars Standalone
2022-23 2021-22
Profit before depreciation, exceptional and extra ordinary items & tax 17,599 14,334
Less: Depreciation, amortization and obsolescence 2,024 1,826
Profit/(Loss) before exceptional items and tax 15,575 12,508
Add: Exceptional Items - -
Profit/(Loss) before tax 15,575 12,508
Less: Provision for tax 4,471 3,323
Profit for the period carried to the Balance Sheet 11,104 9,185
Add: Balance brought forward from previous year 26,786 21,235
Less: Dividend paid for the year (Including Tax deducted at source) 3,167 3,634
Balance to be carried forward 34,723 26,786

2. PERFORMANCE OF THE COMPANY

A. State of Company Affairs

The gross sales and other income for the financial year under review were Rs. 73,138 million as against Rs. 60,274 million for the previous financial year registering an increase of 21.3%. The profit before tax from continuing operations, including extraordinary and exceptional items was Rs. 15,575 million and the profit after tax from continuing operations including extraordinary and exceptional items of Rs. 11,104 million for the financial year under review as against Rs. 12,508 million and Rs. 9,185 million respectively for the previous financial year, registering an increase of 24.5% and 20.9% respectively.

B. Segmental Performance

The Company has five business segments, namely Transportation, Industrial products, Telecom & Hi Tech, Plant Engineering and Medical Devices. During the year, the contribution to the revenue from various business segments were as follows:

(Rs. million)

Revenue for 2022-23 % of overall Revenue for 2021-22 % of overall
Transportation 23,784 33.5% 18,030 30.7%
Industrial Products 15,013 21.1% 12,510 21.3%
Telecom & Hi Tech 11,196 15.7% 10,564 18.0%
Plant Engineering 12,662 17.8% 10,030 17.1%
Medical Devices 8,426 11.9% 7,603 12.9%
Total 71,081 100.0% 58,737 100%

The detailed segmental performance is referred to in Note No. 39 of the Notes forming part of the standalone financial statements.

C. Geographical Performance

The revenue contribution of the Company from various geographies is mentioned herein below:

(Rs. million)

Sr. No. Geography FY 2022-23 % of overall FY 2021-22 % of overall
1. North America 41,061 57.8% 34,170 58.2%
2. Europe 12,930 18.2% 10,637 18.1%
3. India 10,838 15.2% 9,053 15.4%
4. Rest of the World 6,252 8.8% 4,877 8.3%
Total 71,081 100.0% 58,737 100%

D. Capital Expenditure

As on March 31, 2023, the gross fixed and intangible assets including leased assets, stood at Rs. 17,975 million (previous year Rs. 16,720 million) and the net fixed and intangible assets, including leased assets, at Rs. 10,195 million (previous year Rs. 10,144 million). Capital Expenditure during the year is Rs. 1,535 million (previous year Rs. 1,293 million).

E. Subsidiary/Associate/Joint Venture Companies

During the year under review, the name of Graphene Solutions PTE Ltd. was changed to L&T Technology Services PTE Ltd., with effect from May 20, 2022.

The Company is in the process of incorporating a subsidiary in Poland under the name of L&T Technology Services Poland sp. z o.o.Rs. The Company has not infused any capital till March 31, 2023.

The following is the Group structure of the Company:

 

* holding in the company - 74%

$ holding in the company - 100%

The Company has formulated a policy on the identification of material subsidiaries in line with Regulation 16(c) of the Securities & Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), as amended, and the same is placed on the website at https://www.ltts.com/investors/corporate-governance. The Company has 1 material subsidiary viz: L&T Technology Services LLC. Since this material

subsidiary is not incorporated in India, Secretarial Audit pursuant to Regulation 24A of SEBI Listing Regulations is not applicable.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ("the Act") a statement containing the salient features of financial statements of the Companys subsidiaries in Form AOC-1 is attached to the financial statements of the Company.

F. Key Business Development: Acquisition of Smart World & Communication ("SWC") Business of Larsen & Toubro Limited

In January 2023, the Company announced the acquisition of a substantial portion of the SWC Business of Larsen & Toubro Limited including its employees, assets and liabilities, licenses, regulatory approvals, permits, contracts as going concern on a slump sale basis.

This is a progression of its 6 Big Bets strategy, as the Company had identified that the SWC Business of L&T could potentially open new avenues of growth in 3 of its big bets i.e., Nex-Gen Comms, Digital Products & AI and Sustainability.

Subsequently, the transaction was completed on April 1, 2023.

G. Management Discussion and Analysis

The Management Discussion and Analysis as required in terms of Regulation 34 of SEBI Listing Regulations, forms part of the Annual report separately.

3. TRANSFER TO RESERVES

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

4. DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

The Board at its meeting held on October 18, 2022, declared an interim dividend of Rs. 15/- (750%) per equity share amounting to Rs. 1,430.60 million (the total payout including Tax Deducted at Source amounted to Rs. 1,583.67 million). The dividend was paid on November 10, 2022.

Further, the Board of directors, in its meeting held on April 26, 2023, had recommended the payment of dividend of Rs. 30/- (1500%) per equity share of Rs. 2/- each for the financial year ended March 31, 2023. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting ("AGM") to be held on July 18, 2023.

The final dividend on equity shares, if approved by the members, would involve a cash outflow (including Tax Deducted at Source) of Rs. 3,168 million.

The Dividend 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 Regulations. The Dividend Distribution Policy is provided as Annexure A forming a part of this Boards Report and also uploaded on the Companys website at https://www.ltts.com/investors/corporate-governance.

5. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

There are no amounts that are due to be transferred to IEPF by the Company.

The Company has sent adequate communication to the members whose dividends are unclaimed, requesting them to provide/update bank details with the RTA/Company, so that dividends paid by the Company are credited to the investors accounts on a timely basis.

The Company has sent communication to shareholders holding shares in physical form for collecting details of their bank account such as Bank name, Bank Branch, MICR number, IFSC Code for payment of dividend to such shareholders, whose dividend remained unclaimed/ unpaid. The Company hereafter will be crediting the dividend through electronic mode instead of revalidating and issuing fresh warrants or demand drafts to the shareholders.

Pursuant to the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), the Company has appointed the Company Secretary as the Nodal Officer for carrying out the necessary functions under the applicable provisions of the Act and the rules made thereunder.

Pursuant to the provisions of Section 124 of the Act read with IEPF Rules and relevant circulars and amendments thereto, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to IEPF, constituted by the Central Government. Further, pursuant to the provisions of IEPF Rules, all equity shares in respect of which dividend has not been paid or claimed for last seven consecutive years shall be transferred by the Company to the designated demat account of the IEPF authority within a period of thirty days of such shares becoming due to be transferred. Pursuant to Section 124 of the Act, the unpaid dividends that are due for transfer to the IEPF are as follows:

Year Type of Dividend Dividend Per Share (Rs.) Date of Declaration Due for Transfer on
2016-17 Interim Dividend 3 10.11.2016 12.12.2023
2016-17 Final Dividend 4 23.08.2017 21.09.2024
2017-18 Interim Dividend 4 07.1 1.2017 7.12.2024
2017-18 Final Dividend 12 22.08.2018 26.09.2025
2018-19 Interim Dividend 7.5 25.10.2018 16.12.2025
2018-19 Final Dividend 13.5 20.07.2019 25.08.2026
2019-20 Interim Dividend 7.5 18.10.2019 8.12.2026
2019-20 Final Dividend 13.50 17.07.2020 25.08.2027
2020-21 Interim Dividend 7.50 19.10.2020 13.12.2027
2020-21 Final Dividend 14.5 16.07.2021 24.08.2028
2021-22 Special Dividend 10 19.10.2021 13.12.2028
2021-22 Interim Dividend 10 18.01.2022 14.03.2029
2021-22 Final Dividend 15 15.07.2022 21.08.2029
2022-23 Interim Dividend 15 18.10.2022 13.12.2029

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

There are no material changes and commitments affecting the financial position of the Company between the end of the current financial year and the date of this report.

7. SHARE CAPITAL

During the year under review, the Company had allotted 75,975 Equity Shares of Rs. 2 each upon exercise of stock options by the eligible employees under the Employee Stock Option Scheme - 2016.

As on March 31, 2023, the total paid up equity share capital of the Company was Rs. 21,12,16,284/- consisting of 10,56,08,142 equity shares of Rs. 2/- each, fully paid up.

As on March 31, 2023, Larsen & Toubro Limited, Promoter of the Company holds 7,79,86,899 shares constituting 73.85% of the paid- up share capital of the Company.

8. DEPOSITS

During the year ended March 31, 2023, the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed thereunder. Hence, the Company does not have any unclaimed deposits as on the date of the balance sheet.

9. DEPOSITORY SYSTEM

As the members are aware, the Companys shares are compulsorily tradable in electronic form only. As on

March 31, 2023, 99.98% of the Companys total paid- up capital representing 10,55,87,489 shares are in dematerialized form. In terms of Regulation 40 (1) of SEBI Listing Regulations requests for effecting transfer of securities shall be processed only if the securities are held in the dematerialized form.

Further, with effect from January 24, 2022, all requests for transmission, transposition, issue of duplicate share certificate, claim from unclaimed suspense account, renewal/exchange of securities certificate, endorsement, sub-division/splitting of securities certificate and consolidation of securities certificates/folios will be processed and mandatorily a letter of confirmation will be issued, which needs to be submitted to Depository Participant to get credit of these securities in dematerialized form. Shareholders desirous of using these services are requested to contact RTA of the company, the contact details of RTA are available on the website of the Company at www.LTTS.com.

Further 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.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies

(Accounts) Rules, 2014 is provided in Annexure B forming part of this Boards Report.

11. CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR) Committee comprises of 2 Independent Directors and 1 NonExecutive Director. The CSR Committee comprises of Mr. Sudip Banerjee, Mr. R. Chandrasekaran and Dr. Keshab Panda as its Members. Mr. Sudip Banerjee is the Chairman of the Committee.

During the year under review, two meetings of the CSR Committee were held on April 20, 2022 and October 17, 2022.

The disclosures required to be given under Section 135 of the Act read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time are provided in Annexure C to the Boards Report.

The CSR Policy Framework is available on the website of the Company at https://www.ltts.com/investors/corporate- govemance.

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

12. 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 Act and Regulation 34(3) read with Schedule V of the SEBI Listing Regulations and forms part of the financial statements.

13. RISK MANAGEMENT POLICY

The Risk Management Committee comprises of Mr. R. Chandrasekaran, Mr. Amit Chadha and Mr. Rajeev Gupta. Mr. R. Chandrasekaran is the Chairman of the Committee.

The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Company has formulated a risk management policy

and has in place a mechanism to inform the Board Members about risk assessment, including cyber security and ESG risks and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. The details of the same are given in Annexure D - Report on Corporate Governance forming part of this Report.

A detailed note on risk management and internal controls with reference to the financial statement is given under the financial review section of the Management Discussion and Analysis which forms part of the Annual Report.

14. VIGIL MECHANISM

The Whistle Blower Policy of the Company meets the requirement of the Vigil Mechanism framework under the Act and Regulation 22 of SEBI Listing Regulations. As per the provisions of Section 177(9) of the Act, the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns.

The details of the same are given in Annexure D - Report on Corporate Governance forming part of this Report.

15. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Abhishek Sinha was re-appointed as Chief Operating Officer & Whole-Time Director for a period of 3 (Three) years with effect from October 18, 2022, up to and including October 17, 2025. The same was approved by the shareholders in the 10th AGM held on July 15, 2022.

Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC), the Board at its meeting held on April 26, 2023 appointed Ms. Aruna Sundararajan as an Additional Director in the capacity of Independent Director for a period of 5 years with effect from April 26, 2023 up to April 25, 2028 which shall be subject to the approval of the shareholders in the ensuing AGM. Further, on the recommendation of NRC, the Board also appointed Mr. Alind Saxena as an Additional Director designated as President Sales & Whole-Time Director for a period of 3 years with effect from April 26, 2023 up to and including April 25, 2026 which shall be subject to the approval of the shareholders in the ensuing AGM.

Dr. Keshab Panda, Non-Executive Director, is liable to retire by rotation at the ensuing AGM and, being eligible, offers himself for re-appointment.

The Company has disclosed on its website https://www.ltts.com/investors/corporate-governance details of the familiarization programs formulated to educate the 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.

The Board opines that all the Independent Directors on the Board possess integrity, necessary expertise and experience for performing their functions diligently.

16. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the financial year under review, 6 (six) meetings of the Board of Directors were held. The details of the meetings are provided in Annexure D - Report on Corporate Governance forming part of this Boards Report.

17. DISCLOSURE OF REMUNERATION

The details of remuneration as required to be disclosed under the Section 197(12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure E forming part of this Boards Report.

The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure F forming part of this Boards Report.

In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining 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.

18. COMPANY POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company has in place a Nomination and Remuneration Committee (NRC) in accordance with the requirements of Section 178 of the Act read with rules made thereunder and Regulation 19 of SEBI Listing Regulations.

The details of the same are given in Annexure D - Report on Corporate Governance forming part of this Boards Report.

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. A copy of the NRC Policy as disclosed on the Companys website at https://www.ltts.com/investors/corporate-governance is also enclosed to the Boards Report as Annexure G. During the year under review, the Company amended the said policy in line with amendments in the Act and SEBI Listing Regulations.

The Committee has formulated a policy on Board diversity.

19. DECLARATION OF INDEPENDENCE OF INDEPENDENT DIRECTORS

The Company has received Declarations of Independence from Independent Directors as stipulated under Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, confirming that he/she is not disqualified from appointing/continuing as Independent Director as per the criteria laid down in section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations.

20. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms that:

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 judgments 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 Act 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 control 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.

21. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND DIRECTORS

The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Chairman, and individual directors has to be made.

The Company had engaged an external agency to facilitate the process of annual evaluation of the performance of the Board, Committees, Chairman, and the individual directors. The said external agency was responsible to receive the responses from the Directors, to consolidate and analyze their responses and present the same to the Chairman of the Nomination and Remuneration Committee. The external agency used its IT platform for the entire Board evaluation process right from initiation till conclusion in order to ensure that the entire process is done in a confidential, transparent and independent manner without the involvement of the Management or the Companys IT system to ensure unbiased feedback.

All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, individual directors and the Chairman.

The questionnaires cover the Board composition, its structure, its culture, its effectiveness, its functioning, information availability, adequate discussions, etc. These questionnaires also cover specific criteria and the grounds on which all Directors in their individual capacity will be evaluated.

The evaluation of Independent Directors was done by the Board including assessment of their performance and their independence of management.

The input given by all the Directors was discussed in the meeting of the Independent Directors held in accordance with Schedule IV of the Act on March 10, 2023. The performance evaluation of the Board, Committees, Chairman and Directors was also reviewed by the Nomination and Remuneration Committee as well as in the Board Meeting on the same day. The Group Chairman had an individual discussion with all the Independent Directors and the Chairman of the

Nomination and Remuneration Committee also had a discussion with all the Executive Directors individually. Most of the suggestions from the Board Evaluation exercise have been suitably implemented such as meetings of Chairman of NRC with individual Directors and Action Taken Report of Board decisions.

The performance evaluation further included evaluation of Board Members against the list of core skills/ expertise/ competencies for the effective functioning of the Company. The names of Directors who have such skills/ expertise/ competence is provided in detail in Annexure D - Report on Corporate Governance forming part of this Boards Report.

22. AUDIT COMMITTEE

The Company has in place an Audit Committee in terms of the requirements of the Act read with the rules made thereunder and Regulation 18 of the SEBI Listing Regulations.

The details pertaining to the same have been provided in Annexure D - Report on Corporate Governance forming part of this Report.

23. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Company has in place a Stakeholders Relationship Committee (SRC) in terms of the requirements of the Act read with the rules made thereunder and Regulation 20 of the SEBI Listing Regulations.

The details of the same are given in Annexure D - Report on Corporate Governance forming part of this Boards Report.

24. 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 Act. For the year ended March 31, 2023, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations which is operating effectively and no material weaknesses exist. 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.

The Audit committee defines the scope and authority of the Internal Auditor. The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance, systems, accounting procedures and policies at all locations of the Company. Based on suggestions from internal auditors, respective functions take corrective actions or process improvements.

25. COMPLIANCE WITH SECRETARIAL STANDARDS ON THE BOARD AND GENERAL MEETINGS

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

26. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has constituted an Internal Committee (IC) - in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The IC has been constituted as per the Act, to redress the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, 1 case of sexual harassment was received on POSH (Policy on prevention of Sexual Harassment) of Women at Workplace. The same was resolved and appropriate action was taken by the Company.

Continuous awareness workshops/training programs for employees are conducted across the Company to sensitize employees to uphold the dignity of their colleagues at workplace especially with respect to prevention of sexual harassment.

The Company, on the recommendation of Audit Committee, also undertook measures by way of periodical e-mailers and sessions to create awareness on microaggression.

27. CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Act and Regulation 34 of the SEBI Listing Regulations and prepared in accordance with the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI), in this regard.

28. AUDITORS REPORT

The Auditors report to the shareholders does not contain any qualification, observation or comment or adverse remark(s).

29. STATUTORY AUDITORS

M/s MSKA & Associates, Chartered Accountants (Firm Registration No. 105047W) were appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 10th AGM till the conclusion of 15th AGM 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 Auditors have also furnished a declaration confirming their independence as well as their arms length relationship with the Company as well as a declaration that they have not taken up any prohibited non-audit assignments for the Company.

The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the audit process.

Further, in compliance with Section 146 of the Act, the notices of the general meeting of the Company are also forwarded to the Statutory Auditors of the Company to ensure their attendance at the AGM of the Company.

The details of the total fees paid by the Company and its subsidiaries and other relevant details are provided in Annexure D - Report on Corporate Governance forming part of this Boards Report.

30. SECRETARIAL AUDIT REPORT

The Board had appointed Alwyn Jay & Co., (Firm Registration No. P2010MH21500), Practicing Company Secretaries, to conduct a Secretarial Audit under the provisions of Section 204 of the Act for the financial year 2022-23.

The Secretarial Audit Report issued by Alwyn Jay & Co.; Practicing Company Secretaries is attached as Annexure H to this Boards Report.

The Secretarial Auditors Report to the shareholders does not contain any qualification or reservation or adverse remark.

31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Pursuant to the amendments in the SEBI Listing Regulations, the Audit Committee has approved the amendments to the Related Party Transaction Policy and its Guidelines and the same is disclosed on the Companys website at https://www.ltts.com/investors/corporate-governance.

The Company has a process in place of periodically reviewing and monitoring Related Party Transactions and all related party transactions were in the ordinary course of business and at arms length.

The Audit Committee has approved all the Related Party Transactions for the FY 2022-23 and Omnibus approval of the Audit committee is obtained before the commencement of financial year for all the transactions for FY 2023-24 as required under the provisions of Section 177 of the Act.

Further, there are no materially significant related party transactions that may have conflict with the interest of the Company.

The details of contracts or arrangements entered into with related parties in Form AOC-2 is provided in Annexure I forming part of this Boards Report.

32. 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.

33. ANNUAL RETURN

As per the provisions of Section 92(3) of the Act, the Annual Return of the Company for the financial year 2022-23 is available on the website of the Company at https://www. ltts.com/investors/corporate-governance.

34. OTHER DISCLOSURES

1. Corporate Governance Report

Pursuant to Regulation 34 read with schedule V of the SEBI Listing Regulations, report on Corporate Governance and a certificate obtained from the Secretarial Auditor confirming compliance, is provided in Annexure D forming part of this Boards Report.

2. Employee Stock Option Scheme

There has been no material change in the Employee Stock Option Scheme - 2016 (ESOP Scheme - 2016) during the current financial year. The ESOP Scheme -2016 is in compliance with the Securities and Exchange Board of India (Share based Employee Benefit and Sweat Equity) Regulations, 2021 ("SBEB Regulations").

The disclosure relating to the ESOP Scheme - 2016 required to be made under the Act and rules made thereunder and the SBEB Regulations is provided on the website of the Company http://www.ltts.com/investors/.

The Secretarial Auditors certificate confirming compliance with the Act and the SBEB Regulations is provided in Annexure D forming part of this Boards Report.

3. Voting Rights

No disclosure is required under Section 67(3)(c) of the Act, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.

4. Credit Rating

The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations. The Company has received CRISIL AAA/stable and CRISIL A1+ rating for its long term and short-term financial instruments of the Company, respectively.

5. Reporting of Frauds

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 Act.

6. KYC Registration for Holders of Physical Securities

As per SEBI circular dated November 3, 2021, the Company regularly reminds shareholders via Annual Report and Postal Ballot communication for updation of their KYC information with KFin Technologies Limited.

As per SEBI circular dated March 16, 2023 the Company shall be sending individual notices

to holders of physical securities 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 on or before September 30, 2023. In case the shareholders fail to update KYC Information on or before September 30, 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 KFin Technologies Limited at the earliest. The relevant forms for updating the KYC information are provided on the website of the Company at https://www. ltts.com/investors/investor-services.

7. Business Responsibility and Sustainability Reporting

As per Regulation 34 of the SEBI Listing Regulations, a separate section on Business Responsibility and Sustainability Reporting forms a part of this Annual Report.

8. Statutory Compliance

The Company complies with all applicable laws, rules, and regulations, pays applicable taxes on time, ensures taking care of all its stakeholders and initiates sustainable activities and ensures statutory CSR Spend. The Company has an in-house Compliance tool to monitor all the compliances.

9. MSME

The Ministry of Micro, Small and Medium Enterprises vide their Notification dated 2nd November 2018 has instructed all the companies registered under

the Act, with a turnover of more than Rupees Five Hundred crore to get themselves onboarded on the Trade Receivables Discounting system platform (TReDS), set up by the Reserve Bank of India. In compliance with this requirement, the Company has registered itself on TReDS through -KredX Early-.

The Company has complied with the requirement of submitting a half yearly return to the Ministry of Corporate Affairs within the specified timelines.

10. Cost records and audit

Maintenance of cost records and requirement of cost audit as prescribed under Section 148 of the Act are not applicable for the business activities carried out by the Company.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the customers, vendors, academic institutions, Financial Institutions, Regulatory Authorities, Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company. Your Directors also acknowledge the support and co-operation from the Government of India and the Governments of various countries, the concerned State Governments, other Government Departments and Governmental Agencies. The Directors appreciate the significant contributions made by the employees of the Company and its subsidiaries during the year under review and value the contributions made by every member of the LTTS family globally.

For and on behalf of the Board

Amit Chadha S. N. Subrahmanyan
CEO & Managing Director Vice Chairman
(DIN: 07076149) (DIN: 02255382)
Place: Mumbai Place: Mumbai
Date: April 26, 2023 Date: April 26, 2023