Consolidated Financial Statements 2016-17 INDEPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED IND AS FINANCIAL STATEMENTS OF A GROUP UNDER THE COMPANIES ACT, 2013 AND THE RULES THEREUNDER

DELOITTE HASKINS & SELLS LLP SHARP & TANNAN Chartered Accountants Chartered Accountants Indiabulls Finance Centre, Tower 3 Ravindra Annexe 27th – 32nd Floor, Senapati Bapat Marg 194, Churchgate Reclamation, Elphinstone Road (West) Dinshaw Vachha Road Mumbai 400 013. Mumbai 400 020.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Consolidated Ind AS Financial Statements We have audited the accompanying Consolidated Ind AS financial statements of LARSEN & TOUBRO LIMITED (hereinafter referred to as the “Parent”) and its subsidiaries (the Parent and its subsidiaries together referred to as the “Group”) its joint ventures and associates, comprising the Consolidated Balance Sheet as at March 31, 2017, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Cash Flows, and the Consolidated Statement of Changes in Equity, for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS financial statements”) and which also includes Joint operations of the Group. Management’s Responsibility for the Consolidated Ind AS Financial Statements The Parent’s Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as the “Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance (including other comprehensive income), consolidated statement of cash flows and the consolidated statement of changes in equity of the Group including its joint operations, joint ventures and associates in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. The respective Boards of Directors of the companies included in the Group and of its joint operations, joint ventures and associates are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, and of its joint operations, joint ventures and associates and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Parent, as aforesaid. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Parent’s preparation of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating

343 the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Parent’s Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements. We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to in sub-paragraphs (a) and (b) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of the other auditors on separate financial statements of joint operations, subsidiaries, joint ventures and associates referred to below in the Other Matters paragraph, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its joint operations, joint ventures and associates as at March 31, 2017, and its consolidated profit, consolidated total comprehensive income, consolidated statement of cash flows and consolidated statement of changes in equity for the year ended on that date. Other Matters (a) The consolidated Ind AS financial statements include the financial statements of 16 joint operations included in the standalone financial statements of the Parent included in the Group whose financial statements reflect total assets of v 3,647.41 crore as at March 31, 2017 and total revenues of v 4,360.69 crore for the year ended on that date, as considered in the standalone financial statements of the Parent included in the Group. The financial statements of these joint operations have been audited by the other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations, and our report in terms of sub section (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations is based solely on the report of such other auditors. The above includes 7 joint operations which are located outside India whose financial statements have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Parent’s management has converted the financial statements of such joint operations located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Parent management. Our opinion in so far as it relates to the amounts and disclosures included in respect of said joint operations located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Parent and audited by us. (b) The consolidated Ind AS financial statements include the financial statements of 34 subsidiaries, whose financial statements reflect total assets of v 55,693.16 crore as at March 31, 2017, total revenues of v 15,300.27 crore and net cash outflows amounting to v 343.25 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements which have not been audited by us. The consolidated Ind AS financial statements also include the Group’s share of loss (net) of v 561.10 crore for the year ended March 31, 2017, as considered in the consolidated Ind AS financial statements, in respect of 4 joint ventures, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries and joint ventures is based solely on the reports of the other auditors. The above include 28 subsidiaries and a joint venture which are located outside India whose financial statements have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Parent’s management has converted the financial statements of such subsidiaries and joint venture located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Parent’s management. Our opinion in so far as it relates to the amounts and disclosures included in respect of said subsidiaries and joint venture located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the parent and audited by us. (c) The consolidated Ind AS financial statements include the financial statements/information of 14 subsidiaries, whose financial statements reflect total assets of v 70.15 crore as at March 31, 2017, total revenues of v 333.18 crore and net cash outflows amounting to v 31.38 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements which have not been audited by us. The consolidated Ind AS financial statements also include the Group’s share of profit (net) v 7.37 crore for the year ended March 31, 2017, as considered in the consolidated Ind AS financial statements, in respect of 2 joint ventures and 6 associates, whose financial statements/information have not been audited by their auditors. These financial

344 statements/information are unaudited and have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, is based solely on such unaudited financial statements/information. In our opinion and according to the information and explanations given to us by the Management, these financial statements/information are not material to the Group. (d) The comparative financial statements for the year ended March 31, 2016 in respect of 4 joint operations, 37 subsidiaries and 4 joint ventures included in this consolidated Ind AS financial statements prepared in accordance with the Ind AS have been audited by other auditors and have been relied upon by us. The consolidated Ind AS financial statements also includes the comparative financial statements/information for the year ended March 31, 2016 in respect of 16 joint operations, 22 subsidiaries, 3 joint ventures and 10 associates included in consolidated Ind AS financial statements prepared in accordance with the Ind AS have not been audited by their auditors. These financial statements/information are unaudited and have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, subsidiaries, joint ventures and associates, is based solely on such unaudited financial statements/ information. In our opinion and according to the information and explanations given to us by the Management, these financial statements are not material to the Group. Our opinion on the consolidated Ind AS financial statements above, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/information certified by the Management. Report on Other Legal and Regulatory Requirements As required by Section 143(3) of the Act, based on our audit and on the consideration of the report of other auditors on separate financial statements and the other financial information of joint operations, subsidiaries, joint venture and associate companies incorporated in India, referred in the Other Matters paragraph above we report, to the extent applicable, that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements. (b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books, returns and the reports of the other auditors. (c) The consolidated Balance Sheet, the consolidated Statement of Profit and Loss (including other comprehensive income), the consolidated Statement of Cash Flows and consolidated Statement of Changes in Equity dealt with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements. (d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act. (e) On the basis of the written representations received from the directors of the Parent as on March 31, 2017 taken on record by the Board of Directors of the Parent and the reports of the statutory auditors of its subsidiary companies, associate companies and joint venture companies incorporated in India, none of the directors of the Group companies, its associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act. (f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”, which is based on the auditors’ reports of the Parent, joint operation companies, subsidiary companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Parent’s internal financial controls over financial reporting. (g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: i. The consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint ventures. ii. Provision has been made in the consolidated Ind AS financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. iii. There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Parent and its subsidiary companies, associate companies and joint venture companies incorporated in India.

345 iv. To the best of our information and according to the information and explanations given to us, we report that, except where, for reasons explained in note no. 59 to the consolidated financial statements, the disclosures by certain subsidiaries in the financial services segments of the Group with regard to the Specified Bank Notes (“SBNs”) were restricted to readily available information and also considering that certain amounts directly deposited into the bank accounts of those entities by their customers for which information relating to SBNs was not available with those entities were classified as “Permitted receipts/Other Denomination Notes”, the Parent Company has provided requisite disclosures in the consolidated financial statements as regards the Group entities’ holding and dealings in SBNs, as defined in the Notification S.O. 3407(E) dated 8th November, 2016, of the Ministry of Finance, during the period from November 9, 2016 to December 30, 2016. Based on audit procedures performed by us and the representations provided to us by the management, we report that the disclosures are in accordance with the relevant books of accounts maintained by those entities for the purpose of preparation of the consolidated Ind AS financial statements which, as the case may be, were produced before us or other auditors by the managements of the respective Group entities.

For DELOITTE HASKINS & SELLS LLP For SHARP & TANNAN Chartered Accountants Chartered Accountants (Firm Registration No. 117366W/W-100018) (Firm Registration No. 109982W)

P. R. RAMESH FIRDOSH D. BUCHIA (Partner) (Partner) (Membership No. 70928) (Membership No. 38332)

MUMBAI, May 29, 2017

ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph “f” under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the “Act”) In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended March 31, 2017, we have audited the internal financial controls over financial reporting of LARSEN & TOUBRO LIMITED (hereinafter referred to as the “Parent”) and its subsidiary companies (hereinafter referred to as the “Group”), which includes internal financial controls over financial reporting of the joint operations which are companies incorporated in India, its joint ventures and associate companies, which are companies incorporated in India, as of that date. Management’s Responsibility for Internal Financial Controls The respective Boards of Directors of the Parent, its joint operations, its subsidiary companies, its joint ventures and its associate companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors’ Responsibility Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend

346 on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiary companies, joint operations, joint ventures and associate companies, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and associate companies, which are companies incorporated in India. Meaning of Internal Financial Controls Over Financial Reporting A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operations, its joint ventures and associate companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 1 joint operation, 4 subsidiary companies, and 2 joint venture companies, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies incorporated in India. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 7 subsidiary companies and 4 associate companies, which are companies incorporated in India, whose financial statements/information are unaudited and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as these financial statements/information are not material to the Group. Our opinion is not modified in respect of the above matters.

For DELOITTE HASKINS & SELLS LLP For SHARP & TANNAN Chartered Accountants Chartered Accountants (Firm Registration No. 117366W/W-100018) (Firm Registration No. 109982W)

P. R. RAMESH FIRDOSH D. BUCHIA (Partner) (Partner) (Membership No. 70928) (Membership No. 38332)

MUMBAI, May 29, 2017

347 Consolidated Balance Sheet as at March 31, 2017 As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Note v crore v crore v crore v crore v crore v crore ASSETS: Non-current assets Property, plant and equipment 2 11242.66 12172.17 13669.78 Capital work-in-progress 2 2118.19 1790.53 1452.66 Investment property 3 3429.72 4386.00 2768.70 Goodwill 4 1398.66 1446.96 1536.98 Other intangible assets 5 432.59 556.57 568.47 Intangible assets under development 5 11353.23 9183.92 6473.66 Financial assets Investments in joint ventures and associates 55(e) 2772.90 1257.88 2066.65 Other investments 6 3180.74 2327.01 1888.39 Loans 7 1473.82 1037.65 806.43 Loans towards financing activities 8 47133.86 47888.27 41431.60 Other financial assets 9 775.12 563.55 480.60 55336.44 53074.36 46673.67 Deferred tax assets (net) 50(d) 1736.15 1371.91 1009.90 Non current assets for current tax (net) 165.37 553.99 236.27 Other non-current assets 10 3238.16 2737.19 2395.00 Current assets Inventories 11 4139.74 4854.21 5981.16 Financial assets Investments 12 13799.39 7494.19 7353.81 Trade receivables 13 27969.60 26024.98 22254.43 Cash and cash equivalents 14 3793.33 3806.54 4412.57 Other bank balances 15 1779.16 1583.37 696.85 Loans 16 480.84 651.14 542.64 Loans towards financing activities 17 24927.38 18706.34 14322.02 Other financial assets 18 2703.58 2298.67 2128.97 75453.28 60565.23 51711.29 Other current assets 19 40366.11 40453.65 34972.91 Group(s) of assets classified as held for sale 52 1649.37 1579.46 1671.35 TOTAL ASSETS 212059.67 194726.15 171121.80

348 Consolidated Balance Sheet as at March 31, 2017 (contd.)

As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Note v crore v crore v crore v crore v crore v crore EQUITY AND LIABILITIES: Equity Equity share capital 20 186.59 186.30 185.91 Other equity 21 50029.93 43994.06 41022.18 Equity attributable to owners of the Company 50216.52 44180.36 41208.09 Non-controlling interest 3563.60 2892.84 1970.62 Liabilities Non-current liabilities Financial liabilities Borrowings 22 67340.58 61223.84 52709.64 Other financial liabilities 23 191.33 141.40 222.12 67531.91 61365.24 52931.76 Provisions 24 526.59 424.66 385.35 Deferred tax liabilities (net) 50(d) 610.95 635.48 659.49 Other non-current liabilities 25 172.14 181.14 211.93 Current liabilities Financial liabilities Borrowings 26 16556.79 14896.75 15897.14 Current maturities of long term borrowings 27 10078.90 12014.90 8122.87 Trade payables 28 29774.25 27003.56 22056.89 Other financial liabilities 29 5189.05 4322.44 3772.85 61598.99 58237.65 49849.75 Other current liabilities 30 23444.74 24407.89 20804.60 Provisions 31 2658.34 2303.52 1676.85 Current tax liabilities (net) 240.29 83.49 299.55 Liabilities associated with group(s) of assets classified as 52 held for sale 1495.60 13.88 1123.81 TOTAL EQUITY AND LIABILITIES 212059.67 194726.15 171121.80 CONTINGENT LIABILITIES 32 COMMITMENTS (capital and others) 33 NOTES FORMING PART OF THE FINANCIAL 1 to 63 STATEMENTS

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 A. M. NAIK by the hand of Group Executive Chairman (DIN 00001514) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M.M.CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798) For SHARP & TANNAN Chartered Accountants SUBODH BHARGAVA SUNITA SHARMA SUSHOBHAN SARKER Firm’s Registration No.109982W (DIN 00035672) (DIN 02949529) (DIN 00088276) by the hand of

FIRDOSH D. BUCHIA N.HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Partner Company Secretary (DIN 00041197) (DIN 00022065) Membership No. 038332 M. No. A3471 Directors Mumbai, May 29, 2017

349 Consolidated Statement of Profit and Loss for the year ended March 31, 2017 2016-17 2015-16 Note v crore v crore v crore v crore INCOME: Revenue from operations 34 110011.00 101975.34 Other income 35 1401.01 904.35

Total income 111412.01 102879.69

EXPENSES: Manufacturing, construction and operating expenses: 36 Cost of raw materials, components consumed 14320.98 13729.98 Excise duty 699.19 852.86 Construction materials consumed 20732.39 20256.77 Purchase of stock-in-trade 1610.57 1333.44 Stores, spares and tools consumed 2090.42 1834.19 Sub-contracting charges 22556.13 20788.86 Changes in inventories of finished goods, work-in-progress and stock-in-trade and property development 84.00 (514.86) Other manufacturing, construction and operating expenses 10583.48 9160.56 Finance cost of financial services business and finance lease activity 5362.09 4967.11

78039.25 72408.91 Employee benefits expense 37 13853.07 13330.84 Sales, administration and other expenses 38 7045.50 5778.52 Finance costs 39 1339.84 1655.06 Depreciation, amortisation, impairment and obsolescence 2369.93 1786.73

102647.59 94960.06 Less: Overheads capitalised 1.51 5.77

Total expenses 102646.08 94954.29

Profit before exceptional items and tax 8765.93 7925.40 Exceptional items 42 121.43 94.22

Profit before tax 8887.36 8019.62 Tax expense: Current tax 50(a) 2976.31 2817.69 Deferred tax (net) 50(a) (827.76) (380.73)

2148.55 2436.96

Profit after tax 6738.81 5582.66 Less: Additional provision/(reversal) of tax on dividend distributed by subsidiaries (141.96) 47.80

6880.77 5534.86 Add: Share in profit/(loss) of joint ventures/associates (net) 55(f) (395.27) (990.16)

Profit for the year 6485.50 4544.70

Carried forward 6485.50 4544.70

350 Consolidated Statement of Profit and Loss for the year ended March 31, 2017 (contd.)

2016-17 2015-16 Note v crore v crore v crore v crore Brought forward 6485.50 4544.70 Other comprehensive income A. Items that will not be reclassified to profit or loss: Remeasurements of the defined benefit plans [net of tax] (25.35) (10.42) B. Items that will be reclassified to profit or loss: Debt instruments through other comprehensive income [net of tax] (6.41) (2.59) Exchange differences in translating the financial statements of foreign operations [net of tax] (130.83) 68.93 Effective portion of gains and losses on hedging instruments in a cash flow hedge [net of tax] 382.94 91.78 Cost of hedging reserve [net of tax] (42.57) 11.35 Other comprehensive income for the year [net of tax] 177.78 159.05 Total comprehensive income for the year 6663.28 4703.75 Profit for the year attributable to: - Owners of the Company 6041.23 4232.88 - Non-controlling interests 444.27 311.82 6485.50 4544.70 Other comprehensive income for the year attributable to: - Owners of the Company 146.38 155.82 - Non-controlling interests 31.40 3.23 177.78 159.05 Total comprehensive income for the year attributable to: - Owners of the Company 6187.61 4388.70 - Non-controlling interests 475.67 315.05 6663.28 4703.75

Basic earnings per equity share (v) 49 64.80 45.48 Diluted earnings per equity share (v) 49 64.58 45.27 Face value per equity share (v) 2.00 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 63

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 A. M. NAIK by the hand of Group Executive Chairman (DIN 00001514) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M.M.CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798) For SHARP & TANNAN Chartered Accountants SUBODH BHARGAVA SUNITA SHARMA SUSHOBHAN SARKER Firm’s Registration No.109982W (DIN 00035672) (DIN 02949529) (DIN 00088276) by the hand of

FIRDOSH D. BUCHIA N.HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Partner Company Secretary (DIN 00041197) (DIN 00022065) Membership No. 038332 M. No. A3471 Directors Mumbai, May 29, 2017

351 Consolidated Statement of Changes in Equity for the year ended March 31, 2017

A. Equity share capital

2016-17 2015-16 Particulars Number of v crore Number of v crore shares shares Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 93,14,78,845 186.30 92,95,62,061 185.91 Add: Shares issued on exercise of employee stock options during the year 14,86,958 0.29 19,16,784 0.39 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 93,29,65,803 186.59 93,14,78,845 186.30

B. Other equity (v crore) Particulars Equity Reserves and surplus Items of other comprehensive income Total other Non- Total component Capital Securities Employee Statutory Retained Foreign Hedging Debt equity controlling of foreign reserve premium share reserves earnings currency reserve instruments interest currency account options transla- through other convertible (net) tion comprehensive bonds reserve income Balance as at 1-4-2015 153.20 281.06 7963.16 369.24 1987.37 29703.20 538.23 (51.90) 78.62 41022.18 1970.62 42992.80 Profit for the year (a) – – – – – 4232.88 – – – 4232.88 311.82 4544.70 Other comprehensive income (b) – – – – – (8.86) 71.36 95.91 (2.59) 155.82 3.23 159.05 Total comprehensive income for the year (a+b) – – – – – 4224.02 71.36 95.91 (2.59) 4388.70 315.05 4703.75 Issue of equity shares – – 201.63 – – – – – – 201.63 – 201.63 Share issue expenses – – (0.07) – – – – – – (0.07) – (0.07) Impact of business combination – (0.66) – – – – – – – (0.66) – (0.66) Transfer from/(to) retained earnings during the year – – – (12.35) 671.93 (659.58) – – – – – – Employee share options (net) – – – (74.67) – – – – – (74.67) (0.69) (75.36) Dividend paid for the previous year (including tax on dividend) – – – – – (1805.90) – – – (1805.90) (57.77) (1863.67) Net gain/loss on transaction with non-controlling interest – – – – – 262.85 – – – 262.85 (262.85) – Increase in non-controlling interest due to dilution/ divestment/ acquisition – – – – – – – – – – 928.48 928.48 Balance as at 31-3-2016 153.20 280.40 8164.72 282.22 2659.30 31724.59 609.59 44.01 76.03 43994.06 2892.84 46886.90

352 Consolidated Statement of Changes in Equity for the year ended March 31, 2017 (contd.)

(v crore) Particulars Equity Reserves and surplus Items of other comprehensive income Total other Non- Total component Capital Securities Employee Statutory Retained Foreign Hedging Debt equity controlling of foreign reserve premium share reserves earnings currency reserve instruments interest currency account options transla- through other convertible (net) tion comprehensive bonds reserve income Balance as at 1-4-2016 153.20 280.40 8164.72 282.22 2659.30 31724.59 609.59 44.01 76.03 43994.06 2892.84 46886.90 Profit for the year (c) – – – – – 6041.23 – – – 6041.23 444.27 6485.50 Other comprehensive income (d) – – – – – (20.72) (131.35) 303.51 (5.06) 146.38 31.40 177.78 Total comprehensive income for the year (c+d) – – – – – 6020.51 (131.35) 303.51 (5.06) 6187.61 475.67 6663.28 Issue of equity shares – – 154.18 – – – – – – 154.18 – 154.18 Share issue expenses (0.05) (0.05) (0.05) Impact of business combination – (0.12) – – – – – – (0.12) – (0.12) Transfer from/(to) retained earnings during the year – – – (21.86) 83.00 (61.14) – – – – – – Employee share options (net) – – – 42.89 – – – – – 42.89 19.96 62.85 Income tax charged against retained earnings – – – – – (0.30) – – – (0.30) – (0.30) Dividend paid for the previous year (including tax on dividend) – – – – – (2070.00) – – – (2070.00) (92.14) (2162.14) Net gain/loss on transaction with non-controlling interest – – – – – 1721.66 – – – 1721.66 (1721.66) – Increase in non-controlling interest due to dilution/ divestment/ acquisition – – – – – – – – – – 1988.93 1988.93 Balance as at 31-3-2017 153.20 280.28 8318.85 303.25 2742.30 37335.32 478.24 347.52 70.97 50029.93 3563.60 53593.53

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 A. M. NAIK by the hand of Group Executive Chairman (DIN 00001514) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M.M.CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798) For SHARP & TANNAN Chartered Accountants SUBODH BHARGAVA SUNITA SHARMA SUSHOBHAN SARKER Firm’s Registration No.109982W (DIN 00035672) (DIN 02949529) (DIN 00088276) by the hand of

FIRDOSH D. BUCHIA N.HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Partner Company Secretary (DIN 00041197) (DIN 00022065) Membership No. 038332 M. No. A3471 Directors Mumbai, May 29, 2017

353 Consolidated Statement of Cash Flows for the year ended March 31, 2017

2016-17 2015-16 v crore v crore A. Cash flow from operating activities: Profit before tax (excluding non-controlling interest and exceptional items) 8765.93 7925.40 Adjustments for: Dividend received (748.63) (196.12) Depreciation, amortisation, impairment and obsolescence 2369.93 1786.73 Exchange difference on items grouped under financing/investing activities (80.51) 45.56 Effect of exchange rate changes on cash and cash equivalents 34.92 (7.42) Interest expense 1339.84 1655.06 Interest income (422.62) (426.85) (Profit)/loss on sale of property, plant and equipment (net) (17.88) (60.55) (Profit)/loss on sale/fair valuation of investments (net) (34.22) (65.73) (Profit)/loss on sale of stake in subsidiary and joint venture companies of Developmental Projects and Realty Segments (95.81) (236.53) Employee stock option-discount forming part of employee benefits expense 88.17 65.33 Operating profit before working capital changes 11199.12 10484.88 Adjustments for: (Increase)/decrease in trade and other receivables (2078.84) (9449.56) (Increase)/decrease in inventories 1509.77 216.60 Increase/(decrease) in trade payables and customer advances 4550.32 9308.11 Cash generated from operations before financing activities 15180.37 10560.03 (Increase)/decrease in loans and advances towards financing activities (5743.85) (10584.93)

Cash generated from operations 9436.52 (24.90) Direct taxes refund/(paid) [net] (3201.67) (3214.69) Net cash (used in)/from operating activities 6234.85 (3239.59) B. Cash flow from investing activities: Purchase of fixed assets (2978.71) (4321.63) Sale of fixed assets (including advance received) 156.33 198.25 Purchase of non-current investments (1551.99) (575.05) Sale of non-current investments 67.00 333.08 (Purchase)/sale of current investments (net) (6273.01) (171.25) Change in other bank balance and cash not available for immediate use (321.17) (909.11) Investment in joint ventures (2010.36) - Deposits/ loans made with associates, joint ventures and third parties (net) (212.35) (242.25) Interest received 408.84 402.31 Dividend received from associates 0.57 16.93 Dividend received from other investments 748.63 196.12 Consideration received on transfer of foundry business unit 83.65 79.70 Consideration received on disposal of subsidiaries (including advance received) 2169.01 410.30 Consideration received on disposal of joint venture – 21.54 Consideration paid on acquisition of subsidiaries (7.07) (32.36) Cash & cash equivalents discharged pursuant to disposal of subsidiaries/joint ventures (19.61) (33.14) Net cash (used in)/from investing activities (9740.24) (4626.56)

354 Consolidated Statement of Cash Flows for the year ended March 31, 2017 (contd.)

2016-17 2015-16 v crore v crore C. Cash flow from financing activities: Proceeds from issue of share capital 53.32 70.19 Proceeds from non-current borrowings 30900.44 30224.75 Repayment of non-current borrowings (27531.88) (19753.06) Proceeds from other borrowings (net) 1704.64 44.07 Payment (to)/from non controling interest (net)- including sale proceeds on divestment of part stake in subsidiary companies 2058.82 970.58 Dividends paid (1701.51) (1512.33) Additional tax on dividend (391.54) (329.91) Interest paid (including cash flows from interest rate swaps) (1565.20) (2461.59) Net cash (used in)/from financing activities 3527.09 7252.70 Net (decrease)/increase in cash and cash equivalents (A + B + C) 21.70 (613.45) Cash and cash equivalents at beginning of the year 3789.51 4402.96 Cash and cash equivalents at end of the year 3811.21 3789.51

Notes: 1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 “Statement of Cash Flows” as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Purchase of fixed assets represents additions to property, plant & equipment, investment property and intangible assets adjusted for movement of (a) capital work in progress for property, plant & equipment and investment property and (b) Intangible assets under development during the year. 3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following : 2016-17 2015-16 v crore v crore (a) Cash and cash equivalents disclosed under current assets [Note 14] 3793.33 3806.54 (b) Other bank balances disclosed under current assets [Note 15] 1779.16 1583.37 (c) Cash and cash equivalents disclosed under non-current assets [Note 9] 223.56 98.18 Total Cash and cash equivalents as per Balance Sheet 5796.05 5488.09 Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents 17.88 (17.03) Less: (ii) Other bank balances disclosed under current assets [Note 15] 1779.16 1583.37 Less: (iii) Cash and cash equivalents disclosed under non-current assets [Note 9] 223.56 98.18 Total Cash and cash equivalents as per Statement of Cash Flows 3811.21 3789.51

4. Previous year’s figures have been regrouped/reclassified wherever applicable.

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 A. M. NAIK by the hand of Group Executive Chairman (DIN 00001514) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M.M.CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798) For SHARP & TANNAN Chartered Accountants SUBODH BHARGAVA SUNITA SHARMA SUSHOBHAN SARKER Firm’s Registration No.109982W (DIN 00035672) (DIN 02949529) (DIN 00088276) by the hand of

FIRDOSH D. BUCHIA N.HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Partner Company Secretary (DIN 00041197) (DIN 00022065) Membership No. 038332 M. No. A3471 Directors Mumbai, May 29, 2017

355 DELOITTE HASKINS & SELLS LLP SHARP & TANNAN Chartered Accountants Chartered Accountants Indiabulls Finance Centre, Tower 3 Ravindra Annexe 27th – 32nd Floor, Senapati Bapat Marg 194, Churchgate Reclamation Elphinstone Road (West) Dinshaw Vachha Road Mumbai 400013. Mumbai 400 020.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of Larsen & Toubro Limited (the “Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, which includes 25 Joint Operations (herein after referred to as “standalone Ind AS financial statements”). Management’s Responsibility for the Standalone Ind AS Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the “Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company including its joint operation in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (“Ind AS”) prescribed under section 133 of the Act. The Boards of Directors of the Company and those charged with governance of its joint operation are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and its joint operation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements of joint operations referred to in the Other Matters paragraph below, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit, total comprehensive income, cash flows and the changes in equity for the year ended on that date. Other Matters a) We did not audit the financial statements / information of 16 joint operations included in the standalone Ind AS financial statements of the Company whose financial statements reflect total assets of v 3,647.41 crore as at March 31, 2017, total revenues of v 4,360.69 crore, total profit after tax (net) of v 268.96 crore and total comprehensive income (net) of v 269.03 crore for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial statements of these joint operations have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to aforesaid joint operations, is based solely on the reports of such other auditors. Out of above, there are 7 joint operations which are located outside India whose financial results have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Company’s management has converted the financial statements of such joint

229 operations located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Company’s management. Our audit report in so far as it relates to the balances and affairs of such joint operations located outside India is based on the reports of other auditors and the conversion adjustments prepared by the management of the Company and audited by us. b) The comparative financial information of the Company for the transition date opening balance sheet as at 1st April 2015 included in these standalone Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by one of the joint auditors whose report for the year ended March 31, 2015 dated May 30, 2015 expressed an unmodified opinion on those standalone financial statements, and have been restated to comply with Ind AS. Adjustments made to the previously issued said financial information prepared in accordance with the Companies (Accounting Standards) Rules, 2006 to comply with Ind AS have been audited by us. c) The comparative financial information for the year ended March 31, 2016 in respect of 4 joint operations included in this standalone Ind AS financial statements prepared in accordance with the Ind AS have been audited by the other auditors. The comparative financial information for the year ended March 31, 2016 in respect of 16 joint operations included in this standalone Ind AS financial statements prepared in accordance with the Ind AS have not been audited by their auditors and have been furnished to us by the Management. Our opinion on the standalone Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of these matters with respect to our reliance on the work done and the reports of the other auditors and the financial information certified by the Management. Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditor on the separate financial statements / information of the joint operation, referred to in the Other Matters paragraph above we report, to the extent applicable that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b) In our opinion, proper books of account as required by law have been kept by the Company and its joint operation so far as it appears from our examination of those books and the reports of the other auditors; c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account; d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued thereunder; e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors and the report of the statutory auditor of its joint operation company incorporated in India, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act; f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and joint operation which is a Company incorporated in India and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s and it’s joint operation’s internal financial controls over financial reporting; and g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements; ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and iv. To the best of our information and according to the information and explanations given to us and having regard to the nature of business and size of its operations and cash payments made by the Company in the ordinary course of business and based on the Company’s practices for recording such transactions, the Company has provided the requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management, we report that the disclosures are in accordance with the relevant books of account maintained by the Company and as produced before us and other auditor by the management. 2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order. For DELOITTE HASKINS & SELLS LLP For SHARP & TANNAN Chartered Accountants Chartered Accountants (Firm Registration No. 117366W/W-100018) (Firm Registration No. 109982W)

P. R. RAMESH FIRDOSH D. BUCHIA (Partner) (Partner) (Membership No. 70928) (Membership No. 38332)

MUMBAI, May 29, 2017

230 ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (the “Company”) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company as at end for the year ended on that date which includes internal financial controls over financial reporting of the Company’s joint operation which is a Company incorporated in India. Management’s Responsibility for Internal Financial Controls The Board of Directors of the Company and those charged with governance of its joint operation which is a Company incorporated in India are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor of the joint operation which is a Company incorporated in India, in terms of their report referred to in the Other Matters section of our report of even date, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other Matters section of our report of even date, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the respective Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

231 Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to a joint operation which is a Company incorporated in India, is based on the corresponding report of the other auditor of such Company incorporated in India. Our opinion is not modified in respect of this matter. For DELOITTE HASKINS & SELLS LLP For SHARP & TANNAN Chartered Accountants Chartered Accountants (Firm Registration No. 117366W/W-100018) (Firm Registration No. 109982W)

P. R. RAMESH FIRDOSH D. BUCHIA (Partner) (Partner) (Membership No. 70928) (Membership No. 38332)

MUMBAI, May 29, 2017 ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a program of verification of its fixed assets to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its fixed assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings (including land whose title deed have been pledged as security against debentures issued by the Company), are held in the name of the Company as at the balance sheet date, except the following:

v crore Type of asset Total no. of Leasehold / Gross block as at Net block as at Remarks cases freehold March 31, 2017 March 31, 2017 Land 3 Freehold 1.27 1.27 Conveyance deed pending to be executed. Buildings 2 Freehold 3.54 0.94 Conveyance deed pending to be executed.

In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. (ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification between the physical stock and the book records. (iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act, in respect of which: (a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company’s interest. (b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations. (c) There is no overdue amount remaining outstanding as at the balance sheet date.

232 (iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable. (v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under paragraph 3 (v) of the Order is not applicable to the Company. (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) According to the information and explanations given to us, in respect of statutory dues: (a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities. (b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable. (c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on March 31, 2017 on account of disputes are given below:

Name of Nature of Dues Forum where Period to which Amount Amount Amount Statute Dispute is Relates Involved Unpaid Pending (v crore) (v crore) Central Sales Taxability of sub-contractor turnover, Supreme Court 2000-01 to 2006-07 12.13 3.14 Tax Act, Local rate of tax for declared goods, Sales Tax Acts inter-state sales and non-submission and Works of forms Contract Tax Act Dispute regarding question of law, High Court 1986-87 to 1987-88, 74.62 65.49 non-submission of forms, classification 1993-94, 1994-95, 1998- dispute, tax deducted at source at 99 to 2002-03, 2005-06, lower rate, sales in transit, high seas 2006-07 to 2012-13 sales, labour turnover, local VAT, rate of tax on declared goods and other matters. Non-submission of forms, classification Sales Tax/ VAT 1989-90 to 2013-14 417.09 360.28 disputes, disallowance of sales Tribunal occasioning import, arbitrary demand raised, sub-contractors turnover disallowed, pumping and freight charges, inter-state sales turnover, tax deducted at source disallowed, rates of tax of declared goods, classification dispute, disallowance of Entry tax and other matters. Dispute regarding question of law, Commissioner 2000-01, 2003-04 to 2012- 43.44 40.82 non-submission of forms, classification (Appeal) 13, 2014-15 to 2015-16 dispute, disallowance of setoff, Commissioner 2008-09, 2012-13 0.33 0.33 valuation of goods, sales in transit and high seas sales, and other matters. Non Submission of Forms and other Additional 2011-12 to 2012-13 2.59 2.58 matters. Commissioner

233 Name of Nature of Dues Forum where Period to which Amount Amount Amount Statute Dispute is Relates Involved Unpaid Pending (v crore) (v crore) Dispute regarding question of law, Joint 2006-07, 2009-10, 27.18 4.02 non-submission of forms, sales in Commissioner 2011-12 to 2015-16 transit, local VAT and other matters. Non-submission of forms, additional Assistant / 1998-99, 2000-01 to 1219.32 1128.36 demands for pending forms, rate of Deputy / Joint 2014-15 tax dispute, disallowance of branch Commissioner transfer, sub-contractors turnover, – Appeals considering supply agreement as Works Contract Tax, disallowance of sales in transit, stock transfer and other matters. Sales in transit, local VAT and other Assessing/ 1996-97 to 1998-99, 2001- 7.97 7.13 matters. Commercial Tax 02 to 2007-08, 2009-10 to Officer 2012-13 The Central Export rebate claim, service tax on High Court 2005-06 to 2007-08, 42.48 40.74 Excise Act, commercial construction services, 2009-10 to 2012-13 1944, Service service tax liability against rate change Tax under and penalty imposed for wrong Finance Act, availment of CENVAT credit. 1994 and Demand of excise duty on Fabrication CESTAT 1991-92, 2001-02 to 1025.48 1001.52 Customs Act, of Cable tray supports/ ED exemption/ 2011-12 1962 Export rebate disallowance / Service Tax on Business Auxiliary Services/ Valuation Dispute pertaining to Excise/ Duty on Supply of Bolts & nuts/ GTA services, site jobs, export rebate disallowance, MRP valuation disputes, CENVAT credit availed, non-maintenance of separate records, and other matters. Disallowance of CENVAT credit, excise Commissioner 2006-07 to 2012-13, 13.87 13.57 duty refund, excise duty on site jobs, (Appeal) 2015-16 short payment of service tax, service tax rate dispute, valuation dispute and other matters. Disallowance of CENVAT credit, short Commissioner 2005-06 to 2013-14 78.69 77.58 payment of service tax, service tax rate dispute, valuation dispute and other matters. Disallowance of CENVAT credit, short Tribunal 2006-07 to 2009-10, 78.97 78.12 payment of service tax and other 2011-12 to 2012-13 matters. Non fulfilment of Export Obligations Directorate 2015-16 to 2016-17 12.49 12.49 under Export promotion scheme General of Foreign Trade Income-tax Act, Demands arising out of Regular ITAT 2003-04, 2006-07 to 1616.42 491.16 1961 Assessment/ Reassessment 2011-12

234 (viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks and dues to debenture holders. The Company has not borrowed any funds from the government. (ix) In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under paragraph 3 (ix) of the Order is not applicable to the Company. (x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act. (xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) of the Order is not applicable to the Company. (xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with the related parties and the details of related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards. (xiv) According to the information and explanations given to us, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order is not applicable to the Company. (xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act are not applicable to the Company. (xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLS LLP For SHARP & TANNAN Chartered Accountants Chartered Accountants (Firm Registration No. 117366W/W-100018) (Firm Registration No. 109982W)

P. R. RAMESH FIRDOSH D. BUCHIA (Partner) (Partner) (Membership No. 70928) (Membership No. 38332)

MUMBAI, May 29, 2017

235 Balance Sheet as at March 31, 2017

As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Note v crore v crore v crore v crore v crore v crore ASSETS: Non-current assets Property, plant and equipment 2 6522.85 7129.89 7068.96 Capital work-in-progress 2 302.53 253.22 385.73 Investment property 3 396.70 446.90 471.18 Other intangible assets 4 125.04 138.58 84.94 Intangible assets under development 4 201.25 158.91 189.50 Financial assets Investments 5 19776.81 19187.86 17446.14 Loans 6 1770.54 2797.52 3002.86 Other financial assets 7 500.33 474.09 346.46 22047.68 22459.47 20795.46 Deferred tax assets/(liabilities) [net] 49(e) 285.22 156.14 (95.97) Other non-current assets 8 2222.67 1786.70 1450.22 Current assets Inventories 9 1762.86 1955.11 2260.77 Financial assets Investments 10 6982.08 4803.32 5518.05 Trade receivables 11 19919.97 18967.75 16790.00 Cash and cash equivalents 12 2202.26 2075.83 2764.78 Other bank balances 13 1599.97 1494.43 255.84 Loans 14 1919.41 2432.26 1381.61 Other financial assets 15 2054.63 1880.49 1428.09 34678.32 31654.08 28138.37 Other current assets 16 33263.70 33481.95 28454.83 Group(s) of assets classified as held for sale 42 388.00 – 141.79 TOTAL ASSETS 102196.82 99620.95 89345.78

236 Balance Sheet as at March 31, 2017 (contd.)

As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Note v crore v crore v crore v crore v crore v crore EQUITY AND LIABILITIES: Equity Equity share capital 17 186.59 186.30 185.91 Other equity 18 45826.15 41949.01 38366.62 Total equity 46012.74 42135.31 38552.53 Liabilities Non-current liabilities Financial liabilities Borrowings 19 7134.28 8312.47 8430.81 Other financial liabilities 20 88.57 72.45 102.00 7222.85 8384.92 8532.81 Provisions 21 470.68 371.50 346.10 Other non-current liabilities 22 3.86 5.83 0.81 Current liabilities Financial liabilities Borrowings 23 2334.84 4175.98 3998.58 Current maturities of long term borrowings 24 1111.59 1436.03 647.93 Trade payables 25 24031.83 22215.92 18376.00 Other financial liabilities 26 1572.65 1319.68 1190.57 29050.91 29147.61 24213.08 Other current liabilities 27 18297.72 18651.96 16785.98 Provisions 28 1092.15 897.29 801.42 Current tax liabilities (net) 45.91 26.53 75.83 Liabilities associated with the group(s) of assets 42 classified as held for sale – – 37.22 TOTAL EQUITY AND LIABILITIES 102196.82 99620.95 89345.78

CONTINGENT LIABILITIES 29 COMMITMENTS (capital and others) 30 NOTES FORMING PART OF THE FINANCIAL 1 to 60 STATEMENTS

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 A. M. NAIK by the hand of Group Executive Chairman (DIN 00001514) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798) For SHARP & TANNAN Chartered Accountants SUBODH BHARGAVA SUNITA SHARMA SUSHOBHAN SARKER Firm’s Registration No.109982W (DIN 00035672) (DIN 02949529) (DIN 00088276) by the hand of

FIRDOSH D. BUCHIA N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Partner Company Secretary (DIN 00041197) (DIN 00022065) Membership No. 038332 M. No. A3471 Directors Mumbai, May 29, 2017

237 Statement of Profit and Loss for the year ended March 31, 2017

2016-17 2015-16 Note v crore v crore v crore v crore INCOME:

Revenue from operations 31 66301.35 63812.65

Other income 32 1971.85 2341.04

Total income 68273.20 66153.69

EXPENSES:

Manufacturing, construction and operating expenses 33

Cost of raw materials components consumed 7370.57 7397.55

Excise duty 577.49 635.39

Construction materials consumed 18493.31 18804.70

Purchase of stock-in-trade 1390.84 1129.45

Stores, spares and tools consumed 1446.67 1349.23

Sub-contracting charges 16770.61 15567.87

Changes in inventories of finished goods, work-in-progress and stock-in-trade and property development 131.59 76.57

Other manufacturing, construction and operating expenses 5808.52 5208.33

51989.60 50169.09

Employee benefits expense 34 5146.47 4974.80

Sales, administration and other expenses 35 2741.55 2845.77

Finance costs 36 1318.03 1476.82

Depreciation, amortisation, impairment and obsolescence 1215.19 997.40

62410.84 60463.88

Less: Overheads capitalised 1.51 5.53

Total expenses 62409.33 60458.35

Profit before exceptional items and tax 5863.87 5695.34

Exceptional items 46 893.97 560.28

Profit before tax 6757.84 6255.62

Carried forward 6757.84 6255.62

238 Statement of Profit and Loss for the year ended March 31, 2017 (contd.)

2016-17 2015-16 Note v crore v crore v crore v crore Brought forward 6757.84 6255.62 Tax expenses Current tax 49(a) 1675.20 1530.01 Deferred tax 49(a) (371.10) (273.97)

1304.10 1256.04

Profit after tax 5453.74 4999.58 Other Comprehensive Income A. Items that will not be reclassified to Profit or Loss: Remeasurements of the defined benefit plans [net of tax] (8.02) (8.44) B. Items that will be reclassified to Profit or Loss: Debt instruments through Other Comprehensive Income [net of tax] (10.25) (2.59) Exchange differences in translating the financial statements of (4.32) 4.14 foreign operations [net of tax] Effective portion of gains and losses on hedging instruments in a cash flow hedge [net of tax] 223.37 78.41 Cost of hedging reserve [net of tax] (43.43) 11.34

Other Comprehensive Income for the year [net of tax] 157.35 82.86

Total Comprehensive Income for the year 5611.09 5082.44

Basic earnings per equity share (v) 52 58.49 53.71

Diluted earnings per equity share (v) 52 58.30 53.47

Face value per equity share (v) 2.00 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 60

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 A. M. NAIK by the hand of Group Executive Chairman (DIN 00001514) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798) For SHARP & TANNAN Chartered Accountants SUBODH BHARGAVA SUNITA SHARMA SUSHOBHAN SARKER Firm’s Registration No.109982W (DIN 00035672) (DIN 02949529) (DIN 00088276) by the hand of

FIRDOSH D. BUCHIA N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Partner Company Secretary (DIN 00041197) (DIN 00022065) Membership No. 038332 M. No. A3471 Directors Mumbai, May 29, 2017

239 Statement of changes in Equity for the year ended March 31, 2017

A. Equity share capital 2016-17 2015-16 Particulars Number of v crore Number of v crore shares shares Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 93,14,78,845 186.30 92,95,62,061 185.91 Add: Shares issued on exercise of employee stock options during the year 14,86,958 0.29 19,16,784 0.39 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 93,29,65,803 186.59 93,14,78,845 186.30

B. Other equity (v crore) Equity Reserves and surplus Items of Other Comprehensive Income component Debt Foreign of foreign Securities Debenture instruments Total other Particulars Capital Employee share General Retained currency Hedging currency premium redemption through Other equity reserve options (net) reserve earnings translation reserve convertible account reserve Comprehensive reserve bonds Income Balance as at 1-4-2015 153.20 10.52 7963.16 308.84 400.01 25054.47 4522.65 0.73 (125.58) 78.62 38366.62 Profit for the year (a) – – – – – – 4999.58 – – – 4999.58 Other Comprehensive Income (b) ––––––(8.44) 4.14 89.75 (2.59) 82.86 Total comprehensive income for the year (a+b) – – – – – – 4991.14 4.14 89.75 (2.59) 5082.44 Issue of equity shares – – 201.63 – – – – – – – 201.63 Share issue expenses –– (0.07)–––––––(0.07) Transfer from/to general reserve/retained earnings during the year –– – (12.02) 6.50 162.02 (156.50) – – – – Employee share options (net) –– – (54.59) – – – – – – (54.59) Dividend paid for the previous year (including tax on dividend) – – – – – – (1647.02) – – – (1647.02) Balance as at 31-3-2016 153.20 10.52 8164.72 242.23 406.51 25216.49 7710.27 4.87 (35.83) 76.03 41949.01 Profit for the year (c) – – – – – – 5453.74 – – – 5453.74 Other Comprehensive Income (d) ––––––(8.02) (4.32) 179.94 (10.25) 157.35 Total comprehensive income for the year (c+d) – – – – – 5445.72 (4.32) 179.94 (10.25) 5611.09 Issue of equity shares – – 154.18 – – – – – – – 154.18 Share issue expenses –– (0.05)–––––––(0.05) Transfer from/to general reserve/retained earnings during the year –– – (19.61) (49.75) 157.11 (87.75) – – – – Employee share options (net) –– – (45.37) – – – – – – (45.37) Dividend paid for the previous year (including tax on dividend) – – – – – – (1842.71) – – – (1842.71) Balance as at 31-3-2017 153.20 10.52 8318.85 177.25 356.76 25373.60 11225.53 0.55 144.11 65.78 45826.15

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 A. M. NAIK by the hand of Group Executive Chairman (DIN 00001514) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M.M.CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798) For SHARP & TANNAN Chartered Accountants SUBODH BHARGAVA SUNITA SHARMA SUSHOBHAN SARKER Firm’s Registration No.109982W (DIN 00035672) (DIN 02949529) (DIN 00088276) by the hand of

FIRDOSH D. BUCHIA N.HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Partner Company Secretary (DIN 00041197) (DIN 00022065) Membership No. 038332 M. No. A3471 Directors Mumbai, May 29, 2017

240 Statement of Cash Flows for the year ended March 31, 2017 2016-17 2015-16 v crore v crore A. Cash flow from operating activities: Profit before tax (excluding exceptional items) 5863.87 5695.34 Adjustments for: Dividend received (1065.10) (1121.35) Depreciation, amortisation, impairment and obsolescence (net) 1215.19 997.40 Exchange difference on items grouped under financing/investing activities (67.40) 59.47 Effect of exchange rate changes on cash and cash equivalents 0.11 2.00 Interest expense 1318.03 1476.82 Interest income (539.31) (530.72) Profit on sale of fixed assets (net) (23.70) (82.51) Profit on sale of investments (net) [including fair valuation] 72.44 (150.87) Employee stock option-discount forming part of employee benefits expense 61.77 60.34 Operating profit before working capital changes 6835.90 6405.92 Adjustments for: (Increase)/decrease in trade and other receivables (1343.12) (7781.31) (Increase)/decrease in inventories 192.26 305.65 Increase/(decrease) in trade payables and customer advances 1981.62 5985.83 Cash (used in)/generated from operations 7666.66 4916.09 Direct taxes refund/(paid) [net] (1519.29) (1616.23) Net cash (used in)/from operating activities 6147.37 3299.86 B. Cash flow from investing activities: Purchase of fixed assets (749.02) (1087.23) Sale of fixed assets (including advance received) 114.35 290.00 Investment in subsidiaries, associates and joint ventures (3375.61) (2545.89) Divestment of stake in subsidiaries, associates and joint ventures 3348.24 2289.55 Sale of non-current investments – 106.65 (Purchase)/sale of current investments (net) (2304.55) 681.89 Change in other bank balance and cash not available for immediate use (230.92) (1261.18) Deposits/loans (given) - subsidiaries, associates, joint ventures and third parties (1085.78) (12498.99) Deposits/loans repaid - subsidiaries, associates, joint ventures and third parties 2336.24 9790.42 Advance towards equity commitment (addition) (6.35) (5.25) Advance towards equity commitment refund 5.25 1070.15 Interest received 830.53 446.58 Dividend received from subsidiaries 405.47 994.16 Dividend received from other investments 659.63 127.19 Consideration received on transfer of Foundry Business Unit 83.65 79.70 Net cash (used in)/from investing activities [non-cash transaction: Note (51(c)#), (51(c)##)] 31.13 (1522.25)

241 Statement of Cash Flows for the year ended March 31, 2017 (contd.)

2016-17 2015-16 v crore v crore C. Cash flow from financing activities: Proceeds from fresh issue of share capital 53.32 70.19 Proceeds from non-current borrowings 378.26 1589.29 Repayment of non-current borrowings (1643.23) (1420.79) (Repayments)/proceeds from other borrowings (net) (1845.06) 152.59 Dividends paid (1701.51) (1512.33) Additional tax on dividend (141.20) (134.69) Interest paid (including cash flows from interest rate swaps) (1152.54) (1208.59) Net cash (used in)/from financing activities (6051.96) (2464.33) Net (decrease)/increase in cash and cash equivalents (A + B + C) 126.54 (686.72) Cash and cash equivalents at beginning of the year 2078.06 2764.78 Cash and cash equivalents at end of the year 2204.60 2078.06 Notes: 1. Statement of cash flows has been prepared under the indirect method as set out in the Ind AS 7 “Statement of Cash Flows” as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Purchase of fixed assets represents additions to property, plant and equipment, investment property and other intangible assets adjusted for movement of (a) capital-work-in-progress for property, plant and equipment and investment property and (b) intangible assets under development during the year. 3. Cash and cash equivalents included in the Statement of cash flows comprise the following: 2016-17 2015-16 v crore v crore (a) Cash and cash equivalents disclosed under current assets [Note 12] 2202.26 2075.83 (b) Other bank balances disclosed under current assets [Note 13] 1599.97 1494.43 (c) Cash and cash equivalents disclosed under non-current assets [Note 7] 223.56 98.18 Total cash and cash equivalents as per Balance Sheet 4025.79 3668.44 Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents 2.34 2.23 Less: (ii) Other bank balances disclosed under current assets [Note 13] 1599.97 1494.43 Less: (iii) Cash and cash equivalents disclosed under non-current assets [Note 7] 223.56 98.18 Total cash and cash equivalents as per Statement of Cash Flows 2204.60 2078.06

4. Previous year’s figures have been regrouped/reclassified wherever applicable.

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 A. M. NAIK by the hand of Group Executive Chairman (DIN 00001514) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798) For SHARP & TANNAN Chartered Accountants SUBODH BHARGAVA SUNITA SHARMA SUSHOBHAN SARKER Firm’s Registration No.109982W (DIN 00035672) (DIN 02949529) (DIN 00088276) by the hand of

FIRDOSH D. BUCHIA N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Partner Company Secretary (DIN 00041197) (DIN 00022065) Membership No. 038332 M. No. A3471 Directors Mumbai, May 29, 2017

242 Consolidated Financial Statements 2017-18

DELOITTE HASKINS & SELLS LLP Chartered Accountants Indiabulls Finance Centre, Tower 3 27th – 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400 013.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Consolidated Ind AS Financial Statements We have audited the accompanying consolidated Ind AS financial statements of LARSEN & TOUBRO LIMITED (hereinafter referred to as the “Parent”) and its subsidiaries (the Parent and its subsidiaries together referred to as the “Group”), which includes Group’s share of profit/ loss in its associates and its joint ventures and which also includes 31 joint operations of the Group accounted on a proportionate basis, comprising the Consolidated Balance Sheet as at March 31, 2018, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Statement of Cash Flows, and the Consolidated Statement of Changes in Equity, for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS financial statements”). Management’s Responsibility for the Consolidated Ind AS Financial Statements The Parent’s Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as the “Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance (including other comprehensive income), consolidated statement of cash flows and the consolidated statement of changes in equity of the Group including its joint operations, associates and joint ventures in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group and of its joint operations, associates and joint ventures are responsible for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, and of its joint operations, associates and joint ventures for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Parent, as aforesaid. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Parent’s preparation of the consolidated Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Parent’s Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements.

347 We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to in sub-paragraphs (a) and (b) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of the other auditors on separate financial statements/financial information of the joint operations, subsidiaries, associates and joint ventures referred to below in the Other Matters paragraph, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its joint operations, associates and joint ventures as at March 31, 2018, and their consolidated profit, consolidated total comprehensive income, consolidated cash flows and consolidated statement of changes in equity for the year ended on that date. Other Matters (a) The consolidated Ind AS financial statements include the financial information of 27 joint operations included in the standalone financials of the respective entities of the Group whose financial information reflect total assets of R 4,801.11 crore as at March 31, 2018 and total revenues of R 5,459.95 crore and net cash inflows amounting to R 189.64 crore for the year ended on the date. The financial information of these joint operations have been audited by other auditors whose reports have been furnished to us by the Management and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations is based solely on the reports of such other auditors. (b) The consolidated Ind AS financial statements include the financial information of 73 subsidiaries, whose financial information reflect total assets of R 1,07,664.88 crore as at March 31, 2018, total revenues of R 43,824.89 crore and net cash inflows amounting to R 1,875.64 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements which have not been audited by us. The consolidated Ind AS financial statements also include the Group’s share of total loss after tax (net) of R 559.98 crore and total comprehensive loss (net) of R 540.58 crore for the year ended March 31, 2018, as considered in the consolidated Ind AS financial statements, in respect of 2 associates and 13 joint ventures, whose financial information have not been audited by us. The financial information of these subsidiaries, associates and joint ventures have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, associates and joint ventures, is based solely on the reports of such other auditors. (c) The consolidated Ind AS financial statements include the financial information of 3 joint operations whose financial information reflect total assets of R 34.28 crore as at March 31, 2018, and total revenues of R 5.32 crore and net cash outflows amounting to R Nil for the year ended on the date. The financial information of these joint operations is unaudited and has been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, the financial information of these joint operations is not material to the Group. (d) The consolidated Ind AS financial statements include the financial information of 20 subsidiaries, whose financial information reflect total assets of R 84.67 crore as at March 31, 2018, total revenue of R 61.95 crore and net cash inflows amounting to R 20.31 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements which have not been audited by their auditors. The consolidated Ind AS financial statements also include the Group’s share of profit after tax (net) of R 1.36 crore and total comprehensive income (net) of R 1.38 crore for the year ended March 31, 2018, as considered in the consolidated Ind AS financial statements, in respect of 5 associates and 2 joint ventures, whose financial information have not been audited by us. These financial information are unaudited and have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, the financial information of these subsidiaries, associates and joint ventures are not material to the Group. (e) The audit of the consolidated financial information for the year ended March 31, 2017 was carried out by us jointly with another firm of chartered accountants, and the report had expressed unmodified opinion in relation thereto. Our opinion on the consolidated Ind AS financial statements above and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of other auditors and the financial information certified by the Management.

348 Report on Other Legal and Regulatory Requirements As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the financial information of joint operations, subsidiaries, associates and joint venture incorporated in India, referred in the Other Matters paragraph above we report, to the extent applicable, that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements. (b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books, returns and the reports of other auditors. (c) The consolidated Balance Sheet, the consolidated Statement of Profit and Loss (including Other Comprehensive Income), the consolidated Statement of Cash Flows and consolidated Statement of Changes in Equity dealt with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements. (d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act. (e) On the basis of the written representations received from the directors of the Parent as on March 31, 2018 taken on record by the Board of Directors of the Parent and the reports of the statutory auditors of its joint operations companies, subsidiary companies, associate companies and joint venture companies incorporated in India, none of the Directors of the Group companies, its joint operations, associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act. (f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”, which is based on the auditors’ reports of the Parent, subsidiary companies, joint operation companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of Parent’s internal financial controls over financial reporting. (g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: i. The consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint ventures. ii. Provision has been made in the consolidated Ind AS financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and iii. There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Parent and its subsidiary companies, associate companies and joint venture companies incorporated in India.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

P. R. RAMESH (Partner) (Membership No. 70928)

MUMBAI, May 28, 2018

349 ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph “f” under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended March 31, 2018, we have audited the internal financial controls over financial reporting of LARSEN & TOUBRO LIMITED (hereinafter referred to as “Parent”) and its subsidiary companies (hereinafter referred to as the “Group”), which includes internal financial controls over financial reporting of its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, as of that date. Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors’ Responsibility Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by other auditors of the subsidiary companies, joint operations, joint ventures and associate companies, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India. Meaning of Internal Financial Controls Over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that

350 the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the reports of other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 35 subsidiary companies, 1 joint operation, 12 joint venture companies and 2 associate companies, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies incorporated in India. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 5 subsidiary companies, and 2 associate companies, which are companies incorporated in India, whose financial information is unaudited, and is based solely on the Management’s representations provided to us and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as the financial information of such entities is not material to the Group. Our opinion is not modified in respect of the above matters with respect to our reliance on the work done and the reports of other auditors and the financial information certified by the Management.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

P. R. RAMESH (Partner) (Membership No. 70928)

MUMBAI, May 28, 2018

351 Consolidated Balance Sheet as at March 31, 2018 As at 31-3-2018 As at 31-3-2017 Note v crore v crore v crore v crore ASSETS: Non-current assets Property, plant and equipment 2 10642.04 11232.97 Capital work-in-progress 2 2143.07 1944.71 Investment Property 3 4345.86 3613.26 Goodwill 4 1561.78 1398.66 Other intangible assets 5 2030.51 432.22 Intangible assets under development 5 11300.36 11353.23 Financial assets Investments in joint ventures and associates 55(e) 2487.59 2772.90 Other investments 6 3359.47 2679.90 Loans 7 1793.85 1487.38 Loans towards financing activities 8 61816.54 47133.86 Other financial assets 9 614.32 857.60 70071.77 54931.64 Deferred tax assets (net) 50(d) 2131.98 1736.15 Other non-current assets 10 4587.74 3697.51 Current assets Inventories 11 4847.80 4139.74 Financial assets Investments 12 9464.25 14300.22 Trade receivables 13 34654.08 28688.97 Cash and cash equivalents 14 6834.34 3526.87 Other bank balances 15 1198.19 1779.09 Loans 16 559.72 486.45 Loans towards financing activities 17 26448.01 24927.38 Other financial assets 18 4194.59 3286.34 83353.18 76995.32 Other current assets 19 46524.83 39056.82 Group(s) of assets classified as held for sale 52 1512.43 1649.37 TOTAL ASSETS 245053.35 212181.60

352 Consolidated Balance Sheet as at March 31, 2018 (contd.) As at 31-3-2018 As at 31-3-2017 Note v crore v crore v crore v crore EQUITY AND LIABILITIES: Equity Equity share capital 20 280.27 186.59 Other equity 21 55376.72 50029.93 Equity attributable to owners of the Company 55656.99 50216.52 Non-controlling interest 5625.00 3563.60 Liabilities Non-current liabilities Financial liabilities Borrowings 22 72914.76 67340.58 Other financial liabilities 23 353.95 226.09 73268.71 67566.67 Provisions 24 523.54 526.60 Deferred tax liabilities (net) 50(d) 637.92 610.95 Other non-current liabilities 25 67.97 172.14 Current liabilities Financial liabilities Borrowings 26 19331.85 16534.47 Current maturities of long term borrowings 27 15277.47 10078.90 Trade payables 28 37794.96 30294.86 Other financial liabilities 29 4848.99 4828.64 77253.27 61736.87 Other current liabilities 30 27326.97 23384.55 Provisions 31 2483.75 2667.81 Current tax liabilities (net) 747.26 240.29 Liabilities associated with group(s) of assets classified as held for sale 52 1461.97 1495.60 TOTAL EQUITY AND LIABILITIES 245053.35 212181.60

CONTINGENT LIABILITIES 32 COMMITMENTS (capital and others) 33 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 65

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No. 117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Company Secretary (DIN 00041197) (DIN 00022065) M. No. A3471 Directors Mumbai, May 28, 2018

353 Consolidated Statement of Profit and Loss for the year ended March 31, 2018 2017-18 2016-17 Note v crore v crore v crore v crore INCOME: Revenue from operations 34 119862.10 110011.00 Other income 35 1412.03 1344.11 Total income 121274.13 111355.11 EXPENSES: Manufacturing, construction and operating expenses: 36 Cost of raw materials, components consumed 15377.21 14320.98 Excise duty 178.94 699.19 Construction materials consumed 24057.20 20716.99 Purchase of stock-in-trade 1357.76 1610.57 Stores, spares and tools consumed 2384.91 2090.42 Sub-contracting charges 24639.02 22560.54 Changes in inventories of finished goods, work-in-progress and (1230.19) 84.00 stock-in-trade and property development Other manufacturing, construction and operating expenses 10520.74 10595.04 Finance cost of financial services business and finance lease activity 6019.74 5362.09 83305.33 78039.82 Employee benefits expense 37 15292.48 13853.97 Sales, administration and other expenses 38 7698.10 6988.24 Finance costs 39 1538.52 1338.73 Depreciation, amortisation, impairment and obsolescence 1928.73 2369.93 109763.16 102590.69 Less: Overheads capitalised 5.19 1.51 Total expenses 109757.97 102589.18 Profit before exceptional items and tax 11516.16 8765.93 Exceptional items 42 123.00 121.43 Profit before tax 11639.16 8887.36 Tax expense: Current tax 50(a) 3732.27 2834.35 Deferred tax (net) 50(a) (533.40) (827.76) 3198.87 2006.59 Profit after tax 8440.29 6880.77 Add: Share in profit/(loss) of joint ventures/associates (net) 55(f) (435.86) (395.27) Profit for the year 8004.43 6485.50 Other comprehensive income A. Items that will not be reclassified to profit or loss: Re-measurements of the net defined benefit Plans 34.84 (31.30) Income tax on re-measurements of the net defined benefit Plans (5.47) 5.95 29.37 (25.35) B. Items that will be reclassified to profit or loss: Debt instruments through other comprehensive income (45.48) (5.33) Income tax on debt instruments through other comprehensive income (2.05) (1.08) (47.53) (6.41) Foreign currency translation reserve 97.61 (133.12) Income tax on foreign currency translation reserve 0.49 2.29 98.10 (130.83) Carried forward - Other comprehensive income 79.94 (162.59)

354 Consolidated Statement of Profit and Loss for the year ended March 31, 2018 (contd.)

2017-18 2016-17 Note v crore v crore v crore v crore Brought forward - Other comprehensive income 79.94 (162.59) Effective portion of gains and losses on hedging instruments in a 91.06 555.83 cash flow hedge Income tax on effective portion of gains and losses on hedging instruments in a cash flow hedge (8.38) (218.59) 82.68 337.24 Cost of hedging reserve 1.16 4.17 Income tax on cost of hedging reserve (0.52) (1.04) 0.64 3.13 Other Comprehensive Income for the year [net of tax] 163.26 177.78 Total comprehensive income for the year 8167.69 6663.28 Profit for the year attributable to: - Owners of the Company 7369.86 6041.23 - Non controlling interests 634.57 444.27

8004.43 6485.50 Other comprehensive income for the year attributable to: - Owners of the Company 162.33 146.38 - Non controlling interests 0.93 31.40 163.26 177.78 Total comprehensive income for the year attributable to: - Owners of the Company 7532.19 6187.61 - Non controlling interests 635.50 475.67 8167.69 6663.28 Basic earnings per equity share (R) 49 52.62 43.20 Diluted earnings per equity share (R) 49 52.49 43.05 Face value per equity share (R) 2.00 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 65

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No. 117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Company Secretary (DIN 00041197) (DIN 00022065) M. No. A3471 Directors Mumbai, May 28, 2018

355 Consolidated Statement of Changes in Equity for the year ended March 31, 2018 A. Equity share capital

2017-18 2016-17 Particulars Number of v crore Number of v crore shares shares Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 93,29,65,803 186.59 93,14,78,845 186.30 Add: Shares issued on exercise of employee stock options during the year 16,38,898 0.33 14,86,958 0.29 Add: Bonus shares allotted during the year 46,67,64,755 93.35 – – Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,13,69,456 280.27 93,29,65,803 186.59

B. Other equity v crore Particulars Equity Reserves and surplus Items of other comprehensive income Total Other Non– Total component Capital Capital Securities Employee Statutory Retained Foreign Hedging Debt Equity controlling of Foreign reserve Redemp- premium share Reserves Earnings currency reserve instruments interest currency tion account options translation through convertible Reserve (net) reserve Other bonds Comprehen- sive Income Balance as at 1-4-2016 153.20 280.40 – 8164.72 282.22 2659.30 31724.59 609.59 44.01 76.03 43994.06 2892.84 46886.90 Profit for the year (a) – – – – – – 6041.23 – – – 6041.23 444.27 6485.50 Other comprehensive income (b) – – – – – – (20.72) (131.35) 303.51 (5.06) 146.38 31.40 177.78

Total comprehensive income for the – – – – – – 6020.51 (131.35) 303.51 (5.06) 6187.61 475.67 6663.28 year (a+b)

Issue of equity shares – – – 154.18 – – – – – – 154.18 – 154.18 Share issue expenses – – – (0.05) – – – – – – (0.05) – (0.05) Impact of business combination – (0.12) – – – – – – – – (0.12) – (0.12) Transfer from/(to) retained earnings during the year – – – – (21.86) 83.00 (61.14) – – – – – – Employee share options (net) – – – – 42.89 – – – – – 42.89 19.96 62.85 Depreciation charged against retained earnings (net of deferred tax) – – – – – – (0.30) – – – (0.30) – (0.30) Dividend paid for previous year – – – – – – (1701.51) – – – (1701.51) (92.14) (1793.65) Additional tax on dividend paid for the previous year –––––– (368.49) ––– (368.49) – (368.49) Net gain/loss on transaction with non-controlling interest – – – – – – 1721.66 – – – 1721.66 (1721.66) – Increase in non-controlling interest due to dilution/ divestment/acquisition – – – – – – – – – – – 1988.93 1988.93

Balance as at 31-3-2017 153.20 280.28 – 8318.85 303.25 2742.30 37335.32 478.24 347.52 70.97 50029.93 3563.60 53593.53

356 Consolidated Statement of Changes in Equity for the year ended March 31, 2018 (contd.)

v crore Particulars Share Equity Reserves and surplus Items of other comprehensive income Total Other Non– Total application component Capital Capital Securities Employee Statutory Retained Foreign Hedging Debt Equity controlling money of Foreign reserve Redemp- premium share Reserves Earnings currency reserve instruments interest pending currency tion account options translation through allotment convertible Reserve (net) reserve Other bonds Comprehen- sive Income Balance as at 1-4-2017 – 153.20 280.28 – 8318.85 303.25 2742.30 37335.32 478.24 347.52 70.97 50029.93 3563.60 53593.53 Profit for the year (c ) – – – – – – – 7369.86 – – – 7369.86 634.57 8004.43 Other comprehensive income (d) – – – – – – – 23.56 94.43 90.53 (46.19) 162.33 0.93 163.26 Total comprehensive – – – – – – – 7393.42 94.43 90.53 (46.19) 7532.19 635.50 8167.69 income for the year (c+d) Issue of equity shares – – – – 137.63 – – – – – – 137.63 – 137.63 Transfer to non- financial assets/liabilities – – – – – – – – – (0.28) – (0.28) – (0.28) Share issue expenses – – (0.13) – – – – – – (0.13) (0.13) Impact of business combination – – (4.20) – – – – – – – – (4.20) – (4.20) Transfer from/(to) retained earnings during the year – – – 42.00 0.02 (21.30) 610.61 (631.33) – – – – – – Employee share options (net) – – – – – 31.61 – – – – – 31.61 5.57 37.18 Utilised for issue of bonus shares – – – – (93.35) – – – – – – (93.35) – (93.35) Dividend paid for the previous year – – – – – – – (1960.76) – – – (1960.76) (151.20) (2111.96) Additional tax on dividend paid for the previous year – – – – – – – (441.05) – – – (441.05) – (441.05) Share application money received during the year 3.56 – – – – – – – – – – 3.56 – 3.56 Net gain/loss on transactions with non-controlling interest – – – – – – – 113.83 – – – 113.83 (113.83) – Increase in non-controlling interest due to dilution/ divestment/acquisition – – – – – – – 27.74 – – – 27.74 1685.36 1713.10 Balance as at 31-03-2018 3.56 153.20 276.08 42.00 8363.02 313.56 3352.91 41837.17 572.67 437.77 24.78 55376.72 5625.00 61001.72

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No. 117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Company Secretary (DIN 00041197) (DIN 00022065) M. No. A3471 Directors Mumbai, May 28, 2018

357 Consolidated Statement of Cash Flows for the year ended March 31, 2018

2017-18 2016-17 v crore v crore A. Cash flow from operating activities: Profit before tax (excluding non-controlling interest and exceptional items) 11516.16 8765.93 Adjustments for : Dividend received (2748.08) (748.63) Depreciation, amortisation, impairment and obsolescence 1928.73 2369.93 Exchange difference on items grouped under financing/investing activities (31.03) (80.51) Effect of exchange rate changes on cash and cash equivalents (53.53) 34.92 Interest expense 1538.52 1338.73 Interest income (665.67) (422.62) (Profit)/loss on sale of property, plant and equipment and investment property (net) (686.23) (17.88) (Profit)/loss on sale/fair valuation of investments (net) 2217.72 (34.22) (Profit)/loss on sale of stake in subsidiary companies of Realty Segments – (95.81) (Gain)/loss on derivatives at fair value through profit or loss 125.74 56.89 Employee stock option-discount forming part of employee benefits expense 111.39 88.17 Gain on settlement of debt (5.58) – Operating profit before working capital changes 13248.14 11254.90 Adjustments for : (Increase)/decrease in trade and other receivables (14499.91) (2471.33) (Increase)/decrease in inventories (642.38) 1509.77 Increase/(decrease) in trade payables and customer advances 11725.82 5307.44 Cash generated from operations before financing activities 9831.67 15600.78 (Increase)/decrease in loans and advances towards financing activities (16459.25) (5743.85) Cash generated from operations (6627.58) 9856.93 Direct taxes refund/(paid) [net] (3403.44) (3201.67) Net cash (used in)/from operating activities (10031.02) 6655.26 B. Cash flow from investing activities: Purchase of fixed assets (2877.17) (2977.09) Sale of fixed assets (including advance received) 862.13 156.33 Purchase of non-current investments (1170.49) (1055.24) Sale of non-current investments 428.59 67.00 (Purchase)/sale of current investments (net) 2551.83 (6769.76) Change in other bank balance and cash not available for immediate use 484.65 (321.60) Investment in joint ventures – (2010.36) Deposits/loans given to associates, joint ventures and third parties (621.93) (410.10) Deposits/loans repaid by associates, joint ventures and third parties 229.89 197.74 Interest received 534.51 408.84 Dividend received from associates 0.66 0.57 Dividend received from other investments 2748.08 748.63 Consideration received on transfer of foundry business unit – 83.65 Settlement of derivative contracts related to current investments (125.74) (56.89) Consideration received on disposal of subsidiaries (including advance received) 1048.29 2169.01 Consideration paid on acquisition of subsidiaries (213.77) (7.07) Cash & cash equivalents acquired pursuant to acquisition of subsidiaries 50.47 – Cash & cash equivalents discharged pursuant to disposal of subsidiaries (15.50) (19.60) Net cash (used in)/from investing activities 3914.50 (9795.94)

358 Consolidated Statement of Cash Flows for the year ended March 31, 2018 (contd.)

2017-18 2016-17 v crore v crore C. Cash flow from financing activities: Proceeds from issue of share capital (including share application money) 49.50 53.32 Proceeds from non-current borrowings [Note 62] 46903.46 30522.82 Repayment of non-current borrowings [Note 62] (36964.48) (27286.28) Proceeds from other borrowings (net) [Note 62] 2680.02 1643.82 Payment (to)/from non-controlling interest (net)- including sale proceeds on divestment of part stake in subsidiary companies 1413.12 2058.82 Settlement of derivative contracts related to borrowings 149.31 170.51 Dividends paid (1960.76) (1701.51) Additional tax on dividend (429.01) (391.54) Interest paid (including cash flows on account of interest rate swaps) (2470.70) (2174.03) Net cash (used in)/from financing activities 9370.46 2895.93 Net (decrease)/increase in cash and cash equivalents (A + B + C) 3253.94 (244.75) Cash and cash equivalents at beginning of the year 3544.75 3789.50 Cash and cash equivalents at end of the year 6798.69 3544.75

Notes: 1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 “Statement of Cash Flows” as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Purchase & Sale of fixed assets represents additions & deletions to property, plant and equipment, investment property and intangible assets adjusted for movement of (a) capital work in progress for property, plant and equipment and investment property and (b) Intangible assets under development during the year. 3. Cash and cash equivalents included in the Statement of Cash flows comprise the following : 2017-18 2016-17 v crore v crore (a) Cash and cash equivalents disclosed under current assets [Note 14] 6834.34 3526.87 (b) Other bank balances disclosed under current assets [Note 15] 1198.19 1779.09 (c) Cash and cash equivalents disclosed under non-current assets [Note 9] 320.31 224.06 Total Cash and cash equivalents as per Balance Sheet 8352.84 5530.02 Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents (35.65) 17.88 Less: (ii) Other bank balances disclosed under current assets [Note 15] 1198.19 1779.09 Less: (iii) Cash and cash equivalents disclosed under non-current assets [Note 9] 320.31 224.06 Total Cash and cash equivalents as per Statement of Cash Flows 6798.69 3544.75

4. Previous year’s figures have been regrouped/reclassified wherever applicable. In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No. 117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) P. R. RAMESH Partner R. SHANKAR RAMAN M. DAMODARAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 02106990) (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Company Secretary (DIN 00041197) (DIN 00022065) M. No. A3471 Directors Mumbai, May 28, 2018

359 DELOITTE HASKINS & SELLS LLP Chartered Accountants Indiabulls Finance Centre, Tower 3 27th – 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400013.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of LARSEN & TOUBRO LIMITED (the “Company”), which also includes 29 Joint Operations accounted on a proportionate basis, which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements The Board of Directors of the Company and those charged with governance of the joint operation referred to above, which is a company incorporated in India, are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the “Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the respective companies and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view, and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

PB 235 Opinion In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on financial information of joint operations referred to in the Other Matters paragraph below, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date. Other Matters a) We did not audit the financial information of 25 joint operations included in the standalone Ind AS financial statements of the Company whose financial information reflect total assets of r 4,583.15 crore as at March 31, 2018 and total revenues of r 5,285.06 crore and net cash inflows of r 203.19 crore for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial information of these joint operations has been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations, is based solely on the report of such other auditors. Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of this matter. b) The Statement includes the unaudited financial information of 3 joint operations included in the standalone Ind AS financial statements of the Company whose financial information reflect total assets of r 34.28 crore as at March 31, 2018 and total revenues of r 5.32 crore and net cash outflows of less than r 0.01 crore for the year ended on that date, as considered in the standalone Ind AS financial statement. The financial information of these joint operations is unaudited and have been furnished to us by the Management and our opinion on the Statement, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information. In our opinion and according to information and explanation given to us by the Management, such financial information is not material to the Company. c) The audit of standalone financial statements for the year ended March 31, 2017 were carried out by us jointly with another firm of chartered accountants, and the report had expressed an unmodified opinion in relation thereto. Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the financial information of joint operation, referred to in the Other Matters paragraph above we report, to the extent applicable that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company and its joint operation companies so far as it appears from our examination of those books and the reports of the other auditors; c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of accounts; d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act; e) On the basis of the written representations received from the Directors of the Company as on March 31, 2018 taken on record by the Board of Directors and the report of statutory auditor of its joint operation company incorporated in India, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act; f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and joint operation which are companies incorporated in India and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s and its joint operation internal financial controls over financial reporting; and g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements;

236 237 ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts and iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. 2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

P. R. RAMESH (Partner) (Membership No. 70928)

MUMBAI, May 28, 2018

ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (the “Company”) as at March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company as for the year ended on that date which includes internal financial controls over financial reporting of 1 of the 29 joint operations, which is a Company incorporated in India.

Management’s Responsibility for Internal Financial Controls The Board of Directors of the Company and those charged with governance of the joint operation referred to above, which is a Company incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the Company and its joint operation Company incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

236 237 We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor of the joint operation which is a Company incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other Matters paragraph below, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting established by the respective Company considering the essential components of internal control stated in the Guidance Note. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 1 joint operation, which is a Company incorporated in India, is solely based on the report furnished to us by the other auditor of such Company. Our opinion is not modified in respect of this matter.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

P. R. RAMESH (Partner) (Membership No. 70928)

MUMBAI, May 28, 2018

ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of Larsen & Toubro Limited of even date)

(i) In respect of the Company’s property, plant and equipment: (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(b) The Company has a program of physical verification of its property, plant and equipment to cover all the items of property, plant and equipment in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its property, plant and equipment. Pursuant to the program, certain property, plant

238 239 and equipment were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings (including land whose title deed have been pledged as security against debentures issued by the Company), are held in the name of the Company as at the balance sheet date, except the following: v crore Type of asset Total no. of Leasehold / Gross block as at Net block as at Remarks cases freehold March 31, 2018 March 31, 2018 Land 3 Freehold 1.27 1.27 Conveyance deed pending Buildings 2 Freehold 3.52 0.73 to be executed as the matter is sub judice.

In respect of immovable properties of land and buildings that have been taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. (ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification between the physical stock and the books of accounts. (iii) According to the information and explanations given to us, the Company has not entered into any contracts or arrangements covered under section 189 of the Act and hence reporting under paragraph 3 (iii) of the Order is not applicable to the Company. (iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable. (v) According to the information and explanations given to us, the Company has not accepted any deposits during the year and does not have any unclaimed deposits as at March 31, 2018 and hence, the provisions of the clause 3 (v) of the Order is not applicable to the Company. (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained by the company. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) According to the information and explanations given to us, in respect of statutory dues: (a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Goods and Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other statutory dues applicable to it to the appropriate authorities. (b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Goods and Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable. (c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Goods and Service Tax and Value Added Tax which have not been deposited as on March 31, 2018 on account of disputes are given below:

Name of Nature of Dues Forum Period to which Amount Amount Statute where Amount Relates Involved Unpaid Dispute is (v crore) (v crore) Pending Central Sales Taxability of sub-contractor Supreme 2000-01 to 2006-07 12.12 3.13 Tax Act, Local turnover, rate of tax for declared Court Sales Tax Acts, goods, inter-state sales and Entry Tax non-submission of forms and Works Contract Tax Act

238 239 Name of Nature of Dues Forum Period to which Amount Amount Statute where Amount Relates Involved Unpaid Dispute is (v crore) (v crore) Pending Central Sales Dispute regarding question of law, High Court 1986-87 to1987-88, 61.96 54.43 Tax Act, Local classification dispute, local VAT and 1993-94, 1994-95, Sales Tax Acts, Works contract disputes. 1998-99 to 2002-03, Entry Tax 2005-06, 2006-07 to and Works 2012-13 Contract Tax Non-submission of forms, Sales Tax/ VAT 1989-90 to 2013-2014 505.84 442.41 Act classification disputes, inter-state Tribunal sales turnover, rates of tax of declared goods, classification dispute, disallowance of Entry Tax and other matters Dispute regarding question of Commissioner 1995-1996 to 35.27 34.36 law, non-submission of forms, (Appeal) 2013-2016 classification dispute, disallowance Commissioner 1994-1995 to 8.67 8.67 of setoff, valuation of goods, sales 2016-2017 in transit and high sea sales, and other matters. Additional 2011-12 to 2012-13 2.62 1.99 Commissioner Joint 2012-2013 to 10.87 6.27 Commissioner 2015-2016 Joint 1995-96 to 2012-13 1,414.85 1,325.03 Commissioner (Appeal) Non submission of forms and other Assistant / 1996-97 to 2013-14 499.29 497.10 matters Deputy Commissioner Assessing/ 1999-00 to 2001-02, 0.94 0.93 Commercial 2013-2014 Tax Officer The Central Dispute regarding question of law, High Court 2005-06 , 2007-2008, 113.87 85.13 Excise classification dispute and other 2009 to 2011 Act,1944, matters. Service Tax Disallowance of CENVAT credit, CESTAT 1991-92, 2001-02 to 413.35 408.54 under Finance short payment of service tax, 2011-12 Act, 1994 and MRP Valuation disputes, dispute Customs Act, regarding classification of services 1962 and other matters. Disallowance of CENVAT credit, Commissioner 2006-07 to 2014-15 25.92 24.85 short payment of service tax, (Appeal) service tax rate dispute, valuation Commissioner 2012-2013 2.05 2.05 dispute and other matters

Mine and Demand notice for royalty on High Court 2013-2014 to 20.79 10.39 Minerals alleged use of excavated minor 2015-2016 (Regulation minerals. and Development) Act, 1957 Income-tax Demand arising out of Regular ITAT 2004-2005, 2007-2008 1,564.30 482.31 Act, 1961 Assessment/Reassessment to 2012-2013

240 241 (viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks and dues to debenture holders. The Company has not borrowed any funds from the government. (ix) In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under paragraph 3 (ix) of the Order is not applicable to the Company. (x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act. (xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) of the Order is not applicable to the Company. (xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with related parties and the details of such related party transactions have been disclosed in the financial statements as required by the applicable accounting standards. (xiv) According to the information and explanations given to us, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order is not applicable to the Company. (xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act is not applicable to the Company. (xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

P. R. RAMESH (Partner) (Membership No. 70928)

MUMBAI, May 28, 2018

240 241 Balance Sheet as at March 31, 2018 As at 31-3-2018 As at 31-3-2017 Note v crore v crore v crore v crore ASSETS: Non-current assets Property, plant and equipment 2 6272.46 6523.22 Capital work-in-progress 2 452.10 302.53 Investment property 3 474.98 396.70 Intangible assets 4 193.09 124.67 Intangible assets under development 4 200.77 201.25 Financial assets Investments 5 22994.26 19776.81 Loans 6 1684.13 1777.54 Other financial assets 7 438.54 506.68 25116.93 22061.03 Deferred tax assets (net) 49(e) 400.62 285.22 Other non-current assets 8 2929.00 2244.35 Current assets Inventories 9 2500.04 1762.86 Financials assets Investments 10 4344.98 6982.08 Trade receivables 11 24454.24 19921.95 Cash and cash equivalents 12 3183.75 1935.81 Other bank balances 13 1134.12 1599.91 Loans 14 992.34 1905.80 Other financial assets 15 3441.78 2317.92 37551.21 34663.47 Other current assets 16 39130.82 33285.14 Group(s) of assets classified as held for sale 42 388.00 388.00 TOTAL ASSETS 115610.02 102238.44

242 243 Balance Sheet as at March 31, 2018 (contd.) As at 31-3-2018 As at 31-3-2017 Note v crore v crore v crore v crore EQUITY AND LIABILITIES: Equity Equity share capital 17 280.27 186.59 Other equity 18 48893.98 45826.15 Total equity 49174.25 46012.74 Liabilities Non-current liabilities Financial liabilities Borrowings 19 5495.16 7134.28 Other financial liabilities 20 108.64 88.57 5603.80 7222.85 Provisions 21 472.87 470.68 Other non-current liabilities 22 1.27 3.86 Current liabilities Financial liabilities Borrowings 23 4129.57 2312.50 Current maturities of long term borrowings 24 936.27 1111.59 Trade payables 25 31097.11 24338.32 Other financials liabilities 26 1870.87 1440.25 38033.82 29202.66 Other current liabilities 27 20853.82 18186.75 Provisions 28 1102.22 1092.99 Current tax liabilities (net) 367.97 45.91 TOTAL EQUITY AND LIABILITIES 115610.02 102238.44

CONTINGENT LIABILITIES 29 COMMITMENTS (capital and others ) 30 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 64

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 S .N .SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) P. R. RAMESH Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA M. DAMODARAN SUNITA SHARMA (DIN 00035672) (DIN 02106990) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Company Secretary (DIN 00041197) (DIN 00022065) M. No. A3471 Directors Mumbai, May 28, 2018

242 243 Statement of Profit and Loss for the year ended March 31, 2018

2017-18 2016-17

Note v crore v crore v crore v crore INCOME: Revenue from operations 31 74611.65 66301.35 Other income 32 1884.82 1914.96

Total Income 76496.47 68216.31

EXPENSES: Manufacturing, construction and operating expenses 33 Cost of raw materials components consumed 8092.54 7370.57 Excise duty 149.10 577.49 Construction materials consumed 22237.57 18493.31 Purchase of stock-in-trade 1296.62 1390.84 Stores, spares and tools consumed 1815.21 1446.67 Sub-contracting charges 19620.99 16775.01 Changes in inventories of finished goods, work-in-progress and (962.36) 131.59 stock-in-trade and property development Other manufacturing, construction and operating expenses 6388.59 5817.99

58638.26 52003.47 Employee benefits expense 34 5713.59 5147.38 Sales, administration and other expenses 35 2836.27 2671.00 Finance costs 36 1432.23 1316.91 Depreciation, amortisation, impairment and obsolescence 1049.46 1215.19

69669.81 62353.95 Less: Overheads capitalised 5.19 1.51

Total expenses 69664.62 62352.44 Profit before exceptional items and tax 6831.85 5863.87 Exceptional items 46 430.53 893.97

Profit before tax 7262.38 6757.84 Tax expenses Current tax 49 (a) 1974.07 1675.20 Deferred tax 49 (a) (98.99) (371.10)

1875.08 1304.10

Profit after tax 5387.30 5453.74

Carried forward 5387.30 5453.74

244 245 Statement of Profit and Loss for the year ended March 31, 2018 (contd.)

2017-18 2016-17

Note v crore v crore v crore v crore Brought forward 5387.30 5453.74 Other Comprehensive Income A. Items that will not be reclassified to Profit or Loss: Gain/(loss) on re-measurements of the defined benefits plan 3.82 (12.27) Income tax on re-measurements of the defined benefits plan (1.32) 4.25 2.50 (8.02) B. Items that will be reclassified to Profit and Loss Debt instruments through Other Comprehensive Income 0.27 (9.17) Income tax on debt instruments through Other Comprehensive Income (11.12) (1.08) (10.85) (10.25) Exchange differences in translating the financial statements of foreign operations (1.41) (6.61) Income tax on exchange differences in translating the financial statements of foreign operations 0.49 2.29 (0.92) (4.32) Effective portion of gains and losses on hedging instruments in a cash flow hedge (64.52) 272.01 Income tax on effective portion of gains and losses on hedging instruments in a cash flow hedge 22.40 (94.34) (42.12) 177.67 Cost of hedging reserve 0.59 3.47 Income tax on cost of hedging reserve (0.14) (1.20) 0.45 2.27 Other Comprehensive Income for the year [net of tax] (50.94) 157.35 Total Comprehensive Income for the year 5336.36 5611.09

Basic earnings per equity share (R) 52 38.46 39.00 Diluted earnings per equity share (R) 52 38.37 38.86 Face value per equity share (R) 2.00 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 64

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 S .N .SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) P. R. RAMESH Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA M. DAMODARAN SUNITA SHARMA (DIN 00035672) (DIN 02106990) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Company Secretary (DIN 00041197) (DIN 00022065) M. No. A3471 Directors Mumbai, May 28, 2018

244 245 Statement of changes in Equity for the year ended March 31, 2018 A. Equity share capital 2017-18 2016-17 Particulars Number of v crore Number of v crore shares shares Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 93,29,65,803 186.59 93,14,78,845 186.30 Add: Shares issued on exercise of employee stock options during the year 16,38,898 0.33 14,86,958 0.29 Add: Bonus shares allotted during the year 46,67,64,755 93.35 – – Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,13,69,456 280.27 93,29,65,803 186.59

B. Other equity (v crore) Reserves and surplus Items of Other Comprehensive Income Equity Share component Debt application of foreign Capital Employee Foreign instruments Total other Particulars money Securities Debenture currency Capital reserve on share General Retained currency Hedging through equity pending premium redemption convertible reserve business options reserve earnings translation reserve other allotment account reserve bonds combination (net) reserve Comprehen- sive Income Balance as at 1-4-2016 – 153.20 10.52 8164.72 242.23 406.51 25216.49 7710.27 4.87 (35.83) 76.03 41949.01 Profit for the year (a) – – – – – – – – 5453.74 5453.74 Other Comprehensive Income (b) – – – – – – – – (8.02) (4.32) 179.94 (10.25) 157.35 Total Comprehensive Income for the year (a+b) – – – – – – – – 5445.72 (4.32) 179.94 (10.25) 5611.09 Issue of equity shares – – – – 154.18 – – – – – – – 154.18 Share issue expenses – – – – (0.05) – – – – – – – (0.05) Transfer from/to general reserve/retained earnings – – – – – (19.61) (49.75) 157.11 (87.75) – – – – during the year Employee share options (net) – – – – – (45.37) – – – – – (45.37) Dividend paid for the previous year – – – – – – – (1701.51) – – – (1701.51) Dividend distribution tax paid for the previous year – – – – – – (141.20) – – – (141.20) Balance as at 31-3-2017 – 153.20 10.52 – 8318.85 177.25 356.76 25373.60 11225.53 0.55 144.11 65.78 45826.15 Profit for the year (c) – – – – – – – – 5387.30 – – – 5387.30 Other Comprehensive Income (d) – – – – – – – – 2.50 (0.92) (41.67) (10.85) (50.94) Total Comprehensive Income for the year (c+d) – – – – – – – 5389.80 (0.92) (41.67) (10.85) 5336.36 Issue of equity shares – – – – 137.63 – – – – – – – 137.63 Transfer to non- financial assets/liability – – – – – – – – – – (0.28) – (0.28) Share issue expenses – – – – (0.13) – – – – – – – (0.13) Utilised for issue of bonus shares – – – – (93.35) – – – – – – – (93.35) Transfer from/to general reserve/retained earnings – – – – – (21.66) 102.18 21.66 (102.18) – – – – during the year Employee share options (net) – – – – – (47.00) – – – – – – (47.00) Transfer under scheme of arrangement – – – (6.36) 0.02 – – 0.52 15.55 – – – 9.73 Applications during the year 3.56 – – – – – – – – – – – 3.56 Dividend paid for the previous year – – – – – – – – (1960.76) – – – (1960.76) Dividend distribution tax paid for the previous year – – – – – – – – (317.93) – – – (317.93) Balance as at 31-3-2018 3.56 153.20 10.52 (6.36) 8363.02 108.59 458.94 25395.78 14250.01 (0.37) 102.16 54.93 48893.98

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 S .N .SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) P. R. RAMESH Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798) SUBODH BHARGAVA M. DAMODARAN SUNITA SHARMA (DIN 00035672) (DIN 02106990) (DIN 02949529) N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Company Secretary (DIN 00041197) (DIN 00022065) M. No. A3471 Mumbai, May 28, 2018 Directors 246 247 Statement of Cash Flows for the year ended March 31, 2018 2017-18 2016-17 v crore v crore A. Cash flow from operating activities: Profit before tax (excluding exceptional items) 6831.85 5863.87 Adjustments for: Dividend received (3228.67) (1065.10) Depreciation, amortisation, impairment and obsolescence (net) 1049.46 1215.19 Exchange difference on items grouped under financing/investing activities (19.71) (67.40) Effect of exchange rate changes on cash and cash equivalents 1.66 0.11 Interest expense 1432.23 1316.91 Interest income (496.89) (539.31) (Profit)/loss on sale of fixed assets (net) (60.18) (23.70) (Profit)/loss on sale of investments (net) [including fair valuation] 2233.22 72.44 (Gain)/loss on derivatives at fair value through Profit or Loss 125.74 56.89 Employee stock option-discount forming part of employee benefits expense 69.77 61.77 Operating profit before working capital changes 7938.48 6891.67 Adjustments for: (Increase)/decrease in trade and other receivables (12405.09) (1558.15) (Increase)/decrease in inventories (705.73) 192.26 Increase/(decrease) in trade payables and customer advances 9757.85 1973.38 Cash (used in)/generated from operations 4585.51 7499.16 Direct taxes refund/(paid) [net] (1633.70) (1519.47) Net cash (used in)/from operating activities 2951.81 5979.69 B. Cash flow from investing activities: Purchase of fixed assets (1136.78) (749.02) Sale of fixed assets (including advance received) 123.32 114.35 Investment in subsidiaries, associates and joint ventures (3420.51) (3375.61) Divestment of stake in subsidiaries, associates and joint ventures 1068.38 3348.24 Purchase of non- current investments (75.00) – (Purchase)/sale of current investments (net) 375.80 (2304.55) Change in other bank balance and cash not available for immediate use 371.17 (230.85) Deposits/loans (given) - subsidiaries, associates, joint venture companies and third parties (12708.16) (19180.19) Deposits/loans repaid - subsidiaries, associates, joint venture companies and third parties 13698.56 20430.65 Advance towards equity commitment (addition) (19.45) (6.35) Advance towards equity commitment refund – 5.25 Interest received 439.88 830.53 Dividend received from subsidiaries 502.51 384.72 Dividend received from other investments 2693.08 659.63 Settlement of derivative contracts related to current investments (125.74) (56.89) Consideration received on transfer of Foundry Business unit – 83.65 Net cash (used in)/from investing activities 1787.06 (46.44)

246 247 Statement of Cash Flows for the year ended March 31, 2018 (contd.)

2017-18 2016-17 v crore v crore C. Cash flow from financing activities: Proceeds from fresh issue of share capital (including share application money) 49.50 53.32 Proceeds from non-current borrowings [Note 62] 1922.70 0.64 Repayment of non-current borrowings [Note 62] (3794.12) (1397.62) (Repayments)/proceeds from other borrowings (net) [Note 62] 1783.81 (1905.88) Settlement of derivative contracts related to borrowings 149.31 170.51 Dividends paid (1960.76) (1701.51) Additional tax on dividend (317.93) (141.20) Interest paid (including cash flows from interest rate swaps) (1321.87) (1151.42) Net cash (used in)/from financing activities (3489.36) (6073.16) Net (decrease)/increase in cash and cash equivalents (A + B + C) 1249.51 (139.91) Cash and cash equivalents at beginning of the year (includes R 0.09 crore transferred 1938.24 2078.06 under scheme of merger - Note [60]) Cash and cash equivalents at end of the year 3187.75 1938.15 Notes: 1. Statement of cash flows has been prepared under the indirect method as set out in the Ind AS 7 ”Statement of Cash Flows” as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Purchase of fixed assets represents additions to property, plant and equipment, investment property and other intangible assets adjusted for movement of (a) capital-work-in-progress for property, plant and equipment and investment property and (b) intangible assets under development during the year. 3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following: 2017-18 2016-17 v crore v crore (a) Cash and cash equivalents disclosed under current assets [Note 12] 3183.75 1935.81 (b) Other bank balances disclosed under current assets [Note 13] 1134.12 1599.91 (c) Cash and cash equivalents disclosed under non-current assets [Note 7] 319.52 223.56 Total Cash and cash equivalents as per Balance Sheet 4637.39 3759.28 Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents 4.00 2.34 Less: (ii) Other bank balances disclosed under current assets [Note 13] 1134.12 1599.91 Less: (iii) Cash and cash equivalents disclosed under non-current assets [Note 7] 319.52 223.56 Total Cash and cash equivalents as per Statement of Cash Flows 3187.75 1938.15

4. Previous year’s figures have been regrouped/reclassified wherever applicable.

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 S .N .SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) P. R. RAMESH Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 70928 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA M. DAMODARAN SUNITA SHARMA (DIN 00035672) (DIN 02106990) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA Company Secretary (DIN 00041197) (DIN 00022065) M. No. A3471 Mumbai, May 28, 2018 Directors

248 249 Auditors’ Report on Consolidated Financial Statements ANNUAL REPORT 2018-19

DELOITTE HASKINS & SELLS LLP Chartered Accountants Indiabulls Finance Centre, Tower 3 27th – 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400 013.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Audit of Consolidated Financial Statements Opinion We have audited the accompanying consolidated financial statements of Larsen & Toubro Limited (the “Parent”) and its subsidiaries (the Parent and its subsidiaries together referred to as the “Group”), which includes Group’s share of profit/ loss in its associates and its joint ventures and which also includes 31 joint operations of the Group accounted on a proportionate basis, which comprise the Consolidated Balance Sheet as at March 31, 2019, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the year then ended on that date, and notes to financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the “Consolidated Financial Statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Group as at March 31, 2019, the consolidated profit, consolidated total comprehensive income, consolidated changes in equity and its consolidated cash flows for the year ended on that date.

Basis for opinion We conducted our audit of consolidated financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group, and of its joint operations, associates and joint ventures in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Appropriateness of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 “Revenue from Contracts with Customers” (new revenue accounting standard) Key audit matter Appropriateness of recognition, measurement, presentation and disclosures of revenues and other related description balances in view of adoption of Ind AS 115 “Revenue from Contracts with Customers” (new revenue accounting standard).

418 The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognised over a period. Additionally, new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Refer to Note No. 1(i) of the Consolidated Financial Statements Principal Audit The auditors have assessed the process to identify the impact of adoption of the new revenue accounting Procedures standard. The procedures performed included the following: • Evaluated the design of internal controls relating to implementation of the new revenue accounting standard; • Selected samples of continuing and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price. The auditors have carried out a combination of procedures involving enquiry and observation, reperformance and inspection of evidence in respect of operation of such controls; and • Selected samples of continuing and new contracts and performed the following procedures: i. Read and analysed contracts to identify the distinct performance obligations in such contracts; ii. Compared such performance obligations with that identified and recorded by the Company; iii. Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration; iv. in respect of samples relating to fixed price contracts, progress towards satisfaction of performance obligation used to compute recorded revenue was verified with the supporting documentation, validated estimates of costs to complete, mathematical appropriateness of calculations and the adequacy of project accounting; and v. Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.

Revenue recognition – accounting for construction contracts Key audit matter There are significant accounting judgements including estimation of costs to complete, determining the stage of description completion and the timing of revenue recognition. The Group recognises revenue and profit/loss on the basis of stage of completion based on the proportion of contract costs incurred as at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue and profit/loss therefore rely on estimates in relation to total estimated costs of each contract. Cost contingencies are included in these estimates to take into account specific uncertain risks, or disputed claims against the Group, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the contract life and adjusted where appropriate. The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable. Refer to Note No 1(i) of the Consolidated Financial Statements Principal Audit The auditors’ procedures included: Procedures • Testing of the design and implementation over controls involved for the determination of the estimates used, as well as their operating effectiveness; • Testing the relevant information technology systems’ access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard; • Testing samples of contracts for appropriate identification of performance obligations; • For the sample selected, reviewing for change orders and the impact on estimated costs to complete; • Engaging technical experts to review estimates of costs to complete for sample contracts; and • Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.

419 Auditors’ Report on Consolidated Financial Statements ANNUAL REPORT 2018-19

Appropriateness of revenues and onerous obligations in respect of fixed price contracts involves critical estimates for services relating to Information Technology & Technology Services Segment Key audit matter Estimated effort is a critical estimate to determine revenues and provision for onerous obligations in fixed price description contracts. This estimate has a high inherent uncertainty as it requires consideration of progress of the contract, efforts incurred till date, efforts required to complete the remaining contract performance obligations. Refer to Note No.1(i) of the Consolidated Financial Statements Principal Audit The auditors audit approach was a combination of test of internal controls and substantive procedures which Procedures included the following: • Evaluated the design of internal controls relating to recording of efforts incurred and estimation of efforts required to complete the performance obligations; • Tested the access and application controls pertaining to time recording, allocation and budgeting systems which prevents unauthorised changes to recording of efforts incurred; • Selected samples of contracts and tested the operating effectiveness of the internal controls relating to efforts incurred and estimated through inspection of evidence of performance of these controls; • Selected samples of contracts and performed a retrospective review of efforts incurred with estimated efforts to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract; • Reviewed samples of contracts with unbilled revenues to identify possible delays in achieving milestones, which require change in estimated efforts to complete the remaining performance obligations; and • Performed analytical procedures and test of details for reasonableness of incurred and estimated efforts.

Revenue recognition and measurement of contract assets in respect of un-invoiced amounts and measurement of receivables in respect of overdue invoices. Key audit matter The Group, in its contract with customers, promises to transfer distinct services to its customers which may be description rendered in the form of engineering, procurement and construction (EPC) services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could range from cost plus fee to agreed unit price to lump-sum arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the group’s performance have resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date, or in the case of certain defence contracts, where the evidence of work carried out and cost incurred are covered by confidentiality arrangements involves a significant amount of judgment. • Recognition of revenue before formal acknowledgment of receipt of services by the customer could lead to an over or under-statement of revenue and profit, whether intentionally or in error; and • Assessing the recoverability of amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment. Refer to Note No. 1(i) and 1(r) of the Consolidated Financial Statements Principal Audit The procedures performed included the following: Procedures • Obtained an understanding of the Group’s processes in collating the evidence supporting execution of work for each disaggregated type of revenue. Auditors have also obtained an understanding of the design of key controls for quantifying units of items / services that would be invoiced and the application of appropriate prices for each of such services; • Tested the design and operating effectiveness of management’s key controls in collating the units of services delivered and in the application of accurate prices for each of such services for samples of the un-invoiced revenue entries, which included testing of access and change management controls exercised in respect of related information systems;

420 • Tested samples of un-invoiced revenue entries with reference to the reports from the information system that records the costs incurred against the services delivered to confirm the work performed and application of appropriate margin applied for the respective services. The auditors have also tested whether appropriate adjustments have been made for the element of variable consideration related to committed service levels of performance. With regard to incentives, auditors tests were focused to ensure that accruals were restricted to only those items where contingencies were minimal; • Tested cut-offs for revenue recognized against un-invoiced amounts by matching the revenue accrual against accruals for corresponding cost; • For defence contracts which are covered under statutory confidentiality arrangements, the auditors have compared the revenue recognised with amounts collected from customers to ensure that the gap between revenue recognised and collections is below the materiality threshold; • Extended the testing upto the date of approval of financial statements by the Board of Directors of the Parent entity to verify adjustments, if any, that may have been necessary upon receipt of approvals from customers for services delivered prior to the reporting date and/or collections there against; • Reviewed the delivery and collection history of customers against whose contracts un-invoiced revenue is recognised; and • Verification of subsequent receipts, post balance sheet date.

Provision for expected credit losses for financial services segment Key audit matter The Group has financial assets that are debt instruments such as loans, debt securities, bank balances and deposits description and trade receivables that are measured at: amortised cost; and fair value through other comprehensive income (“FVOCI”); and finance lease receivables recognised as per Ind AS 16 on “Leases”, in respect of which impairment losses have been recognised and measured using the “expected credit losses” (“ECL”) model laid down in Ind AS 109 on “Financial Instruments” for which, the Group has used the general approach described in Ind AS 109. While the Group has identified objective criteria to define “significant increase in credit risk” (“SICR”) on a financial asset, identification of financial instruments that could be grouped together on the basis of shared credit risk and assessed collectively for SICR constitutes a significant judgement. Also, the Group has used an internal rating based approach in building its ECL model, using its own internal estimates for some or all of the credit risk components such as the Probability of Default (“PD”), Loss Given Default (“LGD”) and Effective Maturity (“M”). Each of these elements are critical estimates in the measurement of impairment on such financial assets. The Group has also built in a collective adjustment for its loan portfolios to be more responsive to emerging macro-economic and other risk developments, which also involves critical judgements and estimates. Therefore, impairment of financial assets was considered a key audit matter. Principal Audit The procedures performed included the following: Procedures • Obtained an understanding of how the Group identified financial assets that are not measured at fair value through profit and loss, with similar credit risks, to assess SICR collectively i.e. the extent of forward looking information, that is reasonable and supportable, was collated and the extent to which reliance was placed on past information. • Checked the appropriateness of the Group’s determination of SICR and the resultant basis for classification of exposures into various stages. • Assessed the appropriateness of key data sources and assumptions in building estimates for components of credit risk including PD, LGD and M that were used in modelling ECL provisions. For data from external sources, we understood the process of choosing such data, its relevance to the Group. The auditors have evaluated the key controls and governance over the modelling process including model monitoring, validation and approval. The auditors have tested controls over model outputs and recognition and approval of post model adjustments and management overlays. • For corporate exposures, tested design and operating effectiveness of the key controls over the appropriateness of use of collaterals, the quantification thereof and the timing of recovery.

421 Auditors’ Report on Consolidated Financial Statements ANNUAL REPORT 2018-19

• Tested the design and operating effectiveness of the Group’s key internal controls around the completeness and accuracy of financial assets on which the ECL model was applied. A sample of exposures was also tested for staging, application of the appropriate PD, LGD and M. The auditors have tested the mathematical accuracy of the model output and its sensitivity to changes in modelling assumptions. • Assessed and tested the material overlays with a focus on the reasonableness of the supportable information used. • Involved our specialists in areas that required specific expertise (i.e. data reliability and the expected credit loss model). • Assessed the accuracy of the disclosures in the financial statements and ensured that they were in accordance with Ind AS 109.

Evaluation of uncertain tax positions Key audit matter The Group has material uncertain tax positions including matters under dispute which involves significant description judgment to determine the possible outcome of these disputes. Refer to Note No 1(z) and 1(aa) of the Consolidated Financial Statements Principal Audit The auditors procedures included the following: Procedures • Obtained understanding of key uncertain tax positions; • Obtained details of completed tax assessments and demands for the year ended March 31, 2019 from the management; • The auditors along with our internal tax experts – i. discussed with appropriate senior management and evaluated the Management’s underlying key assumptions in estimating the tax provision; ii. Assessed management’s estimate of the possible outcome of the disputed cases; and iii. Considered legal precedence and other rulings in evaluating management’s position on these uncertain tax positions. • Additionally, considered the effect of new information in respect of uncertain tax positions as at April 1, 2018 to evaluate whether any change was required to management’s position on these uncertainties.

Impairment of Toll Collection Rights Key audit matter Toll collection rights obtained in consideration for rendering construction services, represent the right to collect description toll revenue during the concession period in respect of Build-Operate-Transfer ("BOT") and Design-Build-Operate- Transfer (“DBOT”) projects. Toll collection rights are capitalised as intangible assets upon completion of the project at the cumulative construction costs plus the present value of obligation towards negative grants and additional concession fee payable to National Highways Authority of India ("NHAI")/State Authorities, if any. The Group has carried out an evaluation for impairment of such toll collection rights which have incurred losses on a continuous basis, representing indicators of impairment. Management has estimated the future cash flows arising from achieving revenues and costs in line with the increase in traffic as well as refinancing/ restructuring. As such estimations involve complex and subjective judgements by the Management, there is a risk that there may be an impairment that has not been recorded. Refer to Note No 1(n) of the Consolidated Financial Statements. Principal Audit The auditors have performed a range of audit procedures, which included the following: Procedures • Evaluated the design and implementation of the relevant controls and the operating effectiveness of such internal controls in estimating the future projections including assumptions used in determining the value in use; • Compared the actual revenues and cash flows generated by the entities during the year as compared to the projections and estimates considered in the previous year and evaluated the basis of future projections with regard to the revenue and cash flows;

422 • Evaluated the appropriateness of key assumptions in the valuations including discount rate, growth rate, and consulted internal specialists. The challenge was based on the auditors’ assessment of the historical accuracy of the Group’s estimates in the prior periods and an assessment of the consistency of assumptions across all the subsidiaries and comparison of the assumptions with public data wherever available; • The auditors have also performed a sensitivity analysis to assess the impact of possible different assumptions related to revenue and cost estimates including: i. Increase/decrease in revenue growth rate; ii. Increase/decrease to cost forecasts; and • The auditors have enquired with key financial and operational personnel to identify any factors that should be taken into account in auditors’ analysis. In all cases, the auditors have corroborated management’s explanations, including changes in assumptions, and evaluated these relative to auditors own analysis.

Multiple IT Applications Key audit matter One of the components is highly dependent on technology due to the significant number of transactions description that are processed daily and discrete IT Systems. The interest income is computed through various IT Systems and the interfacing of these system with the accounting system is critical aspect of audit. The audit approach relies extensively on automated controls and controls around interface of different systems, therefore on the effectiveness of controls over IT systems. IT application controls are critical to ensure that changes to applications and underlying data are made in an appropriate manner. Appropriate controls contribute to mitigating the risk of potential fraud or errors as a result of changes to applications and data. Management has implemented Group wide preventive and detective controls across critical applications and infrastructure to reduce the risk over IT applications in the financial reporting process. Due to the pervasive nature, the auditors have assessed the risk of a material misstatement arising from technology as significant for the audit. Principal Audit The component auditors have performed a range of audit procedures, which included the following: Procedures Access rights were tested over applications, operating systems and databases relied upon for financial reporting. Specifically, the tests were designed to cover the following: • New access requests for joiners were properly reviewed and authorised; • User access rights were removed on a timely basis when an individual left or moved role; • Access rights to applications, operating systems and databases were periodically monitored for appropriateness; and • Highly privileged access is restricted to appropriate personnel. Other areas that were independently assessed included password policies, security configurations, controls over changes to applications and databases and that business users, developers and production support did not have access to change applications, the operating system or databases in the production environment. Testing of automated controls and interface testing was carried out. Other procedures performed included: • Where inappropriate access was identified, we understood the nature of the access, and, where possible, obtained additional evidence on the appropriateness of the activities performed; • Additional substantive testing was performed on specific year-end reconciliations and confirmations with external counterparties; • A list of users’ access permissions was obtained and manually compared to other access lists where segregation of duties was deemed to be of higher risk. Information Other than the Consolidated Financial Statements and Auditor’s Report The Company’s Board of Directors is responsible for the preparation of other information. The other information comprise the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the consolidated financial statements and our auditor’s report.

423 Auditors’ Report on Consolidated Financial Statements ANNUAL REPORT 2018-19

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, compare with the other information of the joint operations, subsidiaries, joint ventures and associates audited by other auditors to the extent it relates to these entities and, in doing so, place reliance on the work of the other auditors and consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. Other information so far as it relates to the joint operations, subsidiaries, joint ventures and associates, is traced from their financial statements audited by the branch auditors and other auditors and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Management’s Responsibility for the Consolidated Financial Statements The Parent’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the “Act”) with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated total comprehensive income, consolidated changes in equity and consolidated cash flows of the Group including its joint operations, associates and joint ventures in accordance with the Ind AS and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, and of its joint operations, associates and joint ventures and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group, its joint operations, associates and joint ventures are responsible for assessing the ability of the Group, its joint operations, associates and joint ventures to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The respective Board of Directors of the companies included in the Group, its joint operations, associates and joint ventures are also responsible for overseeing the financial reporting process of the Group, its joint operations, associates and joint ventures. Auditor’s Responsibility for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Parent, subsidiary companies, joint operation companies, associate companies and joint venture companies incorporated in India, have adequate internal financial controls systems in place and the operating effectiveness of such controls.

424 • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group, its joint operations, associates and joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group, its joint operations, associates and joint ventures to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group, its joint operations, associates and joint ventures to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements. Materiality Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the consolidated financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the consolidated financial statements. Communication with those charged with governance We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Matters 1. the consolidated financial statements includes the financial information of 24 joint operations included in the standalone financials statements of the companies included in the Group whose financial information reflect total assets of R 4,540.71 crore as at March 31, 2019, total revenue of R 6,018.63 crore and net cash outflows amounting to R 170 crore for the year ended on that date, as considered in the respective standalone financial statements of the Companies included in the Group. The financial information of these joint operations have been audited by other auditors whose reports have been furnished to us by the Management and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations is based solely on the work done by and the reports of such other auditors. The consolidated financial statement also includes the financial information of 66 subsidiaries whose financial information reflect total assets of R 1,14,000.15 crore as at March 31, 2019, total revenues of R 50,475.82 crore and net cash outflows amounting to R 1,045.06 crore for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share of total loss after tax (net) of R 310.50 crore and total comprehensive loss (net) of R 301.19 crore for the year ended March 31, 2019, as considered in the consolidated financial statement, in respect of 3 associates and 7 joint ventures, whose financial information have not been audited by us. The financial information of these subsidiaries, associates and joint ventures have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures and our report in terms of subsection (3) of Section 143 of

425 Auditors’ Report on Consolidated Financial Statements ANNUAL REPORT 2018-19

the Act, in so far as it relates to the aforesaid subsidiaries, associates and joint ventures is based solely on the reports of such other auditors. our opinion on the consolidated financial statements is not modified in respect of the above matters with respect to our reliance on the work done by and the reports of such other auditors. 2. The consolidated financial statements includes the financial information of 6 joint operations included in the standalone financial statements of the companies included in the Group which have not been audited by their auditors, whose financial information reflects total assets of R 302.45 crore as at March 31, 2019 and total revenues of R 452.54 crore and net cash inflow of R 0.10 crore for the year ended on that date, as considered in the respective standalone financial statements of the Companies included in the Group. The financial information of these joint operations has been unaudited and has been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information which is certified by the management. In our opinion and according to the information and explanations given to us by the Management, the financial information of these joint operations are not material to the Group.

the consolidated financial statements includes the financial information of 44 subsidiaries which have not been audited by their auditors, whose financial information reflect total assets of R 250.21 crore as at March 31, 2019, total revenues of R 255.06 crore and net cash inflow of R 40.61 crore for the year ended on that date. The consolidated financial statements also includes the Group’s share of total loss after tax (net) of R 0.06 crore and total comprehensive income (net) of R 0.63 crore for the year ended March 31, 2019, as considered in the consolidated financial statement, in respect of 3 associates and 7 joint ventures, whose financial information has not been audited by their auditors. The financial information of these subsidiaries, associates and joint ventures is unaudited and has been furnished to us by the Management and our opinion on the consolidated financial statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures, is based solely on such unaudited financial information which is certified by the management. In our opinion and according to the information and explanations given to us by the Management, the financial information of these subsidiaries, associates and joint ventures are not material to the Group. our opinion on the consolidated financial statement is not modified in respect of the above matters with respect to our reliance on the financial information certified by the Management. Report on Other Legal and Regulatory Requirements As required by Section 143(3) of the Act, based on our audit we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements. b) in our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books. c) the Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. d) in our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. e) on the basis of the written representations received from the directors of the Parent as on March 31, 2019 taken on record by the Board of Directors of the Parent, and the reports of the statutory auditors of its joint operations companies, subsidiary companies, associate companies and joint venture companies incorporated in India, none of the directors of the Group companies, its joint operations, associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act. f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”, which is based on the auditor’s reports of the Parent and its subsidiary companies, joint operation companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls over financial reporting of those companies, for reasons stated therein. g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of Section 197(16) of the Act, as amended

426 in our opinion and to the best of information and according to the explanations given to us, the remunerations paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: • The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint ventures. • Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and • There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Parent, applicable subsidiary companies, associate companies, joint venture and joint operation companies to the extent incorporated in India.

For Deloitte Haskins & Sells LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar (Membership No. 039826)

Mumbai, May 10, 2019

427 Auditors’ Report on Consolidated Financial Statements ANNUAL REPORT 2018-19

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT (Referred to in paragraph “1(f)” under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the “Act”) In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2019, we have audited the internal financial controls over financial reporting of LARSEN & TOUBRO LIMITED (hereinafter referred to as “Parent”) and its subsidiary companies (the parent and its subsidiaries together referred to as the “Group”), which includes internal financial controls over financial reporting of its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, as of that date. Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditors’ Responsibility Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, which are applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by other auditors of the subsidiary companies, joint operations, joint ventures and associate companies, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India. Meaning of Internal Financial Controls over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

428 Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the reports of other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 34 subsidiary companies, 1 joint operation company, 7 joint venture companies and 3 associate companies, which are companies incorporated in India, is based solely on the corresponding reports furnished to us by the auditors of such companies incorporated in India. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 10 subsidiary companies, and 5 joint venture companies, which are companies incorporated in India, whose financial information is unaudited and whose efficacy of internal financial controls over financial reporting is based solely on the Management’s certification provided to us and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as the financial information of such entities is not material to the Group. Our opinion is not modified in respect of the above matters with respect to our reliance on the work done by and the reports of such other auditors and the financial information certified by the Management.

For Deloitte Haskins & Sells LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar (Membership No. 039826)

Mumbai, May 10, 2019

429 Consolidated Balance Sheet ANNUAL REPORT 2018-19

Consolidated Balance Sheet as at March 31, 2019 As at 31-3-2019 As at 31-3-2018 As at 1-4-2017 Note v crore v crore v crore v crore v crore v crore ASSETS: Non-current assets Property, plant and equipment 2 10889.56 10642.04 11232.97 Capital work-in-progress 2 2483.56 2143.07 1944.71 investment Property 3 4254.56 4345.86 3613.26 Goodwill 4 1826.91 1561.78 1398.66 other intangible assets 5 4222.91 2030.51 432.22 intangible assets under development 5 11435.93 11300.36 11353.23 Financial assets investments in joint ventures and 55(e) associates 2642.29 2481.59 2766.90 Other investments 6 4531.81 3365.47 2685.91 Loans 7 1862.32 1793.85 1487.38 loans towards financing activities 8 57788.88 54459.45 48234.72 other financial assets 9 1144.05 614.32 857.60 67969.35 62714.68 56032.51 deferred tax assets (net) 50(d) 3418.93 2754.92 2359.10 other non-current assets 10 5648.62 4753.78 3697.51 Current assets Inventories 11 6413.93 4847.80 4139.74 Financial assets Investments 12 13946.17 9464.25 14300.22 Trade receivables 13 37038.17 33116.98 27787.85 Cash and cash equivalents 14 6509.49 6834.34 3526.87 other bank balances 15 5216.75 1198.39 1779.09 Loans 16 626.69 559.72 486.45 loans towards financing activities 17 42530.82 32005.11 22026.52 other financial assets 18 2006.28 4194.41 3286.34 107874.37 87373.20 73193.34 other current assets 19 52688.03 47897.02 39957.92 Group(s) of assets classified as held for sale 52 7.41 1512.43 1649.37 TOTAL ASSETS 279134.07 243877.45 211004.54

430 Consolidated Balance Sheet as at March 31, 2019 (contd.) As at 31-3-2019 As at 31-3-2018 As at 1-4-2017 Note v crore v crore v crore v crore v crore v crore EQUITY AND LIABILITIES: Equity equity share capital 20 280.55 280.27 186.59 other equity 21 62094.25 54623.23 49276.44 equity attributable to owners of the 62374.80 54903.50 49463.03 Company non-controlling interests 6826.11 5201.43 3140.03 Liabilities Non-current liabilities Financial liabilities Borrowings 22 74120.79 72914.76 67340.58 other financial liabilities 23 354.83 353.95 226.09 74475.62 73268.71 67566.67 Provisions 24 556.84 523.54 526.60 deferred tax liabilities (net) 50(d) 311.13 637.92 610.95 other non-current liabilities 25 0.55 67.97 172.14 Current liabilities Financial liabilities Borrowings 26 29223.84 19331.85 16534.47 Current maturities of long term borrowings 27 22210.54 15277.47 10078.90 Trade payables: due to micro enterprises and small enterprises 261.12 176.16 130.26 Due to others 28 42733.69 37621.22 30164.60 other financial liabilities 29 4815.08 5032.18 4828.64 99244.27 77438.88 61736.87 other current liabilities 30 31166.55 27095.64 23392.13 Provisions 31 3037.84 2525.05 2667.81 Current tax liabilities (net) 1137.16 752.84 232.71 Liabilities associated with group(s) of assets classified as held for sale 52 3.20 1461.97 1495.60 TOTAL EQUITY AND LIABILITIES 279134.07 243877.45 211004.54

CONTINGENT LIABILITIES 32 COMMITMENTS (capital and others) 33 NOTES FORMING PART OF THE 1 to 69 FINANCIAL STATEMENTS

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No.117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) SANJIV V. PILGAONKAR Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 39826 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA N. KUMAR Company Secretary (DIN 00041197) (DIN 00022065) (DIN 00007848) M. No. A3471 Directors Mumbai, May 10, 2019 431 Consolidated Statement of Profit and Loss ANNUAL REPORT 2018-19

Consolidated Statement of Profit and Loss for the year ended March 31, 2019 2018-19 2017-18 Note v crore v crore v crore v crore INCOME: Revenue from operations 34 141007.09 119862.10 Other income 35 1851.53 1341.93 Total income 142858.62 121204.03 EXPENSES: Manufacturing, construction and operating expenses: 36 Cost of raw materials, components consumed 17002.51 15245.37 excise duty - 178.94 Construction materials consumed 31059.78 24056.23 Purchase of stock-in-trade 1800.15 1574.64 stores, spares and tools consumed 2858.57 2378.50 sub-contracting charges 26346.70 24639.02 Changes in inventories of finished goods, work-in-progress and stock-in-trade (867.67) (1315.23) other manufacturing, construction and operating expenses 13695.42 10540.63 Finance cost of financial services business and finance lease activity 7385.63 6019.74 99281.09 83317.84 Employee benefits expense 37 18100.58 15270.79 Sales, administration and other expenses 38 7302.27 7637.18 Finance costs 39 1806.04 1538.52 Depreciation, amortisation, impairment and obsolescence 2084.00 1928.73 128573.98 109693.06 Less: Overheads Capitalised 1.53 5.19 Total expenses 128572.45 109687.87 Profit before exceptional items and tax 14286.17 11516.16 Exceptional items (net) 42 294.75 123.00 Profit before tax 14580.92 11639.16 Tax expense: Current tax 50(a) 4693.33 3732.27 deferred tax (net) 50(a) (349.99) (533.40) 4343.34 3198.87 Profit after tax 10237.58 8440.29 Share in profit/(loss) of joint ventures/associates (net) 55(f) (21.00) (435.86) Profit for the year 10216.58 8004.43 Other comprehensive income A. items that will not be reclassified to profit or loss: equity instruments through other comprehensive income 24.22 – income tax on equity instruments through other comprehensive income – – 24.22 – Gain/(loss) on remeasurements of the net defined benefit plans (30.17) 34.84 income tax (expenses)/income on re-measurements of the net defined benefit plans 10.98 (5.47) (19.19) 29.37 B. items that will be reclassified to profit or loss: debt instruments through other comprehensive income (63.01) (45.48) income tax (expenses)/income on debt instruments through other comprehensive income 7.61 (2.05) (55.40) (47.53) Foreign currency translation reserve (17.23) 97.61 income tax (expenses)/income on foreign currency translation reserve (3.25) 0.49 (20.48) 98.10 Carried forward - Other comprehensive income (70.85) 79.94 432 Consolidated Statement of Profit and Loss for the year ended March 31, 2019 (contd.)

2018-19 2017-18 Note v crore v crore v crore v crore Brought forward - Other comprehensive income (70.85) 79.94 effective portion of gains/(losses) on hedging instruments in a cash flow hedge (283.06) 91.06 income tax (expenses)/income on effective portion of gains and losses on hedging instruments in a cash flow hedge 106.69 (8.38) (176.37) 82.68 Cost of hedging reserve 26.65 1.16 income tax (expenses)/income on cost of hedging reserve (9.31) (0.52) 17.34 0.64 Other Comprehensive Income for the year [net of tax] (229.88) 163.26 Total comprehensive income for the year 9986.70 8167.69 Profit for the year attributable to : - owners of the Company 8905.13 7369.86 - non-controlling interests 1311.45 634.57 10216.58 8004.43 Other comprehensive income for the year attributable to: - owners of the Company (273.99) 162.33 - non-controlling interests 44.11 0.93 (229.88) 163.26 Total comprehensive income for the year attributable to: - owners of the Company 8631.14 7532.19 - non-controlling interests 1355.56 635.50 9986.70 8167.69 Basic earnings per equity share (R) 49 63.51 52.62 Diluted earnings per equity share (R) 49 63.40 52.49 Face value per equity share (R) 2.00 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 69

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No.117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) SANJIV V. PILGAONKAR Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 39826 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA N. KUMAR Company Secretary (DIN 00041197) (DIN 00022065) (DIN 00007848) M. No. A3471 Directors Mumbai, May 10, 2019

433 Consolidated Statement of changes in Equity ANNUAL REPORT 2018-19

Consolidated Statement of Changes in Equity for the year ended March 31, 2019 A. equity share capital

2018-19 2017-18 Particulars Number of v crore Number of v crore shares shares Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 1,40,13,69,456 280.27 93,29,65,803 186.59 Add: Shares issued on exercise of employee stock options during the year 13,59,929 0.28 16,38,898 0.33 Add: Bonus shares allotted during the year – – 46,67,64,755 93.35 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,27,29,385 280.55 1,40,13,69,456 280.27

B. other equity v crore Particulars Share Equity Reserves and surplus Items of other comprehensive income Total Other Non– Total application component Capital Capital Securities Employee Statutory Retained Foreign Hedging Debt Equity controlling money of Foreign reserve Redemp- premium share Reserves Earnings currency reserve instruments interests pending currency tion options translation through allotment convertible Reserve (net) reserve Other bonds Comprehen- sive Income Balance as at 31-3-2017 – 153.20 280.28 – 8318.85 303.25 2742.30 37335.32 478.24 347.52 70.97 50029.93 3563.60 53593.53 Change in accounting policy [Refer Note 65] – – – – – – – (753.49) – – – (753.49) (423.57) (1177.06) Restated balance as at 1-4-2017 – 153.20 280.28 – 8318.85 303.25 2742.30 36581.83 478.24 347.52 70.97 49276.44 3140.03 52416.47 Profit for the year (a) – – – – – – – 7369.86 – – – 7369.86 634.57 8004.43 Other comprehensive income (b) – – – – – – – 23.56 94.43 90.53 (46.19) 162.33 0.93 163.26 Total comprehensive income for the year (a+b) – – – – – – – 7393.42 94.43 90.53 (46.19) 7532.19 635.50 8167.69 Issue of equity shares – – – – 137.63 – – – – – – 137.63 – 137.63 Transfer to non- financial assets/liabilities – – – – – – – – – (0.28) – (0.28) – (0.28) Share issue expenses – – – – (0.13) – – – – – – (0.13) – (0.13) Impact of business combination – – 2.16 – – – – – – – – 2.16 – 2.16 Transfer from/(to) retained earnings during the year – – – 42.00 0.02 (21.30) 610.61 (631.33) – – – – – – Employee share options (net) – – – – – 31.61 – – – – – 31.61 5.57 37.18 Utilised for issue of bonus shares – – – – (93.35) – – – – – – (93.35) – (93.35) Dividend paid for previous year – – – – – – – (1960.76) – – – (1960.76) (151.20) (2111.96) Additional tax on dividend paid for the previous year – – – – – – – (441.05) – – – (441.05) – (441.05) Share application money received during the year 3.56 – – – – – – – – – – 3.56 – 3.56 Net gain/loss on transactions with non-controlling interests – – – – – – – 113.83 – – – 113.83 (113.83) – Increase in non-controlling interests due to dilution/ divestment/acquisition – – – – – – – 21.38 – – – 21.38 1685.36 1706.74 Balance as at 31-3-2018 3.56 153.20 282.44 42.00 8363.02 313.56 3352.91 41077.32 572.67 437.77 24.78 54623.23 5201.43 59824.66

434 Consolidated Statement of Changes in Equity for the year ended March 31, 2019 (contd.)

v crore Particulars Share Equity Reserves and surplus Items of other comprehensive income Total Other Non– Total application component Capital Capital Securities Employee Statutory Retained Foreign Hedging Debt Equity controlling money of Foreign reserve Redemp- premium share Reserves Earnings currency reserve instruments interests pending currency tion options translation through allotment convertible Reserve (net) reserve Other bonds Comprehen- sive Income Balance as at 31-3-2018 3.56 153.20 282.44 42.00 8363.02 313.56 3352.91 41077.32 572.67 437.77 24.78 54623.23 5201.43 59824.66 Change in accounting policy [Refer Note 1(i) and 44(h)] – – – – – – – (1237.65) – – – (1237.65) (2.73) (1240.38) Restated balance as at 1-4-2018 3.56 153.20 282.44 42.00 8363.02 313.56 3352.91 39839.67 572.67 437.77 24.78 53385.58 5198.70 58584.28 Profit for the year (c ) – – – – – – – 8905.13 – – – 8905.13 1311.45 10216.58 Other comprehensive income (d) – – – – – – – 5.50 (31.94) (192.40) (55.15) (273.99) 44.11 (229.88) Total comprehensive income for the year (c+d) – – – – – – – 8910.63 (31.94) (192.40) (55.15) 8631.14 1355.56 9986.70 Issue of equity shares (3.56) – – – 108.97 – – – – – – 105.41 6.50 111.91 Transfer to non- financial assets/liabilities – – – – – – – – – (0.37) – (0.37) – (0.37) Transfer from/(to) retained earnings during the year – – – – – (12.19) 498.77 (486.58) – – – – – – Employee share options (net) – – – – – 35.68 – – – – – 35.68 117.43 153.11 Dividend paid for the previous year – – – – – – – (2243.18) – – – (2243.18) (199.53) (2442.71) Additional tax on dividend paid for the previous year – – – – – – – (427.02) – – – (427.02) (50.01) (477.03) Net gain/loss on transactions with non-controlling interests – – – – – – – 2634.66 – – – 2634.66 (2634.66) – Increase in non-controlling interests due to dilution/ divestment/acquisition – – – – – – – (27.65) – – – (27.65) 3032.12 3004.47 Balance as at 31-3-2019 – 153.20 282.44 42.00 8471.99 337.05 3851.68 48200.53 540.73 245.00 (30.37) 62094.25 6826.11 68920.36

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No.117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) SANJIV V. PILGAONKAR Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 39826 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA N. KUMAR Company Secretary (DIN 00041197) (DIN 00022065) (DIN 00007848) M. No. A3471 Directors Mumbai, May 10, 2019

435 Consolidated Statement of Cash Flows ANNUAL REPORT 2018-19

Consolidated Statement of Cash Flows for the year ended March 31, 2019

2018-19 2017-18 v crore v crore A. Cash flow from operating activities: Profit before tax (excluding non-controlling interests and exceptional items) 14286.17 11516.16 Adjustments for : Dividend income (236.91) (2748.08) Depreciation, amortisation, impairment and obsolescence 2084.00 1928.73 Exchange difference on items grouped under financing/investing activities (101.14) (31.03) Effect of exchange rate changes on cash and cash equivalents 49.59 (53.53) Expenses on buyback of shares 17.38 – Finance costs 1806.04 1538.52 Interest income (900.58) (665.67) (Profit)/loss on sale of property, plant and equipment and investment property (net) (591.37) (686.23) (Profit)/loss on sale/fair valuation of investments (net) (65.33) 2217.72 (Profit)/loss on sale of a subsidiary classified under developmental projects segment (415.61) – (Gain)/loss on derivatives at fair value through profit or loss 21.81 125.74 Employee stock option-discount forming part of employee benefits expense 157.97 111.39 Gain on settlement of debt – (5.58) Operating profit before working capital changes 16112.02 13248.14 Adjustments for : (Increase)/decrease in trade and other receivables (9395.14) (14501.11) (Increase)/decrease in inventories 330.68 (642.38) Increase/(decrease) in trade and other payables 6672.34 11727.02 Cash generated from operations before financing activities 13719.90 9831.67 (Increase)/decrease in loans and advances towards financing activities (13855.16) (16459.25) Cash generated from operations (135.26) (6627.58) Direct taxes refund/(paid) [net] (4581.59) (3403.44) Net cash (used in)/from operating activities (4716.85) (10031.02) B. Cash flow from investing activities: Expenditure on acquisition of fixed assets (4282.61) (2877.17) Sale of fixed assets (including advance received) 807.98 862.13 Purchase of non-current investments (1862.54) (1164.82) Sale of non-current investments 653.36 428.59 (Purchase)/sale of current investments (net) (3032.80) 2551.37 Change in cash and other bank balances not available for immediate use (3988.12) 484.65 Deposits/loans given to associates, joint ventures and third parties (93.62) (621.93) Deposits/loans repaid by associates, joint ventures and third parties 43.62 229.89 Interest received 730.61 529.30 Dividend received from joint ventures/associate 19.44 0.66 Dividend received from other investments 236.91 2748.08 Settlement of derivative contracts related to current investments (21.81) (125.74) Consideration received on disposal of subsidiaries (including advance received) 67.00 1048.29 Consideration paid on acquisition of subsidiaries (309.86) (213.77) Cash & cash equivalents acquired pursuant to acquisition of subsidiaries 33.05 50.47 Cash & cash equivalents discharged pursuant to disposal of subsidiaries – (15.50) Net cash (used in)/from investing activities (10999.39) 3914.50

436 Consolidated Statement of Cash Flows for the year ended March 31, 2019 (contd.)

2018-19 2017-18 v crore v crore C. Cash flow from financing activities: Proceeds from issue of share capital (including share application money)[net] 11.31 49.50 Proceeds from non-current borrowings [Note 62] 24181.62 46903.46 Repayments of non-current borrowings [Note 62] (14081.42) (36964.48) Proceeds from other borrowings (net) [Note 62] 7765.14 2680.02 Payment (to)/from non-controlling interests (net)- including sale proceeds on divestment of part stake in subsidiary companies 2884.85 1413.12 Settlement of derivative contracts related to borrowings 308.95 149.31 Dividend paid (2243.18) (1960.76) Additional tax on dividend (403.93) (429.01) Interest paid (including cash flows on account of interest rate swaps) (2982.36) (2470.70) Net cash (used in)/from financing activities 15440.98 9370.46 Net (decrease)/increase in cash and cash equivalents (A + B + C) (275.26) 3253.94 Cash and cash equivalents at beginning of the year 6798.69 3544.75 Cash and cash equivalents at the end of the year 6523.43 6798.69

Notes: 1. statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 “Statement of Cash Flows” as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Purchase & Sale of fixed assets represents additions & deletions to property, plant and equipment, investment property and intangible assets adjusted for movement of (a) capital work-in-progress for property, plant and equipment and investment property and (b) Intangible assets under development during the year. 3. Cash and cash equivalents included in the Statement of Cash flows comprise the following: As at As at 31-3-2019 31-3-2018 v crore v crore (a) Cash and cash equivalents disclosed under current assets [Note 14] 6509.49 6834.34 (b) other bank balances disclosed under current assets [Note 15] 5216.75 1198.39 (c) Cash and bank balances disclosed under non-current assets [Note 9] 290.07 320.31 Total Cash and cash equivalents as per Balance Sheet 12016.31 8353.04 Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents 13.94 (35.65) Less: (ii) Other bank balances disclosed under current assets [Note 15] 5216.75 1198.39 Less: (iii) Cash and bank balances disclosed under non-current assets [Note 9] 290.07 320.31 Total Cash and cash equivalents as per Statement of Cash Flows 6523.43 6798.69

4. Previous year’s figures have been regrouped/reclassified wherever applicable.

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No.117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) SANJIV V. PILGAONKAR Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 39826 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA N. KUMAR Company Secretary (DIN 00041197) (DIN 00022065) (DIN 00007848) M. No. A3471 Directors Mumbai, May 10, 2019 437 Auditors’ Report on Standalone Financial Statements ANNUAL REPORT 2018-19

DELOITTE HASKINS & SELLS LLP Chartered Accountants Indiabulls Finance Centre, Tower 3 27th – 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400013.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF Larsen & Toubro Limited Report on the Audit of Standalone Financial Statements Opinion We have audited the accompanying standalone financial statements of Larsen & Toubro Limited (the “Company”), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information and which includes 29 joint operations whose legal status is an entity.(Hereinafter referred to as the “Standalone Financial Statements”). In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019 and its profit/loss, total comprehensive income/loss, its cash flows and the changes in equity for the year ended on that date. Basis for Opinion We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Revenue recognition – accounting for construction contracts Key audit matter There are significant accounting judgements including estimation of costs to complete, determining the description stage of completion and the timing of revenue recognition. The Company recognises revenue and profit/loss on the basis of stage of completion based on the proportion of contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue and profit/loss therefore rely on estimates in relation to total estimated costs of each contract. Cost contingencies are included in these estimates to take into account specific uncertain risks, or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the contract life and adjusted where appropriate.

300 The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable. Refer to Note Number. 1(e) of the Standalone Financial Statements Principal Audit Our procedures included : Procedures • Testing of the design and implementation of controls involved for the determination of the estimates used as well as their operating effectiveness; • Testing the relevant information technology systems’ access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard; • Testing a sample of contracts for appropriate identification of performance obligations; • For the sample selected, reviewing for change orders and the impact on the estimated costs to complete; • Engaging technical experts to review estimates of costs to complete for sample contracts; and • Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings Assessment of the carrying value of unquoted equity instruments in loss making subsidiaries and joint ventures. Key audit matter The impairment review of unquoted equity instruments and debt, with a carrying value of R 2,669 crore, description is considered to be a risk area due to the size of the balances as well as the judgmental nature of key assumptions, which may be subject to management override. The carrying value of such unquoted equity instruments and debt is at risk of recoverability. The net worth of the underlying entities has significantly eroded and the orders in hand are below the break-even production levels of this facilities. The estimated recoverable amount is subjective due to the inherent uncertainty involved in forecasting and discounting future cash flows. Refer to Note Number 1(j) of the Standalone Financial Statements Principal Audit Besides obtaining an understanding of Management’s processes and controls with regard to testing the Procedures impairment of the unquoted equity instruments in loss making subsidiaries and joint ventures. Our procedures included the following: • Engaged internal fair valuation experts to challenge management’s underlying assumptions and appropriateness of the valuation model used; • Compared the Company’s assumptions with comparable benchmarks in relation to key inputs such as long-term growth rates and discount rates; • Assessed the appropriateness of the forecast cash flows within the budgeted period based on their understanding of the business and sector experience; • Considered historical forecasting accuracy, by comparing previously forecasted cash flows to actual results achieved; and • Performed a sensitivity analysis in relation to key assumptions. Revenue recognition and measurement of contract assets in respect of un-invoiced amounts and measurement of receivables in respect of overdue invoices. Key audit matter The Company, in its contract with customers, promises to transfer distinct services to its customers description which may be rendered in the form of engineering, procurement and construction (EPC) services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could range from cost plus fee to agreed unit price to lump-sum arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the Company’s performance have resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date, or in the case of certain defence contracts, where the evidence of work carried out and cost incurred are covered by confidentiality arrangements involves a significant amount of judgment.

301 Auditors’ report on Standalone Financial StatementS ANNUAL REPORT 2018-19

• Recognition of revenue before formal acknowledgment of receipt of services by the customer could lead to an over or under-statement of revenue and profit, whether intentionally or in error; and • Assessing the recoverability of amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment. Refer to Note Number 1(e) and 1(m) of the Standalone Financial Statements Principal Audit Procedures The procedures performed included the following: • Obtained an understanding of the Company’s processes in collating the evidence supporting execution of work for each disaggregated type of revenue. Auditors have also obtained an understanding of the design of key controls for quantifying units of items / services that would be invoiced and the application of appropriate prices for each of such services; • Tested the design and operating effectiveness of management’s key controls in collating the units of services delivered and in the application of accurate prices for each of such services for samples of the un-invoiced revenue entries, which included testing of access and change management controls exercised in respect of related information systems; • Tested samples of un-invoiced revenue entries with reference to the reports from the information system that records the costs incurred against the services delivered to confirm the work performed and application of appropriate margin applied for the respective services. The auditors have also tested whether appropriate adjustments have been made for the element of variable consideration related to committed service levels of performance. With regard to incentives, auditors tests were focused to ensure that accruals were restricted to only those items where contingencies were minimal; • Tested cut-offs for revenue recognized against un-invoiced amounts by matching the revenue accrual against accruals for corresponding cost; • For defence contracts which are covered under by statutory confidentiality arrangements, the auditors have compared the revenue recognised with amounts collected from customers to ensure that the gap between revenue recognised and collections is below the materiality threshold; • Extended the testing upto the date of approval of financial statements by the Board of Directors of the Parent entity to verify adjustments, if any, that may have been necessary upon receipt of approvals from customers for services delivered prior to the reporting date and/or collections there against; • Reviewed the delivery and collection history of customers against whose contracts un-invoiced revenue is recognised; and • Verification of subsequent receipts, post balance sheet date. Evaluation of uncertain tax positions Key audit matter The Company has material uncertain tax positions including matters under dispute which involves description significant judgment to determine the possible outcome of these disputes. Refer to Note. Number 1(u) and 1(w) of the Standalone Financial Statements Principal Audit Procedures Our procedures included the following: • Obtained understanding of key uncertain tax positions; • Obtained details of completed tax assessments and demands for the year ended March 31, 2019 from the management; • We along with our internal tax experts – i. discussed with appropriate senior management and evaluated the Management’s underlying key assumptions in estimating the tax provision; ii. assessed management’s estimate of the possible outcome of the disputed cases; and iii. considered legal precedence and other rulings in evaluating management’s position on these uncertain tax positions. • Additionally, considered the effect of new information in respect of uncertain tax positions as at April 1, 2018 to evaluate whether any change was required to management’s position on these uncertainties.

302 Information Other than the Standalone Financial Statements and Auditor’s Report The respective Board of Directors of the Company and its Joint Operation Companies are responsible for the preparation of other information. The other information comprise the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the standalone financial statements and our auditor’s report. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Management’s Responsibility for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the “Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, cash flows and changes in equity of the Company including its joint operation companies in accordance with the Ind AS and accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the respective Companies and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibility for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls systems in place and the operating effectiveness of such controls. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Company’s ability

303 Auditors’ report on Standalone Financial StatementS ANNUAL REPORT 2018-19

to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its joint operations to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit of the standalone financial statements of such entities included in the standalone financial statements. Materiality Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements. Communication with those charged with governance We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters (a) We did not audit the financial information of 24 joint operations included in the standalone financial statements whose financial information reflect total assets of R 4,540.71 crore as at March 31, 2019, total revenues of R 6,018.63 crore and net cash outflows amounting to R 170 crore for the year ended on that date, as considered in the standalone financial statements. The financial information of these joint operations have been audited by the other auditors whose reports has been furnished to us by the management, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of section 143 of the Act, in so far as it relates to the aforesaid joint operations, is based solely on the report of such other auditors. our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters. (b) the standalone financial statements also includes the financial information of 4 joint operations which have not been audited by their auditors, whose financial information reflect total assets of R 41.12 crore as at March 31, 2019 and total revenues of R 4.99 crore and net cash outflows amounting to R 0.13 crore for the year ended on that date, as considered in the standalone financial statements. The financial information of these joint operations has been unaudited and has been furnished to us by the Management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information which is certified by management. In our opinion and according to the information and explanation given to us by the Management, the financial information of these joint operations are not material to the Company. Report on Other Legal and Regulatory Requirements As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub- section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable As required by Section 143(3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

304 b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. e) on the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act. f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements; ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar (Partner) (Membership No. 039826) MUMBAI, May 10, 2019

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT (Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (the “Company”) as at March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company as for the year ended on that date which includes internal financial controls over financial reporting, which is applicable to 1 of the 29 joint operations, being a Company incorporated in India audited by another auditor. Management’s Responsibility for Internal Financial Controls The Board of Directors of the Company and those charged with governance of the joint operation referred to above, which is a company incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditor’s Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the Company and its joint operation Company incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on

305 Auditors’ report on Standalone Financial StatementS ANNUAL REPORT 2018-19

Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor of the joint operation, which is a Company incorporated in India, in terms of their report referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other Matters paragraph below, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting established by the respective company considering the essential components of internal control stated in the Guidance Note. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 1 joint operation, which is a company incorporated in India, is solely based on the corresponding report of the other auditor of such company. Our opinion is not modified in respect of this matter. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar (Partner) (Membership No. 039826) MUMBAI, May 10, 2019

306 ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of Larsen & Toubro Limited of even date)

(i) in respect of the Company’s property, plant and equipment: (a) the Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment. (b) the Company has a program of physical verification of its property, plant and equipment to cover all the items of property, plant and equipment in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its property, plant and equipment. Pursuant to the program, certain property, plant and equipment were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) according to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings are held in the name of the Company as at the balance sheet date, except the following: v crore Type of asset Total no. of Leasehold / Gross block as at Net block as at Remarks cases freehold March 31, 2019 March 31, 2019 Land 3 Freehold 1.27 1.27 Conveyance deed pending Buildings 2 Freehold 3.53 0.59 to be executed as the matter is sub judice. in respect of immovable properties of land and buildings that have been taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. (ii) as explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification between the physical stock and the books of accounts. (iii) according to the information and explanations given to us, the Company has not entered into any contracts or arrangements covered under section 189 of the Companies Act, 2013 (the “Act”) and hence reporting under paragraph 3 (iii) of the Order is not applicable to the Company. (iv) in our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable. (v) according to the information and explanations given to us, the Company has not accepted any deposits during the year and does not have any unclaimed deposits as at March 31, 2019 and hence, the provisions of the clause 3 (v) of the Order is not applicable to the Company. (vi) the maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained by the company. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) according to the information and explanations given to us, in respect of statutory dues: (a) the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Goods and Service Tax, Customs Duty, cess and other material statutory dues applicable to it to the appropriate authorities. (b) there were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Goods and Service Tax, Customs Duty, cess and other material statutory dues in arrears as at March 31, 2019 for a period of more than six months from the date they became payable.

307 Auditors’ report on Standalone Financial StatementS ANNUAL REPORT 2018-19

(c) details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Goods and Service Tax and Value Added Tax which have not been deposited as on March 31, 2019 on account of disputes are given below:-

Name of Nature of Dues Forum Period to which Amount Amount Statute where Amount Relates Involved Unpaid Dispute is (v crore) (v crore) Pending The Central Classification dispute and other Supreme 2002-2003, 2003- 7.34 6.79 Excise matters Court 2004, 2011-12 to Act,1944, 2015-16 Service Tax Dispute regarding questions of law, High Court 2003-04 to 2012-13 114.28 85.25 under Finance classification dispute and other Act, 1994 and matters Customs Act, Disallowance of CENVAT credit, CESTAT 1991-92, 2001-02 to 303.46 297.35 1962 short payment of service tax, 2013-14, 2016-17 MRP Valuation disputes, dispute regarding classification of services, disallowances of excise duty exemption, Non Maintenance of Separate Books of Accounts, Export rebate disallowance, and other matters. Disallowance of CENVAT credit, Commissioner 2006-07 to 2012-13 7.27 6.13 short payment of service tax ,service (Appeal) tax rate dispute, valuation dispute and other matters The Central Taxability of sub-contractor Supreme 2000-01 to 2006-07, 16.07 7.03 Sales Tax Act, turnover, rate of tax for declared Court 2010-11 Entry tax, Local goods, disallowance of labour Sales Tax Act, turnover and non- submission of Works Contract forms Tax Act and Dispute regarding questions of law, High Court 1986-87, 1987-88, 71.55 65.18 Goods & classification dispute, local VAT and 1993-94, 1994-95, Services Tax Act Works contract disputes. 1999-00 to 2012-13 Non submission of Forms, Sales Tax/VAT 1989-90, 1991-92, 593.04 510.07 classification disputes, inter-state Tribunal 1993-94 to 1996-97, sale turnover, Rate of tax of 1999-00 to 2015-16 declared goods, Labour & service charges disallowed, Disallowance of exemptions claimed for imports & Sales in transit, Sale mismatch & levy of tax on import of goods through Way bill, Road permit issue and other matters Dispute regarding questions of Commissioner 1999-00 to 2015-16 31.92 30.66 law, classification dispute, sales (Appeal) in transit, high sea sales, non- Additional 2005-06, 2007-08 to 4.08 3.10 submission of C forms & E1 forms, Commissioner 2014-15 disallowance of ITC, valuation of Joint 2007-08 to 2015-16 14.04 10.00 goods and other matters Commissioner Joint 1995-96, 1996-97, 2,443.83 2,377.28 Commissioner 1999-00 to 2017-18 (Appeal)

308 Name of Nature of Dues Forum Period to which Amount Amount Statute where Amount Relates Involved Unpaid Dispute is (v crore) (v crore) Pending The Central Dispute regarding questions of Assistant/ 1996-97 to 2017-18 531.73 528.68 Sales Tax Act, law, classification dispute, sales Deputy Entry tax, Local in transit, high sea sales, non- Commissioner Sales Tax Act, submission of C forms & E1 forms, Assessing / 1996-97 to 2016-17 8.80 8.22 Works Contract disallowance of ITC, valuation of Commercial Tax Act and goods and other matters Tax Officer Goods & Services Tax Act Income Tax Act, Demand arising out of Regular ITAT 2004-05 & 2009-10 to 1,066.36 287.60 1961 Assessment/Reassessment 2012-13 Demand arising out of Regular CIT(A) 2015-16 569.35 569.35 Assessment/Reassessment (viii) in our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks and dues to debenture holders. The Company has not borrowed any funds from the government (ix) in our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under paragraph 3 (ix) of the Order is not applicable to the Company. (x) to the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (xi) in our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act. (xii) in our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) of the Order is not applicable to the Company. (xiii) in our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with related parties and the details of such related party transactions have been disclosed in the financial statements as required by the applicable accounting standards. (xiv) according to the information and explanations given to us, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order is not applicable to the Company. (xv) in our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act is not applicable to the Company. (xvi) the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar (Partner) (Membership No. 039826) MUMBAI, May 10, 2019

309 Balance Sheet ANNUAL REPORT 2018-19

Balance Sheet as at March 31, 2019 As at 31-3-2019 As at 31-3-2018 Note v crore v crore v crore v crore ASSETS: Non-current assets Property, plant and equipment 2 6571.93 6272.46 capital work-in-progress 2 580.92 452.10 investment property 3 381.26 474.98 intangible assets 4 228.52 193.09 intangible assets under development 4 171.69 200.77 Financial assets Investments 5 20139.47 22994.26 Loans 6 1732.65 1684.13 other financial assets 7 577.00 438.54 22449.12 25116.93 deferred tax assets (net) 49(e) 841.86 400.62 other non-current assets 8 3347.25 3093.34 Current assets Inventories 9 3220.44 2500.05 Financials assets Investments 10 4694.98 4344.98 Trade receivables 11 28216.82 22917.45 cash and cash equivalents 12 2733.41 3183.75 other bank balances 13 4866.08 1134.31 Loans 14 1293.86 992.33 other financial assets 15 1995.18 3441.59 43800.33 36014.41 other current assets 16 44090.65 40499.93 Group(s) of assets classified as held for sale 42 41.72 388.00 TOTAL ASSETS 125725.69 115606.68

310 Balance Sheet as at March 31, 2019 (contd.) As at 31-3-2019 As at 31-3-2018 Note v crore v crore v crore v crore EQUITY AND LIABILITIES: Equity equity share capital 17 280.55 280.27 other equity 18 52270.17 48893.98 Total equity 52550.72 49174.25 Liabilities Non- current liabilities Financial liabilities Borrowings 19 2391.87 5495.16 other financial liabilities 20 53.75 108.64 2445.62 5603.80 Provisions 21 497.62 472.87 other non-current liabilities 22 0.58 1.27 Current liabilities Financial liabilities Borrowings 23 3668.25 4129.57 current maturities of long term borrowings 24 4131.45 936.27 Trade payables: due to micro enterprises and small enterprises 201.86 137.71 Due to others 25 36076.36 30957.29 other financial liabilities 26 1857.85 1878.00 45935.77 38038.84 other current liabilities 27 22550.64 20845.46 Provisions 28 1423.83 1102.22 current tax liabilities(net) 320.91 367.97 TOTAL EQUITY AND LIABILITIES 125725.69 115606.68

CONTINGENT LIABILITIES 29 COMMITMENTS (capital and others) 30 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 64

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No.117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) SANJIV V. PILGAONKAR Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 39826 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA N. KUMAR Company Secretary (DIN 00041197) (DIN 00022065) (DIN 00007848) M. No. A3471 Directors Mumbai, May 10, 2019

311 Statement of Profit and Loss ANNUAL REPORT 2018-19

Statement of Profit and Loss for the year ended March 31, 2019

2018-19 2017-18

Note v crore v crore v crore v crore INCOME: Revenue from operations 31 86987.86 74611.65 Other income 32 2768.84 1612.67

Total Income 89756.70 76224.32

EXPENSES: Manufacturing ,construction and operating expenses 33 cost of raw materials components consumed 7832.79 7942.99 excise duty – 149.10 construction materials consumed 29099.38 22236.60 Purchase of stock-in-trade 1786.14 1531.22 Stores,spares and tools consumed 2341.99 1808.79 Sub-contracting charges 22021.74 19620.99 changes in inventories of finished goods, stock-in-trade and work-in-progress (1296.12) (1047.41) other manufacturing, construction and operating expenses 8117.47 6378.22

69903.39 58620.50 Employee benefits expense 34 6082.49 5614.74 Sales, administration and other expenses 35 2319.78 2680.73 Finance costs 36 1641.39 1432.23 Depreciation, amortisation, impairment and obsolescence 1067.95 1049.46

81015.00 69397.66 Less: Overheads capitalised 1.54 5.19

Total Expenses 81013.46 69392.47 Profit before exceptional items and tax 8743.24 6831.85 Exceptional items 46 474.93 430.53 Profit before tax 9218.17 7262.38 Tax expenses current tax 49(a) 2687.22 1974.07 deferred tax 49(a) (146.75) (98.99)

2540.47 1875.08

Profit after tax 6677.70 5387.30

Carried forward 6677.70 5387.30

312 Statement of Profit and Loss for the year ended March 31, 2019 (contd.)

2018-19 2017-18

Note v crore v crore v crore v crore Brought forward 6677.70 5387.30 Other Comprehensive Income A items that will not be reclassified to Profit or Loss : Gain/(loss) on remeasurements of the defined benefits plan (31.30) 3.82 Income tax (expenses)/income on remeasurements of the defined 10.94 (1.32) benefits plan (20.36) 2.50 B items that will be reclassified to Profit and Loss debt instruments through Other Comprehensive Income (78.85) 0.27 income tax (expenses)/income on debt instruments through Other 16.68 (11.12) Comprehensive Income (62.17) (10.85) exchange differences in translating the financial statements of foreign operations 9.31 (1.41) income tax (expenses)/income on exchange differences in translating the financial statements of foreign operations (3.25) 0.49 6.06 (0.92) effective portion of gains/(losses) on hedging instruments in a cash flow hedge (89.27) (64.52) income tax (expenses)/income on effective portion of gains/(losses) on hedging instruments in a cash flow hedge 30.59 22.40 (58.68) (42.12) cost of hedging reserve 25.39 0.59 income tax (expenses)/income on cost of hedging reserve (8.87) (0.14) 16.52 0.45 Other Comprehensive Income for the year [net of tax ] (118.63) (50.94) Total Comprehensive Income for the year 6559.07 5336.36

Basic earnings per equity share (R) 52 47.63 38.46 Diluted earnings per equity share (R) 52 47.54 38.37 Face value per equity share (R) 2.00 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 64

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No.117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) SANJIV V. PILGAONKAR Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 39826 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA N. KUMAR Company Secretary (DIN 00041197) (DIN 00022065) (DIN 00007848) M. No. A3471 Directors Mumbai, May 10, 2019

313 Statement of changes in Equity ANNUAL REPORT 2018-19

Statement of changes in Equity for the year ended March 31, 2019 A. Equity share capital 2018-19 2017-18 Particulars Number of v crore Number of v crore shares shares Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 1,40,13,69,456 280.27 93,29,65,803 186.59 Add: Shares issued on exercise of employee stock options during the year 13,59,929 0.28 16,38,898 0.33 Add: Bonus shares alloted during the year 46,67,64,755 93.35 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,27,29,385 280.55 1,40,13,69,456 280.27

B. Other equity v crore Reserves and surplus Items of Other Comprehensive Income Equity Share component Debt application of foreign Capital Employee Foreign instruments Total other Particulars money Capital reserve on Securities share Debenture General Retained currency Hedging through pending currency redemption equity convertible reserve business premium options reserve reserve earnings translation reserve Other allotment bonds combination (net) reserve Comprehen- sive Income Balance as at 1-4-2017 – 153.20 10.52 8318.85 177.25 356.76 25373.60 11225.53 0.55 144.11 65.78 45826.15 Profit for the year (a) –––––––– 5387.30 ––– 5387.30 Other Comprehensive Income (b) –––––––– 2.50 (0.92) (41.67) (10.85) (50.94) Total Comprehensive Income for the year (a+b) – – – – – – 5389.80 (0.92) (41.67) (10.85) 5336.36 Issue of equity shares –––– 137.63 ––––––– 137.63 Transfer to non- financial assets/liability –––––––––– (0.28) – (0.28) Share issue expenses –––– (0.13) ––––––– (0.13) Utilised for issue of bonus shares –––– (93.35) ––––––– (93.35) Transfer from/to general reserve/retained earnings during the year –––– (21.66) 102.18 21.66 (102.18) –––– Employee share options (net) –––– (47.00) –––––– (47.00) Transfer under scheme of amalgamation [refer note 60(b)] ––– (6.36) 0.02 –– 0.52 15.55 ––– 9.73 Applications during the year 3.56 ––––––––––– 3.56 Dividend paid for the previous year –––––––– (1960.76) ––– (1960.76) Dividend distribution tax paid for the previous year –––––––– (317.93) ––– (317.93) Balance as at 31-3-2018 3.56 153.20 10.52 (6.36) 8363.02 108.59 458.94 25395.78 14250.01 (0.37) 102.16 54.93 48893.98 Change in accounting policy [Ind AS 115] [Note 48(h) & 1(e)] (701.58) (701.58) Restated balance as at 1-4-2018 3.56 153.20 10.52 (6.36) 8363.02 108.59 458.94 25395.78 13548.43 (0.37) 102.16 54.93 48192.40 Profit for the year (c) –––––––– 6677.70 ––– 6677.70 Other Comprehensive Income (d) –––––––– (20.36) 6.06 (42.16) (62.17) (118.63) Total Comprehensive Income for the period (c+d) – – – – – – – 6657.34 6.06 (42.16) (62.17) 6559.07 Issue of equity shares (3.56) ––– 108.97 ––––––– 105.41 Transfer to non- financial assets/liability –––––––––– (0.38) – (0.38) Transfer from/to general reserve/retained earnings during the year ––––– (12.13) (18.68) 112.13 (81.32) –––– Employee share options (net) ––––– 10.45 –– ––– 10.45 Dividend paid for the previous year ––––– –– (2243.18) ––– (2243.18) Dividend distribution tax paid for the previous year ––––– –– (353.60) ––– (353.60) Balance as at 31-3-2019 – 153.20 10.52 (6.36) 8471.99 106.91 440.26 25507.91 17527.67 5.69 59.62 (7.24) 52270.17 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No.117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) SANJIV V. PILGAONKAR Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 39826 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798) SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529) N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA N. KUMAR Company Secretary (DIN 00041197) (DIN 00022065) (DIN 00007848) M. No. A3471 Directors 314 Mumbai, May 10, 2019 Statement of Cash Flows for the year ended March 31, 2019 2018-19 2017-18 v crore v crore A. Cash flow from operating activities: Profit before tax (excluding exceptional items) 8743.24 6831.85 Adjustments for: Dividend received (1512.12) (3228.67) Depreciation, amortisation, impairment and obsolescence (net) 1067.95 1049.46 Exchange difference on items grouped under financing/investing activities (67.59) (19.71) Effect of exchange rate changes on cash and cash equivalents 3.64 1.66 Expenditure on buyback 17.38 – Interest expense 1641.39 1432.23 Interest income (499.95) (496.89) (Profit)/loss on sale of fixed assets (net) (594.24) (60.18) (Profit)/loss on sale of investments (net) (including fair valuation) (251.15) 2233.22 (Gain)/loss on derivatives at fair value through Profit or Loss 22.60 125.74 Employee stock option-discount forming part of employee benefits expense 74.70 69.77 Operating profit before working capital changes 8645.85 7938.48 Adjustments for: (Increase)/decrease in trade and other receivables (9810.89) (12269.46) (Increase)/decrease in inventories (345.65) (705.73) Increase/(decrease) in trade payables and customer advances 6444.64 9753.03 Cash (used in)/generated from operations 4933.95 4716.32 Direct taxes refund/(paid) [net] (2684.73) (1764.32) Net cash (used in)/from operating activities 2249.22 2952.00 B. Cash flow from investing activities: Expenditure on acquisition of fixed assets (1571.41) (1136.78) Sale of fixed assets (including advance received) 785.16 123.32 Investment in subsidiaries, associates and joint venture companies (469.84) (3420.51) Divestment of stake in subsidiaries, associates and joint venture companies 4181.49 1068.38 Purchase of non-current investments (17.49) (75.00) Sale of non-current investments 3.82 – (Purchase)/sale of current investments (net) 1146.61 375.80 Change in other bank balance and cash not available for immediate use (3702.01) 370.98 Deposits/loans (given) - subsidiaries, associates, joint venture companies and third parties (12969.83) (12708.16) Deposits/loans repaid - subsidiaries, associates, joint venture companies and third parties 12427.56 13698.56 Advance given towards equity commitment (addition) – (19.45) Interest received 452.57 439.88 Dividend received from subsidiaries and joint venture companies 1330.60 502.51 Dividend received from other investments 178.70 2693.08 Settlement of derivative contracts related to current investments (22.60) (125.74) Net cash (used in)/from investing activities 1753.33 1786.87

315 Statement of Cash Flows ANNUAL REPORT 2018-19

Statement of Cash Flows for the year ended March 31, 2019 (contd.)

2018-19 2017-18 v crore v crore C. Cash flow from financing activities: Proceeds from fresh issue of share capital (including share application money)[net] 11.31 49.50 Proceeds from non-current borrowings [Note 62] 789.05 1922.70 Repayments of non-curent borrowings [Note 62] (974.33) (3794.12) (Repayments)/Proceeds from other borrowings (net) [Note 62] (606.49) 1783.81 Settlement of derivative contracts related to borrowings 308.95 149.31 Dividends paid (2243.18) (1960.76) Additional tax on dividend (353.60) (317.93) Interest paid (including cash flows from interest rate swaps) (1380.96) (1321.87) Net cash (used in)/from financing activities (4449.25) (3489.36) Net (decrease)/increase in cash and cash equivalents (A + B + C) (446.70) 1249.51 Cash and cash equivalents at beginning of the year {2017-18: included R 0.09 crore 3187.75 1938.24 transferred under scheme of amalgamation [Note 60(b)]} Cash and cash equivalents at end of the year 2741.05 3187.75 Notes: 1. Statement of cash flows has been prepared under the indirect method as set out in the Ind AS 7 “Statement of Cash Flows” as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Purchase of fixed assets represents additions to property, plant and equipment, investment property and other intangible assets adjusted for movement of (a) capital work in progress for property, plant and equipment and investment property and (b) intangible assets under development during the year. 3. cash and cash equivalents included in the Statement of Cash Flows comprise the following : 2018-19 2017-18 v crore v crore (a) Cash and cash equivalents disclosed under current assets [Note 12] 2733.41 3183.75 (b) Other bank balances disclosed under current assets [Note 13] 4866.08 1134.31 (c) Cash and bank balances disclosed under non-current assets [Note 7] 289.76 319.52 Total Cash and cash equivalents as per Balance Sheet 7889.25 4637.58 Add : Unrealised exchange (gain)/loss on cash and cash equivalents 7.64 4.00 Less : Other bank balances disclosed under current assets [Note 13] 4866.08 1134.31 Less : Cash and bank balances disclosed under non-current assets [Note 7] 289.76 319.52 Total Cash and cash equivalents as per Statement of Cash Flows 2741.05 3187.75 4. Previous year’s figures have been regrouped/reclassified wherever applicable.

In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No.117366W/W-100018 S. N. SUBRAHMANYAN by the hand of Chief Executive Officer & Managing Director (DIN 02255382) SANJIV V. PILGAONKAR Partner R. SHANKAR RAMAN M. M. CHITALE Membership No. 39826 Chief Financial Officer & (DIN 00101004) Whole-time Director (DIN 00019798)

SUBODH BHARGAVA SUNITA SHARMA (DIN 00035672) (DIN 02949529)

N. HARIHARAN VIKRAM SINGH MEHTA SANJEEV AGA N. KUMAR Company Secretary (DIN 00041197) (DIN 00022065) (DIN 00007848) M. No. A3471 Directors Mumbai, May 10, 2019

316 LARSEN & TOUBRO LIMITED e Regstered Mee, LET House, Donald Estate, Mumbel 400 001 CIN : 1.09991/4111946PLC0047413 STATEMENT OF CONSOLIDATED UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31. 2019 r cram Quarter ended Nine months ended Year ended Particulars December 31, September 30, December 31. December 31, December 31, March 31. 2019 2019 2018 2019 2018 2019 (Reviewed] [Reviewed) (Reviewed] (Reviewed] (Reviewed] [Audited] A Continuing operations 1 Income: a) Revenue from operations 36242.68 35328.45 34233.96 101207.08 91916.88 135220.29 b) Other income (net) 474.92 596.44 589.12 1706.32 1225.58 1836.53 Total Income 36717.60 35924.89 34823.08 102913.40 93142.46 137056.82 2 Expenses: a) Manufacturing, construction and operating expenses: i) Cost of raw materials and components consumed 3961.55 3867.41 3988.16 11754.01 10538.46 14771.56 ii) Stores. spares and tools consumed 611.02 617.36 776.14 1767.94 2183.75 2812.31 iii) Sub-contracting charges 6906.93 5956.78 6037.58 17987.02 16752.28 26011.91 iv) Construction materials consumed 6867.92 6454.05 8752.93 111845 74 19539.56 31230,14 v) Purchase of stock-In-trade 243.05 188.85 227.11 617.42 588.87 887.87 vi) Changes in inventories of finished goods. stock-in-trade and work-in-progress (114.00) 313.28 (903.93) (16.64) (978.44) (731.11) vii) Other manufacturing. construction and operating expenses 3373.24 3465.33 3660.56 9697.86 9600.19 13264.43 b) Finance cost of financial services business and finance lease activity 2004.35 2023.28 1976.22 6106.25 5418.91 7385.63 c) Employee benefits expense 6133.21 6140.60 4445.47 16825.59 12977.65 17466.40 d) Sales. administration and other expenses 2137.69 2279.65 1522.35 6413.93 5245.08 6791.21 e) Finance costs 709.18 685.90 533.99 1981.73 1296.05 1802.55 f) Depreciation. amortisation. impairment and obsolescence 660.23 629.65 405.28 1751.34 1487.60 1923.03 Total Expenses 33494.37 32622.14 31421.86 93732.19 84649.96 123616.23

3 Profit before exceptional Items (1-2) 3223.23 3302.75 3401.22 9181.21 8492.50 13440.59 4 Exceptional items - - - • 294.75 294.75 5 Profit before tax (3+4) 3223.23 3302.75 3401.22 9181.21 8787.25 13735.34 6 Tax expense: a) Current tax 815.18 991.78 1182.80 2542.95 2665.94 4402.95 b) Deterred tax (104.18) (200.66) (56.73) (246.04) 166.78 (335.86) Total tax expense 711.00 791.12 1126.07 2296.91 2832.72 4067.09 7 Net profit after tax from continuing operations (5.6) 2512.23 2511.63 2275.15 6884.30 5954.53 9668.25 8 Share in profitftloss) after tax of joint ventures/associates (net) 48.09 40.04 (56.47) (74.69) 106.24 (21.00) 9 Net profit after tax and share In profit/(loss) of joint ventures/associates from continuing 2560.32 2551.67 2218.68 6809.61 6060.77 8647.25 operations (7+8) B Discontinued operations 10 Profit before tax from discontinued operations 255.91 269.55 217.68 697.91 555.05 845.57 11 Tax expense of discontinued operations 64.57 50.79 74.08 175.73 188.13 276.24 12 Net profit after tax from discontinued operations (10-11) 191.34 218.76 143.60 522.18 366.92 569.33 13 Net profit after tax from continuing operations & discontinued operations (9+12) 2751.68 2770.43 2362.28 7331.79 6427.69 10216.58 Attributable to: Owners of the Company 2352.12 2527.26 2041.62 6351.96 5486.89 8905.13 Non-controlling interests 399.54 243.17 320.66 979.83 940.80 1311.45 14 Other comprehensive income (OCI) 187.03 (305.02) 443.04 (381.80) (467.52) (229.88) Attributable to: Owners of the Company 176.58 (256.11) 339.02 (334.96) (481.89) (273.99) Non-controlling interests 10.45 (48.91) 104.02 (46.84) 14.37 44.11 15 Total comprehensive Income (13+14) 2938.69 2465.41 2805.32 6949.99 5960.17 9986.70 Attributable to: Owners of the Company 2528.70 2271.15 2380.64 6017.00 5005.00 8631.14 Non-controlling interests 409.99 194.26 424.68 932.99 955.17 1355.56 16 Paid-up equity share capital (face value of share: 2 2 each) 280.72 280.65 280.44 280.72 280.44 280.55 17 Other equity attributable to owners of the Company 62094,25 18 Earnings per share (EPS) of 2 2 each from continuing operations (not annualised): (a) Basic EPS (F) 15.40 16.45 13.54 41.55 36.52 59.45 (b) Diluted EPS (2) 15.38 16.43 13.52 41.49 36.46 59.35 19 Earnings per share (EPS) of 2 2 each from discontinued operations (not annualised): (a) Basic EPS (7) 1.36 1.56 1.02 3.72 2.62 4.06 (b) Diluted EPS (7) 1.36 1.56 1.02 3.72 2.61 4.05 20 Earnings per sharo (EPS) oft 2 each from continuing operations & discontinued operations (not annualised): (a) Basic EPS (2) 16.76 18.01 14.56 45.27 39.14 63.51 (b) Diluted EPS (2) 16.74 17.99 14.54 45.21 39.07 63.40 Notes: (i) During the quarter ended December 31, 2019, the Company has allotted 315.794 equity shares of 2 2 each fully paid-up on exercise of stock options by employees in accordance with the Company's stock option schemes. (ii) Effective April 1. 2019. the Group has adopted Ind AS 116 leases' and capitalised assets taken on operating lease. The transition was effected using modified retrospective method. The impact of transition on the profit after tax for the quarter and nine months ended December 31, 2019 is not material. (iii) The Group's Electrical & Automation (E&A) business was classified as discontinued operation In the quarter ended June 30. 2019 with the sale of E&A business likely to be completed within one year from then. Accordingly. the profit thereof has been disclosed separately for the periods presented.

(iv) The Company acquired control of Mindtree Limited on July 2. 2019. The revenue and expenses of Mindtree Limited have. accOrdingly, been consolidated and included in the above financials. Resultantly. the figures for the current periods are not comparable with the previous periods.

(v) The Company reports consolidated financial results on quarterly basis as per Ratjulatiurr 33 of die SEM (Listing Obligations and Disclosure Requirements) Regulations. 2015. as amended. Tne standalone financial results are available on the Company's website viz. www.larsentoubro.com and on the websites of BSE (www.bseindia.com) and NSE (www.nseindia.com). The specified Items of the standalone financial results of the Company for the quarter and nine months ended December 31. 2019 are given below: r Crory Quarter ended Nine months ended Year ended Particulars December 31, September 30, December 31, December 31, December 31, March 31. 2019 2019 2018 2019 2018 2019 [Reviewed] (Reviewed) [Reviewed] [Reviewed] [Reviewed] [Audited] Revenue from continuing operations 19885.25 18751.69 21102.18 55135.84 52762.07 82226.89 Profit before tax from continuing operations 1379.95 1766.46 2052.70 4735.90 5151.36 8405.77 Profit before tax from discontinued operations 250.02 252.59 217.71 680.15 555.96 812.41 Net profit after tax from continuing operations 1154.68 1776.65 1490.47 4205.05 3926.62 6134.64 Net profit after tax from discontinued operations 188.82 206.95 144.31 514.05 373.67 543.06 Net profit after tax from continuing operations & discontinued operations 1343.50 1983.60 1634.78 4719.10 4300.29 6677.70

(vi) Figures for the previous periods have been regrouped/reclassified to conform to the classification of the current periods. (vii) The above results have been reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on January 22. 2020.The same have also been subjected to Limited Review by the Statutory Auditors.

" ,jc I ,s C.,.0 for LARSEN & TOUBRO LIMITED cf, "..\ 1 • ,(1. 1 ' j)/(. 'lr Mumbai S. N. SUBRAHMANYAN January 22, 2020 Chief Executive Officer & Managing Director Consolidated unaudited segment-wise Revenue, Result, Total assets and Total liabilities in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended:

t Crore Quarter ended Nine months ended Year ended Particulars December 31, September 30, December 31, December 31, December 31, March 31, 2019 2019 2018 2019 2018 2019 (Reviewed' [Reviewed! [Reviewed! [Reviewed] [Reviewed] [Audited! Gross segment revenue 1 Infrastructure 17399.42 16780.60 18371.27 48217.63 46110.21 73203.76 2 Power 698.31 491.63 908.30 1753.18 3048.79 3983.09 3 Heavy Engineering 806.08 705.80 692.83 2503.41 1614.21 2513.66 4 Defence Engineering 1064.66 1017.25 1044.91 3051.06 2740.85 3849.24 5 Electrical & Automation (discontinued operations) 1419.82 1484.43 1564.69 4327.91 4378.12 6093.63 6 Hydrocarbon 4392.61 4304.94 3777.70 12466.28 10851.98 15176.23 7 IT & Technology Services 6125.94 5903.60 3764.07 15873.93 10726.34 14553.10 8 Financial Services 3550.12 3444.47 3258.93 10456.69 9455.35 12637.69 9 Developmental Projects 1238.20 1452.27 1193.52 3868.85 3985.11 5068.04 10 Others 1316.22 1592.13 1661.05 4102.11 4522.22 5934.99 Total 38011.38 37177.12 36237.27 106621.05 97433.18 143013.43 Less: Revenue of discontinued operations 1419.82 1484.43 1564.69 4327.91 4378.12 6093.63 Less: Inter-segment revenue 348.88 364.24 438.62 1086.06 1138.18 1E519.51 Net segment revenue from continuing operations 36242.68 35328.45 34233.96 101207.08 91916.88 135220.29

Segment result 1 Infrastructure 884.28 991.95 765.60 2580.81 2300.48 5388.77 2 Power 13.92 10.41 15.41 32.94 101.49 129.88 3 Heavy Engineering 158.60 141.88 104.63 460.36 317.50 487.01 4 Defence Engineering 181.57 146.49 55.52 452.21 302.02 472.22 5 Electrical & Automation (discontinued operations) 257.09 270.10 217.60 700.38 558.74 850.09 6 Hydrocarbon 493.00 504.06 269.87 1243.88 791.69 1178.10 7 IT & Technology Services 995.47 890.50 761.63 2670.20 2321.12 3084.20 8 Financial Services 726.93 758.73 775.80 2231.94 2302.84 3052.64 9 Developmental Projects 182.48 120.66 32.65 396.86 374.61 314.35 10 Others 252.15 311.80 728.49 818.93 621.16 776.20 Total 4145.49 4146.58 3727.20 11588.51 9991.65 15733.46 Less: Result of discontinued operations 257.09 270.10 217.60 700.38 558.74 850.09 (Add)/Less: Inter-segment margins on capital jobs 8.72 7.85 (5.27) 25.78 (10.64) 5.50 Less: Finance costs 709.18 685.90 533.99 1981.73 1296.05 1802.55 Add/(Less): Unallocable corporate income net of expenditure 52.73 120.02 420.34 300.59 345.00 365.27 Add/(Less): Exceptional items - - - 294.75 294.75 Profit before tax from continuing operations 3223.23 3302.75 3401.22 918t21 8787.25 13735.34

Segment assets 1 Infrastructure 74392.96 69763.34 74848.71 2 Power 6025.49 6222.47 6030.51 3 Heavy Engineering 4595.01 4375.44 4614.54 4 Defence Engineering 8045.89 7856.82 7826.76 5 Electrical & Automation (discontinued operations) 4322.74 4144.43 4183.22 6 Hydrocarbon 13251.13 11309.96 12224.57 7 IT & Technology Services 25259.15 8581.47 9647.21 8 Financial Services 107583.76 100694.89 104842.19 9 Developmental Projects 32329.23 30376.88 30998.97 10 Others 10545.91 10900.64 9819.89 Total segment assets 286351.27 254226.34 265036.57 Less: Inter-segment assets 5615.11 5409.61 2260.34 Add: Unallocable corporate assets 12529.78 22056.38 16165.54 Total assets 293265.94 270873.11 278941.77

Segment liabilities 1 Infrastructure 44806.48 44924.46 50908.92 2 Power 4512.01 5086.16 4838.09 3 Heavy Engineering 1396.95 1997.12 2111.79 4 Defence Engineering 4369.84 4864.47 4964.28 5 Electrical & Automation (discontinued operations) 1872.75 1868.68 2053.88 6 Hydrocarbon 10752.79 9458.30 10096.59 7 IT & Technology Services 5509.35 2421.33 2575.96 8 Financial Services 94235.81 89173.46 92973.64 9 Developmental Projects 9375.12 8795.85 9368.08 10 Others 3591.34 4130.31 3936.13 Total segment liabilities 180422.44 172720.14 183827.36 Less: Inter-segment liabilities 5615.11 5409.61 2260.34 Add: Unallocable corporate liabilities 43164.58 38354.89 28173.84 Total liabilities 217971.91 205665.42 209740.86 Notes: (I) The Group has reported segment Information as per Ind AS 108 'Operating Segments' read with SEBI circular dated July 5, 2016. The identification of operating segments is consistent with performance assessment and resource allocation by the management. (II) Segment composition: Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure. heavy civil infrastructure, power transmission & distribution, water & effluent treatment, smart world & communication projects and metallurgical & material handling systems. Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. Heavy Engineering segment comprises manufacture and supply of custom designed. engineered critical eauipment & systems to core sector industries like Fertiliser. Refinery, Petrochemical. Chemical, Gil A Gas and Thermal & Nuclear Power. Defence Engineering segment comprises design. development, prototyping, serial production, delivery, commissioning and through life-support of equipment. systems and platforms for Defence and Aerospace sectors. It also includes Defence Shipbuilding comprising design, construction. commissioning, repair/refit and upgrades of Naval and Coast Guard vessels. Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built tow and medium voltage switchboards, electronic energy meters/protection (relays) systems and control & automation products [refer note (iii) of financial results). Hydrocarbon segment comprises complete EPC solutions for the global Oil & Gas Industry from front-end design through detailed engineering, modular fabrication, procurement. project management. construction, installation and commissioning. IT & Technology Services segment comprises information technology and integrated engineering services. Financial Services segment comprises rural finance. housing finance, wholesale finance, mutual fund and wealth management. Developmental Projects segment comprises development, operation and maintenance of basic infrastructure projects, toll and fare collection, power development, development and operation of port facilities (till the date of sale) and providing related adsOsory services. Others segment includes realty, manufacture and sale of industrial valves, manufacture, marketing and servicing of construction equipment and parts thereof, marketing and servicing of mining machinery and parts thereof. manufacture and sale of rubber processing machinery, mining and aviation. (III) Segment revenue comprises sales and operational income allocable specifically to a segment and includes in the case of Developmental Projects and Realty business (grouped under 'Others' segment) profits on sale of stake in the subsidiary and/or joint venture companies in those segments. Unallocable corporate income primarily includes interest income, dividends and profit on sale of investments. Unallocable expenditure mainly Includes corporate expenses not allocated to segments. Unallocable corporate assets mainly comprise investments. Investment (Including long term loans) in joint ventures and associates identified with a particular segment are reported as part of the segment assets of those respective segments. Unallocable corporate liabilities mainly comprise borrowings. In respect of (a) Financial Services segment and (b) Power Generation projects under Developmental Projects segment which are classified as assets given on finance lease. segment liabilities include borrowings as the finance costs on borrowings are accounted as segment expense in respect of the segment and projects. (IV) In respect of most of the segments of the Group, sales and margins do not accrue uniformly during the year. (V) Figures for the previous periods have been regrouped/reclassified to conform to the classification of the current periods.

for LARSEN & TOUBRO LIMITED

•)KIN I (.11 c‘ i igcltorAfk 1..110V !II eL IUMBeab Or: S. N. SUBRAHMANYAN Janua "62020 Chief Executive Officer & Managing Director _....//• / Chartered Accountants Indiabulls Finance Centre Deloitte Tower 3, 27"-32' Floor Senapati Bapat Marg Haskins & Sells LLP Elphinstone Road (West) Mumbai - 400 013 Maharashtra, India

Tel: +91 22 6185 4000 Fax: +91 22 6185 4001

INDEPENDENT AUDITOR'S REVIEW REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF LARSEN & TOUBRO LIMITED

1. We have reviewed the accompanying Statement of Consolidated Unaudited Financial Results of LARSEN & TOUBRO LIMITED (the "Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as the "Group"), and its share of the net profit after tax and total comprehensive income of its associates and joint ventures for the quarter and nine months ended December 31, 2019 (the "Statement"), which includes 32 Joint Operations of the Group, being submitted by the Parent pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

2. This Statement, which is the responsibility of the Parent's Management and approved by the Parent's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.

3, We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Institute of Chartered Accountants of India ("ICAI"), A review of interim financial information consists of making inquiries, primarily of Parent's personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, to the extent applicable.

4. The Statement includes the interim financial information of the entities listed in Attachment A.

5. Based on our review conducted and procedures performed as stated in paragraph 3 above and based on the consideration of the review reports of the other auditors referred to in paragraph 6 below, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (l.isting Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

- 400 013, Maharashtra, India. Regd. Office: Indiabulls Finance Centre, Tower 3, 27'" - 32' Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai (LLP Identification No. MB-8737) Deloitte Haskins & Sells LLP

6. We did not review the interim financial information of 5 joint operations included in the respective standalone unaudited interim financial information of the entities included in the Group, whose interim financial information reflect total revenue of 545.99 crore and t 1,758.19 crore, total profit/(loss) after tax (net) of (46.80) crore and t 31.08 crore and total comprehensive income/(loss) (net) of (46.80) crore and 31.08 crore for the quarter and nine months ended December 31, 2019 respectively, as considered in the respective standalone unaudited interim financial information of the entities included in the Group. The interim financial information of these joint operations have been reviewed by the other auditors whose reports have been furnished to us by the Parent's Management, and our conclusion in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on the report of such other auditors and the procedures performed by us as stated in paragraph 3 above.

We did not review the interim financial information of 27 subsidiaries included in the consolidated unaudited financial results, whose standalone unaudited interim financial information reflect total revenue of t 8,701.50 crore and 25,903.40 crore, total profit after tax (net) of 896.35 crore and 2,537.04 crore and total comprehensive income (net) of 927.26 crore and t 2,365.85 crore, for the quarter and nine months ended December 31, 2019 respectively, as considered in the consolidated unaudited financial results. The consolidated unaudited financial results also includes the Group's share of total loss after tax (net) of 24.37 crore and 31.44 crore and total comprehensive loss (net) of 20.34 crore and 17.83 crore for the quarter and nine months ended December 31, 2019 respectively, as considered in the consolidated unaudited financial results, in respect of 5 joint ventures, whose interim financial information have not been reviewed by us. These interim financial information have been reviewed by other auditors whose reports have been furnished to us by the Parent's Management and our conclusion on the Statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and joint ventures, is based solely on the reports of the other auditors and the procedures performed by us as stated in paragraph 3 above.

Our conclusion on the Statement is not modified in respect of these matters.

7. The consolidated unaudited financial results includes the interim financial information of 26 joint operations included in the respective standalone unaudited interim financial information of the entities included in the Group, whose interim financial information reflect total revenue of 603.77 crore and 1,478.94 crore, total loss after tax (net) of 7.59 crore and t 14.72 crore and total comprehensive loss (net) of 7.59 crone and t 14.72 crore for the quarter and nine months ended December 31, 2019 respectively, as considered in the respective standalone unaudited interim financial information of the entities included in the Group. The interim financial information of these joint operations have not been reviewed by their auditors and whose interim financial information has been furnished to us by the Parent's Management. According to the information and explanations given to us by the Parent's Management, these interim financial information are not material to the Group.

The consolidated unaudited financial results also includes the interim financial information of 88 subsidiaries which have not been reviewed by their respective auditors, whose interim financial information reflect total revenue of 671.78 crore and 1,926.23 crore, total loss after tax (net) of t 15.98 crore and 17.19 crore and total comprehensive loss (net) of t 18.01 crore and t 16.98 crore for the Deloitte Haskins & Sells LLP

quarter and nine months ended December 31, 2019 respectively, as considered in the consolidated unaudited financial results. The consolidated unaudited financial results also includes the Group's share of net profit/(loss) after tax (net) of (0.82) crore and t 0.74 crore and total net comprehensive profit/(loss) (net) of 1.05 crore and t 0.22 crore for the quarter and nine months ended December 31, 2019 respectively, as considered in the consolidated unaudited financial results, in respect of 6 associates and 10 joint ventures, based on their interim financial information, which have not been reviewed by their respective auditors and whose interim financial information has been furnished to us by the Parent's Management. According to the information and explanations given to us by the Parent's Management, these interim financial information are not material to the Group.

Our conclusion on the Statement is not modified in respect of our reliance on the interim financial information certified by the Parent's Management.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar Partner (Membership No. 39826) UDIN: Zoo3c1BZ 6 AAAAR H 8131 Place: Mumbal Date: January 22, 2020 J. Deloitte Haskins & Sells LLP

Attachment A

Sr.No. Name of entities Subsidiaries 1 Bhilai Power Supply Company Limited 2 Chennai Vision Developers Private Limited 3 Esencia Technologies Inc. 4 Esencia Technologies India Private Limited 5 Henikwon Corporation SDN. BHD. 6 Hi-Tech Rock Products & Aggregates Limited 7 Kana Controls General Trading & Contracting Company W.L.L. 8 Kesun Iron & Steel Company Private Limited 9 MT Arunachal Hydropower Limited 10 L&T Asian Realty Project LLP 11 L&T Aviation Services Private Limited 12 L&T Capital Company Limited 13 L&T Capital Markets (Middle East) Limited 14 L&T Capital Markets Limited 15 L&T Cassidian Limited 16 t.&T Construction Equipment Limited 17 L&T Electrical & Automation FZE 18 L&T Electricals & Automation Saudi Arabia Company Limited LLC 19 L&T Electricals and Automation Limited 20 L&T Finance Holdings Limited 21 L&T Finance Limited 22 L&T Financial Consultants Limited 23 L&T Geostructure LLP 24 L&T Global Holdings Limited 25 L&T Himachal Hydropower Limited 26 L&T Housing Finance Limited 27 L&T Hydrocarbon Engineering Limited 28 L&T Hydrocarbon International FZE 29 L&T Information Technology Services (Shanghai) Co. Ltd. 30 L&T Information Technology Spain, S.L. 31 Larsen & Toubro Infotech Austria GmbH # 32 L&T Infotech Financial Services Technologies Inc. 33 L&T Infotech S. DE R.L. DE C.V. 34 !AT Infra Contractors Private Limited 35 L&T Infra Debt Fund Limited 36 L&T Infra Investment Partners 37 L&T Infra Investment Partners Advisory Private Limited 38 L&T Infra Investment Partners Trustee Private Limited Deloitte Haskins & Sells LLP

Sr.No. Name of entities Subsidiaries 39 L&T Infrastructure Engineering Limited 40 L&T Infrastructure Finance Company Limited 41 L&T Investment Management Limited 42 L&T Metro Rail (Hyderabad) Limited 43 L&T Modular Fabrication Yard LLC 44 L&T Mutual Fund Trustee Limited 45 l&T Overseas Projects Nigeria Limited 46 L&T Parel Project LLP 47 L&T Power Development Limited 48 L&T Power Limited 49 L&T Realty FZE 50 L&T Realty Limited 51 L&T Seawoods Limited 52 L&T Shipbuilding Limited$ 53 L&T Technology Services Limited 54 L&T Technology Services LLC 55 L&T Thales Technology Services Private Limited 56 L&T Uttaranchal Hydropower Limited 57 L&T Valves Limited 58 L&T Vision Ventures Limited 59 L&T Westend Project LLP 60 Larsen & Toubro (East Asia) SDN.BHD. 61 Larsen & Toubro (Oman) LLC 62 L&T Hydrocarbon Saudi Company (formerly known as Larsen & Toubro ATCO Saudi LLC) 63 Larsen & Toubro Electromech LLC 64 Larsen & Toubro Heavy Engineering LLC 65 Larsen & Toubro Hydrocarbon International Limited LLC 66 Larsen & Toubro Infotech Canada Limited 67 Larsen & Toubro Infotech Limited 68 Larsen & Toubro Infotech LLC 69 Larsen & Toubro Infotech South Africa (Proprietary) Limited 70 Larsen & Toubro Infotech GmbH 71 Larsen & Toubro International FZE 72 Larsen & Toubro Kuwait Construction General Contracting Company WLL 73 Larsen & Toubro LLC 74 Larsen & Toubro Qatar LLC 75 Larsen & Toubro Saudi Arabia LLC 76 Larsen & Toubro T&D SA (Proprietary) Limited 77 Larsen Toubro Arabia LLC 78 Mudit Cement Private Limited 79 Nabha Power Limited 80 PT Larsen & Toubro Hydrocarbon Engineering Indonesia Deloitte Haskins & Sells LLP

Sr.No. Name of entities Subsidiaries 81 PT. Tamco Indonesia 82 Sahibganj Ganges Bridge-Company Private Limited 83 Servowatch Systems Limited 84 Syncordis S.A. 85 Syncordis SARL 86 Syncordis Limited 87 Syncordis Support Services S.A. 88 Syncordis Software Services India Private Limited 89 Tamco Electrical Industries Australia Pty Ltd. 90 Tamco Switchgear (Malaysia) Sdn. Bhd. 91 Thalest Limited 92 Graphene Semiconductor Services Private Limited 93 Graphene Solutions PTE Ltd. 94 Graphene Solutions SDN .BHD 95 Graphene Solutions Taiwan Limited 96 Seastar Labs Private Limited 97 L&T Construction Machinery Limited 98 LTR SSM Private Limited 99 Ruletronics Systems Private Limited 100 Larsen & Toubro Infotech Norge AS 101 Nielsen+Partner Unternehmensberater GmbH 102 Nielsen+Partner Unternehmensberater AG 103 Nielsen+Partner Pte Ltd 104 Nielsen+Partner S.A 105 Nielsen&Partner Company Limited 106 Nielsen&Partner Pty Ltd 107 Ruletronics Limited 108 Ruletronics Systems Inc 109 L&T Geo - L&T UJV CMRL CS 110 L&T Geo - L&T JV for Maharatangarh project 111 Mindtree Limited @ 112 Mindtree Software (Shanghai) Co. Ltd @ 113 Bluefin Solutions Sdn Bhd @ 114 Bluefin Solutions Limited @ 115 Bluefin Solutions Inc. @ 116 Lymbyc Solutions Inc. @ 117 Lymbyc Solutions Private Limited @ 118 L&T Valves Arabia Manufacturing LLC @ 119 L&T Valves USA LLC @ 120 L&T Technology Services (Shanghai) Co. Ltd@ 121 L&T Technology Services (Canada) Ltd@ 122 Powerup Cloud Technologies Private Limited @ Deloitte Haskins & Sells LLP

Sr.No Name of entities Associates 1 L&T Camp Facilities LLC 2 L&T-Chiyoda Limited 3 Magtorq Private Limited 4 Larsen & Toubro Qatar & HBK Contracting Co. LLC 5 Gujarat Leather Industries Limited 6 Magtorq Engineering Solutions Private Limited

Joint Ventures 1 L&T Transportation Infrastructure Limited 2 PNG Tollway Limited 3 L&T MBDA Missile Systems Limited 4 L&T Howden Private Limited 5 L&T Sapura Shipping Private Limited 6 L&T Sapura Offshore Private Limited 7 L&T-Gulf Private Limited** 8 L&T-MHPS Boilers Private Limited 9 L&T-MHPS Turbine Generators Private Limited 10 Raykal Aluminium Company Private Limited 11 L&T Special Steels and Heavy Forgings Private Limited 12 L&T Kobelco Machinery Private Limited## 13 L&T-Sargent & Lundy Limited 14 Indiran Engineering Projects and Systems Kish PJSC 15 L&T Infrastructure Development Projects limited 16 L&T Hydrocarbon Caspian LLC

Joint Operations 1 Desbuild L&T Joint Venture 2 Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint Venture 3 Al Balagh Trading & Contracting Co W.L.L- L&T Joint Venture 4 L&T - AM Tapovan Joint Venture 5 HCC - L&T Purulia Joint Venture 6 International Metro Civil Contractors Joint Venture 7 Metro Tunneling Group 8 L&T - Hochtief Seabird Joint Venture 9 Metro Tunneling Chennai-L&T Shanghai Urban Construction (Group) Corporation Joint Venture 10 Metro Tunneling Delhi-L&T Shanghai Urban Construction (Group) Corporation Joint Venture 11 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi 12 Aktor- Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering Joint Venture 13 Civil Works Joint Venture 14 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 15 DAEWOO and L&T Joint Venture Deloitte Haskins & Sells LLP

Sr.No Name of entities Joint Operations 16 L&T-STEC JV Mumbai 17 L&T Eastern Joint Venture 18 Larsen and Toubro Limited-Scomi Engineering BHD Consortium-Residual Joint Works Joint Venture 19 Larsen and Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint Venture 20 L&T-Delma Mafraq Joint Venture 21 L&T-AL-Sraiya LRDP 6 Joint Venture 22 Larsen & Toubro Limited & NCC Limited Joint Venture 23 Besix - Larsen & Toubro Joint Venture 24 Larsen & Toubro Ltd - Passavant Energy & Environment JV 25 LNT - Shriram EPC Tanzania UJV 26 LTH Milcom Private Limited 27 L&T- lnabensa Consortium 28 L&T- ISDPL (JV) 29 L&T-IHI Consortium 30 EMAS Saudi Arabia Limited 31 Bauer - L&T Geo Joint Venture 32 L&T - lecton JV@

Symbol Ex•lanation to Symbol Acquired/ incorporated during the period. The Company ceased to be a subsidiary of the Parent w.e.f. August 20, 2019 owing to its liquidation ## Divestment of entire stake during the period. The entity is in the process of amalgamation with the Parent Company. ** The Company is considered as subsidiary. LARSEN & TOUBRO LIMITED (9 Registered Office: UT House, Ballard Estate. Mumbai 400 001 CIN : L99999MH1946PLC004768 STATEMENT OF STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2019 7 Crore Quarter ended Nine months ended Year ended December 31, September 30, December 31. December 31, December 31, March Particulars 31, 2019 2019 2018 2019 2018 2010 [Reviewed] [Reviewed] [Reviewed] [Reviewed] [Reviewed] [Audited] A Continuing operations 1 Income: a) Revenue from operations 19885.26 18751.69 21102.18 55135.84 52762.07 82226.89 b) Other income(net) 695.08 1022.16 822.77 2179.35 1971.84 2760.83 Total Income 20580.34 19773.85 21924.95 57315.19 54733.91 84987.72 2 Expenses: a) Manufacturing, construction and operating expenses: i) Cost of raw matenals and components consumed 1461.26 1236.32 1685.80 4208.29 4257.92 6038.09 ii) Stores. spares and tools consumed 417.40 447.29 646.68 1274.24 1778.89 2308.59 iii) Sub-contracting charges 5781.91 5153.27 5120.52 15358.54 13573.46 21724.30 iv) Construction materials consumed 6334.18 6140.05 8177.49 17696.59 18054.49 29246.05 v) Purchases of stockm•trade 245.14 196.20 231.75 630.24 601.67 906.49 vi) Changes in inventories of finished goods, stock-in-trade and work-in-progress (72.85) (70.50) (659.34) (389.23) (1323.92) (1172.96) vii) Other manufacturing, construction and operating expenses 1996.33 1973.66 2047.69 5750.60 5410.45 7841.04 b) Employee benefits expense 1490.68 1547.70 1377.83 4486.40 4238.72 5668.68 of Sales, administration and other expenses 760.84 574.65 524.79 1880.79 1607.80 1925.76 d) Finance costs 558.50 559.05 488.56 1599.18 1205.26 1641.39 of Depreciation, amortisation, impairment and obsolescence 227.00 249.70 230.48 710.64 677.43 929.45 Total Expenses 19200.39 18007.39 19872.25 53206.28 50082.17 77056.88

3 Profit before exceptional Items (1-2) 1379.95 1766.46 2052.70 4108.91 4651.74 7930.84 4 Exceptional items(net) - - 626.99 499.62 474.93 5 Profit before tax (344) 1379.95 1766.46 2052.70 4735.90 5151.36 8405.77 6 Tax expense: a) Current tax 231.68 268.06 586.93 835.61 1277.78 2409.73 b) Deterred tax (6.41) (278.25) (24.70) (304.76) (53.04) (138.60) Total tax expense 225.27 (10.19) 562.23 530.85 1224.74 2271.13 7 Net profit after tax from continuing operations (5.6) 1154.68 1776.65 1490.47 4205.05 3926.62 6134.64 B Discontinued operations a Profit before lax from discontinued operations 250.02 252.59 217.71 680.15 555.96 812.41 9 Tax expense of discontinued operations 61.20 45.64 73.40 166.10 182.29 269.35 ix Net profit after tax from discontinued operations (8.9) 188.82 206.95 144.31 514.05 373.67 543.06 ii Net profit after tax from continuing operations & discontinued operations (7+10) 1343.50 1983.60 1634.78 4719.10 4300.29 6677.70 12 Other comprehensive income (OCI) 82.10 (165.24) 62.31 (354.07) (166.46) (118.63) 13 Total Comprehensive Income (11+12) 1425.60 1818.36 1697.09 4365.03 4133.83 6559.07 14 Paid•Up equity share capital (face value of share: 7 2 each) 280.72 280.65 280.44 280.72 280.44 280.55 15 Other equity 52270.17

16 Earnings per share (EPS) of 7 2 each from continuing operations (not annualised): (a) Basic EPS (7) 8.22 12.67 10.63 29.97 28.00 43.76 (b) Diluted EPS (7) 8.22 12.65 10.61 29.92 27.96 43.67 17 Earnings per share (EPS) of 7 2 each from discontinued operations (not annualised): (a) Basic EPS (7) 1.35 1.47 1.03 3.66 2.67 3.87 (b) Diluted EPS (7) 1.34 1.47 1.03 3.66 2.66 3.87 18 Earnings per share (EPS) of 7 2 each from continuing operations & discontinued operations (not annualised): (a) Basic EPS (7) 9.57 14.14 11.66 33.63 30.67 47.63 (b) Diluted EPS (7) 9.56 14.12 11.64 33.58 30.62 47.54 Notes: (i) During the quarter ended December 31, 2019. the Company has allotted 315,794 equity shares of 7 2 each ful y paid-up, on exercise of stock options by employees in accordance with the Company's stock option schemes

(ii) Effective April 1, 2019. the Company has adopted Ind AS 116 "Leases- and capitalised assets taken on operating lease. The transition was effected using modified retrospective method. The impact of transition on the profit after tax for the quarter and nine months ended December 31, 2019 is not material.

(iii) The Company's Electrical & Automation (E&A) business was classified as discontinued operation in the quarter ended June 30. 2019 with the sale of E&A business likely to be completed within one year from then. Accordingly, the profit thereof has been disclosed separately for the periods presented.

(iv) Figures for the previous periods have been regrouped/reclassified to conform to the classification of the current periods. (v) The above results have been reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on January 22, 2020. The same have also been subjected to Limited Review by the Statutory Auditors.

for LARSEN & TOUBRO LIMITED

Mumbai S N. SUBRAFIMANYAN January 22, 2020 Chief Executive Officer & Managing Director Standalone unaudited segment-wise Revenue, Result, Total assets and Total liabilities in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201 5 as amended: Z Cr ore Quarter ended Nine months ended Year ended December 31, September 30, December 31, December 31, December 31, Particulars March 31, 2019 2019 2018 2019 2018 2019 [Reviewed' [Reviewed] [Reviewed] [Reviewed] [Reviewed] [Audited) Gross segment revenue 1 Infrastructure 16628.09 15998.21. 17291.80 45983.03 43071.49 68908 53 2 Power 698.31 491.63 908 30 1753.18 3048.79 3983 09 3 Heavy Engineering 806.08 705.77 692.82 2503.31 1614.21 2513.25 4 Defence Engineering 1063.36 1019.84 1012.87 3050.61 2601.83 3691 67 5 Electrical & Automation (discontinued operations) 1161./3 12 1/.26 1289.03 3552.11 3524.21 4930 56 6 Others 770.06 642.99 1314.41 2133.65 2802.08 3660.70 Total 21127.63 20075.70 22509.23 58975.89 56662.61 87687.80 Less. Revenue of discontinued operations 1161.73 1217.26 1289.03 3552.11 3524.21 4930 56 Less. Inter-segment revenue 80.64 106.75 118.02 287.94 376.33 530.35 Net segment revenue from continuing operations 19885.26 18751.69 21102.18 55135.84 62762.07 82226.89

Segment results 1 Infrastructure 884.28 923.62 731.53 2445.66 2120.53 5000.21 2 Power 13.76 10.25. 15.41 32.62 101.49 -129.84 3 Heavy Engineering 158.62 141.82 104.40 459.93 317.42 486.79 4 Defence Engineering 207.21 160.08 82.66 533.23 410.09 549.83 5 Electrical & Automation (discontinued operations) 250.02 252.59 217.71 680.15 555.96 812.41 6 Others 96.72 96.72 727.36 356.00 1066.00 1230.28 Total 1610.61 1585.08 1879.07 4507.59 4571.49 8209.36 Less' Result of discontinued operations 250.02 252.59 217.71 680.15 555.96 812 41 Less: Inter-segment margins on capital jobs 6.83 17.29 1.26 30.26 1.26 10.11 Less: Finance costs 558.50 559.05 488.56 1599.18 1205.26 1641.39 Add: Unallocable corporate income net of expenditure 584.69 1010.31 881.16 1910.91 1842.73 2185.39 Add/(Less): Exceptional items(net) - - - 626.99 499.62 474.93 Profit before tax from continuing operations 1379.95 1766.46 2052.70 4735.90 5151.36 8405.77

Segment assets 1 Infrastructure 69309.48 63800.14 68926.08 2 Power 4949.14 5351.20 5095.07 3 Heavy Engineering 3525.92 2687.03 2932.34 4 Defence Engineering 6695.05 6487.33 6408.76 5 Electrical & Automation (discontinued operations) 2775.33 2631.68 2726.08 6 Others 3936.13 3991.96 3399.31 Total segment assets 91191.05 84949.34 89487.64 Less: Inter-segment assets 601.50 721.57 633.58 Add: Unallocable corporate assets 44241.74 43975.33 36871.63 Total assets 134831.29 128203.10 125725.69

Segment liabilities 1 Infrastructure 41842.49 41100.75 47253.59 2 Power 4512.01 5086.16 4838.09 3 Heavy Engineering 1396.95 1442.25 1528.56 4 Defence Engineering 4658.07 5199.97 5302.55 5 Electrical & Automation (discontinued operations) 1329.22 1345.75 1562.30 6 Others 1755.87 1676.60 1530.73 Total segment liabilities 65494.61 55851.48 62015.82 Less : Inter-segment liabilities 601.50 721.57 633.58 Add . Unallocable corporate liabilities 25672.35 22970.62 11792.73 Total liabilities 80565.46 78100.63 73174.97 Notes: (I) The Company has reported segment information as per Ind AS 108 "Operating Segments" read with SEM circular dated July 5. 2016. The identification of operating segments is consistent with performance assessment and resource allocation by the management.

(II) Segment composition: Infrastructure segment comprises engineering and construction of building and factones, transportation infrastructure, heavy civil infrastructure, power transmission & distribution, water & effluent treatment, smart world & communication projects and metallurgical & material handling systems Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery. Petrochemical, Chemical, Oil & Gas and Thermal & Nuclear Power. Defence Engineering segment comprises design, development. prototyping, serial production, delivery. commissioning and through life-support of equipment, systems and platforms for Defence and Aerospace sectors. It also includes Defence Shipbuilding comprising design, construction, commissioning, repaidrefit and upgrades of Naval and Coast Guard vessels. Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems and control & automation products (refer note (iii) of financial results] Others segment includes Realty (reported as a separate segment in the previous year which has been reclassified and i epui tact Lank. 'Oil Itli S.. segment as the thresholds for reportatillity have not been met in the current penod), Hydrocarbon, marketing and servicing of construction & mining machinery and parts thereof, manufacture and sale of rubber processing machinery

(III) Unallocable corporate income primarily includes interest income, dividends and profit on sale of investments. Unallocable expenditure mainly includes corporate expenses not allocated to segments. Unallocable corporate assets mainly comprise investments. Corporate liabilities mainly comprise borrowings

(IV) In respect of most of the segments of the Company. sales and margins do not accrue uniformly during the year. (V) Figures for the previous periods have been regrouped/reclassified to conform to the classification of the current periods.

for LARSEN & TOUBRO LIMITED

'if • PI-VI/A YV'Ijs J

Mumbai S. N. SUBRAHMANYAN slanuary_22, 2020 Chief Executive Officer & Managing Director Chartered Accountants Deloitte Lotus Corporate Park 1" Floor, Wing A - G CTS No.185/A, Jay Coach Haskins & Sells LLP Off Western Express Highway Goregaon (East) Mumbai - 400 063 Maharashtra, India

Tel: +91 22 6245 1000 Fax: +91 22 6245 1001 INDEPENDENT AUDITOR'S REVIEW REPORT ON REVIEW OF INTERIM STANDALONE FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF LARSEN & TOUBRO LIMITED

1. We have reviewed the accompanying Statement of Standalone Unaudited Financial Results of LARSEN & TOUBRO LIMITED (the "Company"), which includes 30 joint operations consolidated on a proportionate basis for the quarter and nine months ended December 31, 2019 (the "Statement"), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

2. This Statement, which is the responsibility of the Company's Management and approved by the Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.

3. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Institute of Chartered Accountants of India ("ICAI"). A review of interim financial information consists of making inquiries, primarily of the Company's personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, to the extent applicable.

4. The Statement includes the interim financial information of the joint operations listed in Attachment A.

5. Based on our review conducted and procedures performed as stated in paragraph 3 above and based on the consideration of the review reports of other auditors as referred in paragraph 6 below, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

Regd. Office: Indiabulls Finance Centre, Tower 3, 27' - 32"° Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai - 400 013, Maharashtra, India. (LLP Identification No. MB-8737) Deloitte Haskins & Sells LLP

6. We did not review the interim financial information of 4 joint operations included in the Statement whose financial information reflect total revenue of t 546.20 crore and 1,756.42 crore, total profit/(loss) after tax (net) of (46.79) crore and 31.07 crore and total comprehensive income/(loss) (net) of t (46.79) crore and 31.07 crore for the quarter and nine months ended December 31, 2019 respectively, as considered in this Statement. The interim financial information of joint operations have been reviewed by the other auditors whose reports have been furnished to us, and our conclusion in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on the report of such other auditors and the procedures performed by us as stated in paragraph 3 above.

Our conclusion on the Statement is not modified in respect of this matter.

7. We did not review the interim financial information of 25 joint operations included in the Statement whose financial information reflect total revenue of 574.29 crore and 1,319.28 crore, total loss after tax (net) of (20.29) crore and (10,07) crore and total comprehensive loss (net) of t (20.29) crore and t (10.07) crore for the quarter and nine months ended December 31, 2019 respectively, as considered in this Statement. The interim financial information of these joint operations have not been reviewed by their auditors whose financial information have been furnished to us by the Management of the Company, and our conclusion in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such interim financial information certified by the Management of the Company. According to the information and explanations given to us by the Management, these interim financial information are not material to the Company.

Our conclusion on the Statement is not modified in respect of our reliance on the interim financial information certified by the Management.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar Partner (Membership No. 39826) UDIN: cZoO3cMZC,AAAAAq 3o1q Place: Mumbai Date: January 22, 2020 b. Deloitte Haskins & Sells LLP

Attachment A: List of Joint Operations

Sr. No. Name of Joint Operations 1 Desbuild L&T Joint Venture 2 Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint Venture 3 Al Balagh Trading & Contracting Co W.L.L- L&T Joint Venture 4 L&T - AM Tapovan Joint Venture 5 HCC - L&T Purulia Joint Venture 6 International Metro Civil Contractors Joint Venture 7 Metro Tunneling Group 8 L&T - Hochtief Seabird Joint Venture Metro Tunneling Chennai-L&T Shanghai Urban Construction (Group) 9 Corporation Joint Venture Metro Tunneling Delhi-L&T Shanghai Urban Construction (Group) Corporation 10 Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 11 Delhi 12 Aktor- Larsen & Toubro-Yapi Merkezi-STFA-AI Jaber Engineering Joint Venture 13 Civil Works Joint Venture 14 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 15 DAEWOO and L&T Joint Venture 16 L&T - STEC JV Mumbai 17 L&T-Eastern Joint Venture Larsen and Toubro Limited-Scomi Engineering BHD Consortium-Residual Joint 18 Works Joint Venture Larsen and Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint 19 Venture 20 L&T-Delma Mafraq Joint Venture 21 L&T-AL-Sraiya LRDP 6 Joint Venture 22 Larsen & Toubro Limited & NCC Limited Joint Venture 23 Besix - Larsen & Toubro Joint Venture 24 Larsen & Toubro Ltd - Passavant Energy & Environment JV 25 LNT - Shriram EPC Tanzania UJV 26 LTH Milcom Private Limited 27 L&T- Inabensa Consortium 28 L&T- ISDPL (JV) 29 L&T-IHI Consortium 30 L&T - Tecton@

@Incorporated during the period