The Directors have pleasure in presenting their Annual Report and
 Accounts for the year ended March 31, 2012.
 
 FINANCIAL RESULTS
 
                                          2011-2012       2010-2011 
                                           Rs crore        Rs crore
 
 Profit before depreciation, 
 exceptional                               6,954.79        6,167.78 
 and extraordinary items and tax
 
 Less: Depreciation, amortization and        700.45          600.28 
 obsolescence 
 
                                           6,254.34        5,567.50
 
 Add: Transfer from revaluation reserve        0.99            1.06
 
 Profit before exceptional and             6,255.33        5,568.56
 extraordinary items and tax
 
 Add: Exceptional items                       55.00          262.07
 
 Profit before extraordinary 
 items and tax                             6,310.33        5,830 63
  
 Extraordinary items - 70.84
 
 Profit before tax                         6,310.33        5,901.47
 
 Less: Tax expenses                        1,853.83        1,943.58
 
 Profit after tax                          4,456.50        3,957.89
 
 Add: Balance brought forward from           105.68          107.29
  previous year
 
 Less: Dividend paid for the previous          3.89            4.01 
 year (including
 additional tax on dividend)
 
 Balance available for disposal which      4,558.29        4,061.17 
 the directors
 appropriate as follows :
 
 Debenture redemption reserve                 44.00           49.83
 
 Proposed Dividend                         1,010.46          882.84
  
 Additional tax on dividend                  101.44          112.82
 
 General reserve                           3,250.00        2,910.00
 
                                           4,405.90        3,955.49
 
 Balance to be carried forward               152.39          105.68
 
 Dividend                                   1010.46          882.84 
 The Directors recommend payment of final
 dividend of Rs 16.50 per 
 equity share of Rs 2/- each on 
 61,23,98,899 shares
 
 YEAR IN RETROSPECT
 
 The gross sales and other income for the financial year under review
 were Rs 55,076 crore as against Rs 45,444 crore for the previous
 financial year registering an increase of 21 %. The Profit before tax
 excluding extraordinary and exceptional items was Rs 6,255 crore and the
 Profit after tax excluding extraordinary and exceptional items of Rs
 4,413 crore for the financial year under review as against Rs 5,569
 crore and Rs 3,676 crore respectively for the previous financial year,
 registering an increase of 12% and 20% respectively.
 
 DIVIDEND
 
 The Directors recommend payment of dividend of Rs 16.50 per equity share
 of Rs 2/- each.
 
 DEPOSITORY SYSTEM
 
 As the members are aware, the Companys shares are compulsorily
 tradable in electronic form. As on March 31, 2012, 97.19% of the
 Companys total paid-up Capital representing 59,52,14,789 shares is in
 dematerialized form. In view of the numerous advantages offered by the
 Depository system, members holding shares in physical mode are advised
 to avail of the facility of dematerialization from either of the
 Depositories.
 
 CAPITAL & FINANCE
 
 During the year under review, the Company allotted 35,46,773 equity
 shares upon exercise of stock options by the eligible employees under
 the Employee Stock Option Schemes.
 
 During the year under review, Rs 540 crore were drawn by the Company
 under the partly-paid Non-Convertible Debentures issued in 2010-2011.
 Further the Company tied up long term foreign currency loans equivalent
 to approximately USD 145 million, half of which was drawn during the
 year, the balance to be drawn in 2012-2013.
 
 During the year, the Company repaid a part of the long term foreign
 currency loans, equivalent to about Rs 615 crore and redeemed
 Non-Convertible Debentures of Rs 250 crore.
 
 CAPITAL EXPENDITURE
 
 As at March 31, 2012, the gross fixed and intangible assets, including
 leased assets, stood at Rs 1 1,295 crore and the net fixed and
 intangible assets, including leased assets, at Rs 8,364 crore. Additions
 during the year amounted to Rs 1,725 crore.
 
 DEPOSITS
 
 7 Deposits totalling Rs 71,000 which were due for repayment on or before
 March 31, 2012 were not claimed by the depositors on that date. As on
 the date of this report, none of these deposits have been claimed and
 paid.
 
 TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND
 
 The Company sends letters to all shareholders whose dividends are
 unclaimed so as to ensure that they receive their rightful dues.
 Efforts are also made in co-ordination with the Registrar to locate the
 shareholders who have not claimed their dues.
 
 As provided in Section 205C(2) of the Companies Act, 1956, dividend
 amount which was due and payable and remained unclaimed and unpaid for
 a period of seven years has to be transferred to Investor Education &
 Protection Fund. Despite the reminder letters sent to each shareholder,
 an amount of Rs 1,10,97,033/- remained unclaimed and was transferred to
 Investor Education & Protection Fund by the Company during the year.
 Cumulatively, the amount transferred to the said fund was Rs
 9,90,45,963/- as on March 31, 2012.
 
 SUBSIDIARY COMPANIES
 
 During the year under review, the Company subscribed to / sold /
 acquired equity shares in various subsidiary companies. These
 subsidiaries are either SPVs executing projects secured through Build
 Operate Transfer (BOT) route, or holding companies making investments
 in companies such as those engaged in power and financial services
 business.  The details of investments in subsidiary companies during
 the year are as under:
 
 A) Shares acquired during the year:
 
 Name of the company                         No. of shares
 
 L&T Cassidian Limited                              50,000
 
 L&T Howden Private Limited                    1,00,20,000
 
 Larsen & Toubro Consultoria 
 E Projecto Ltda                                    96,819
 
 L&T General Insurance 
 Company Limited                              12,50,00,000
 
 L&T Power Development Limited                 3,20,00,000
 
 L&T Infrastructure Development 
 Projects Limited                              6,94,08,226
 
 PNG Tollway limited                           2,19,83,000
 
 L&T Special Steels and Heavy 
 Forgings Pvt. Limited                        11,10,00,000
 
 L&T Kobelco Machinery Private Limited         1,02,00,000
 
 L&T Metro Rail (Hyderabad) Limited               9,30,000
 
 L&T Sapura Shipping Private Limited              1,72,911
 
 L&T Infocity Limited                          2,40,30,000
 
 
 
 B) Shares sold / transferred during the year:
 
 Name of the company                         No. of shares
 
 L&T Cassidian Limited                              13,000
 
 L&T- Sargent & Lundy 
 Limited (under buy-back)                         4,36,366
 
 L&T Rajkot Vadinar Tollway 
 Limited                                       5,50,15,000
 
 L&T Western India Tollbridge Limited          1,39,50,007
 
 Raykal Aluminium Company Private Limited            2,250
 
 L&T Power Limited*                                      7
 
 *During the year the share capital of the Company was consolidated from
 15,34,92,000 equity shares of Rs 10 each into 51,164 equity shares of Rs
 30,000 each.
 
 The Ministry of Corporate Affairs (MCA), vide its circular No. 2/2011
 dated February 8, 2011, has granted general exemption under Section
 212(8) of the Companies Act, 1956, subject to certain conditions being
 fulfilled by the Company. As required under the circular, the Board of
 Directors has, at its meeting held on January 23, 2012, passed a
 resolution giving consent for not attaching the Balance Sheet of the
 subsidiary companies. We have also given the required information on
 subsidiary companies in this Annual Report. Shareholders who wish to
 have a copy of the full report and accounts of the subsidiaries will be
 provided the same on receipt of a written request from them. These
 documents will be uploaded on the Companys Website viz.
 www.larsentoubro.com and will also be available for inspection by any
 shareholder at the Registered Office of the Company, on any working day
 during business hours.
 
 AUDITORS REPORT
 
 The Auditors Report to the Shareholders does not contain any
 qualification.
 
 DISCLOSURE OF PARTICULARS
 
 Information as per the Companies (Disclosure of Particulars in the
 Report of Board of Directors) Rules, 1988, relating to Conservation of
 Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is
 provided in Annexure A forming part of this Report.
 
 OTHER DISCLOSURES
 
 The disclosures required to be made under the Securities and Exchange
 Board of India (Employee Stock Option Scheme and Employee Stock
 Purchase Scheme) Guidelines, 1999, together with a certificate obtained
 from the Statutory Auditors, confirming compliance, is provided in
 Annexure B forming part of this Report.
 
 Pursuant to Clause 49 of the Listing Agreement entered into with the
 Stock Exchanges, a Report on Corporate Governance and a certificate
 obtained from the Statutory Auditors confirming compliance, is provided
 in Annexure C forming part of this Report.
 
 PERSONNEL
 
 The Board of Directors wishes to express its appreciation to all the
 employees for their outstanding contribution to the operations of the
 Company during the year. The information required under Section 217(2A)
 of the Companies Act, 1956 and the Rules made thereunder, is provided
 in Annexure  forming part of the Report. In terms of Section 219(1
 )(b) (iv) of the Act, the Report and Accounts are being sent to the
 Shareholders excluding the aforesaid Annexure. Any Shareholder
 interested in obtaining copy of the same may write to the Company
 Secretary. None of the employees listed in the said Annexure is related
 to any Director of the Company.
 
 CORPORATE GOVERNANCE VOLUNTARY GUIDELINES
 
 By complying with the provisions of the Companies Act, 1956 and Clause
 49 of the Listing Agreement, the Company is complying with all the
 major clauses of the Corporate Governance Voluntary Guidelines, 2009.
 
 We have reported in Annexure C to the Directors Report - Corporate
 Governance, the extent of our compliance of the Corporate Governance
 Voluntary Guidelines, 2009 under the following heads;
 
 1.  Nomination & Remuneration Committee
 
 2.  Other Information
 
 3.  Audit Committee
 
 4.  General Shareholders Information
 
 CORPORATE SOCIAL RESPONSIBILITY VOLUNTARY GUIDELINES
 
 MCA had released a set of guidelines on Corporate Social Responsibility
 (CSR) in December 2009. The Company is substantially complying with the
 guidelines laid down.
 
 The Company has been one of the first engineering and construction
 companies in India to publish its report on Corporate Sustainability.
 
 The activities carried out by the Company as a part of its CSR
 initiatives are briefly described on pages 14 to 19 and 106 of the
 Annual Report. The detailed Corporate Sustainability Report is also
 available on the Companys website www.larsentoubro.com.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Board of Directors of the Company confirms;
 
 i.  that in the preparation of the annual accounts, the applicable
 Accounting Standards have been followed and there has been no material
 departure;
 
 ii.  that the selected accounting policies were applied consistently
 and the Directors made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company as at March 31, 2012 and of the profits of the Company for
 the year ended on that date;
 
 iii. that proper and sufficient care has been taken for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 iv.  that the annual accounts have been prepared on a going concern
 basis; and
 
 v.  that the Company has adequate internal systems and controls in
 place to ensure compliance of laws applicable to the Company.
 
 DIRECTORS
 
 During the year under review, Mr. K. V. Rangaswami Whole- time Director
 of the Company retired as Director of the Company on June 30, 2011.
 
 Mr. S. N. Subrahmanyan was inducted as Whole-time Director of the
 Company w.e.f. July 1, 2011.
 
 Mr. Y. M. Deosthalee, Chief Financial Officer and Whole- time Director
 of the Company retired on September 5,2011.
 
 The Board has appointed Mr. R. Shankar Raman as Chief Financial Officer
 w.e.f. September 6, 2011 and as a Whole- time Director of the Company
 w.e.f. October 1, 2011.
 
 Pursuant to the Articles of Association of the Company, Mr. A. M. Naik
 is proposed to be appointed as a Director liable to retire by rotation,
 with effect from October 1,2012, in the forthcoming Annual General
 Meeting, in view of his appointment as Executive Chairman from October
 1, 2012 upto September 30, 2017.
 
 Mr. K. Venkataramanan is appointed as Chief Executive Officer and
 Managing Director of the Company w.e.f. April 1, 2012 upto September
 30, 2015. Pursuant to the Articles of Association of the Company he
 will not be liable to retire by rotation.
 
 Mr. Shailendra Roy was inducted as a Whole-time Director of the Company
 w.e.f. March 9, 2012.
 
 Consequent to her retirement from General Insurance Company Limited
 (GIC), Mrs. Bhagyam Ramani resigned as a Director w.e.f. May 8, 2012.
 
 Mr. Thomas Matthew T., Mr. M.V. Kotwal, Mr. V. K. Magapu and Mr. Ravi
 Uppal retire from the Board by rotation and are eligible for
 re-appointment at the forthcoming Annual General Meeting.
 
 Mr. J. S. Bindra retires from the Board of Directors but has not sought
 re-appointment at the forthcoming Annual General Meeting. Accordingly,
 a suitable resolution will be placed before the shareholders for their
 approval.
 
 The notice convening the Annual General Meeting includes the proposal
 for appointment/re-appointment of Directors.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 Your Directors have pleasure in attaching the Consolidated Financial
 Statements pursuant to Clause 32 of the Listing Agreement entered into
 with the Stock Exchanges and prepared in accordance with the Accounting
 Standards prescribed by the Institute of Chartered Accountants of
 India, in this regard.
 
 The Auditors Report to the Shareholders does not contain any
 qualification.
 
 AUDITORS
 
 The Auditors, M/s. Sharp & Tannan (S&T), hold office until the
 conclusion of the ensuing Annual General Meeting and are recommended
 for re-appointment. Certificate from the Auditors has been received to
 the effect that their re-appointment, if made, would be within the
 limits prescribed under Section 224(1 B) of the Companies Act, 1956.
 
 S&T has submitted the Peer Review Certificate dated September 21, 2010
 issued to them by Institute of Chartered Accountants of India (ICAI).
 
 COST AUDITORS
 
 The Ministry of Corporate Affairs (MCA) has introduced The Companies
 (Cost Audit Report) Rules, 2011 vide its notification no. GSR 430(E)
 dated June 3, 2011. These rules make it mandatory for industries to
 appoint a Cost Auditor within 90 days of the commencement of the
 financial year. The Cost Audit Order No. 52/26/CAB/2010 dated January
 24, 2012 covers engineering machinery (including electrical and
 electronic products) due to which some of the Companys manufacturing
 operations will get covered w.e.f. April 1, 2012.
 
 Based on the Audit Committee recommendations at its meeting held on May
 2, 2012, the Board has approved the appointment of M/s R. Nanabhoy &
 Co. as the Cost Auditors of the Company for the financial year
 2012-2013, subject to approval of the Central Government.
 
 ACKNOWLEDGEMENT
 
 Your Directors take this opportunity to thank the Financial
 Institutions, Banks, Central and State Government authorities,
 Regulatory authorities, Stock Exchanges and all the various
 stakeholders for their continued co-operation and support to the
 Company. Your Directors also wish to record their appreciation for the
 continued co-operation and support received from the Joint Venture
 partners / Associates.
 
                                         For and on behalf of the Board
 
                                                    A.  M. Naik
 
                                            Chairman & Managing Director
 
 Mumbai, May 14, 2012