Dear Shareholders,
 
 The macro business environment in the year under review was
 characterized by uncertainty and volatility. The Company also
 experienced extended prospect- to-award timelines. Nevertheless, the
 execution schedule of our existing orders remained largely on track. We
 also continued to gain significantly through our focus on competency,
 quality assurance and delivery. This ensured that the external
 environment did not impinge unduly on our performance, and we could
 successfully navigate through the economic cross currents to convert
 profitable business opportunities into contracted customer commitments.
 
 Performance Overview
 
 The Company has once again registered impressive performance on ail
 important parameters during FY11. Order Inflows for the year, though
 volatile from quarter to quarter, recorded a growth of 15%. Revenues,
 driven by a robust Order Book position in the beginning of the year,
 registered a 19% growth for the year which was commendable considering
 the challenging execution environment that all sectors witnessed
 throughout the fiscal. EBITDA Margins, by and large, held up to FY10
 levels despite higher input prices which were mitigated through timely
 and cost efficient execution of orders on hand.  The closing Order Book
 position at the end of FY11 recorded an impressive Rs. 130,217 crore
 which is in excess of two years of backlog. Profit after Tax at Rs. 3,676
 crore excluding Exceptional and Extraordinary items, grew 15% during
 the year. Robust operating cash flows contributed to the healthy
 financial condition of the Company.
 
 The performance of the Subsidiary & Associate companies during the year
 was also encouraging. The Group total income for the year reached Rs.
 52,089 crore while the Group Profit after Tax excluding Exceptional and
 Extraordinary items, recorded an impressive X 4,238 crore, an increase
 of 12% year on year.
 
 I am happy to announce that the Board has recommended an enhanced
 dividend of 7 14.50 per equity share on a face value of Rs. 2 per share
 for the year.
 
 Gearing for growth
 
 The Company has taken a number of measures during the year under review
 to ensure that it accelerates its growth momentum going forward. Major
 steps include:
 
 Restructuring
 
 A 5-year strategic plan for our businesses was completed in FY11 after
 extensive consultations and a detailed review of. our portfolio and
 organization structure. This plan has led to an organizational
 remodeling which would facilitate growth through greater levels of
 empowerment and delegation while sharpening accountability. L&T has
 accordingly been restructured into multiple Independent Companies (ICs)
 within the L&T Parent Company. Although not legal entities, Independent
 Companies are vertically integrated business segments with their own
 internal boards which include a number of independent directors and a
 representative director from the parent company on each IC Board.  This
 will allow greater independence in functioning and provide external and
 broader business perspectives to the IC management. The new structure
 has been rolled out and is beginning to function.
 
 Business Integration
 
 The Company is today the largest vertically integrated EPC player in
 the domestic infrastructure space.  This has been achieved over the
 years through successful efforts to encompass all value creating and
 critical activities in each core business that it operates in.  In
 Hydrocarbon, the Company straddles the design-fabrication- installation
 value chain. In Power, the facilities for manufacture of supercritical
 boilers turbines, and critical piping which have been commissioned,
 have plugged a vital gap in our EPC Power offerings to customers. In
 addition, all the power auxiliaries like Electrostatic Precipitators,
 Axial Fans and Heaters are approaching completion.  Along with other
 essential existing facilities, the Company is capable of offering
 comprehensive Balance of Plant solutions to Power Generation customers.
 In the Infrastructure space, the Company is one of the largest
 developer-cum-EPC players with a diverse portfolio of strategic
 concessions in the areas of Roads, Ports, Power Generation, Metro Rail
 and Urban Infrastructure.
 
 iii. Capacity Expansion
 
 The Company has added capacities in different businesses to capture the
 next growth wave. In addition to commissioning of the manufacturing
 facilities for Boilers, Turbinesand other Powerauxilliaries, the
 Company has also expanded its facilities in Hazira and created a
 Knowledge City in Vadodara thus integrating the total capabilities of
 EPC and Manufacturing. The manufacturing of heavy forgings and castings
 at Hazira is nearing completion. At Oman, in addition to the Modular
 Fabrication Facility for Oil & Gas structures, the new Heavy
 Engineering facilities are now operational. In Kattupalli, the
 Shipbuilding facility and the container port facility are getting ready
 shortly.
 
 iv. Technology
 
 The ability to understand, develop and successfully apply new
 technologies is a key differentiator of the Company. This has
 contributed to the dominant position in the sectors that we operate in,
 viz, Infrastructure, Power, Hydrocarbon, Process and Switchgear.  The
 
 Company actively scouts for technology partners in areas where
 offerings to customers can be enhanced. Engagement with these
 technology majors are in the form of Joint Ventures or technology
 alliances or Process Qualifications from Process Licensors.
 Relationships with all existing partners have been productive and
 rewarding.
 
 v.  Talent Management
 
 The Company recognizes that talent management is a constantly evolving
 discipline which needs to engage with a dynamic environment.  Built on
 an entrenched set of core principles, the Company''s HR policies are
 designed to ensure that it remains the employer of choice. Compensation
 packages have been revised to ensure that superior resources are
 sufficiently incentivized to join and stay with the company. The
 Company also offers an unmatched canvas of professional opportunity for
 growth and development.
 
 vi. Information Technology
 
 The Company believes in IT as a business enabler which can add a
 cutting edge difference to its capabilities. Business verticals run
 advanced transaction processing systems through backend integrated ERP
 systems that enable online data capture and seamless integration of
 functions within the business verticals. The Company is constantly
 enhancing decision support systems that can offer businesses further
 advantages in the marketplace.
 
 Renewable Energy
 
 The prospects of irreversible climatic change have added urgency to
 initiatives for clean and renewable energy initiatives around the
 world.  The Company believes that the seeds of growth for renewable
 energy planted now will, in time, bear fruit that will make these
 ventures viable.  It has embarked on multiple initiatives including
 projects in Solar Photovoltaic Power and manufacture of engineered
 large size castings for critical applications in wind power turbines.
 The Company is also actively involved in setting up of Hydro Electric
 Power Generating stations both as an EPC contractor and as a Power
 developer.
 
 Sustainable Development
 
 Sustainable development is the key to an organization to survive and
 thrive. Accordingly, we have set out on a multi-year journey to achieve
 world class sustainable development through conservation of natural
 resources, environment protection, employee engagement and welfare
 measures that affect different parts of society. Your Company is one of
 the 28 Indian companies whose Sustainability Reports are available in
 the public domain and is the first Indian company in the Engineering &
 Construction Segment to publicly report on its sustainability
 performance.  The Company has reported on all Core Performance
 Indicators (49) under the ''Global Reporting Initiative'' and the reports
 have been externally assured for authenticity of the information
 presented. The last report (2010) has been credited with a ''GRI
 Checked'' Application Level A  rating.
 
 Economic Scenario
 
 The Indian economy and factors impacting key sectors like
 Infrastructure, Power and Hydrocarbon experienced macro headwinds
 during the year.  Difficulty in land acquisition, slow pace of granting
 environmental clearances, non-allocation of fresh coal blocks for
 mining, unexpected shortage of gas production from the KG basin gas
 fields, governance issues at the political and bureaucratic level, high
 inflation led by food, commodity, oil prices and increasing interest
 rates all combined to slow down the pace of project award decisions.
 Consequently, Institutional Investors, both domestic and foreign,
 turned bearish on the India Infrastructure theme. There were, however,
 a number of strong macro tailwinds as well that were mitigating the
 adverse situation. These include a steady correction of the fiscal
 deficit through better-than-expected proceeds from 3G Telecom License
 auction, sustainable buoyancy in both direct and indirect tax revenues,
 GDP growth rate of around 8.5%, the consequent increase in per capita
 income and the consumption spends, a sustained rate of domestic savings
 hovering around 35% of nominal GDP and the intention of the Government
 to push for reforms. Aided by these favorable factors, the Company
 expects the growth momentum in the economy to continue inspite of the
 near term challenges.
 
 Outlook
 
 The Company believes that in the forthcoming year, it will still
 continue to bag important E&C Projects across the sectors that it
 operates in and hence further grow its Order Book position by the end
 of the forthcoming year. Some areas of opportunities are detailed as
 under -
 
 1) Infrastructure & Construction
 
 a) Transportation Infrastructure
 
 This area, which covers, roads, railways (national and metro rails),
 ports and airports shows encouraging signs on some fronts. The pace of
 NHAI awards for road concessions is picking up speed. Project awards
 are expected in areas such as Dedicated Freight Corridor, airport and
 port expansion in different parts of the country. Some Tier-2 cities
 are planning metro or mono rails as the solution to urban traffic
 congestion and some airport prospects in India and abroad are being
 targeted.
 
 b) Water
 
 This area has seen large underspends in the first 4 years of the 11th
 Five Year plan and is heading towards becoming a serious infrastructure
 bottleneck. Apart from social repercussions arising out of urban water
 supply shortages, the large planned capacity additions in the power
 sector are likely to place a strain on water resources across the
 country. Harnessing glacial flows and abundant rainfall by reservoir
 building, bulk water transmission infrastructure and purification
 through water treatment plants are increasing opportunities that the
 Company sees in future. Converting seawater into potable water with
 desalination plants throws up increasing business prospects both in
 domestic and Middle East markets.  Industrial opportunities in the form
 of effluent treatment plants also offers an increased market.
 
 c) Urban Building Infrastructure
 
 The Company sees growing business opportunities in other parts of urban
 infrastructure such as hospitality, educational institutions and
 healthcare facilities. Urban population pressure is leading to a
 multiplicity of different forms of housing in Tier-1 and Tier-2 cities.
 The revival of the IT sector is also opening up increased business in
 IT and Office Space.
 
 d) Mining, Metals & Material Handling
 
 With the evident growth in the mining and industrial components of GDP
 coupled with a domestic imbalance in the demand-supply of steel, the
 Company sees abundant opportunities in mining equipment and capacity
 addition in the metals sector.  Larger business prospects in Material
 Handling is being driven by power capacity addition, increase in ports
 and expansion of ferrous and non-ferrous metals production capacities.
 
 2) Heavy Engineering
 
 a) Heavy Industrial Equipment
 
 The Company''s heavy engineering facilities in Hazira located in Coastal
 Gujarat is widely acclaimed for its world class design, manufacturing
 capabilities and on-time execution track record of technologically
 complex large sized equipment orders for process plants in India and
 abroad.  This is standing the Company in good stead when scouting for 
 business in domestic and international markets and is expected to 
 facilitate growth in Power and Hydrocarbon sectors. The new heavy 
 engineering facility in Oman is strategically located for conversion 
 of prospects to business in the Middle East.
 
 b) Nuclear Power
 
 While the tsunami damage to the Fukushima nuclear plants in Japan have
 triggered a worldwide relook at the need for nuclear power as an energy
 source, it is the considered view of the Company that this may push
 back large ordering of nuclear power capacity addition in the world by
 a few years. As far as India is concerned, the ambitious program of
 ramping up the installed base to 20GW by 2020 and to 63GW by 2032 is
 likely to be on track with a couple of years delay because of more
 stringent safety measures that will become mandatory during
 construction of nuclear power plants. The JV with Nuclear Power
 Corporation of India Ltd. is progressing and the completion of
 facilities for the forging plant is on schedule.  The Company believes
 that large scale ordering of new facilities will happen over the next
 few years and your Company is well poised to exploit this potential.
 
 c) Defence
 
 The Company is gearing up to catch growth opportunities when the
 Government policy changes would allow private sector participation in
 India''s defence program in a significant manner. The Company is
 presently building a shipyard at Kattupalli near Chennai for catering
 to the requirements of Indian Navy when such prospects materialize.
 
 3) Thermal Power
 
 a) Coal-based
 
 Inspite of difficult hurdles in this sector in the form of land
 acquisition and getting coal linkages, the Company is positive on the
 various business prospects in this area. The Company is uniquely placed
 to exploit this growth opportunity since it now offers the full range
 of products and services in this space such as turnkey power plant
 construction, manufacture of supercritical boilers and turbines, other
 critical auxiliary equipment such as piping, electrostatic
 precipitators, axial fans and heaters as well as the entire range of
 Balance of Plant offerings.
 
 b) Gas-based
 
 The Company has an established track record of putting up gas-based
 power plants for customers on time and within costs. This gives a push
 to the increasing market of gas fired power plants that are on the
 anvil once the visibility of increased gas availability improves.
 
 4) Power Transmission & Distribution
 
 The Company is one of the major players in EPCsectorforTransmission
 
 Line and Substation projects, boosted by its manufacturing facility for
 rolling out transmission towers. This sector has been under- invested
 over the last few years and we anticipate a healthy rise in the award
 of T&D projects that are slated to be awarded, including a number of
 HSTC (High Speed Transmission Corridors) that are due to evacuate power
 from generating stations to end-user locations.
 
 5) Hydrocarbon
 
 The Company has, over the years, built an enviable reputation of being
 able to deliver large complex projects in upstream, mid and downstream
 and fertilizer sectors.  It is well placed to bag orders that come up
 for awards for pipelines, wellhead platforms and process platforms in
 the upstream sector and for refineries and petrochemicals in the mid
 and downstream sectors.  These opportunities are being seen both in
 India and in the Middle East. The Company has 3 Fabrication Facilities
 located at Hazira in Gujarat, Kattupalli in Tamil Nadu and Sohar in
 Oman which enables the business to cater to different geographies in
 India and abroad. Plans for making increased gas available to the
 fertilizer sector through policy directives is spurring capacity
 expansion in this sector where the Company has a demonstrated track
 record of executing EPC projects.
 
 6) Electrical & Electronics
 
 This business segment witnessed mixed fortunes during the year under
 review with project awards showing sluggishness but industrial demand
 for off-the-shelf switchgear products showing increased offtake.  The
 Company now sees signs of stabilizing markets and growth potential for
 both project and product businesses during the year ahead.
 
 7) Machinery & Industrial Products
 
 This business continued to register all round growth during FY11
 largely driven by improved demand for valves and construction and
 mining businesses.
 
 The new plant for manufacture of Specialized Valves in Coimbatore which
 commenced operations in FY10 has started catering to the demands of the
 Power Sector.
 
 The expanded capacity in the manufacturing campus at Kansbahal near
 Rourkela is now catering to the requirements of Apron Feeders and Wheel
 Loaders and the new foundry at Coimbatore in Tamil Nadu is now
 providing Wind Mill Castings.
 
 During the year, the Company divested its stake in L&T Case Equipment
 Ltd. and at the same time acquired the stake of its JV partners Messer
 Eutectic Castolin Holding GmbH and Eutectic Corporation, USA in Ewac
 Alloys Ltd., which offers specialized welding solutions. This is in
 line with its ongoing business portfolio review.
 
 8) Information Technology Business
 
 L&T Infotech, which suffered a slowdown in business during the global
 economic crisis, is back on the growth path and revenues grew by around
 30% in FY11 on a consolidated basis.  The trend in share of revenue has
 been relatively stable across industry verticals, business horizontals
 and geographies.
 
 9) Financial Services
 
 The 2 flagship Companies within the Financial Services business, viz.,
 L&T Finance Ltd. and L&T Infrastructure Finance Ltd., have continued
 their growth trajectory.  On a combined basis, their Total Income,
 Profit after Tax and Net Worth grew by 48%, 61% and 41% respectively
 aided by their focus on Returns, Asset quality and efficient liability
 and interest cost management. L&T Infrastructure Finance Ltd. also
 raised around Rs. 650 crore of retail subscription through 2 tranches of
 its first ever issue of tax-free infrastructure bonds after getting
 Infrastructure Finance Company status from the Reserve Bank of India.
 Their total asset book has grown to over Rs. 17,000 crore at the end of
 FY11 from Rs. 11,000 crore a year ago.  The Company believes that these
 businesses will continue to grow at an encouraging pace.
 
 10) Developmental Projects
 
 Developmental Business has been playing an increasingly strategic role
 in the growth of the Company. The Company now has a rich portfolio of
 concessions and ownership rights in areas of Roads, Power Plants, Metro
 Rail, Ports and Urban Infrastructure. A brief profile of each part of
 the total portfolio is given as under -
 
 a) Roads
 
 The Company has a basket of 15 road concessions covering 5,700 lane-km.
 Some of these projects are operational and some are under construction.
 
 b) Power
 
 The Company has a concession for coal fired plants in Punjab and 4
 concessions for hydroelectric plants totaling planned generating
 capacity of over 2,800 MW. Development of these plants are in varying
 stages of maturity.
 
 c) Metro Rail
 
 The Company bagged the largest Metro Rail concession awarded in the
 country till date with a total estimated project cost in excess of Rs.
 16,000 crore. The project has been financially closed and execution of
 the different parts of the project is expected to start soon. The
 project is expected to be completed within the stipulated time of 5
 years from the appointed date.
 
 d) Ports
 
 The Company has now commissioned its 27 Million Tonne capacity deep
 water port at Dhamra in Coastal Orissa and expects this venture to
 start contributing to revenues in a meaningful manner from FY12
 onwards. The container port at Kattupalli in Tamil Nadu is expected to
 be commissioned by end FY12.
 
 11) International Business
 
 International business for the Company came down during the global
 slowdown 2 years ago.  Since then, the countries where the Company is
 focusing on have shown signs of recovery and the Company is hopeful of
 increased business from those countries. The Middle East holds ample
 opportunities in the areas of Hydrocarbon, Power Transmission &
 Distribution and selective Infrastructure areas such as roads and
 airports.
 
 Before concluding, I would like to appreciate the efforts of all the
 employees of this organization for taking the Company to greater
 heights once again - this achievement would not have been possible
 without their whole- hearted and unstinting efforts.
 
 I would also like to thank all my colleagues on the Board who have
 jointly steered the Company during an uncertain period in FY11 and all
 other stakeholders like shareholders, Financial Institutions, members
 of our supply chain and regulators for providing their support to our
 efforts.
 
 The Company is committed to the pursuit of value creation through
 profitable growth of its businesses and we reaffirm our commitment to
 uphold highest standards of governance.
 
 Thank you,
 
 A. M. Naik
 
 Chairman & Managing Director
 Mumbai, May 19, 2011