Dear Members,
 The Directors have pleasure in presenting their Annual Report and
 Accounts for the year ended March 31, 2011.
 
 FINANCIAL RESULTS
 
                                       2010-2011      2009-2010
                                       Rs. crore        Rs. crore
 
 Profit before depreciation and tax    6,432.13        6,295.27
 
 Less: Depreciation and amortization     600.28          415.90
 
                                       5,831.85         5,87937
 Add: Transfer from Revaluation Reserve    1.06            1.30
 
 Profit before Tax and extraordinary   5,832.91        5,880.67
 
 items Less: Provision for Tax         1,945.86        1,640.87
 
 Profit after Tax (before extraordinary3,887.05        4,239.80
 items)
 
 Gain on extra-ordinary items 
 (net of tax)                             70.84          135.72
 
 Profit after Tax and extraordinary 
 items                                 3,957.89        4,375.52 
 
 Add: Balance brought forward from       107.29          700.50
 
 previous year Less: Dividend paid for 
 the previous                              4.01            2.39
 year (including dividend
 distribution tax)
 
 Balance available for disposal 
 which the                             4,061.17        4,473.63
 directors appropriate as follows:
 
 Debenture Redemption Reserve             49.83           43.34
 
 Proposed Dividend                       882.84          752.75
 
 Dividend Tax                            112.82          110.25
 
 General Reserve                       2,910.00        3,460.00
 
                                       3,955.49        4,366.34
 
 Balance to be carried forward           105.68          107.29
 
 Dividend
 
 The Directors recommend payment of      882.84          752.75
 final dividend of Rs. 14.50 per equity share
 of Rs. 2 each on 60,88,52,126 shares
 
 YEAR IN RETROSPECT
 
 The gross sales and other income for the financial year under review
 were Rs. 45,738 crore as against f 39,381 crore for the previous
 financial year registering an increase of 16%.  The Profit before tax
 excluding extraordinary and exceptional items was Rs. 5,571crore and the
 Profit after tax excluding extraordinary and exceptional items of Rs.
 3,676 crore for the financial year under review as against Rs. 4,806
 crore and Rs. 3,185 crore respectively for the previous financial year,
 registering an increase of 16% and 15% respectively.
 
 DIVIDEND
 
 The Directors recommend payment of dividend of Rs. 14.50 per equity share
 of Rs. 2 each.
 
 Equity Shares that may be allotted on exercise of Options granted under
 the Employee Stock Option Schemes as also on conversion of outstanding
 Foreign Currency Convertible Bonds (FCCBs) before the Book Closure for
 payment of dividend will rank pari passu with the existing shares and
 be entitled to receive the dividend.
 
 DEPOSITORY SYSTEM
 
 As the members are aware, the Company''s shares are compulsorily
 tradable in electronic form. As on March 31, 2011, 96.95% of the
 Company''s total paid-up Capital representing 59,02,88,225 shares are 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 66,56,718 equity
 shares upon exercise of stock options by the eligible employees under
 the Employee Stock Option Schemes.
 
 During the year under review, the Company tied up Rs. 800 crore of debt,
 through multiple issuances of Non- Convertible Debentures, which have
 maturity of 10 years and are unsecured. Of this, f 260 crore have been
 drawn in 2010-11, the balance Rs. 540 crore to be drawn in 2011-12. In
 2011-12, for one of the issuances, the Company has an option to not
 draw Rs. 270 crore and prepay Rs. 30 crore.
 
 The debentures were issued for general corporate purposes.  During the
 year under review, the Company repaid a part of the long term foreign
 currency loans, equivalent to about Rs. 430 crore.
 
 CAPITAL EXPENDITURE
 
 As at March 31, 2011, the gross tangible and intangible assets,
 including leased assets, stood atRs. 9,770.61crore and the net fixed and
 intangible assets, including leased assets, at Rs. 7,458.13 crore.
 Additions during the year amounted to Rs. 1,705.68 crore.
 
 DEPOSITS
 
 22 Deposits totalling Rs. 0.03 crore which were due for repayment on or
 before March 31, 2011, were not claimed by the depositors on that date.
 As on the date of this report, deposits aggregating to Rs. 0.01 crore
 thereof 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 & Share
 Transfer Agent to locate the shareholders who have not claimed their
 dues.
 
 During the year under review, the Company has transferred a sum of Rs.
 70,44,129 to Investor Education & Protection Fund, the amount which was
 due & payable and remained unclaimed and unpaid for a period of seven
 years, as provided in Section 205C(2) of the Companies Act, 1956.
 Despite the reminder letters sent to each shareholder, this amount
 remained unclaimed and hence was transferred. Cumulatively, the amount
 transferred to the said Fund was Rs. 8,79,48,930 as on March 31, 2011.
 
 SUBSIDIARY COMPANIES
 
 During the year under review, the Company subscribed to/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
 power and financial services. The details of investments in subsidiary
 companies made during the year are as under:
 
 - 11,22,51,000 equity shares of Rs. 10 each in L&T-MHI Boilers Private
 Limited.
 
 - 12,75,51,000 equity shares of Rs. 10 each in L&T-MHI Turbine Generators
 Private Limited.
 
 6,34,32,835 equity shares of Rs. 10 each in L&T Finance Holdings Limited
 (formerly L&T Capital Holdings Limited).
 
 - 50,000 equity shares of Rs. 10 each in L&T Solar Limited.
 
 - 3,24,00,000 equity shares of Rs. 10 each of L&T Infrastructure
 Development Projects Limited.
 
 114,90,00,000 equity shares of Rs. 10 each in L&T Power Development
 Limited.
 
 15,00,006 equity shares of Rs. 10 each in L&T-Gulf Private Limited.
 
 17,10,00,000 equity shares of Rs. 10 each in L&T General Insurance
 Company Limited.
 
 2,600 equity shares of Rs. 10 each in L&T Krishnagiri Walajahpet Tollway
 Private Limited.
 
 100 equity shares of Rs. 10 each in L&T Devihalli Hassan Tollway Private
 Limited.
 
 - 2,40,00,000 equity shares of Rs. 10 each in L&T Aviation Services
 Private Limited.
 
 - 50,10,000 equity shares of Rs. 10 each in L&T Howden Private Limited.
 
 - 34,40,000 equity shares of Rs. 10 each in L&T Metro Rail (Hyderabad)
 Limited (formerly L&T Hyderabad Metro Rail Private Limited).
 
 - 9,51,38,939 equity shares of Rs. 10 each in L&T Sapura Shipping Private
 Limited.
 
 6,000 equity shares of Rs. 10 each in L&T Sapura Offshore Private
 Limited.
 
 50,000 equity shares of Rs. 10 each in L&T PowerGen Limited.
 
 4,14,720 equity shares of Rs. 100 each representing 50% stake of EWAC
 Alloys Limited.
 
 10,400 equity shares of Rs. 10 each in L&T Samakhiali Gandhidham Tollway
 Private Limited.
 
 - 1,53,00,000 equity shares of 7 10 each in L&T Kobelco Machinery
 Private Limited.
 
 - 11,10,00,000 equity shares of Rs. 10 each in L&T Special Steels and
 Heavy Forgings Private Limited.
 
 Further contribution in 67,69,518 partly paid-up equity shares in L&T
 Infrastructure Development Projects Limited. With this contribution,
 these shares have become fully paid-up.
 
 During the year, L&T-Sargent & Lundy Limited issued to the Company
 13,76,065 equity shares of Rs. 10 each as bonus shares.
 
 The Company transferred 6,52,65,000 equity shares of Rs. 10 each in L&T
 Halol-Shamlaji Tollway Limited to L&T Infrastructure Development
 Projects Limited.
 
 The Company transferred 6,30,15,000 equity shares of Rs. 10 each in L&T
 Ahmedabad-Maliya Tollway Limited to L&T Infrastructure Development
 Projects Limited.
 
 The Company transferred 10,000 equity shares of Rs. 10 each in L&T
 Transco Private Limited to L&T Infrastructure Development Projects
 Limited.
 
 The Company sold 500 equity shares of Rs. 10 each in Kesun Iron & Steel
 Company Private Limited.
 
 Three subsidiary companies had applied for strike off under the Easy
 Exit Scheme, 2010 (EES 2010). We have received communication from ROC
 that these companies have been struck off the register under Section
 560(5) of the Companies Act, 1956 and they stand dissolved.
 
 MCA, vide it''s Circular No. 2/2011 dated February 8, 2011, has granted
 general exemption under Section 212(8) of the Companies Act, 1956, for
 not attaching annual reports of subsidiary companies subject to certain
 conditions being fulfilled by the Company. As required under the
 circular, the Board of Directors has, at its meeting held on April 6,
 2011, 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 put up on the Company''s 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 it''s 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, are 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 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 18 to 22 and 101 of the
 Annual Report. The detailed Corporate Sustainability Report is also
 available on the Company''s 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, 2011 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
 
 Mr. R. N. Mukhija and Mr. J. P. Nayak, Whole-time Directors of the
 Company retired at close of working hours of October 23, 2010 and March
 31, 2011 respectively. The Directors record their appreciation of the
 valuable services rendered by Mr. R. N. Mukhija and Mr. J. P. Nayak.
 
 The Board has inducted Mr. Ravi Uppal and Mr. S. N.  Subrahmanyan as
 Whole-time Directors of the Company w.e.f. November 1, 2010 and July 1,
 2011 respectively.
 
 Mr. S. N. Subrahmanyan has been appointed as a Director with effect
 from July 1, 2011, in the casual vacancy to be caused by retirement of
 Mr. K. V. Rangaswami and holds office of Director until conclusion of
 the ensuing Annual General Meeting. Mr. K. Venkataramanan, Mr. S.
 Rajgopal, Mr. A. K. Jain and Mr. S. N. Talwar retire from the Board by
 rotation and are eligible for re-appointment at the forthcoming Annual
 General Meeting. The notice convening the Annual General Meeting
 includes the proposal for 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 May 6, 2009 issued
 to them by Institute of Chartered Accountants of India (ICAI).
 
 ACKNOWLEDGEMENT
 
 Your Directors take this opportunity to thank the Financial
 Institutions, Banks, Central and State Government authorities,
 Regulatory authorities, Stock Exchanges and the 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 19, 2011