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Directors Report of L&T Technology Services Ltd.

Mar 31, 2023

The Board of Directors are pleased to present the 11th Annual Report along with the Audited Financial Statements of L&T Technology Services Limited (''LTTS'' or ''the Company'') for the year ended March 31, 2023.

1. FINANCIAL RESULTS:

('' million)

Particulars

Standalone

2022-23

2021-22

Profit before depreciation, exceptional and extra ordinary items & tax

17,599

14,334

Less: Depreciation, amortization and obsolescence

2,024

1,826

Profit/(Loss) before exceptional items and tax

15,575

12,508

Add: Exceptional Items

-

-

Profit/(Loss) before tax

15,575

12,508

Less: Provision for tax

4,471

3,323

Profit for the period carried to the Balance Sheet

11,104

9,185

Add: Balance brought forward from previous year

26,786

21,235

Less: Dividend paid for the year (Including Tax deducted at source)

3,167

3,634

Balance to be carried forward

34,723

26,786

2. PERFORMANCE OF THE COMPANYA. State of Company Affairs

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

B. Segmental Performance

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

('' million)

Revenue for 2022-23

% of overall

Revenue for 2021-22

% of overall

Transportation

23,784

33.5%

18,030

30.7%

Industrial Products

15,013

21.1%

12,510

21.3%

Telecom & Hi Tech

11,196

15.7%

10,564

18.0%

Plant Engineering

12,662

17.8%

10,030

17.1%

Medical Devices

8,426

11.9%

7,603

12.9%

Total

71,081

100.0%

58,737

100%

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

C. Geographical Performance

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

('' million)

Sr. No.

Geography

FY 2022-23

% of overall

FY 2021-22

% of overall

1.

North America

41,061

57.8%

34,170

58.2%

2.

Europe

12,930

18.2%

10,637

18.1%

3.

India

10,838

15.2%

9,053

15.4%

4.

Rest of the World

6,252

8.8%

4,877

8.3%

Total

71,081

100.0%

58,737

100%

D. Capital Expenditure

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

E. Subsidiary/Associate/Joint Venture Companies

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

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

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

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

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

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

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

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

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

G. Management Discussion and Analysis

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

3. TRANSFER TO RESERVES

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

4. DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

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

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

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

The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line

with Regulation 43A of the SEBI Listing Regulations. The Dividend Distribution Policy is provided as Annexure ''A'' forming a part of this Board''s Report and also uploaded on the Company''s website at https://www.ltts.com/investors/corporate-governance.

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

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

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

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

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

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

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

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

7. SHARE CAPITAL

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

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

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

8. DEPOSITS

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

9. DEPOSITORY SYSTEM

As the members are aware, the Company''s shares are compulsorily tradable in electronic form only. As on

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

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

Further in adherence to SEBI''s circular to enhance the due diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request.

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

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

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

11. CORPORATE SOCIAL RESPONSIBILITY

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

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

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

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

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

12. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Act and Regulation 34(3) read with Schedule V of the SEBI Listing Regulations and forms part of the financial statements.

13. RISK MANAGEMENT POLICY

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

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

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

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

14. VIGIL MECHANISM

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

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

15. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

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

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

The Company has disclosed on its website https://www.ltts.com/investors/corporate-governance details of the familiarization programs formulated to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.

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

16. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

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

17. DISCLOSURE OF REMUNERATION

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

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

In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the registered office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

18. COMPANY POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION

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

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

NRC has formulated a policy on Director''s appointment and remuneration including recommendation of remuneration of the key managerial personnel and senior management personnel and the criteria for determining qualifications, positive attributes and independence of a Director. A copy of the NRC Policy as disclosed on the Company''s website at https://www.ltts.com/investors/corporate-governance is also enclosed to the Board''s Report as Annexure ''G''. During the year under review, the Company amended the said policy in line with amendments in the Act and SEBI Listing Regulations.

The Committee has formulated a policy on Board diversity.

19. DECLARATION OF INDEPENDENCE OF INDEPENDENT DIRECTORS

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

20. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms that:

a. In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

e. The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently;

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

21. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND DIRECTORS

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

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

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

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

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

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

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

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

22. AUDIT COMMITTEE

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

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

23. STAKEHOLDERS'' RELATIONSHIP COMMITTEE

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

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

24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has designed and implemented a process driven framework for Internal Financial Controls (''IFC'') within the meaning of the explanation to Section 134(5(e) of the Act. For the year ended March 31, 2023, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations which is operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company''s operations.

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

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

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

26. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

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

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

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

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

27. CONSOLIDATED FINANCIAL STATEMENTS

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

28. AUDITORS REPORT

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

29. STATUTORY AUDITORS

M/s MSKA & Associates, Chartered Accountants (Firm Registration No. 105047W) were appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 10th AGM till the conclusion of 15th AGM of the Company.

The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI.

The Auditors have also furnished a declaration confirming their independence as well as their arm''s length relationship with the Company as well as a declaration that they have not taken up any prohibited non-audit assignments for the Company.

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

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

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

30. SECRETARIAL AUDIT REPORT

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

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

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

31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

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

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

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

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

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

32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, there were no material and significant orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations in future.

33. ANNUAL RETURN

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

34. OTHER DISCLOSURES

1. Corporate Governance Report

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

2. Employee Stock Option Scheme

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

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

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

3. Voting Rights

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

4. Credit Rating

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

5. Reporting of Frauds

The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under section 143(12) of the Act.

6. KYC Registration for Holders of Physical Securities

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

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

to holders of physical securities to furnish their PAN, details of Nomination, Contact details (viz. address, mobile and e-mail), Bank Account details and specimen signature ("KYC information") to KFin Technologies Limited on or before September 30, 2023. In case the shareholders fail to update KYC Information on or before September 30, 2023, their folios shall be frozen by the RTA as per above SEBI Circular and such shareholders will be eligible for payment of dividend or lodging any grievance or availing any service request from the RTA only after furnishing the KYC information as specified above.

All shareholders of the Company holding shares in physical form are requested to update their KYC information with KFin Technologies Limited at the earliest. The relevant forms for updating the KYC information are provided on the website of the Company at https://www. ltts.com/investors/investor-services.

7. Business Responsibility and Sustainability Reporting

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

8. Statutory Compliance

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

9. MSME

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

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

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

10. Cost records and audit

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

ACKNOWLEDGEMENT

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

For and on behalf of the Board

Amit Chadha S. N. Subrahmanyan

CEO & Managing Director Vice Chairman

(DIN: 07076149) (DIN: 02255382)

Place: Mumbai Place: Mumbai

Date: April 26, 2023 Date: April 26, 2023


Mar 31, 2022

Your Directors have pleasure in presenting the 10th Annual Report along with the Audited Financial Statements of L&T Technology Services Limited for the year ended March 31, 2022.

Financial Results

('' million)

Particulars

Standalone

2021-22

2020-21

Profit before depreciation, exceptional and extra ordinary items & tax

14,334

10,688

Less: Depreciation, amortization and obsolescence

1,826

1,737

Profit / (Loss) before exceptional items and tax

12,508

8,951

Add: Exceptional Items

-

-

Profit / (Loss) before tax

12,508

8,951

Less: Provision for tax

3,323

2,220

Profit for the period carried to the Balance Sheet

9,185

6,731

Add: Balance brought forward from previous year

21,235

16,704

Less: Dividend paid for the year (Including dividend distribution tax and deemed dividend)

3,634

2,200

Balance to be carried forward

26,786

21,235

Performance of the Company State of Company Affairs

The gross sales and other income for the financial year under review were '' 60,274 million as against '' 51,383 million for the previous financial year registering an increase of 17.3%. The profit before tax from continuing operations including extraordinary and exceptional items was '' 12,508 million and the profit after tax from continuing operations including extraordinary and exceptional items was '' 9,185 million for the financial year under review as against '' 8,951 million and '' 6,731 million respectively for the previous financial year, registering an increase of 39.7% and 36.5% respectively.

COVID-19

At the start of the fiscal, LTTS initiated a comprehensive COVID vaccination drive for its employees and their dependents. All centers across geographies were covered within the ambit of the program, which registered significant participation across all levels.

With a focus on ensuring employee well-being and customer success, the LTTS Central BCP team continued to closely monitor the evolving dynamics of the pandemic. Isolation facilities and tele-medical consulting services were extended across locations to help employees tide over the challenges faced while leveraging existing healthcare resources. Regular communications and updates, for both employees and customers, allowed the Company to maintain and drive an enhanced sense of continuity and security -enabling greater trust and deeper belief in LTTS'' commitment to its stakeholders.

During the year, the Company also continued to strengthen and expand its virtualized lab infrastructure to enable its engineers to leverage state-of-the-art solutions while working off-campus. The investments undertaken in this direction constitute a solid foundation of a robust and prosperous future.

With the ongoing decline in the impact of the global pandemic, LTTS has initiated a return-to-office journey on a

rotational basis. The Company''s senior leaders across locations are spearheading this transition, which is founded on adhering to all government-mandated safety protocols for a Work from Office paradigm. Regular temperature checks and other key measures constitute the foundations of this approach.

The Company continues to closely monitor the global pandemic, and is prepared to address all potential scenarios that might pose a challenge to the health and well-being of its stakeholders.

Segmental Performance

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

('' million)

Revenue

for

FY 2021-22

% of overall

Revenue

for

FY 2020-21

% of overall

Transportation

18,030

30.7%

14,740

29.7%

Industrial Products

12,510

21.3%

10,048

20.2%

Telecom & Hi-Tech

10,564

18.0%

10,050

20.3%

Plant Engineering

10,030

17.1%

7,930

16.0%

Medical Devices

7,603

12.9%

6,872

13.8%

Total

58,737

100.0%

49,640

100.0%

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

Geographical Performance

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

('' million)

Sr.

No.

Geography

FY 2021-22

% of overall

FY 2020-21

% of overall

1_

North

America

34,170

58.2%

28,439

57.3%

2.

Europe

10,637

18.1%

8,603

17.3%

3.

India

9,053

15.4%

7,526

15.2%

4.

Rest of the World

4,877

8.3%

5,072

10.2%

Total

58,737

100.0%

49,640

100.0%

Capital & Finance

During the year under review, the Company had allotted 4,86,344 Equity Shares of '' 2 each upon exercise of stock options by the eligible employees under the Employee Stock Option Scheme - 2016.

As on March 31, 2022 the total paid up equity share capital of the Company was '' 21,10,64,334/- consisting of 10,55,32,167 equity shares of '' 2 each, fully paid up.

As on March 31, 2022, Larsen & Toubro Limited, Promoter of the Company holds 7,79,86,899 shares constituting 73.90% of the paid-up share capital of the Company.

Capital Expenditure

As at March 31, 2022, the gross fixed and intangible assets including leased assets, stood at '' 16,720 million (previous year '' 15,464 million) and the net fixed and intangible assets, including leased assets, at '' 10,144 million (previous year '' 10,196 million). Capital Expenditure during the year is '' 1,293 million (previous year '' 753 million).

Deposits

During the year ended March 31, 2022, the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed thereunder. Hence the Company does not have any unclaimed deposits as on date.

In compliance with the MCA notification dated January 22, 2019 and Companies (Acceptance of Deposits) Rules, 2014, the Company is required to file with registrar of companies, annual return in Form DPT-3 for receipts of money or loan by the Company, which are not considered as deposits outstanding as on March 31, 2022.

The Company would be complying with this requirement within the prescribed timelines.

Depository System

As the members are aware, the Company''s shares are compulsorily tradable in electronic form only. As on March 31, 2022, 99.98% of the Company''s total paid-up capital representing 10,55,1 1,621 shares are in dematerialized form. Pursuant to the provisions of the LODR w.e.f. April 1, 2019 all transfer of shares except transmission and transposition are mandatorily required to be carried out only in dematerialized form.

Further, with effect from January 24, 2022, all requests for transmission, transposition, issue of duplicate share certificate, claim from unclaimed suspense account, renewal/exchange of securities certificate, endorsement, sub-division/splitting of securities certificate and consolidation of securities certificates/folios will be processed and mandatorily a letter of confirmation will be issued, which needs to be submitted to Depository Participant to get credit of these securities in

dematerialized form. Shareholders desirous of availing these services are requested to refer to the detailed procedure for availing these services provided on the website of the Company at www.LTTS.com.

In view of the numerous advantages offered by the depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. The Company has not accepted any physical transfer of shares during the year under review.

Further in adherence to SEBI''s circular to enhance the due-diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request.

Transfer to Investor Education and Protection Fund

There are no amounts that are due to be transferred to Investor Education and Protection Fund by the Company.

The Company has sent adequate communication to the members whose dividends are unclaimed, requesting them to provide/update bank details with the RTA/Company, so that

dividends paid by the Company are credited to the investors'' account on timely basis.

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

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

Subsidiary/Associate/Joint Venture Companies

During the year under review, Esencia Technologies Inc., a wholly owned subsidiary of L&T Technology Services LLC (''LTTS LLC''), was merged with LTTS LLC with effect from October 1, 2021.

The Company has formulated a policy on the identification of material subsidiaries in line with Regulation 16(c) of the LODR as amended, and the same is placed on the website at http://www.ltts.com/investors/. The Company does not have any material subsidiaries.

A. Performance and Financial Position of each subsidiary/associate and joint venture companies

A statement containing the salient features of the financial statement of subsidiaries/associate/joint venture companies and their contribution to the overall performance of the Company is annexed to this Report at page no. 261.

Particulars of Loans Given, Investments Made, Guarantees Given or Security Provided by the Company

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Act and Regulation 34(3) read with Schedule V of the LODR in Note 36 forming part of the financial statements.

Particulars of Contracts or Arrangements with Related Parties

Pursuant to the amendments in the LODR the Audit Committee has approved the amendments to the Related Party Transaction Policy and its Guidelines and the Policy has been uploaded on the Company''s website http://www.ltts.com/investors.

The Company has a process in place of periodically reviewing and monitoring related party transactions.

All the related party transactions were in the ordinary course of business and at arm''s length. The Audit Committee has approved all the related party transactions for FY 2021-22 and omnibus approval of the Audit Committee is obtained before the commencement of the financial year for all the transactions for FY 2022-23 as required under the provisions of Section 177 of the Act.

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

Amount to be Carried to Reserves

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

Dividend

The Board at its meeting held on October 19, 2021 declared a special dividend of '' 10/- (500%) per equity share amounting

to '' 947.15 million (the total payout including Tax Deducted at Source amounted to '' 1,054.38 million). The dividend was paid on November 10, 2021.

Further, the Board at its meeting held on January 18, 2022 declared an interim dividend of '' 10/- (500%) per equity share amounting to '' 948.50 million (the total payout including Tax Deducted at Source amounted to '' 1,055.1 1 million). The dividend was paid on February 10, 2022.

Further, the Board of Directors, in its meeting held on April 21, 2022 have recommended the payment of final dividend of '' 15/- (750%) per equity share of '' 2 each for the financial year ended March 31, 2022. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting (AGM) to be held on July 15, 2022.

The final dividend on equity shares, if approved by the members, would involve a cash outflow (including Tax Deducted at Source) of '' 1,583 million.

The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line with Regulation 43A of the LODR. The Policy is provided as Annexure ''A'' forming a part of this Board Report and also uploaded on the Company''s website at https://www.ltts.com/investors/corporate-governance

Material Changes and Commitments Affecting Financial Position of the Company, between the end of the Current Financial Year and the date of the Report

Other than stated elsewhere in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the current financial year and the date of this report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure ''B'' forming part of this Board Report.

Risk Management Policy

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

The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness.

The Company has formulated a risk management Policy and has in place a mechanism to inform the Board Members about risk assessment, including cyber security and ESG risks and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. The details of the same are given in Annexure ''D'' - Report on Corporate Governance forming part of this Board Report. During the year under review, the Board of Directors on the recommendation of the Risk Management Committee have amended the Risk Management Policy and Framework to include enterprise risk management function, risk management framework and aligning enterprise risk management with other lines of defence.

A detailed note on risk management and the internal controls with reference to the financial statement is given under the financial review section of the Management Discussion and Analysis on page no. 115 and 120 of the Annual Report.

Corporate Social Responsibility

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

During the year under review, two meetings of the CSR Committee were held on April 30, 2021 and October 18, 2021.

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

The CSR Policy framework is available on its website https:// www.ltts.com/sites/default/files/investors/corporate-gov/pdf/ Corporate_Social_Responsibility_Policy.pdf

The Board on recommendation of the CSR Committee of the Company have amended the CSR Policy of the Company in line with the recent CSR amendments.

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

Contribution towards CSR Activities

During the year ended March 31, 2022, the Company has spent an amount of '' 187 million as compared to '' 174 million (2% of the average net profits of the immediately preceeding three financial years). Thus, the Company spent

excess amount of '' 13 million, which can be set off till FY 25, in line with the amendments to the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Policy of ''Work From Home'' implemented for fighting the threat of COVID-19 Pandemic

In line with the Govt of India''s directive, State wise guidelines and directives issued by respective countries, and as a protective step for all its employees welfare and safety, the Company had put in place a Policy of "Work From Home" for all its employees from March 23, 2020 at all its Centers and Offices in India and overseas, with the objective of well-being and safety of all its employees. LTTS is currently working on a hybrid model. The provisions of Work from Home policy is applicable to the employees working from home. The said initiative has helped the Company to fight against the threat of Covid-19.

Directors and Key Managerial Personnel Appointed /Resigned during the year

The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Act and the LODR and are placed on the website of the Company https://www ltts com/investors/corporate-governance

A. Appointment/Re-appointment of Directors & Key

Managerial Personnel:

During the year under review, the following appointments/

re-appointments were made on Board:

a. Mr. Luis Miranda was appointed as an Independent Director of the Company with effect from October 19, 2021 for a term of five years up to and including October 18, 2026, same was approved by way of Postal Ballot by the shareholders of the Company on December 25, 2021.

b. Mr. Narayanan Kumar was re-appointed as an Independent Director for a term of three years and six months with effect from July 15, 2021 upto and including January 14, 2025, same was approved by the shareholders in the 9th Annual General Meeting held on July 16, 2021.

c. Mr. S. N. Subrahmanyan & Mr. Abhishek Sinha, Directors are liable to retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment.

d. Mr. Abhishek Sinha is re-appointed as Chief Operating Officer & Whole-Time Director for a period of three years with effect from October 18, 2022 upto and including October 17, 2025, subject to the approval of the shareholders at the ensuing AGM.

e. Ms. Prajakta Powle was appointed as the Company Secretary and Compliance Officer of the Company with effect from March 17, 2022.

Pursuant to the amendments in the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors of the Company have registered themselves with the Databank of Independent Directors. The Directors who were not exempted from the requirement of appearing in the online proficiency test, have successfully qualified in the online proficiency self-assessment.

The Company has also disclosed on its website http:// www.ltts.com/investors/ details of the familiarization programs formulated to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.

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

B. Resignation/Superannuation of Directors & Key Managerial Personnel:

a. Mr. Samir T Desai ceased to be an Independent Director of the Company on August 26, 2021 on account of his resignation from the Company.

b. Mr. Kapil Bhalla superannuated as the Company Secretary and Compliance Officer of the Company with effect from October 29, 2021.

The Board places on record its appreciation for the contribution made by the aforesaid Director and the KMP

Number of Meetings of the Board of Directors

This information is given in Annexure ''D'' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 71 of this Annual Report.

Audit Committee

This information is given in Annexure ''D'' - Report on Corporate Governance forming part of this Report. Members are requested to refer to page no. 76 of the Annual Report.

Company Policy on Director''s Appointment and Remuneration

The Company has in place a Nomination and Remuneration Committee (NRC) in accordance with the requirements of

Section 178 of the Act read with rules made thereunder and Regulation 19 of the LODR.

The details of the same are given in Annexure ''D'' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 78 of this Annual Report.

NRC has formulated a policy on director''s appointment and remuneration including recommendation of remuneration of the key managerial personnel and senior management personnel and the criteria for determining qualifications, positive attributes and independence of a Director and also disclosed the Policy on the Company''s website http://www.ltts.com/ and is also enclosed to the Board report as Annexure ''H''. During the year under the review, the Company had amended the said Policy in line with amendments in the Act.

The Committee has formulated a policy on Board diversity.

Stakeholders'' Relationship Committee

The Company has in place a Stakeholders'' Relationship Committee in terms of the requirements of the Act read with the rules made thereunder and Regulation 20 of the LODR.

The details of the same are given in Annexure ''D'' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 81 of this Board Report.

Declaration of Independence

The Company has received Declarations of Independence from Independent Directors as stipulated under Section 149(7) of the Act and Regulation 25(8) of the LODR confirming that he/she is not disqualified from appointing/continuing as Independent Director as per the criteria laid down in Section 149(6) of the Act and Regulation 16(1 )(b) of the LODR. The same are also displayed on the website of the Company at https://www.ltts.com/investors/corporate-governance. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

Adequacy of Internal Financial Controls

The Company has designed and implemented a process driven framework for Internal Financial Controls (''IFC'') within the meaning of the explanation to Section 134(5)(e) of the Act. For the year ended March 31, 2022, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weaknesses exist. The Company

has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company''s operations.

Directors Responsibility Statement

The Board of Directors of the Company confirms that:

a. I n the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

e. The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently;

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

Performance Evaluation of Board, its Committees and Directors

The Nomination and Remuneration Committee (NRC) and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Chairman and individual Directors has to be made.

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

The Company had engaged an external agency to facilitate the process of annual evaluation of the performance of the

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

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

Evaluation of Independent Directors was done by Board including assessment of their performance and their independence of management.

The inputs given by all the directors were discussed in the meeting of the Independent Directors held in accordance with Schedule IV of the Act on April 21, 2022. The performance evaluation of the Board, Committees, Chairman and Directors was also reviewed by the NRC as well as in the Board Meeting. The Group Chairman had an individual discussion with all the Independent Directors and the Chairman of the NRC also had a discussion with all the Executive Directors individually. Most of the suggestions from the Board Evaluation exercise have been suitably implemented such as meetings of Chairman of NRC with individual directors and Action Taken Report of Board decisions.

Disclosure of Remuneration

The details of remuneration as required to be disclosed under the Act and the rules made thereunder are given in the Annexure ''E'' forming part of this Board Report.

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

In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the registered office of the

Company. None of the employees listed in the said Annexure are related to any Director of the Company.

Compliance with Secretarial Standards on the Board and General Meetings

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

Vigil Mechanism

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

The details of the same are given in Annexure ''D'' - Report on Corporate Governance forming part of this Report. Members are requested to refer to page no. 83 of the Annual Report.

Protection of Women at Workplace

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

During the year under review, no cases of sexual harassment were received on POSH [(Policy on prevention of Sexual Harassment) of Women at Workplace].

Awareness workshops/training programmes are conducted across the Company to sensitize employees to uphold the dignity of their colleagues at work place especially with respect to prevention of sexual harassment.

Consolidated Financial Statements

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

Auditors Report

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

Statutory Auditors

In view of the mandatory requirement of the rotation of Auditors'' and in accordance with the provisions of the Act, Sharp & Tannan, (firm registration number 109982W) Chartered Accountants, were appointed as Statutory Auditors for a period of 4 continuous years from the conclusion of 6th Annual General Meeting (AGM) till the conclusion of 10th AGM of the Company, in the AGM held on August 22, 2018.

The Company''s Auditors Messrs. Sharp & Tannan will be completing a period of ten years as Statutory Auditors of the Company. In view of the mandatory rotation of auditor and in accordance with the provisions of the Act, it is proposed to appoint Messrs. MSKA & Associates, Chartered Accountants (Firm Registration No. 105047W) as Statutory Auditors for a period of five continuous years i.e. from the conclusion of the 10th AGM till the conclusion of the 15th AGM of the Company.

The Board places on record its appreciation for the services rendered by Messrs. Sharp & Tannan as the Statutory Auditors of the Company.

Certificate from the Auditors has been received to the effect that they are eligible to act as Auditors of the Company and their appointment would be within the limits as prescribed under Section 141 of the Act.

The Auditors have confirmed that they have subjected themselves to the peer review process of ICAI and hold valid certificate issued by the Peer Review Board of the ICAI.

The Auditors have also furnished a declaration confirming their independence as well as their arm''s length relationship with the Company as well as declared that they have not taken up any prohibited non-audit assignments for the Company.

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

For the financial year 2021-22, the total fees paid by the Company and its subsidiaries, on a consolidated basis, to the Auditors and all entities in the network firm/entity of which the Auditors are a part thereof for all the services provided by them is '' 4.14 million.

The Auditors attend the AGM of the Company. Also see page no. 84 forming part of Annexure ''D'' of the Board Report.


Secretarial Audit Report

The Board had appointed Alwyn Jay & Co., (firm registration no. P2010MH21500), Practicing Company Secretaries, to carry out Secretarial Audit under the provisions of Section 204 of the Act for the financial year 2021-22.

The Secretarial Audit Report issued by Alwyn Jay & Co., Practicing Company Secretaries is attached as Annexure ''G'' to this Board Report.

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

Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals

During the year under review, there were no material and significant orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations in future.

Annual Return

As per the provisions of Section 92(3) of the Act the Annual Return of the Company for the financial year 2021-22 is available on the website of the Company at https://www.ltts.com/investors/corporate-governance.

Other Disclosures

1. Corporate Governance Report

Pursuant to Regulation 34 read with Schedule V of the LODR a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure ''D'' - Report on Corporate Governance forming part of this Board Report.

2. Employee Stock Option Scheme

There has been no material change in the Employee Stock Option Scheme - 2016 (ESOP Scheme - 2016) during the current financial year. The ESOP Scheme - 2016 is in compliance with the SBEB Regulations.

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

The Secretarial Auditors'' certificate confirming compliance with the Act and the SBEB Regulations is provided in Annexure ''D'' - Report on Corporate Governance forming part of this Board Report.

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

4. Credit Rating

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

5. Reporting of Frauds

The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Act.

6. KYC registration for holders of physical securities:

As per SEBI circular dated November 3, 2021, the Company has sent notice to all holders of physical securities asking them to furnish their PAN, details of Nomination, Contact details (viz. address, mobile and email), Bank Account details and specimen signature ("KYC information") to Kfin Technologies Limited on or before March 31, 2023.

All shareholders of the Company holding shares in physical form are requested to update their KYC information with Kfin Technologies Limited at the earliest. The relevant forms for updating the KYC information are provided on the website of the Company at ltts.com/investors/investor-services.

7. Business Responsibility Reporting

As per Regulation 34 of the LODR a separate section on Business Responsibility Reporting forms a part of the Annual Report (refer pages 124 to 133) describing initiatives taken by the Company from an environmental, social and governance perspective. The activities carried out by the Company as a part of its CSR initiatives during FY 2021-22 are covered in the same.

8. Statutory Compliance

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

9. MSME

The Ministry of Micro, Small and Medium Enterprises vide their Notification dated 2nd November 2018 has instructed all the companies registered under the Act with a turnover of more than Rupees Five Hundred crore to get themselves onboarded on the Trade Receivables Discounting System platform (TReDS), set up by the Reserve Bank of India. In compliance with this requirement, the Company has registered itself on TReDS through -KredX Early-.

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

Acknowledgement

Your Directors take this opportunity to thank the customers, vendors, academic institutions, Financial Institutions, Regulatory Authorities, Stock Exchanges and all the various stakeholders

for their continued co-operation and support to the Company. Your Directors also acknowledge the support and co-operation from the Government of India and the Governments of various countries, the concerned State Governments, other Government Departments and Governmental Agencies. The Directors appreciate the significant contributions made by the employees of the Company and its subsidiaries during the year under review and value the contributions made by every member of the LTTS family globally.

For and on behalf of the Board

Amit Chadha S. N. Subrahmanyan

CEO & Managing Director Vice Chairman

(DIN: 07076149) (DIN: 02255382)

Place: Mumbai Place: Mumbai

Date: April 21, 2022 Date: April 21, 2022


Mar 31, 2021

Your Directors have pleasure in presenting the 9th Annual Report along with the Audited Financial Statements of L&T Technology Services Limited for the year ended March 31, 2021.

Financial Results

('' million)

Standalone

2020-21

2019-20

Profit Before Depreciation, exceptional and extra ordinary items & tax

10,688

12,084

Less: Depreciation, amortization and obsolescence

1,737

1,534

Profit / (Loss) before exceptional items and tax

8,951

10,550

Add: Exceptional Items

-

-

Profit / (Loss) before tax

8,951

10,550

Less: Provision for tax

2,220

2,650

Profit for the period carried to the Balance Sheet

6,731

7,900

Add: Balance brought forward from previous year

16,704

11,770

Less: Dividend paid for the year (Including dividend distribution tax and deemed dividend)

2,200

2,641

Add: ESOP cancellation impact

-

10

Less: Impact of IND AS 116 in opening reserve

-

335

Less: Impact of Ind AS 115 and ECL on contract asset in opening reserve

-

Balance available for disposal (which directors appropriate as follows)

21,235

16,704

Balance to be carried forward

21,235

16,704

Performance of the Company State of Company Affairs

The gross sales and other income for the financial year under review were '' 51,383 million as against '' 53,936 million for the previous financial year registering a decrease of 4.7%. The profit before tax from continuing operations including extraordinary and exceptional items was '' 8,951 million and the profit after tax from continuing operations including extraordinary and exceptional items was '' 6,731 million for the financial year under review as against '' 10,550 million and '' 7,900 million respectively for the previous financial year, registering a decrease of 15.16% and 14.80% respectively.

CoVID-19 update

The pandemic and the ensuing lock-down in several cities has been an unprecedented situation that required quick and decisive steps to be taken to ensure smooth business operations. A core BCP team comprising of the COO, CHRO, CRO, IT Head, Admin & Facilities Head and BCP Officer has been set up to ensure that all functions continue to run without disruptions. Your Company is amongst the few Engineering Companies that have been able to achieve over 92% WFH for employees working on billable roles. Wherever required, Secured Labs were set up at employees'' homes complete with backup power systems and office workstations.

('' million)

Revenue

for

FY 2020-21

% of overall

Revenue

for

FY 2020-21

% of overall

Transportation

14,740

29.7%

17,014

32.8%

Telecom & Hi Tech

10,050

20.3%

9,872

19.0%

Industrial

Products

10,048

20.2%

10,717

20.7%

Plant Engineering

7,930

16.0%

9,101

17.6%

Medical Devices

6,872

13.8%

5,109

9.9%

Total

49,640

100%

51,813

100%

Regular communication with our customers providing updated information on all measures taken to ensure continuity have been well received with many customers appreciating our seamless transition to a WFH model. Project Management Offices setup within the sales organization helped to coordinate client communication and share best practices.

The well-being of employees and the need to maintain their involvement has been a key focus and your Company has taken several steps to address this. Timely email communications on COVID related information, dedicated section on our intranet page, an inhouse Crisis Notification System and virtual town halls by the leadership team to share regular updates and key messages have all contributed to an engaged workforce that has successfully delivered on customer expectation. We have also effectively tracked employee productivity through daily timesheets and all teams ensured that productivity across projects remained high.

Despite a challenging time, the proactive measures taken towards employees, customers, and productivity have resulted in an increase in Customer satisfaction scores and Net promoter scores for FY21 compared to FY20.

Segmental Performance

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

The detailed segmental performance is referred in Note No. 40 of the Notes forming part of the standalone financial statements.

Geographical Performance

The Revenue contribution of the Company from various Geographies is mentioned herein below:

('' million)

Sr. Geography^^H FY % of FY % of

2020-21 overall 2019-20 overall

1. North America 28,439 57.3% 30,258 58.4%

2. Europe 8,603 17.3% 8,256 15.9%

3. India 7,526 15.2% 7,457 14.4%

4. Rest of the World 5,072 10.2% 5,842 11.3%

Total 49,640 100% 51,813 100%

Capital & Finance

During the year under review, the Company had allotted 5,34,265 Equity Shares of '' 2 each upon exercise of stock options by the eligible employees under the Employee Stock Option Scheme - 2016.

As on March 31, 2021 the total paid up equity share capital of the Company was '' 21,00,91,646/-consisting of 10,50,45,823 equity shares of '' 2 each, fully paid up.

As on March 31, 2021, Larsen & Toubro Limited, Promoter of the Company holds 7,79,86,899 shares constituting 74.24% of the paid- up share capital of the Company.

Capital Expenditure

As at March 31, 2021, the gross fixed and intangible assets including leased assets, stood at '' 15,465 million (previous year '' 13,527 million) and the net fixed and intangible assets, including leased assets, at '' 10,197 million (previous year '' 9,595 million). Capital Expenditure during the year is '' 753 million (previous year 1,347 million).

Deposits

During the year ended March 31, 2021, the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed thereunder. Hence the Company does not have any unclaimed deposits as on date.

In compliance with the MCA notification dated January 22, 2019 and Companies (Acceptance of Deposits) Rules, 2014, the Company is required to file with registrar of companies, annual return in Form DPT-3 for receipts of money or loan by the Company, which are not considered as deposits outstanding as on March 31, 2021.

The Company would be complying with this requirement within the prescribed timelines.

Depository System

As the members are aware, the Company''s shares are compulsorily tradable in electronic form only. As on March 31, 2021, 99.99% of the Company''s total paid up capital representing 10,50,25,952 shares are in dematerialized form. Pursuant to the provisions of LODR w.e.f. April 1, 2019 all transfer of shares except transmission and transposition are mandatorily required to be carried out only in dematerialized form.

In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. The Company has not accepted any physical transfer of shares during the year under review.

Further in adherence to SEBI''s circular to enhance the due-diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request.

Transfer to Investor Education and Protection Fund

There are no amounts that are due to be transferred to Investor Education and Protection Fund by the Company.

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

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

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

Subsidiary/ Associate/ Joint Venture Companies

During the year under review, the Company acquired Orchestra Technology Inc. incorporated in Texas, USA through its wholly owned subsidiary, L&T Technology Services LLC. Orchestra Technology Inc. is a US based company providing engineering services and solutions in the Telecom & Hitech industry segment.

The details of investment in Orchestra Technology Inc. during the year are as under:

A. Shares acquired during the year:

Name of the

type of

No. of

Company

Shares

shares

Orchestra Technology Inc

Equity

46,00,000

B. Performance and Financial Position of each subsidiary/associate and joint venture companies:

A statement containing the salient features of the financial statement of subsidiaries/associate/joint venture companies and their contribution to the overall performance of the Company is annexed to this Report at page no. 255.

The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(c) of LODR and the same is placed on the website at http://www.ltts.com/investors/. The Company does not have any material subsidiaries.

Particulars of Loans Given, investments Made, Guarantees Given or Security Provided by the Company

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Act and Regulation 34(3) read with Schedule V of the LODR in Note 37 forming part of the financial statements.

Particulars of Contracts or Arrangements With Related Parties

The Audit Committee and Board of Directors have approved the Related Party Transaction Policy along with threshold limits and the same has been uploaded on the Company''s website http://www. Itts. com/investors

The Company has a process in place of periodically reviewing and monitoring Related Party Transactions.

All the related party transactions were in the ordinary course of business and at arm''s length. The Audit Committee has approved all the Related Party Transactions for the FY 2020-21 and estimated transactions for FY 2021-22 as required under the provisions of Section 177 of the Act.

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

Amount to be Carried to Reserves

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

Dividend

The Board at its meeting held on October 19, 2020 declared an interim dividend of '' 7.50 (375%) per equity share amounting to '' 725 million (the total payout including Tax Deducted at

Source amounted to '' 787 million). The dividend was paid on November 10, 2020.

Further, the Board of Directors, in its meeting held on May 3, 2021 have recommended the payment of dividend of '' 14.50 (725%) per equity share of '' 2 each for the financial year ended March 31, 2021. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting (AGM) to be held on July 16, 2021.

The final dividend on equity shares, if approved by the members, would involve a cash outflow (including Tax Deducted at Source) of '' 1523 million.

The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line with Regulation 43A of the LODR. The Policy is provided as Annexure ''A'' forming a part of this Board Report and also uploaded on the Company''s website at https://www.ltts.com/investors/corporate-governance

Material Changes and Commitments Affecting Financial Position of the Company, between the end of the Current Financial Year and the date of the Report

Other than stated elsewhere in this Report, there are no material changes and commitments affecting the financial position of the Company between the end of the current financial year and the date of this report.

Conservation of Energy, Technology Absorption, Foreign exchange earnings and outgo

Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure ''B'' forming part of this Board Report.

Risk Management Policy

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

The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment, including cyber security and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. The details of the same are given in Annexure ''D'' Report on Corporate Governance forming part of this Report.

A detailed note on risk management and the internal controls with reference to the financial statement is given under the financial review section of the Management Discussion and Analysis on page no. 109 and 114 of the Annual Report.

Corporate Social Responsibility

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

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

The CSR Policy framework is available on its website https://www.ltts.com/sites/default/files/investors/corporate-gov/ pdf/Corporate_Social_Responsibility_Policy.pdf

The Board on recommendation of the CSR Committee of the Company have amended the CSR Policy of the Company in line with the recent CSR amendments.

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

Contribution Towards CSR Activities

During the year ended March 31, 2021, the Company has spent an amount of '' 157.19 million on CSR activities as against the budgeted amount of '' 156 million for FY 2020-21.

During the FY 2019-20, the Company had contributed to PM CARES Fund '' 183.09 million, which was in excess of its CSR obligation for FY 2019-20. Pursuant to the amendments to the Companies (Corporate Social Responsibility Policy) Rules, 2014, a Company which spends in excess of the prescribed requirements shall be allowed to set off the excess amount upto immediately succeeding three financial years. However, the Company has not taken any set off during the FY 2020-21.

Policy of ''Work From Home'' implemented for fighting the threat of Covid-19 Pandemic

In line with the Govt of India''s directive, State wise guidelines and directives issued by respective countries, and as a protective step for the welfare and safety of all its employees, the Company had put in place a Policy of "Work From Home" for all its employees from March 23, 2020 at all its Centers and Offices in India and overseas. With the objective of well

being and safety of all its employees, the Senior Management and BCP Team took lot of initiatives and implemented various policies for the benefit of employees. The Human Resource team was constantly in touch with all the employees and regularly gave instructions to be followed by employees to face this Pandemic through advisory emails. The same policy was continued in FY 2020-21 keeping in mind the safety of all the employees.

Directors and Key Managerial Personnel Appointed/ Resigned during the year

The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Act and LODR and are placed on the website of the Company https://www.ltts.com/investors/corporate-governance.

A. Appointment/Re-appointment of Directors & Key

Managerial Personnel:

During the year under review, the following

appointments/re-appointments were made on Board:-

a. Mr. R. Chandrasekaran was appointed as an Independent Director of the Company with effect from October 19, 2020 for a term of five years up to and including October 18, 2025; same was approved by way of Postal Ballot by the shareholders of the Company on March 3, 2021.

b. Dr. Keshab Panda''s tenure as Chief Executive Officer & Managing Director of the Company which was originally upto January 9, 2021 was extended up to March 31, 2021 and further he was appointed as a Non-Executive Director of the Company with effect from April 1, 2021; same was approved by way of Postal Ballot by the shareholders of the Company on March 3, 2021.

c. Mr. Amit Chadha''s tenure as Deputy Chief Executive Officer and Whole-Time Director of the Company which was originally upto January 31, 2021 was extended upto March 31, 2021 and further he was appointed as the Chief Executive Officer & Managing Director of the Company with effect from April 1, 2021; same was approved by way of Postal Ballot by the shareholders of the Company on March 3, 2021.

d. Mr. Sudip Banerjee was re-appointed as an Independent Director for a term of five years with effect from January 21, 2021 upto and including

January 20, 2026; same was approved by way of Postal Ballot by the shareholders of the Company on March 3, 2021.

e. Mr. N. Kumar was re-appointed as an Independent Director for a term of three years and six months with effect from July 15, 2021 upto and including January 14, 2025, subject to the approval of the shareholders.

Based on their skills, knowledge, experience and report of their performance evaluation, the Board was of the opinion that their association would be of immense benefit to the Company and it would be desirable to avail their services as Independent Directors.

f. Mr. Rajeev Gupta was appointed as the Chief Financial Officer (CFO) of the Company with effect from July 20, 2020.

g. Mr. A. M. Naik and Mr. Amit Chadha, Directors, are liable to retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment.

Pursuant to the amendments in the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors of the Company have registered themselves with the Databank of Independent Directors. The Directors who were not exempted from the requirement of appearing in the online proficiency test, have successfully qualified in the same.

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

B. Resignation of Directors & Key Managerial Personnel:

a. Mr. Arjun Gupta ceased to be Independent Director of the Company on October 27, 2020 on account of completion of his term as an Independent Director.

b. Dr. Keshab Panda ceased to be as CEO & Managing Director of the Company with effect from March 31, 2021 on account of completion of his term as CEO & Managing Director.

c. Mr. P. Ramakrishnan resigned as Chief Financial Officer of the Company on July 19, 2020. He moved back to the parent company i.e Larsen & Toubro Limited as part of a pre-defined career progression plan and role rotation policy.

The Board places on record its appreciation for the contribution made by the aforesaid Directors and the KMP.

The notice convening the AGM includes the proposal for appointment / re-appointment of Directors.

The Company has also disclosed on its website https://www.ltts.com/investors/corporate-governance of the familiarization programs formulated to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.

Number of Meetings of the Board of Directors

This information is given in Annexure ''D'' Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 67 of this Annual Report.

Audit Committee

The Company has in place an Audit Committee in terms of the requirements of Section 177 of the Act read with rules made thereunder and Regulation 18 of LODR.

Currently, the Committee comprises of 3 Independent Directors namely, Mr. N. Kumar-Chairman, Mr. Samir Desai and Ms. Apurva Purohit as Members.

The terms of reference of the Audit Committee are in line with the provisions of the Act read with the rules made thereunder and Regulation 18 and Schedule II of the LODR.

During the year under review 4 meetings were held on May 14, 2020, July 16, 2020, October 19, 2020 and January 20, 2021.

The details relating to the same are given in Annexure ''D'' Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 71 of this Annual Report.

Company Policy on Directors'' Appointment and Remuneration

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

The details of the same are given in Annexure ''D'' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 74 of this Annual Report.

NRC has formulated a policy on director''s appointment and remuneration including recommendation of remuneration of the key managerial personnel and senior management personnel and the criteria for determining qualifications, positive attributes and independence of a Director and also disclosed the policy on the Company''s website http://www.ltts.com/ and is also enclosed to the Board report as Annexure ''H''.

The Committee has formulated a policy on Board diversity.

Stakeholders'' Relationship Committee

The Company has in place a Stakeholders'' Relationship Committee in terms of the requirements of the Act read with the rules made thereunder and Regulation 20 of the LODR.

The details of the same are given in Annexure ''D'' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 77 of this Board Report.

Declaration of independence

The Company has received Declarations of Independence from Independent Directors as stipulated under Section 149(7) of the Act confirming that he/she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the website of the Company https://www.ltts.com/investors/corporate-governance. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013.

Adequacy of internal Financial Controls

The Company has designed and implemented a process driven framework for Internal Financial Controls (''IFC'') within the meaning of the explanation to Section 134(5)(e) of the Act. For the year ended March 31, 2021, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company''s operations.

Directors'' Responsibility Statement

The Board of Directors of the Company confirms that:

a. I n the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

e. The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently;

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

Performance Evaluation of Board, its Committees and Directors

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

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

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

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

Evaluation of Independent Directors was done by Board including assessment of their performance and their independence of management.

The Board Performance Evaluation activity was discussed in the Independent Directors Meeting held on April 30, 2021; this included areas of improvement for the Directors, Board processes and related issues for enhanced Board effectiveness. The performance evaluation of the Board, its Committees, Chairman and Directors was also reviewed by the Nomination and Remuneration Committee and the Board of Directors, in their meetings held on May 3, 2021, which showcased the strengths of the Board and areas of improvement that had taken place in comparison to the evaluation findings of FY2020. The observations made during FY2020 were acted upon appropriately. Overall the Board expressed its satisfaction on the performance evaluation process as well as performance of Chairman, Directors, Committees and Board as a whole.

Disclosure of Remuneration

The details of remuneration as required to be disclosed under the Act and the rules made thereunder are given in the Annexure ''E'' forming part of this Board Report.

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

In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the registered office of the Company. None of the employees listed in the said Annexure are related to any Director of the Company.

Compliance with Secretarial Standards on the Board and General Meetings

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


Protection of Women at Workplace

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

During the year under review, 3 cases of sexual harassment were received on POSH (Policy on prevention of Sexual Harassment) of Women at Workplace. The same were resolved and wherever necessary appropriate action was taken by the Company.

Awareness workshops/training programmes are conducted across the Company to sensitize employees to uphold the dignity of their colleagues at work place especially with respect to prevention of sexual harassment.

Consolidated Financial Statements

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

Auditors'' Report

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

Statutory Auditors

In view of the mandatory requirement of the rotation of Auditors'' and in accordance with the provisions of the Act, Sharp & Tannan, (firm registration number 109982W) Chartered Accountants, were appointed as Statutory Auditors for a period of 4 continuous years from the conclusion of 6th Annual General Meeting (AGM) till the conclusion of 10th Annual General Meeting of the Company, in the AGM held on August 22,2018.

Certificate from the Auditors has been received to the effect that they are eligible to act as auditors of the Company and their appointment would be within the limits as prescribed under Section 141 of the Act.

The Auditors have confirmed that they have subjected themselves to the peer review process of ICAI and hold valid certificate issued by the Peer Review Board of the ICAI.

The Auditors have also furnished a declaration confirming their independence as well as their arm''s length relationship with the Company as well as declared that they have not taken up any prohibited non-audit assignments for the Company.

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

For the financial year 2020-21, the total fees paid by the Company and its subsidiaries, on a consolidated basis, to the Auditors and all entities in the network firm/entity of which the Auditors are a part thereof for all the services provided by them is '' 4.69 million.

The Auditors attend the Annual General Meeting of the Company. Also see page 80 forming part of Annexure ''D'' of the Board Report.

Secretarial Audit Report

The Board had appointed Mrs. Naina Desai, (M. No.1351), Practicing Company Secretary, to carry out Secretarial Audit under the provisions of Section 204 of the Act for the financial year 2020-21. The Board at its meeting held on May 3, 2021 have appointed Alwyn Jay & Co. Company Secretaries, Practicing Company Secretary as the Secretarial Auditor for FY2021-22

The Secretarial Audit Report issued by Mrs. Naina Desai, Practicing Company Secretary is attached as Annexure ''G'' to this Board Report.

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

Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals

During the year under review, there were no material and significant orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations in future.

Annual Return

As per the provisions of Section 92(3) of the Act, the Annual Return of the Company for the financial year 2020-21 is available on the website of the Company https://www.ltts.com/investors/corporate-governance.

other Disclosures

1. Corporate Governance Report

Pursuant to Regulation 34 read with Schedule V of the LODR, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure ''D'' forming part of this Board Report.

2. Employee Stock option Scheme

There has been no material change in the Employee Stock Option Scheme - 2016 (ESOP Scheme - 2016) during the current financial year. The ESOP Scheme -2016 is in compliance with the SBEB Regulations.

The disclosure relating to the ESOP Scheme - 2016 required to be made under the Act and rules made thereunder and the SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company http://www. l tts. com/in vestors/.

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

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

4. Credit Rating

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

5. Vigil Mechanism

As per the provisions of Section 177(9) of the Act, the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns.

The Company has a Whistle-Blower Policy in place since 2014 to encourage and facilitate employees to report concerns about unethical behaviour, actual/

suspected frauds and violation of Company''s Code of Conduct. The Policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. The Policy also establishes adequate safeguards to enable employees to report any instances of leak of unpublished price sensitive information.

The Company has disclosed information about the establishment of the Whistle-Blower Policy on its website h ttps://www. Itts. com/in vestors/corpora te - governance. During the year, no personnel has been declined access to the Audit Committee, wherever desired.

6. Reporting of Frauds

The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Act.

7. Business Responsibility Reporting

As per Regulation 34 of LODR, a separate section on Business Responsibility Reporting forms a part of the Annual Report (refer pages 118 to 126) describing initiatives taken by the Company from an environmental, social and governance perspective. The activities carried out by the Company as a part of its CSR initiatives during 2020-21 are covered in the same.

8. Statutory Compliance

The Company complies with all applicable laws, rules and regulations, pays applicable taxes on time, ensures taking care of all its stakeholders and initiates sustainable activities and ensures statutory CSR Spend.

9. MSME

The Ministry of Micro, Small and Medium Enterprises vide their Notification dated 2nd November 2018 has instructed all the companies registered under the Act, with a turnover of more than Rupees Five Hundred crore to get themselves onboarded on the Trade Receivables Discounting System Platform (TReDS), set up by the Reserve Bank of India. In compliance with this requirement, the Company has registered itself on TReDS through KredX Early.

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

Acknowledgement

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

For and on behalf of the Board

Amit Chadha S. N. Subrahmanyan

CEO & Managing Director Vice Chairman

(DIN: 07076149) (DIN: 02255382)

Place: Washington, USA Place: Mumbai, India

Date : May 3, 2021 Date : May 3, 2021


Mar 31, 2019

Dear Members,

The Directors have pleasure in presenting the 7th Annual Report along with the Audited Financial Statements of L&T Technology Services Limited for the year ended March 31, 2019.

Financial Results

(Rs. million)

Particulars

Standalone

2018-19

2017-18

Profit Before Depreciation, exceptional and extra ordinary items & tax

10,145

7,387

Less: Depreciation, amortization and obsolescence

731

576

Profit / (Loss) before exceptional items and tax

9,414

6,811

Add: Exceptional Items

-

-

Profit / (Loss) before tax

9,414

6,811

Less: Provision for tax

2,413

1,917

Profit for the period carried to the Balance Sheet

7,001

4,894

Add: Balance brought forward from previous year

7,240

3,554

Less: Dividend paid for the year (Including dividend distribution tax and deemed dividend)

2,449

1,208

Add: Gain / (Loss) on re-measurement of the net defined benefit plans

-

-

Less: Impact of Ind AS 115 and ECL on contract asset in opening reserve

22

-

Balance available for disposal (which directors appropriate as follows)

11,770

7,240

Debenture Redemption Reserve

-

Balance to be carried forward

11,770

7,240

Performance of the Company State of Company Affairs

The gross sales and other income for the financial year under review were Rs. 48,632 million as against Rs. 36,947 million for the previous financial year registering an increase of 31.63%. The profit before tax from continuing operations including extraordinary and exceptional items was Rs. 9,414 million and the profit after tax from continuing operations including extraordinary and exceptional items of Rs. 7,001 million for the financial year under review as against Rs. 6,811 million and Rs. 4,894 million respectively for the previous financial year, registering an increase of 38.22% and 43.06% respectively.

Segmental Performance

The Company has five Business Segments, namely Transportation, Process Industry, Industrial Products, Medical Devices and Telecom & Hi-Tech. During the year, the contribution to the revenue from various business segments were as follows:-

(Rs. million)

Revenue for 2018-19

Revenue for 2017-18

Transportation

14,067

10,653

Process Industry

7,220

4,834

Industrial Products

10,182

8,531

Medical Devices

3,378

2,535

Telecom & Hi-Tech

12,273

8,513

Total

47,120

35,066

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

Geographical Performance

The Revenue contribution of the Company from various Geographies is mentioned herein below: _(Rs. million)

Sr. No.

Geography

2018-19

2017-18

1.

North America

25,729

19,962

2.

Europe

8,334

6,291

3.

India

7,012

4,457

4.

Rest of the World

6,045

4,355

Total

47,120

35,066

Capital & Finance

During the year under review, the Company had allotted 15,57,278 Equity Shares of Rs. 2 each upon exercise of stock options by the eligible employees under the Employee Stock Option Scheme - 2016.

As on March 31, 2019 the total paid up equity share capital of the Company was Rs. 20,80,26,650/- consisting of 10,40,13,325 equity shares of Rs. 2 each, fully paid up. Pursuant to Regulation 38 of the LODR to achieve minimum public shareholding requirement of 25%, our Promoter-Larsen & Toubro Limited (L&T) - sold 87,71,569 equity shares between April 1, 2018 till March 31, 2019. The Promoter’s stake thus reduced by 9.93% between April 1, 2018 till March 31, 2019 to 78.88%.

Capital Expenditure

As at March 31, 2019 the gross fixed and intangible assets including leased assets, stood at Rs. 8,087 million (previous year Rs. 7,310 million) and the net fixed and intangible assets, including leased assets, at Rs. 5,654 million (previous year Rs. 5,530 million). Capital Expenditure during the year is NIL (previous year Rs. 1 million).

Deposits

During the year ended March 31, 2019, the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed thereunder. Hence the Company does not have any unclaimed deposits as on date.

The MCA vide its notification dated January 22, 2019 has amended the Companies (Acceptance of Deposits) Rules, 2014 and as per this notification, the Company is required to file with Registrar of Companies a one-time return in Form DPT-3 for outstanding receipt of money/loan by the Company, which are not considered as deposits outstanding as on March 31, 2019 and for a period from April 1, 2014 to March 31, 2019.

The Company would be complying with this requirement once the form is deployed on MCA portal.

Depository System

As the members are aware, the Company’s shares are compulsorily tradable in electronic form. As on March 31, 2019, 99.99% of the Company’s total paid up capital representing 10,40,02,473 shares are in dematerialized form. Pursuant to the provisions of the LODR w.e.f. April 1, 2019 all transfer of shares except transmission and transposition shall be carried out only in dematerialised form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, Members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. The Company has sent intimation to Shareholders who are holding shares in physical form, advising them to get the shares dematerialized.

Transfer to Investor Education and Protection Fund

There are no amounts that are due to be transferred to Investor Education and Protection Fund by the Company

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

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

Subsidiary/ Associate/ Joint Venture Companies

During the year under review, the Company acquired Graphene Semiconductor Services Private Limited along with its three overseas subsidiaries and one Indian subsidiary Company. Graphene Semiconductor Services Private Limited provides end-to-end solutions— right from chip design, embedded software, all the way through providing support to mass manufacturing, thereby being a one-stop service and solution provider. The details of investments in the said Company during the year are as under:

A. Shares acquired during the year: -

Name of the Company

Type of shares/units

No of shares/ units

Graphene

Equity

13,64,601

Semiconductor

shares

Services Private Limited

Note:-

1. The Company acquired 1364601 shares of ‘10 each from Graphene Semiconductor Services Private Limited along with its subsidiaries Graphene Solutions PTE ltd (Singapore), Graphene Solution SDN. BHD (Malaysia), Graphene Solutions Taiwan Limited (Taiwan) and Seastar Labs Private Limited (India)

Post the said acquisition, the Company has three subsidiaries namely L&T Technology Services LLC, L&T Thales Technology Services Private Limited and Graphene Semiconductor Services Private Limited. Further the Company also has following step down subsidiaries namely Esencia Technologies Inc., Esencia Technologies India Private Limited, Graphene Solutions PTE Ltd (Singapore), Graphene Solution SDN. BHD (Malaysia), Graphene Solutions Taiwan Limited (Taiwan) and Seastar Labs Private Limited.

B. Performance and Financial Position of each subsidiary/associate and joint venture companies:

A statement containing the salient features of the financial statement of subsidiaries/associate/joint venture companies and their contribution to the overall performance of the Company is annexed to this Report at page no. 240 of the Annual Report.

The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16 (c) of the LODR and the same is placed on the website at http://www.ltts.com/investors/. The Company does not have any material subsidiaries.

Particulars of loans given, Investments made, Guarantees given or Security Provided by the Company

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Act and Regulation 34(3) read with Schedule V of the LODR in Note 37 forming part of the financial statements.

Particulars of Contracts or Arrangements with Related Parties

The Audit Committee and Board of Directors have approved the Related Party Transaction Policy along with threshold limits and the same has been uploaded on the Company’s website http://www.ltts.com/investors

The Company has a process in place of periodically reviewing and monitoring Related Party Transactions.

All the related party transactions were in the ordinary course of business and at arm’s length. The Audit Committee has approved all the Related Party Transactions for the FY 201819 and estimated transactions for FY 2019-20 as required under the provisions of Section 177 of the Act.

There are no materially significant related party transactions that may have conflict with the interest of the Company

Amount to be Carried to Reserves

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

Dividend

The Board at its meeting held on October 25,2018 declared an interim dividend of Rs. 7.5 per equity share amounting to Rs. 780 million /- (the total payout including Dividend Distribution Tax amounted to Rs. 940 million). The dividend was paid on November 12, 2018. Further, the Board, in its meeting held on May 3, 2019, has recommended a final dividend of Rs. 13.50 per equity share of Rs. 2 each for the financial year ended March 31, 2019. The proposal is subject to the approval of shareholders at the ensuing AGM to be held on July 20, 2019.

The final dividend on equity shares, if approved by the members, would involve a cash outflow of Rs. 1,404 million (the total payout including Dividend Distribution Tax is expected to be Rs. 1,694 million.)

The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company on May 3, 2017 which is in line with regulation 43A of the LODR. The Policy is provided as Annexure ‘A’ forming a part of this Board Report and also uploaded on the Company’s website at http://www.ltts.com/ investors/

Material changes and commitments affecting Financial position of the Company, between the end of the Current Financial Year and the date of the Report

Other than stated elsewhere in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the current financial year and the date of this report.

Conservation of energy, Technology absorption, Foreign Exchange earnings and outgo

Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure ‘B’ forming part of this Board Report.

Risk Management Policy

The Risk Management Committee comprises of Mr. S. N. Subrahmanyan, Dr. Keshab Panda and Mr. P. Ramakrishnan. Mr. S. N. Subrahmanyan is the Chairman of the Committee.

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

A detailed note on risk management and the internal controls with reference to the financial statement is given under the financial review section of the Management Discussion and Analysis on page no. 101 of the Annual Report.

Corporate Social Responsibility

The Corporate Social Responsibility (CSR) Committee comprises of Mr. Arjun Gupta, Mr. Sudip Banerjee and Dr. Keshab Panda as its Members. Mr. Arjun Gupta is the Chairman of the Committee.

The disclosures required to be given under Section 135 of the Act read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are provided in Annexure ‘C’ to Board report.

The CSR Policy framework is available on its website http:// www.ltts.com/media/32150/csr-policy-ltts.pdf.

Directors and Key Managerial Personnel Appointed/Resigned during the Year

The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Act and are placed on the website of the Company https//www.ltts. com/investors/corporategovernance.

The notice convening the AGM includes the proposal for appointment / reappointment of Directors.

A. Appointment/Re-appointment of Directors & key Managerial Personnel:

During the year, the following appointments/reappointments were made on Board:-

a. Mr. Samir Desai was appointed as Independent Directors of the Company with effect from April 30, 2014 to April 29, 2019. Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on January 17, 2019 has approved the re-appointment of Mr. Samir Desai as an Independent Director of the Company for further term of five years with effect from April 30, 2019 upto and including April 29, 2024, subject to approval of the shareholders through special resolution.

Special Resolution for the continuation of Mr. Samir Desai as an Independent Director, who would attain the age of 75 years during his current tenure forms part of the Notice being sent to the shareholders.

Based on his skills, experience, knowledge and report of their performance evaluation, the Board was of the opinion that his association would be of immense benefit to the Company and it would be desirable to avail his services as Independent Director.

b. Mr. Amit Chadha and Mr. A.M.Naik, Directors, retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment.

The notice convening the AGM includes the proposal for appointment / re-appointment of Directors.

B. Resignation of Directors & key Managerial Personnel:

a. Mr. Bhupendra Bhate resigned as Chief Operating Officer & Whole- time Director of the Company on May 3, 2019. Mr. Bhate has taken up a role as Chief Innovation Officer in the Company

The Board places on record its appreciation of the contribution by Mr. Bhate as Director of the Company and conveyed its good wishes for his new role in the Company.

The Company has also disclosed on its website http://www.ltts.com/investors/ details of the familiarization programs formulated to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.

Number of Meetings of the Board of Directors

This information is given in Annexure ‘D’ Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 52 of this Annual Report.

Audit Committee

The Company has in place an Audit Committee in terms of the requirements of Section 177 of the Act read with rules made thereunder and Regulation 18 of the LODR.

The Committee comprises of 1 Non-Executive Director and 3 Independent Directors.

The current members of the Audit Committee are Mr. N. Kumar-Chairman, Mr. Samir Desai, Ms. Renuka Ramnath and Mr. S.N. Subrahmanyan. During the year under review 4 meetings were held on May 22, 2018, July 25, 2018, October 25, 2018 and January 17, 2019.

The details relating to the same are given in Annexure ‘D’ Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 55 of this Annual Report.

Company Policy on Directors Appointment and Remuneration

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

The details of the same are given in Annexure ‘D’ - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 57 of this Annual Report.

NRC Committee has formulated a policy on director’s appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees and the criteria for determining qualifications, positive attributes and independence of a Director and also disclosed the policy on the Company’s website http:// www.ltts.com/ and is also enclosed to the Board report as Annexure ‘I’

The Committee has formulated a policy on Board diversity

Stakeholders’ Relationship Committee

The Company has in place a Stakeholders’ Relationship Committee in terms of the requirements of the Act read with the rules made thereunder and Regulation 20 of the LODR.

The details of the same are given in Annexure ‘D’ - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 60 of this Board Report.

Declaration of Independence

The Company has received Declarations of Independence from Independent Directors as stipulated under Section 149(7) of the Act confirming that he/she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the website of the Company http://www.ltts. com/investors/investor-download/.The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

Adequacy of Internal Financial Controls

The Company has designed and implemented a process driven framework for Internal Financial Controls (‘IFC’) within the meaning of the explanation to Section 134(5)(e) of the Act. For the year ended March 31, 2019, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved controls wherever the effect of such gaps would have a material effect on the Company’s operations.

Directors Responsibility Statement

The Board of Directors of the Company confirms:

a. I n the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

e. The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently;

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

Performance Evaluation of Board, Its Committees and Directors

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

It includes circulation of questionnaires to all Directors for evaluation of the Board and its Committees, Board composition and its structure, its culture, Board effectiveness, Board functioning, information availability, adequate discussions etc. These questionaries’ also cover specific criteria and the grounds on which all directors in their individual capacity will be evaluated. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committee, Individual Directors and the Chairman. The Chairperson of NRC analyses the reports on the questionnaires to arrive at an unbiased conclusion.

The inputs given by all the directors including areas of improvement, for the Directors, Board processes etc. were discussed in the meeting of the Independent Directors held in accordance with Schedule IV of the Act on May 3, 2019 and in the subsequent meetings of Nomination and Remuneration Committee and Board.

Suggestions from the Board Evaluation exercise of FY 201718 has been suitably implemented such as improving board processes, more time for strategy discussion, Directors familiarization program etc.

Disclosure of Remuneration

The details of remuneration as required to be disclosed under the Act and the rules made thereunder are given in the Annexure ‘E’ forming part of this Board Report.

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

In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the registered office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company

Compliance with Secretarial Standards on the Board and General Meetings

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

Protection of Women at Workplace

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

During the year under review, 5 cases of sexual harassment were received by the ICC. The same were resolved and wherever necessary appropriate action was taken by the Company.

Awareness workshops/training programmes are conducted across the Company to sensitize employees to uphold the dignity of their colleagues at work place especially with respect to prevention of sexual harassment.

Consolidated Financial Statements

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

Auditors Report

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

Statutory Auditors

In view of the mandatory rotation of auditors’ requirement and in accordance with the provisions of Act Sharp & Tannan, (firm registration number 109982W) Chartered Accountants, were appointed as Statutory Auditors for a period of 4 continuous years from the conclusion of 6th Annual General Meeting (AGM) till the conclusion of 10th Annual General Meeting of the Company, in the AGM held on August 22,2018.

The requirement to place the matter relating to appointment of Auditor for ratification by members at every AGM is done away with vide notification dated May 7, 2018 issued by MCA. Accordingly, no resolution is proposed for ratification of appointment of Auditors in the notice of 7th AGM.

The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI.

The Auditors have also furnished a declaration confirming their independence as well as their arm’s length relationship with the Company as well as declared that they have not taken up any prohibited non-audit assignments for the Company

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

The Auditors attend the AGM of the Company. Also see page no. 62 forming part of Annexure D of this Board Report.

Secretarial Audit Report

The Board had appointed Mrs. Naina Desai, (M. No.1351), Practicing Company Secretary, to carry out Secretarial Audit under the provisions of Section 204 of the Act for the financial year 2018-19.

The Secretarial Audit Report issued by Mrs. Naina Desai, Practicing Company Secretary is attached as Annexure ‘G’ to this Board Report.

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

Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals

During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

Extract of Annual Return

As per the provisions of Section 92(3) of the Act an extract of the Annual Return in Form MGT -9 is provided in Annexure ‘H’ to this Board Report. The Annual Return is also available on the website of the Company http://www.ltts.com/investors/.

Other Disclosures

1. Corporate Governance Report

Pursuant to Regulation 34 read with Schedule V of the LODR, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure ‘D’ forming part of this Board Report.

2. Employee Stock Option Scheme

There has been no material change in the Employee Stock Option Scheme - 2016 (ESOP Scheme - 2016) during the current financial year. The ESOP Scheme -2016 is in compliance with the SBEB Regulations.

The disclosure relating to the ESOP Scheme - 2016 required to be made under the Act and rules made thereunder and the SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company http://www.ltts.com/investors/.

The Statutory Auditors’ certificate confirming compliance with the Act and the SBEB Regulations is reproduced below:

Independent Auditors’ certificate on Employee Stock Option Scheme

1 This certificate is issued in accordance with the terms of our engagement letter dated 30 August 2018

2 We have examined Employees Stock Option Scheme (‘the Scheme’) of L&T Technology Services Limited (‘the Company’), books of accounts and other relevant records to determine whether the Scheme is in accordance with the rules specified under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (as amended) (“the Regulations”) and in accordance with the resolutions passed in the general meeting held on January 21, 2016 (‘the General Meeting’) and as per postal ballot dated 15 December 2016.

Management’s responsibility

3. Management is responsible for maintaining the information and documents, which are required to be kept and maintained under the relevant laws and regulations and implementing the Scheme in accordance with the Regulations and the resolutions passed at the General Meeting.

4. Management is also responsible for design, implementation and maintenance of internal control relevant to the implementation of Scheme in accordance with the Regulations and the resolutions passed at the General Meeting and for providing all information in this regard.

Auditors’ responsibility

5. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring implementation of the Scheme in accordance with the Regulations and the resolutions passed at the General Meeting. It is neither audit nor expression of opinion on the financial statements of the Company.

6. We have examined the books of accounts and other relevant records and documents maintained by the Company for the purpose of providing reasonable assurance on the implementation of the Scheme by the Company in accordance with the Regulations and the resolutions passed at the General Meeting.

7. We have carried out an examination of the Scheme, books of accounts and other relevant records of the Company in accordance with the Guidance Note on Reports or Certificates for Special Purpose (Revised 2016) issued by the Institute of Chartered Accountants of India (‘the ICAI’), which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.

8. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and related services engagements.

Criteria and Scope

9. The criteria against which the information is evaluated are the following:

a. the Regulations;

b. the Scheme;

c. special resolution passed by the shareholder for the Scheme; and

d. written representation from management.

Opinion

10. Based on our examination of the relevant records and according to the information and explanation provided to us and representations provided by management, we certify that the Company has implemented the Schemes in accordance with the Regulations and the resolutions passed at the general meeting held on January 21, 2016 and as per postal ballot dated 15 December 2016.

Restriction on use

11. The certificate is addressed to and provided to the members of the Company solely for the purpose of compliance with clause 13 of the Regulations. This certificate should be used solely for the purpose of complying with the Regulations and may not be suitable for any other purpose. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing.

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

4. Credit Rating

The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations. The Company has received CRISIL AA /Positive rating and CRISIL A1 rating for it’s the long term and short term financial instruments of the Company respectively

5. Vigil Mechanism

As per the provisions of Section 177(9) of the Act the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns.

The Company has a Whistle-Blower Policy in place since 2014 to encourage and facilitate employees to report concerns about unethical behaviour, actual/ suspected frauds and violation of Company’s Code of Conduct. The policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. The Policy also establishes adequate safeguards to enable employees report instances of leak of unpublished price sensitive information.

The Company has disclosed information about the establishment of the Whistle-Blower Policy on its website http://www.ltts.com/investors/. During the year, no personnel has been declined access to the Audit Committee, wherever desired.

6. Reporting of Frauds

The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under section 143(12) of the Act.

7. Business Responsibility Reporting

As per Regulation 34 of the LODR a separate section on Business Responsibility Reporting forms a part of the Annual Report (refer pages 110 to 118) describing initiatives taken by the Company from an environmental, social and governance perspective. The activities carried out by the Company as a part of its CSR initiatives during 2018-19 are covered in the same.

8. Statutory Compliance

The Company complies with all applicable laws, rules and regulations and ensure taking care of all its stakeholders.

9. MSME

The Ministry of Micro, Small and Medium Enterprises vide their Notification dated 2nd November 2018 has instructed all the Companies registered under the Companies Act, 2013, with a turnover of more than Rupees Five Hundred crore to get themselves onboarded on the Trade Receivables Discounting system platform (TReDS), set up by the Reserve Bank of India. In compliance with this requirement, the Company would be registering itself on TReDS soon through one of the service providers.

The Company would be complying with the requirement of submitting a half yearly return to the MCA within the specified timelines.

Acknowledgement

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

For and on behalf of the Board

DR. KESHAB PANDA S. N. SUBRAHMANYAN

CEO & Managing Director Vice Chairman

(DIN: 05296942) (DIN: 02255382)

Place: Mumbai

Date : May 3, 2019


Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting the 6th Annual Report along with the Audited Financial Statements of L&T Technology Services Limited for the year ended March 31, 2018.

Financial Results

(Rs. million)

2017-18

2016-17

Profit Before Depreciation, exceptional and extra ordinary items & tax

7,387

6,571

Less: Depreciation, amortization and obsolescence

576

575

Profit / (Loss) before exceptional items and tax

6,811

5,996

Add: Exceptional Items

-

-

Profit / (Loss) before tax

6,811

5,996

Less: Provision for tax

1,917

1,506

Profit for the period carried to the Balance Sheet

4,894

4,490

Add: Balance brought forward from previous year

3,554

270

Less: Dividend paid for the year (Including dividend distribution tax and deemed dividend)

1,208

1,206

Add: Gain / (Loss) on re-measurement of the net defined benefit plans

-

-

Balance available for disposal (which Directors appropriate as follows)

7,240

3,554

Debenture Redemption Reserve

-

Balance to be carried forward

7,240

3,554

Performance of the Company

State of Company Affairs

The gross sales and other income for the financial year under review were Rs.36,947 million as against Rs.31,671 million for the previous financial year registering an increase of 16.66%. The profit before tax from continuing operations including extraordinary and exceptional items was Rs.6,811 million and the profit after tax from continuing operations including extraordinary and exceptional items of Rs.4,894 million for the financial year under review as against Rs.5,996 million and Rs.4,490 million respectively for the previous financial year, registering an increase of 13.59% and 9.00% respectively

Segmental Performance

The Company has five Business Segments, namely Transportation, Process Industry, Industrial Products, Medical Devices and Telecom & Hi-Tech. During the year, the contribution to the revenue from various business segments were as follows:-

(Rs. million)

Revenue for 2017-18

Revenue for 2016-17

Transportation

10,653

9,382

Process Industry

4,834

4,962

Industrial Products

8,531

8,524

Medical Devices

2,535

2,196

Telecom & Hi-Tech

8,513

6,061

Total

35,066

31,125

The detailed segmental performance is referred in Note No. 43 of the Notes forming part of the standalone financial statements.

Geographical Performance

The Revenue contribution of the Company from various Geographies is mentioned herein below:

(Rs. million)

Sr. No

Geography

2017-18

2016-17

1.

North America

19,962

18,983

2.

Europe

6,291

6,057

3.

India

4,457

2,881

4.

Rest of the World

4,355

3,205

Total

35,066

31,125

Capital & Finance

During the year under review, the Company had allotted 7,65,655 Equity Shares of Rs.2 each upon exercise of stock options by the eligible employees under the Employee Stock Option Scheme - 2016.

As on March 31, 2018 the total paid up equity share capital of the Company was Rs.204,912,094/- consisting of 102,456,047 equity shares of Rs.2 each, fully paid up. Pursuant to Regulation 38 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 i.e. to achieve minimum public shareholding requirement of 25%, our Promoter- Larsen & Toubro Limited (L&T) - sold 2,049,120 equity shares between February 28, 2018 till April 26, 2018; of this, 468,292 equity shares were sold during the financial year 2017-18. However, of these 468,292 equity shares, the sale of 169,000 equity shares was not reflected in the Benpos of March 31, 2018, due to holidays on the stock exchange. Therefore, as on March 31, 2018, the shareholding of L&T was shown as 88.81% comprising of 90.991.100 equity shares, instead of 88.64% comprising of 90.822.100 equity shares. The Promoter’s stake thus reduced by 2% between February 28, 2018 till April 26, 2018 to 87.10%.

Capital Expenditure

As at March 31, 2018 the gross fixed and intangible assets including leased assets, stood at Rs.7,310 million (previous year Rs.6,928 million) and the net fixed and intangible assets, including leased assets, at Rs.5,530 million (previous year Rs.5,589 million). Capital Expenditure during the year amounted to Rs.1 million (previous year Rs.23 million).

Deposits

During the year ended March 31, 2018, the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Rules framed thereunder. Hence the Company does not have any unclaimed deposits as on date.

Depository System

As the members are aware, the Company’s shares are compulsorily tradable in electronic form. As on March 31, 2018, 99.98% of the Company’s total paid up capital representing 102,435,147 shares are in dematerialized form. SEBI vide its recent circular has proposed to prohibit transfer of shares in physical form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories.

Transfer to Investor Education And Protection Fund

There are no amounts that are due to be transferred to Investor Education and Protection Fund by the Company

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

Subsidiary/ Associate/ Joint Venture Companies

The Company has two subsidiaries namely L&T Technology Services LLC and L&T Thales Technology Services Private Limited. Further the Company also has two step down subsidiaries namely Esencia Technologies Inc. and Esencia Technologies India Private Limited.

During the year under review, the Company, through its subsidiary, L&T Technology Services LLC, had acquired Esencia Technologies Inc. and its Indian subsidiary Esencia Technologies India Private Limited.

Shares acquired during the year:

Name of the

Type of shares/units

No of shares/

Company

units

L&T Technology Services LLC

Common Stock

1,500,0001

Notes:

1. The Company acquired 1,500,000 units of $ 10 each from L&T Technology Services LLC. Further, L&T Technology Services LLC acquired Esencia Technologies Inc. along with its Indian subsidiary.

The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(c) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and the same is placed on the website at http://www.lnttechservices.com/ investors/. The Company does not have any material subsidiaries.

A) Performance and Financial Position of each subsidiary/associate and joint venture companies:

A statement containing the salient features of the financial statement of subsidiaries/associate/joint venture companies and their contribution to the overall performance of the Company is annexed to this Report at page no. 229 of the Annual Report.

Particulars of Loans Given, Investments Made, Guarantees Given or Security Provided by the Company

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Companies Act, 2013 and Regulation 34(3) and Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in Note 36 forming part of the financial statements.

Particulars of Contracts or Arrangements with Related Parties

The Audit Committee and Board of Directors have approved the Related Party Transaction Policy and the same has been uploaded on the Company’s website http://www. lnttechservices.com/investors/.

The Company has a process in place of periodically reviewing and monitoring Related Party Transactions.

All the related party transactions were in the ordinary course of business and at arm’s length. The Audit Committee has approved all the Related Party Transactions for the FY 2017-18 and estimated transactions for FY 2018-19.

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

Amount to be carried to Reserves

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

Dividend

The Board at its meeting held on November 7, 2017 declared an interim dividend of Rs.4/- per equity share amounting to Rs.408,995,668 (the total payout including Dividend Distribution Tax amounted to Rs.492,259,006); the dividend was paid on November 21, 2017. Further, the Board, in its meeting held on May 22, 2018, has recommended a final dividend of Rs.12 (600%) per equity share of Rs.2 each for the financial year ended March 31, 2018. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting to be held on August 22, 2018.

The total amount of dividend for the year is Rs.408,995,668 (excluding Dividend Distribution Tax).

The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company on May 3, 2017 which is in line with regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy is provided as Annexure ‘A’ forming a part of this Board Report and also uploaded on the Company’s website at http://www.lnttechservices.com/investors/

Material Changes and Commitments Affecting Financial Position of the Company, between the End of the Current Financial Year and the Date of The Report

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

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Information as required to be given under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure ‘B’ forming part of this Board Report.

Risk Management Policy

The Risk Management Committee comprises of Mr. S. N. Subrahmanyan, Dr. Keshab Panda and Mr. P. Ramakrishnan. Mr. S. N. Subrahmanyan is the Chairman of the Committee.

The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework.

A detailed note on risk management is given under financial review section of the Management Discussion and Analysis on pages 98 and 99 of this Annual Report.

Corporate Social Responsibility

The Corporate Social Responsibility (CSR) Committee comprises of Mr. Arjun Gupta, Mr. Sudip Banerjee and Dr. Keshab Panda as its Members. Mr. Arjun Gupta is the Chairman of the Committee.

The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are provided in Annexure ‘C’ to the Board report.

The details of various projects and programs which can be undertaken by the Company as a part of its CSR Policy framework is available on its website http://www.lnttechservices.com/ media/32150/csr-policy-ltts.pdf.

Directors and Key Managerial Personnel Appointed/Resigned During the Year

A. Appointment/Re-appointment of Directors & Key Managerial Personnel:

During the year, the following appointments/ re-appointments were made on Board:-

a. The Board has re-appointed Dr. Keshab Panda as the Chief Executive Officer & Managing Director of the Company for a period of three years with effect from January 10, 2018 upto and including January 9, 2021, subject to approval of the shareholders in general meeting.

b. The Board has also re-appointed Mr. Amit Chadha as the President-Sales and Business Development & Whole-Time Director of the Company for a period of three years with effect from February 1, 2018 upto and including January 31, 2021, subject to approval of the shareholders in general meeting.

c. The Board has appointed Mr. Bhupendra Bhate as the Chief Operating Officer & Whole-Time Director of the Company for a period of three years with effect from November 07, 2017 upto and including November 6, 2020, subject to approval of the shareholders in general meeting.

d. Mr. S. N. Subrahmanyan and Dr. Keshab Panda, Directors, retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment.

e. Special Resolution for the continuation of Mr.

A. M. Naik as a Non-Executive Director, post attainment of the age of 75 years, forms part of the Notice being sent to the shareholders.

The notice convening the AGM includes the proposal for appointment/re-appointment of Directors.

The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company http://www. lnttechservices.com/investors/.

The Company has also disclosed on its website http://www.lnttechservices.com/investors/ details of the familiarization programs formulated to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.

Number of Meetings of the Board Of Directors

This information is given in Annexure ‘D’ Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 57 of this Annual Report.

Audit Committee

The Company has in place an Audit Committee in terms of the requirements of Section 177 of the Companies Act, 2013 read with rules made thereunder and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The details relating to the same are given in Annexure ‘D’ Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 59 of this Annual Report.

Company Policy on Directors Appointment and Remuneration

The Company has in place a Nomination and Remuneration Committee (NRC) in accordance with the requirements of section 178 of the Companies Act, 2013 read with rules made thereunder and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The details of the same are given in Annexure ‘D’ -Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 60 of this Annual Report.

NRC Committee has formulated a policy on Director’s appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees and the criteria for determining qualifications, positive attributes and independence of a Director and also disclosed the policy on the Company’s website http://www.lnttechservices.com/ and is also enclosed to the Board report as Annexure ‘I’.

NRC Committee has formulated a policy on Board diversity

Stakeholders’ Relationship Committee

The Company has in place a Stakeholders’ Relationship Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 20 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

The details of the same are given in Annexure ‘D’-Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 63 of this Board Report.

Declaration of Independence

The Company has received Declarations of Independence from Independent Directors as stipulated under Section 149(7) of the Companies Act, 2013 confirming that he/she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the website of the Company http://www.lnttechservices.com/investors/investor-download/. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013.

Adequacy of Internal Financial Controls

The Company has designed and implemented a process driven framework for Internal Financial Controls (‘IFC’) within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013. For the year ended March 31, 2018, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved controls wherever the effect of such gaps would have a material effect on the Company’s operations.

Directors Responsibility Statement

The Board of Directors of the Company confirms:

a. In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

e. The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently;

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

Performance Evaluation of Board, Its Committees and Directors

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

It includes circulation of questionnaires to all Directors for evaluation of the Board and its Committees, Board’s composition and its structure, its culture, Board’s effectiveness, Board’s functioning, information availability, etc. These questionaries’ also cover specific criteria and the grounds on which all Directors in their individual capacity will be evaluated. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committee, Individual Directors and the Chairman.

The Performance evaluation inputs, including areas of improvement along with the implementation for improved corporate governance practices and effective participation in Board/Committee meetings, were discussed in the meeting of the Independent Directors held on May 22, 2018 in accordance with Schedule IV of the Companies Act, 2013 and in the subsequent Meeting of Nomination and Remuneration Committee and the Board.

Disclosure of Remuneration

The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder are given in the Annexure ‘E’ forming part of this Board Report.

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the Company during the year. The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure ‘F’ forming part of this Board Report.

In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the C ompany Secretary at the registered offi ce of the C ompany. None of the employees listed in the said Annexure is related to any Director of the Company

Compliance with Secretarial Standards on the Board and General Meetings

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

Protection of Women at Workplace

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

During the year under review, 3 cases of sexual harassment were received by the ICC.

Consolidated Financial Statements

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in accordance with the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI), in this regard.

Auditors Report

The Auditors report to the shareholders does not contain any qualification, observation or comment or remark(s) which has/ have an adverse effect on the functioning of the Company.

Statutory Auditors

The Company’s auditors, Sharp & Tannan, (firm registration number 109982W) Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting. As per the provisions of the Companies Act, 2013, Sharp & Tannan are eligible to be appointed for the next four years.

A Certificate from the Auditors has been received to the effect that they are eligible to act as auditors of the Company under Section 141 of the Companies Act, 2013.

The Auditors have confirmed that they have subjected themselves to the peer review process of ICAI and hold valid certificate issued by the Peer Review Board of the ICAI.

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

The Auditors have also furnished a declaration confirming their independence as well as their arm’s length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company

The Auditors attended the last Annual General Meeting of the Company.

Secretarial Audit Report

The Board had appointed Ms. Naina Desai, (M. No.1351), Practicing Company Secretary, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2017-18.

The Secretarial Audit Report issued by Naina Desai, Practicing Company Secretary is attached as Annexure ‘G’ to this Board Report.

The Secretarial Auditor’s Report to the shareholders does not contain any qualification or reservation which has any material adverse effect on the functioning of the Company.

Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals

During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

Extract of Annual Return

As per the provisions of Section 92(3) of the Companies Act, 2013, an extract of the Annual Return in Form MGT -9 is provided in Annexure ‘H’ to this Board Report.

Other Disclosures

1. Corporate Governance Report

Pursuant to Regulation 34 read with schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure ‘D’ forming part of this Board Report.

2. Employee Stock Option Scheme

There has been no material change in the ESOP Scheme - 2016 of the Company during the current financial year. The ESOP Scheme -2016 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefit) Regulations, 2014 (“SBEB Regulations”).

The disclosure relating to the ESOP Scheme - 2016 required to be made under the Companies Act, 2013 and rules made thereunder and the SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company http://www. lnttechservices.com/investors/.

The Statutory Auditors’ certificate confirming compliance with the Companies Act, 2013 and the SBEB Regulations obtained from Statutory Auditors is reproduced below:

3. No disclosure is required under Section 67(3)(c) of the Companies Act, 2013, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.

4. Credit Rating

The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations. The Company has received CRISIL AA /Stable rating and CRISIL A1 rating for it’s the long term and short term financial instruments of the Company respectively

5. Vigil Mechanism

As per the provisions of Section 177(9) of the Companies Act, 2013 (‘Act’), the Company is required to establish an effective Vigil Mechanism for Directors and employees to report genuine concerns.

The Company has a Whistle-Blower Policy in place since 2014 to encourage and facilitate employees to report concerns about unethical behaviour, actual/ suspected frauds and violation of Company’s Code of Conduct. The policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy.

The Company has disclosed information about the establishment of the Whistle-Blower Policy on its website http://www.lnttechservices.com/investors/. During the year, no personnel has been declined access to the Audit Committee, wherever desired.

6. Reporting of Frauds

The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under section 143(12) of the Companies Act, 2013.

7. Business Responsibility Reporting:

As per Regulation 34 of the Regulations 2015, a separate section on Business Responsibility Reporting forms a part of the Annual Report (refer pages 108 to 117) describing initiatives taken by the Company from an environmental, social and governance perspective. The activities carried out by the Company as a part of its CSR initiatives during 2017-18 are covered in the same.

8. Acknowledgement

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

For and on behalf of the Board

DR. KESHAB PANDA S. N. SUBRAHMANYAN

CEO & Managing Director Vice Chairman

(DIN: 05296942) (DIN: 02255382)

Mumbai, May 22, 2018


Mar 31, 2017

The Directors have pleasure in presenting the 5th Annual Report along with the Audited Financial Statements of L&T Technology Services Limited for the year ended March 31, 2017.

1. FINANCIAL RESULTS

(Rs. million)

2016-17

2015-16

Profit Before Depreciation, exceptional and extra ordinary items & Tax

6,571

6,135

Less: Depreciation, amortization and obsolescence

575

541

Add: Transfer from Revaluation Reserve

-

-

Profit before exceptional and extraordinary items and tax

5,996

5,594

Add: Exceptional Items

-

-

Profit before extraordinary items and tax

5,996

5,594

Add: Extraordinary items

-

-

Profit / (Loss) before tax

5,996

5,594

Less: Provision for tax

1,506

1,231

Profit for the period carried to the balance sheet

4,490

4,363

Add: Balance brought forward from previous year

270

-458

Balance available for disposal (which directors appropriate as follows)

4,760

3,905

Proposed dividend (Interim dividend paid and deemed dividend)

1,022

3,020

Dividend Tax

184

615

General Reserve

-

-

Balance to be carried forward

3,554

270

2. PERFORMANCE OF THE COMPANY STATE OF COMPANY''S AFFAIRS

Revenue from operations and other income for the financial year under review were Rs.31,680 million as against Rs.29,754 million for the previous financial year registering an increase of 6.47%. The profit before tax was Rs.5,996 million and the profit after tax was Rs.4,490 million for the financial year under review as against Rs.5,594 million and Rs.4,363 million respectively for the previous financial year.

SEGMENTAL PERFORMANCE

The Company has five Business Segments, namely, Transportation, Process Engineering, Industrial Products, Medical Devices and Telecom. During the year, the contribution to the revenue from the various business segments was as follows:-

(Rs. million)

Revenue for 2016-17

Revenue for 2015-16

Transportation

9,382

7,434

Process Engineering

4,962

5,736

Industrial Products

8,524

7,742

Medical Devices

2,196

1,939

Telecom

6,061

6,086

The detailed segmental performance is referred in Note No. 46 of the Notes forming part of the unconsolidated financial statements.

GEOGRAPHICAL PERFORMANCE

The Revenue contribution of the Company from the various Geographies is mentioned herein below:

( Rs. million)

S. N.

Geography

2016-17

2015-16

1.

North America

18,983

16,937

2.

Europe

6,057

5,955

3.

India

2,881

2,584

4.

Rest of the World

3,204

3,461

Total

31,125

28,937

3. INITIAL PUBLIC OFFERING OF YOUR COMPANY

During the year under review, the Company came out with its maiden ''Initial Public Offering'' (IPO) where the Promoters & Holding Company, Larsen & Toubro Limited made an Offer for Sale of 10,400,000 Equity shares of face value of Rs.2 each for cash at a price of Rs.860 per equity share aggregating Rs.8,944 million. The offer constituted 10.23% of the post-offer paid-up equity share capital of the Company. The public issue was open for subscription from September 12, 2016 till September 15, 2016. The issue was oversubscribed by 1.93 times. The Company got listed on September 23, 2016 on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).

The shares prices touched a high of Rs.931 on the date of Listing i.e. on September 23, 2016. Currently the share is being quoted at Rs.770.90 as on May 2, 2017.

Based on the list released by NSE as of March 31, 2017, your company is ranked at 232nd position in the Top 500 Listed Companies on the basis of market capitalization.

4. CAPITAL & FINANCE

During the year under review, the Company had allotted 26,690,392 Equity Shares of Rs.2 each at a premium of Rs.279 per share to the Promoter i.e. Larsen & Toubro Limited on June 3, 2016 by way of rights issue pursuant to a resolution passed by the Board at its meeting held on April 26, 2016. The proceeds of the issue of equity shares were utilized for the purpose of redemption of 750,000,000 Preference Shares of Rs.10 each in five tranches of 150,000,000 Preference Shares in each tranche, from May 16, 2016 to May 20, 2016, for an aggregate amount of Rs.7,500 million. As on date, the capital structure of the Company consists of only Equity Shares.

Consequent to the aforesaid issue, the total paid up equity share capital of the company is Rs.203,380,784 consisting of 10,16,90,392 Equity Shares of Rs.2 each, fully paid up. Pursuant to the IPO, Larsen & Toubro Limited continues to be the Holding Company with a stake of 89.77% comprising of 9,12,90,392 Equity Shares and the Public holding is 10.23% comprising of 10,400,000 Equity Shares.

5. CAPITAL EXPENDITURE

As at March 31, 2017, the gross fixed and intangible assets stood at Rs.6,928 million (previous year Rs.6,435 million) out of which assets amounting to Rs.592 million (previous year Rs.920 million) were added during the year.

6. DEPOSITS

During the year ended March 31, 2017, the Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Rules framed thereunder and hence no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

7. DEPOSITORY SYSTEM

As the members are aware, the Company''s shares are compulsorily tradable in electronic form. As on March 31, 2017, 99.99% of the Company''s total paid up capital representing 101,688,765 shares are in dematerialized form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories.

8. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

There are no amounts that are due to be transferred to Investor Education and Protection Fund by the Company.

9. SUBSIDIARY/ ASSOCIATE/ JOINT VENTURE COMPANIES

The company has two subsidiaries, namely, L&T Thales Technology Services Private Limited and L&T Technology Services LLC.

The Company has signed Definitive Agreement to acquire Esencia Technologies Inc. USA

The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(c) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and the same is placed on the website at http://www.lnttechservices.com/investors/. The Company does not have any material subsidiaries.

A) Performance and Financial Position of each subsidiary/associate and joint venture companies:

A statement containing the salient features of the financial statement of subsidiaries/associate/joint venture companies is annexed to this Report at page no. 219 and 220 of the Annual Report.

10. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided on pages 126 and 129 of this Annual Report.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Audit Committee and Board of Directors have approved the Related Party Transaction Policy and the same has been uploaded on the Company''s website http://www. lnttechservices.com/investors/ .

The Company has a process in place of periodically reviewing and monitoring Related Party Transactions.

All the related party transactions were in the ordinary course of business and at arm''s length. The Audit Committee has approved all the Related Party Transactions for the financial year 2016-17 and estimated transactions for FY 2017-18.

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

12. AMOUNT TO BE CARRIED TO RESERVES

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

13. DIVIDEND

The Board through a Circular Resolution on June 24, 2016, declared an interim dividend of Rs.4.95 and in its meeting held on November 10, 2016, declared an interim dividend of Rs.3 per equity share. Further, the Board, in its meeting held on May 3, 2017, has recommended a final dividend of Rs.4 per equity share for the financial year ended March 31, 2017. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting to be held on August 23, 2017.

The final dividend on equity shares, if approved by the members would involve a total cash outflow including dividend tax in current year of Rs.1,579 million as against Rs.3,635 million in previous year. Dividend (including dividend tax) as a percentage of unconsolidated net profit after tax is 35% as compared to 83% in previous year.

The Board of Directors of the Company has approved the Dividend Distribution Policy on May 3, 2017 in line with regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy is provided in Annexure ''G ''of this Board Report and is also uploaded on the Company''s website at http://www.lnttechservices.com/ investors/.

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

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

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

Information as required to be given under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure “A" forming part of this Board Report .

16. RISK MANAGEMENT POLICY

The Risk Management Committee comprises of Mr.

S. N. Subrahmanyan, Dr. Keshab Panda and Mr. P Ramakrishnan. Mr. S. N. Subrahmanyan is the Chairman of the Committee.

The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework.

A detailed note on risk management is given under financial review section of the Management Discussion and Analysis on pages 94 to 95 of this Annual Report.

17. CORPORATE SOCIAL RESPONSIBILITY

The Company has re-constituted the Corporate Social Responsibility (CSR) Committee on January 21, 2017 comprising of Mr. Arjun Gupta, Mr. Sudip Banerjee and Dr. Keshab Panda as its Member Mr. Arjun Gupta is the Chairman of the Committee.

The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are provided in Annexure ''B'' to the Board report.

The details of various projects and programs which can be undertaken by the Company as a part of its CSR Policy framework is available on the its website http://www. lnttechservices.com/media/32150/csr-policy-ltts.pdf.

18. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED DURING THE YEAR

A. Appointment/Re-appointment of Directors:

During the year, the following appointments were made on Board:-

a. Mr. Narayanan Kumar was appointed as an Independent Director of the Company with effect from July 15, 2016 upto and including July 14, 2021, subject to the approval of the shareholders. His appointment was regularized as an Independent Director in the Annual General meeting of the Company held on July 15, 2016.

b. Mr. A. M .Naik, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting of the Company.

c. Mr. Amit Chadha, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting of the Company.

d. Mr. S. N. Subrahmanyan, Director of the Company was appointed as Non-Executive ViceChairman of the Company with effect from May 3, 2017.

B. Cessation of Directors:

a. Mr. V. K. Magapu ceased to be a Director of the Company w.e.f. July 15, 2016. The Board places on record its appreciation of the immense contribution by Mr. Magapu during his tenure as Director of the Company.

b. Mr. Kumar Prabhas ceased to be COO & WholeTime Director of the Company w.e.f January 21, 2017. The Board places on record the valuable contribution of Mr. Prabhas during his tenure as COO & Whole-Time Director of the Company.

C. Key Managerial Personnel:

The following were the changes in the Key Managerial Personnel:-

a. Mr. Y. V S. Sravankumar ceased to be the Company Secretary w.e.f. April 26, 2016.

b. Mr. Kapil Bhalla was appointed as the Company Secretary w.e.f. April 27, 2016.

The notice convening the AGM includes the proposal for appointment / re-appointment of Directors.

The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company http://www.lnttechservices. com/investors/.

The Company has also disclosed on its website http://www. lnttechservices.com/investors/ details of the familiarization programs formulated to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc.

19. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

This information is given in Annexure “C" Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 64 of this Annual Report.

20. AUDIT COMMITTEE

The Company has in place an Audit Committee in terms of the requirements of Section 177 of the Companies Act, 2013 read with rules made thereunder and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The details relating to the same are given in Annexure “C" Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 65 of this Annual Report.

21. COMPANY POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company has in place a Nomination and Remuneration Committee (NRC) in accordance with the requirements of section 178 of the Companies Act, 2013 read with rules made thereunder and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The details of the same are given in Annexure “C"- Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 67 of this Annual Report.

The Committee has formulated a policy on directors'' appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees and the criteria for determining qualifications, positive attributes and independence of a director.

The Committee has formulated a policy on Board diversity.

22. STAKEHOLDERS'' RELATIONSHIP COMMITTEE

The Company has in place a Stakeholders'' Relationship Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 20 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

The details of the same are given in Annexure “C"- Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page no. 68 of this Board Report.

23. DECLARATION OF INDEPENDENCE

The Company has received Declarations of Independence from Independent Directors as stipulated under Section 149(7) of the Companies Act, 2013 confirming that he/ she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the website of the Company http://www.lnttechservices.com/ investors/investor-download/.

24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has designed and implemented a process driven framework for Internal Financial Controls (''IFC'') within the meaning of the explanation to Section 134(5) (e) of the Companies Act, 2013. For the year ended March 31, 2017, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved controls wherever the effect of such gaps would have a material effect on the Company''s operations.

25. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

a. In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

e. The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently;

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

26. PERFORMANCE EVALUATION OF BOARD/BOARD COMMITTEES AND DIRECTORS

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

It includes circulation of questionnaires to all Directors for evaluation of the Board and its Committees, Board composition and its structure, its culture, its effectiveness, its functioning, information availability, etc. These questionnaires also cover specific criteria and the grounds on which all Directors in their individual capacity will be evaluated.

The inputs given by all the directors were discussed in the meeting of the Independent Directors held on May 3, 2017, as per Schedule IV of the Companies Act, 2013. The performance evaluation of the Board, Committees, Directors and Chairman was also reviewed by the Nomination and Remuneration Committee and the Board.

27. DISCLOSURE OF REMUNERATION

The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder are given in the Annexure “D" forming part of this Board Report.

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the Company during the year. The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure “H" forming part of this Board Report.

In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure “H". 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.

28. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS

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

29. PROTECTION OF WOMEN AT WORKPLACE

The Company has constituted an Internal Complaints Committee (''ICC'') - created in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (''Act'').

The ICC has been constituted as per the Act, to redress the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, no cases of sexual harassment were received by the ICC.

30. CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in accordance with the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI), in this regard.

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

31. STATUTORY AUDITORS

The Company''s auditors, Sharp & Tannan, (firm registration number 109982W) Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting. As per the provisions of the Companies Act, 2013, Sharp & Tannan are eligible to be appointed for the next financial year 2017-18.

A Certificate from the Auditors has been received to the effect that they are eligible to act as auditors of the Company under Section 141 of the Companies Act, 2013.

The Auditors have confirmed that they have subjected themselves to the peer review process of ICAI and hold valid certificate issued by the Peer Review Board of the ICAI.

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

The Auditors have also furnished a declaration confirming their independence as well as their arm''s length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company.

32. SECRETARIAL AUDIT REPORT

The Board had appointed Naina Desai, (M. No.1351), Practicing Company Secretary, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2016-17.

The Secretarial Audit Report issued by Naina Desai, Practicing Company Secretary is attached as Annexure “E" to this Board Report.

The Secretarial Auditor''s Report to the shareholders does not contain any qualification.

33. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

34. EXTRACT OF ANNUAL RETURN

As per the provisions of Section 92(3) of the Companies Act, 2013, an extract of the Annual Return in Form MGT -9 is attached as Annexure ''F'' to this Board Report.

35. OTHER DISCLOSURES

1. CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34 read with schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure “C" forming part of this Board Report.

2. EMPLOYEE STOCK OPTION SCHEME

There has been no material change in the ESOP Scheme - 2016 during the current financial year.

The ESOP Scheme -2016 is in compliance with the Securities and Exchange Board of India (Share based Employee Benefit) Regulations, 2014 (“SBEB Regulations").

The disclosure relating to the ESOP Scheme - 2016 required to be made under the Companies Act, 2013 and rules made thereunder and the SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company http://www. lnttechservices.com/investors/.

3. No disclosure is required under Section 67(3)(c) of the Companies Act, 2013, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.

4. CREDIT RATING

The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations. The Company has received CRISIL AA /Stable rating and CRISIL A1 rating for it''s the long term and short term financial instruments of the Company respectively.

5. VIGIL MECHANISM

As per the provisions of Section 177(9) of the Companies Act, 2013 (''Act''), the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns.

The Company has a Whistle-blower Policy in place since 2014 to encourage and facilitate employees to report concerns about unethical behaviour, actual/ suspected frauds and violation of Company''s Code of Conduct. The policy provides for adequate safeguards against victimization of persons who avail the same and provides for direct access to the chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy.

The Company has disclosed information about the establishment of the Whistle Blower Policy on its website http://www.lnttechservices.com/investors/. During the year, no personnel has been declined access to the Audit Committee, wherever desired.

6. REPORTING OF FRAUDS

The Auditors of the Company have not reported any fraud committed against the Company by its officers or employees as specified under section 143(12) of the Companies Act, 2013.

36. ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the customers, vendors, academic institutions, Financial Institutions, Regulatory authorities and stock exchanges and all the various stakeholders for their continued cooperation and support to the Company. Your Directors also acknowledge the support and co-operation from the Government of India and the Governments of various countries, the concerned State Governments and other Government Departments and Governmental Agencies.

The Directors appreciate and value the contributions made by every member of the LTTS family globally.

For and on behalf of the Board

Dr. Keshab Panda S. N. Subrahmanyan

CEO & Managing Director Vice Chairman

(DIN: 05296942) (DIN: 02255382)

Mumbai, May 3, 2017


Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the Fourth report and Audited Accounts of L&T Technology Services Limited for the year ended March 31, 2016.

FINANCIAL RESULTS

Rs.

Lakhs

Particulars

2015-16

2014-15

Rs.

Rs.

Profit Before Depreciation, exceptional and extra ordinary items & Tax

60,615

42,619

Less: Depreciation, amortization and obsolescence

5,414

4,709

Add: Transfer from Revaluation Reserve

-

-

Profit before exceptional and extraordinary items and tax

55,201

37,910

Add: Exceptional Items

" - -

-

Profit before extraordinary items and tax 55,201

37,910

Add: Extraordinary items

Profit / (Loss) before tax

55,201

37,910

Less: Provision for tax

11,777

6,392

Profit after tax from continuing operations

43,424

31,518

Profit from discontinued operations

Total expenses on discontinued operations

Profit from discontinued operations (after tax)

-

-

Profit for the period carried to the balance sheet

43,424

31,518

Add: Balance brought forward from previous year

5,732

44

Less: Depreciation charged against Retained Earnings

-

251

Balance available for disposal (which directors appropriate as follows)

49,156

31,311

Debenture Redemption Reserve

-

-

Proposed dividend (Including Interim Dividend paid)

30,200

21,500

Dividend Tax

6,148

4,078

General Reserve

-

-

Balance to be carried forward

12,808

5,732

Dividend

30200

21,500

PERFORMANCE OF THE COMPANY

The gross sales and other income for the financial year under review were Rs.2,969 crore as against Rs. 2,586 crore for the previous financial year. The profit before tax from continuing operations including extraordinary and exceptional items was Rs. 552 crore and the profit after tax from continuing operations including extraordinary and exceptional items of Rs. 434 crore for the financial year under review as against Rs. 379 crore and Rs. 315 crore respectively for the previous financial year,

CAPITAL a FINANCE:

During the year under review, the Company has re-organized its equity share capital. The capital structure of the Company was divided into 30 crore equity shares of Rs.10/- each fully paid up, aggregating to Rs 300 Crores which was consolidated into 7.5 crore Equity Shares of Rs 40/- each fully paid up, aggregating to Rs 300 Crores with the approval of Board and shareholders on January 13, 2016.

The Company thereafter has filed a petition with the Honorable High Court of Bombay, to reduce the face value of equity shares from Rs. 40/- each, fully paid up to Rs. II- each, fully paid up. The High Court of judicature of Bombay vide its Order dated April 1, 2016 has approved the said proposal. Accordingly, post reduction the share capital of the Company is as follows:-

Description

Amount (Rs. Crore)

A

7.5 crore Equity Shares of Rs 2/- each (fully paid up)

15

B

Share Premium

285

C

75 crore 10% Redeemable Preference shares of Rs 10/each (fully paid up)

750

Total

1050

CAPITAL EXPENDITURE:

As at March 31, 2016 the gross fixed and intangible assets including leased Assets, stood at Rs.763 crore and the net fixed and intangible assets, including leased assets, at Rs.560 crore. Addition to gross block during the year amounted to Rs. 92 crore.

DEPOSITS:

The Company has not accepted any deposits during the financial year ended March 31, 2016.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided in this Annual Report.

AMOUNT TO BE CARRIED TO RESERVES

The Company has taken Rs 128 crores to Reserves as at the year-end after paying dividend and other appropriations.

DIVIDEND

The Company has declared and paid the following interim dividend on Equity Shares and Preference shares during the financial year 2015-16.

Declaration of Dividend

Date of Circular Resolution

No of Equity / Preference shares

Rate of Dividend

1st Interim Dividend on equity shares

Circular resolution passed on June 26, 2015

300,000,000

Rs. 1.5417/per share

2nd Interim Dividend on equity shares

Circular resolution passed on September 25, 2015

300,000,000

Rs. 1.73825/per share

3rd Interim Dividend on equity shares

Circular resolution passed on December 24, 2015

300,000,000

Rs. 2.03652/per share

4th Interim Dividend on equity shares

Circular resolution passed on March 29, 2016

75,000,000

Rs. 9.00097/per share

1st Interim Dividend on Preference shares

Circular resolution passed on June 26, 2015

750,000,000

Rs 0.2500/per share

2 Interim Dividend on Preference shares

Circular resolution passed on September 25, 2015

750,000,000

Rs. 0.25137/per share

3 Interim Dividend on Preference shares

Circular resolution passed on December 24, 2015

750,000,000

Rs. 0.25206/per share

4th Interim Dividend on Preference shares

Circular resolution passed on March 29, 2016

750,000,000

Rs. 0.24657/per share

AAATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY. BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

The Company in its meeting dated April 26, 2016 had approved the change in terms and conditions of the Preference Shares. Consequently, with effect from April 1, 2015, the

preference shares are convertible anytime, at the option of the Issuer or redeemable at par at the end of 10 years from the date of allotment. The Company reserves the right to convert the preference shares, anytime, partly or fully, to equity shares of face value of Rs.2 each at a premium of Rs.279 per share or redeem the same at premium.

There are no material changes that have taken place between the date of Balance Sheet and the date of Director''s Report other than those discussed above.

RISK MANAGEMENT POLICY

The Company has formulated a Risk Management Policy and has in place a mechanism to inform the Board Members about risk assessment and mitigation procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework.

Risks that impact the Company’s business are broadly classified into Strategic, Business and Operational.

- Strategic: Strategic risks are the risk arising due to the decisions of the management w.r.t. market, business growth, delivery model, etc. which can have adverse effect on the business objectives. Ownership of these risks rests with the Top Management.

- Business: Business risks are the risks which impose uncertainty in profits or danger of loss that could causes business to fail, e.g. Client preferences, increased competition etc. Ownership of these risks rests with the Business Heads.

- Operational: Operational risks are the risks arising from people, systems and processes through which the Company operates. Ownership of these risks rests with Operating Teams.

CORPORATE SOCIAL RESPONSIBILITY

The Company has re-constituted the Corporate Social Responsibility (CSR) committee comprising of Mr. V.K Magapu, Mr. Arjun Gupta and Ms. Renuka Ramnath as its Members on October 28, 2015

The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure ‘A* to the Board report.

CSR Policy is available on the Company’s website http://www.lnttechservices.com/media/32150/csr-policv-ltts.pdf

PERFORMANCE EVALUATION OF BOARD/BOARD COMMITTEES AND DIRECTORS

The Nomination and Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, committees and individual directors has to be made.

It includes circulation of questionnaires to all Directors for evaluation of the Board and its Committees, Board composition and its structure, its culture, Board effectiveness, Board functioning, information availability, etc. These questionnaires’ also cover specific criteria and the grounds on which all directors in their individual capacity will be evaluated.

During the year under review, the Company has completed the performance evaluation of the Board, its Committee{s), Chairman and Directors and the summary of the evaluation shall be shared with the members of the Nomination and Remuneration Committee and the Board.

During the year under review, a meeting of the Independent Directors was held on May 07, 2015 as per the requirements under Schedule IV of the Companies Act, 2013.

DETAILS OF THE DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED / RESIGNED DURING THE YEAR

LIST OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

A. Present Directors of the Company:

Mr. Anilkumar Manibhai Naik

Mr. Samir Thakorbhai Desai

Mr. Vijay Kumar Magapu

Ms. Renuka Ramnath

Dr. Keshab Panda

Mr. Arjun Gupta

Mr. Sekharipuram Narayanan

Mr. Sudip Banerjee

Subrahmanyan

Mr. Amit Chad ha

Mr. Kumar Prabhas

B. Directors appointed during the year:

During the year, following appointments were made on Board:-

a. Dr. Hasit Bharatkumar Joshipura was appointed as an Independent Director of the Company on April 30, 2014 for the period of five years. Mr. Joshipura resigned as Independent Director of the Company on October 28, 2015 upon his appointment in parent company. Further Mr. Joshipura was appointed as an Additional Director of the Company with effect from October 28, 2015.

b. Mr. Arjun Gupta was appointed as an Independent Director of the Company with effect from October 28, 2015 upto and including October 27, 2020.

c. Mr. Sudip Banerjee was appointed as an Independent Director of the Company with effect from January 21, 2016 upto and including January 20, 2021.

d. Dr.Keshab Panda was re-designated as the Chief Executive Officer & Managing Director of the Company with effect from January 21, 2016

Dr.Keshab Panda Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting of the Company.

Mr. Kumar Prabhas was appointed as Whole-time Director & COO of the Company with effect from January 21, 2016 upto and including January 20, 2021.

C. Resignation of Director during the year:

a. Dr. Hasit Bharatkumar Joshipura, appointed as Non - Executive Director on October 28, 2015 ceased to be a Director with effect from the close of working hours of January 22, 2016.

The Board places on record the valuable contribution of Dr. Joshipura during his tenure as Director of the Company.

D. Key Managerial Personnel:

The following are the Key Managerial Personnel as per the provisions of the Companies Act, 2013:

a. Dr. Keshab Panda, Chief Executive Officer a Managing Director

b. Mr. Amit Chadha, Whole Time Director.

c. Mr. Kumar Prabhas, Whole-Time Directora COO.

d. Mr. YVS Sravankumar, Company Secretary and

e. Mr. P Ramakrishnan , Chief Financial Officer

f. Mr. M. V. Govindarajan resigned as the Manager of the Company with effect from June 30, 2015.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

- In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

- The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Directors have prepared the Annual Accounts on a going concern basis;

- The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL

MEETINGS

The Company has complied with Secretarial Standards issued by the Institute of Company

Secretaries of India on Board Meetings and Annual General Meetings.

DISCLOSURES UNDER THE COMPANIES ACT. 2013

1. EXTRACT OF ANNUAL RETURN

As per the provisions of Section 92(3) of the Companies Act, 2013, an extract of the Annual Return is attached as Annexure ‘B’ to this Report.

2. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Meetings of the Board are held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the year under review four meetings were held on May 7, 2015, July 27, 2015, October 28, 2015 and January 21, 2016.

The Agenda of the Meeting is circulated to the Directors in advance. Minutes of the Meetings of the Board of Directors are circulated amongst the Members of the Board for their perusal.

The details of the Board meetings and the attendance of Directors are provided in the Corporate Governance Report.

3. AUDIT COMMITTEE

The Company has constituted an Audit Committee in terms of the requirements of Section 177 of the Companies Act, 2013. The Committee comprises of two Independent Directors and one Non-Executive Director. The terms of reference of the Audit Committee are in line with the provisions of the Companies Act, 2013.

The Company has re - constituted the Audit Committee comprising of Mr. Samir Desai as the Chairman and Mr. V.K.Magapu & Ms. Renuka Ramnath as the Members. Members are requested to refer to the Corporate Governance Report for more details.

In accordance with the requirements of the Companies Act, 2013, during the year, the Company has established a vigil mechanism framework for Directors and employees to report genuine concerns.

4. COMPANY POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Company has constituted the Nomination and Remuneration Committee in accordance with the requirements of Section 178 of the Companies Act, 2013 read with the rules made thereunder. The Committee comprises of two Independent Directors and one Non-Executive Director. The terms of reference of the Nomination & Remuneration Committee are in line with the provisions of the Companies Act, 2013.

The Company has re - constituted the Nomination and Remuneration Committee comprising of Mr. Samir Desai as the Chairman and Mr. A. M. Naik & Mr. Arjun Gupta as the Members.

The Committee has formulated a policy on director''s appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees and the criteria for determining qualifications, positive attributes and independence of a Director.

5. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Audit Committee have approved the Related Party Transactions for the year 201516. All transactions are in the ordinary course of business and at arm’s length.

The details of material contracts or arrangement or transactions at arm’s length basis as per Form AOC-2 as per Companies (Accounts) Rules, 2014 is annexed as Annexure “C” to this report.

6. SUBSIDIARY/ ASSOCIATE/ JOINT VENTURE COMPANIES

During the year under review, the Company has not subscribed to / acquired any equity/preference shares in its subsidiary Companies i.e L&T Thales Technology Services Private Limited and L&T Technology Services LLC.

A) Performance and Financial Position of each subsidiary/associate and joint venture companies:

A statement containing the salient features of the financial statement of subsidiaries/associate/joint venture companies as perform AOC-1 is annexed to this Report as Annexure ‘D’.

7. EMPLOYEE STOCK OPTION SCHEME

The ESOP Scheme- 2016 was approved in meeting of Nomination & Remuneration Committee, Board and Shareholders at their respective meetings held on January 21, 2016. It was proposed to adopt an Employee Stock Option Scheme titled ‘ESOP Scheme 2016'' for the purpose of attracting and retaining senior talent, for issuance of shares up to 8% of the paid up equity share of the Company as on April 1, 2016 to the employees (including Executive Directors and Non- Executive Directors but excluding the Independent Directors) of the Company, the Holding Company, Subsidiary Companies and Associate Company, if any. No shares have been granted under the said ESOP Scheme during the year.

8. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received Declarations of Independence from its Independent Directors as stipulated under Section 149(7) of the Companies Act, 2013 confirming that he/she is not disqualified from continuing as an Independent Director.

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

Information as per Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given below.

a. Conservation of Energy:

The Company being a Technology driven Company, has always adapted new technologies in its office infrastructure setup. Conservation of Energy is one of the most important factors while designing the office infrastructure.

The office zones are created and provided with occupancy sensors to automatically sense presence/ absence of humans. It helps to automatically switch on/off lights in the work area. Air Handling Units (AHUs) are provided with Variable Frequency Drives & Programmable Logic Controllers to vary speed & air flow based on the cooling requirement. Natural light and heat control films on windows are used to reduce light load & AC heat load. The Company in its offices has electrical load systems which estimate the maximum demand and changes accordingly thereby saving electricity consumption.

b. Technology absorption:

The Company being a Technology driven and has always adopted the latest technology trends and best practice. Company works on diverse technologies, domain and believes in providing a platform for sharing of the Knowledge and has built knowledge platform. This platform helps to share and reuse the knowledge assets -in a structured manner, covers all functional areas, context sensitive, complying with protecting Intellectual Property materials. In addition to sharing of the knowledge artifacts, also helps to

resolve technical challenges faced by Individual practitioners through helpdesk system, supported by community of Practice (led by practitioners with varying degree of expertise) to help resolve the problem. Scoring system ensures and motivates contribution from SME (subject matter expert) through a reward mechanism based on the scores earned.

Last year we mentioned about SPARK platform created to promote new ideas and innovation. The platform integrated with various functional areas including the reward and recognition system and cross pollination collaboration platform (Tech Expression), Community of practice, Design Automation, knowledge, & technical helpdesk. The Innovation culture initiative has helped to sustain our innovation culture which has been proved through The Tech Expressions 2015 received a whopping 2215 Technical Abstracts this year as against 1045 in 2014, that’s a jump of 112 percent in just one year.

c. Foreign exchange earnings and outgo:

The Company exports engineering and designing services mainly to North America,

Europe, Middle East, Japan, Korea and other APAC countries.

The total foreign exchange earned and used for the period under review is as under:

Particulars

Rs.

Lakhs

Foreign exchange earned

2,68,949

Foreign exchange used

1,34,624

10. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

11. PROTECTION OF WOMEN AT WORKPLACE

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

During the year under review, no complaints were filed.

12. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has designed and implemented a process driven framework for Internal Financial Controls (‘IFC’) within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013. For the year ended March 31, 2016, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved controls wherever the effect of such gaps would have a material effect on the Company’s operations.

CORPORATE GOVERNANCE REPORT

A report on Corporate Governance is separately annexed to this Report as Annexure “E”. STATUTORY AUDITORS

The Auditors, M/s. Sharp & Tannan, Chartered Accountants hold office until the conclusion of the ensuing Annual General Meeting. As per the provisions of the Companies Act, 2013, M/s. Sharp & Tannan are eligible to be appointed for the next financial year 2016-17.

A Certificate from the Auditors has been received to the effect that they are eligible to act as auditors of the Company under Section 141 of the Companies Act, 2013.

The Board recommends the re-appointment of M/s. Sharp & Tannan, Chartered Accountants as Auditors of the Company from the conclusion of the ensuing AGM until the conclusion of the next AGM.

The notes to accounts referred to in the Auditor s Report are self - explanatory and therefore do not call for any further comments of Directors.

AUDITOR’S REPORT

The notes to accounts referred to in the Auditor''s Report are self explanatory and therefore do not call for any further comments of Directors.

SECRETARIAL AUDIT REPORT

The Board had appointed Ms. Naina Desai, Practicing Company Secretary, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2015-16.

The Secretarial Auditor’s Report to the shareholders does not contain any qualification.

The Secretarial Audit Report issued by Ms. Naina Desai, Practicing Company Secretary is attached as Annexure “F” to this Annual Report.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the customers, supply chain partners, employees, Financial Institutions, Banks, Central and State Government authorities, Regulatory authorities and all the various stakeholders for their continued co-operation and support to the Company. The Directors appreciate and value the contribution made by every member of the L&T Technology Services group globally.

For and/on behalf of the Board

A.M.Naik

Chairman

(DIN: 00001514)

Place: Mumbai

Date: 26 April 2016

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