(v) Provisions, contingent liabilities and contingent assets

Provisions are recognised only when:

(i) the Company has a present obligation (legal or constructive) as a result of a past event; and

(ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(iii) a reliable estimate can be made of the amount of the obligation.

Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money
is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of
expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of:

(i) a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of
one or more uncertain future events not wholly within the control of the entity; or

(ii) a present obligation arising from past events where:

• it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• the amount of the obligation cannot be measured with sufficient reliability.

Contingent assets are disclosed where an inflow of economic benefits is probable.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under
such contract, the present obligation under the contract is recognised and measured as a provision for onerous contract/foreseeable
losses.

(w) Commitments

Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:

• estimated amount of contracts remaining to be executed on capital account and not provided for;

• uncalled liability on shares and other investments partly paid;

• funding related commitment to subsidiary, associate and joint venture companies; and

• other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management.
Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details.

(x) Discontinued operations and non-current assets held for sale

Discontinued operation is a component of the Company that has been disposed of or classified as held for sale and represents a major
line of business.

Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally
through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present
condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and
is expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs
to sell.

(y) Statement of Cash Flows

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from
operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of:

• changes during the period in inventories and operating receivables and payables;

• non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and

• all other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for
general use as at the date of Balance Sheet.

(z) Earnings per share

Basic earnings per share is computed using the net profit or loss after tax and weighted average number of shares outstanding during
the year.

Diluted earnings per share is computed using the net profit or loss after tax and weighted average number of equity and potential equity
shares outstanding during the year, except where the result would be anti-dilutive.

(aa) Key sources of estimation

The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and
the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions
made by management are explained under respective policies. Revisions to accounting estimates include useful lives of property,
plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of retirement benefit plans,
expected cost of completion of contracts, provision for rectification costs, fair value/recoverable amount measurement, tax provisions etc.
Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.

(ab) Business Combination

Common control business combination is accounted using the pooling of interest method where the Company is transferee. Assets
and liabilities of the combining entities are reflected at their carrying amounts and no new asset or liability is recognised. Identity of
reserves of the transferor company is preserved by reflecting them in the same form in the Company's financial statements in which
they appeared in the financial statements of the transferor company. The excess between the amount of consideration paid over the
share capital of the transferor company is recognised as a negative amount and the same is disclosed as capital reserve on business
combination.

The financial information in the financial statements in respect of prior periods is restated from the beginning of the preceding period in
the financial statements if the business combination date is prior to that date. However, if business combination date is after that date,
the financial information in the financial statements is restated from the date of business combination.

Property, Plant and Equipment & Capital work-in-progress (contd.)

a) Additions during the year and capital work-in-progress include X 87.78 crore (previous year X 55.23 Crore) being borrowing cost
capitalised in accordance with Accounting Standard (Ind AS) 23 on "Borrowing Costs".

b) The rate used to determine the amount of borrowing costs eligible for capitalisation is 6.86% (previous year: 7.30%).

c) Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind
AS 116 "Leases".

d) Out of its leasehold land at Hazira, the Company has given certain portion of land for the use to its subsidiary company and the lease
deed is under execution.

e) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption
pattern of the assets and the past performance of similar assets.

NOTE [17]

Equity share capital (contd.)

(i) Stock option schemes

i. Terms:

A. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility
criteria. Under Series 2003(B) and 2006(B), options vest equally over a 4 years period and vesting period is 5 years for series
2006(A), subject to the discretion of the management and fulfillment of certain conditions.

B. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of
equity shares. Management has discretion to modify the exercise period.

iv. Weighted average share price at the date of exercise for stock options exercised during the year is X 3453.74 (previous year:

X 3493.67) per share.

v. A. In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated

as discount and accounted as employee compensation over the vesting period.

B. Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2025-26 is X 42.40 crore
(previous year: X 83.83 crore) [Note 34]. The entire amount pertains to equity-settled employee share-based payment plans.
The expenses includes X Nil (previous year: X 0.04 crore) charged by subsidiary company towards the stock options granted to
Company's employees.

vi. During the year, the Company has recovered X 1.51 crore (previous year: X 2.94 crore) from its subsidiary companies towards the
stock options granted to their employees, pursuant to the employee stock option schemes.

vii. Weighted average fair values of options granted during the year is X 3224.82 (previous year: X 3205.92) per option.

(j) Capital Management:

The Company continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even
amidst an adverse economic environment. Low gearing levels also enable the Company to navigate business challenges on one hand and
raise growth capital on the other. This policy also provides flexibility of fund-raising options for future, which is especially important in
times of global economic volatility. The gross debt equity ratio is 0.16:1 as at March 31,2026 (as at March 31,2025 0.31:1).

During the year ended March 31, 2026, the Company paid the final dividend of ? 34 per equity share for the year ended March 31,

2025 amounting to ? 4676.22 crore.

The Board of directors, at their meeting held on May 5, 2026 recommended the final dividend of ? 38 per equity share for the year
ended March 31,2026 subject to approval from shareholders. On approval, the total dividend outgo is expected to be ? 5227.40 crore
based on number of shares outstanding as at March 31, 2026.

NOTE [18]

Other equity (contd.)

^[3] Capital redemption reserve: Created on: (a) Buyback of equity shares out of free reserves and securities premium in accordance with Section 69 of
the Companies Act, 2013 (b) Redemption of preference shares out of profits in accordance with Section 55(2)(c) of the Companies Act, 2013.

^[4] Debenture redemption reserve (DRR): The Ministry of Corporate Affairs vide notification dated August 16, 2019, amended the Companies (Share
capital and Debenture) Rules, 2014 by which the Company is no longer required to create DRR towards the debentures issued. Earlier to this
amendment, the Company was required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private
placement basis and the amounts credited to the DRR was not to be utilised by the Company except to redeem debentures. The above amount
represents the DRR created out of profits of the Company prior to the said notification.

^[5] General reserve: The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act,1956 where in certain
percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements
to transfer profits to General Reserve is not mandatory. General Reserve is a free reserve available to the company.

23(a) Loans guaranteed by directors Nil (previous year: Nil)

23(b) The Company has fund based and non-fund based facilities (viz. bank guarantees, letter of credits and derivatives) from banks. These
facilities are secured by hypothecation of inventories and trade receivables. Amount of inventories and trade receivables that are pledged
as collateral to the extent of: X 6741 crore as at March 31, 2026 (March 31,2025: X 6932 crore)

23(c) The Company has been sanctioned working capital limits in excess of X 5 crore, in aggregate, at points of time during the year, from
banks or financial institutions on the basis of security of current assets. The quarterly returns filed by the Company with such banks or
financial institutions are in agreement with the Books of Account of the Company of the respective quarters.

Notes :

(1) The Company does not expect any reimbursements in respect of the above contingent liabilities.

(2) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the
arbitration / appellate proceedings. Further, the liability mentioned in (a) to (d) above includes interest in cases where the Company has
determined that the possibility of such levy is remote.

(3) In respect of matters at (e), the cash outflows, if any, could generally occur up to two years, being the period over which the validity
of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the
borrowing to which the guarantees relate.

(4) In respect of matters at (f), the cash outflows, if any, could generally occur up to five years, being the period over which the validity of
the guarantees extends.

(5) In respect of matters at (g) and (h), the cash outflows, if any, could generally occur up to completion of projects undertaken by the
respective joint operations.

(6) In respect of matters at (i), the cash outflows, if any, is fully reimbursable by the third party under an agreement entered in to with them.

(c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten

percent of the Company's total revenue.

(d) The identification of operating segments is consistent with performance assessment and resource allocation by the management

(e) Basis of identifying operating segments, reportable segments, segment profit and definition of each reportable segment:

(i) Basis of identifying Operating segments

Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues
and incur expenses (including transactions with any of the Company's other components); (b) whose operating results are regularly
reviewed by the Company's executive management to make decisions about resource allocation and performance assessment; and
(c) for which discrete financial information is available

The Company has four reportable segments as described under "segment composition" below. The nature of products and services
offered by these businesses are different and are managed separately given the different sets of technology and competency
requirements.

(ii) Reportable segments

An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount
of result or assets exceed 10% or more of the combined total of all the operating segments.

(iii) Segment profit

Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management
reports that are reviewed by the corporate executive management

(iv) The Segment Composition: -

• Infrastructure Projects segment comprises engineering and construction of (a) building and factories, (b) transportation
infrastructure, (c) heavy civil infrastructure, (d) power transmission & distribution, (e) renewables, (f) water & effluent treatment
and (g) minerals and metals

• Energy Projects segment comprises of (a) Hydrocarbon onshore and offshore businesses covering EPC solutions in oil &
gas, refineries, petrochemicals & offshore wind energy sectors, from front-end design through detailed engineering, modular
fabrication, procurement, project management, construction, installation and commissioning, (b) CarbonLite Solutions business
covering BTG scope for power generation plants including associated systems and/or carbon capture utilisation & utility
packages and (c) EPC solutions in clean energy space

• Hi-Tech Manufacturing segment comprises design, manufacture/construct, supply and revamp/retrofit of (a) custom
designed, engineered critical equipment & systems to the process plant and nuclear energy (b) marine and land platforms
including related equipment & systems; aerospace products & systems; precision and electronic products & systems for the
defence, security, space and industrial sectors.

• Others segment includes (a) realty, (b) smart infrastructure & communication projects, (c) construction equipment & industrial
product design development compromising of (i) marketing and servicing of construction equipment, mining machinery and
parts thereof, (ii) manufacture and sale of rubber processing machinery and (d) ecommerce/digital platforms & data centres.

NOTE [41]

Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers" (contd)

i. Decrease in net contract balances is primarily due to higher progress bills raised as compared revenue recognition in both the years.

ii. Revenue recognised from opening balance of contract liabilities amounts to X 15418.41 crore (previous year: X 16338.48 crore)

iii. Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of contract
modifications) amounts to X 1427.72 crore (previous year: X 175.16 crore)

(e) Cost to obtain the contract:

i. Amortisation in Statement of Profit and Loss: Nil (previous year: Nil)

ii. Recognised as contract assets at March 31,2026: Nil (previous year: Nil)

iv) Attrition Rate:

a) For gratuity plan the attrition rate varies from 2% to 12% (previous year: 2% to 12%) for various age groups.

b) For Company pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%) for various age groups.

c) For post-retirement medical benefit plan, the attrition rate varies from 1% to 14% (previous year: 1% to 14%) for various

age groups.

v) The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and
other relevant factors, such as supply and demand in the employment market.

vi) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest
income on long-term investments of the fund. Any shortfall in the interest income over the interest obligation is recognized
immediately in the Statement of Profit and Loss.

vii The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. At
present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at
5.00% p.a.

viii) (A) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation
of gratuity plan:

NOTE [45]

Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.)
h) Characteristics of defined benefit plans and associated risks:

1 Gratuity plan:

The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen
days last salary drawn for each completed year of service. The same is payable on termination of service or retirement
whichever is earlier. The benefit vests after five years of continuous service. The Company's scheme is more favorable as
compared to the obligation under The Code on Social Security, 2020.

The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally separate
from the Company. The trustees nominated by the Company are responsible for the administration of the plan. There are no
minimum funding requirements of these plans. The funding of these plans are based on gratuity fund's actuarial measurement
framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions
set out in (g) supra. Employees do not contribute to any of these plans.

Unfunded gratuity represents a small part of gratuity plan which is not material. Further, the unfunded portion includes
amounts payable in respect of the Company's foreign operations which result in gratuity payable to employees engaged as per
local laws of country of operation."

2 Post-retirement medical care plan:

The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees
post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the
time of retirement. The plan is unfunded. Employees do not contribute to the plan.

3 Company's pension plan:

In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement pension
scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the
employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan.

4 Trust managed provident fund plan:

The Company manages provident fund plan through a provident fund trust for its employees which is permitted under the
Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed
percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum
contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by Employees' Provident
Fund Organisation. The contribution by employer and employee together with interest are payable at the time of separation
from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest
income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognized
immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial
risk associated with the plan is also recognized as expense or income in the period in which such loss/gain occurs.

All the above defined benefit plans expose the Company to general actuarial risks such as interest rate risk and market
(investment) risk.

NOTE [46]

Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance"

(i) The Company's exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by
Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives and duty drawback amounts to

X 353.86 crore (previous year X 161.34 crore).

(ii) The Company's qualifies for certain incentives from the Government of India under the Investment Promotion Scheme 2014 and
Apprenticeship (Amendment) Rules, 2019. Income accounted towards such incentives amounts to X 15.08 crore (Previous year X 11.16
crore).

NOTE [50]

Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" (contd.)

b) Nature of provisions:

i. Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace the items
that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2026 represents the amount of the
expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period
of 1 to 3 years from the date of Balance Sheet.

ii. Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection of
declaration forms.

iii. Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal.

iv. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per the
contract obligations in respect of completed construction contracts accounted under Ind AS 115 "Revenue from Contracts with
customers".

v Onerous contracts provision includes provision for foreseeable losses on construction contracts wherever it was probable that total
contract costs will exceed total contract price.

vi It is not practicable to estimate the timings of cash outflows, if any, in respect of provisions (ii) to (v).

c) Disclosure in respect of contingent liabilities is given as part of Note 29 to the Balance Sheet.

NOTE [52]

Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management

(a) Foreign exchange rate and interest rate risk:

The Company regularly reviews its foreign currency and interest rate related exposures - both hedged and open. The Company primarily
follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE), hence, the movement in mark to market (MTM)
of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values.
However, till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will
impact the Balance Sheet of the Company. Further, given the effective horizons of the Company's risk management activities which
coincide with the durations of the projects under execution, which could extend across 3-4 years and given the business uncertainties
associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments
may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect
the Company's financial condition and operating results. The Company monitors the potential risk arising out of the market factors like
exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on-balance Sheet exposures, the Company
monitors the risks on net unhedged exposures.

(i) Foreign exchange rate risk:

The Company has both receivable and payable exposures in foreign currency. Accordingly, changes in exchange rates may adversely
affect the Company's revenues, cost, and profitability. There is a risk that the Company may also have to adjust the local currency
product pricing due to competitive pressures when there has been significant volatility in foreign currency exchange rates.

The Company may enter foreign currency forward and option contracts with financial institutions to protect against foreign
exchange risks associated with existing assets and liabilities, firm commitments , forecasted future cash flows and net investments
in foreign subsidiaries. In addition, the Company has entered, and may enter in future, into non-designated foreign currency

NOTE [52]

Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd)

contracts to partially offset the foreign currency exchange gains and losses on its foreign-denominated debt issuances. The
Company's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the project/business
life cycle. The Company may also choose not to hedge certain foreign exchange exposures.

The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised financial
liabilities and derivatives for major categories is as follows:

NOTE [52]

Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd)

(ii) Interest rate risk:

The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt. While
most of the Company's outstanding long-term debt in local currency is on fixed rate basis and hence not subject to interest rate
risk. The short-term borrowings\instruments are subject to change in interest rates. A major portion of foreign currency debt is
linked to international interest rate benchmarks like SOFR. The Company may hedge a portion of these risks by way of derivatives
instruments like interest rate swaps and currency swaps.

(b) Liquidity Risk Management:

The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through
adequate committed credit lines. Given the need to fund diverse businesses, the Company maintains flexibility by need based drawing
from committed credit lines. Management regularly monitors the position of cash and cash equivalents. The maturity profiles of financial
assets and financial liabilities including debt financing plans and liquidity ratios are considered while reviewing the liquidity position.

The Company's investment policy and strategy are focused on preservation of capital and supporting the Company's liquidity
requirements. The Company uses a combination of internal and external tools to execute its investment strategy and achieve its
investment objectives. The Company typically invests in money market funds, large debt funds, Government of India securities, equity
funds and other highly-rated securities under a exposure limit framework. The investment policy focuses on minimising the potential risk
of principal loss. To provide a meaningful assessment of the price risk associated with the Company's investment portfolio, the Company
performed a sensitivity analysis to determine the impact of change in prices of the securities on the value of the investment portfolio
assuming a 0.5% movement in the fair market value of debt funds and debt securities, a 1% movement in market value of REITs/InvITs
and a 5% movement in the NAV of the equity funds as below:

NOTE [52]

Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd)

(c) Credit Risk Management:

The Company's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly,
the Company's customer credit risk is low. The Company's average project execution cycle is around 24 to 36 months. General payment
terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention
money to be released at the end of the project. In some cases, retentions are substituted with bank/corporate guarantees. The Company
has a detailed review mechanism of overdue customer receivables at various levels within the organisation to ensure proper attention
and focus for realisation.

(i) The Company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL is
disclosed in Note [41](c)

(ii) Trade receivable written off during the year but still enforceable for recovery amounts to X 45.39 crore (previous year: Nil)

(d) Commodity price risk management:

The Company bids for and executes EPC projects on a turnkey basis. EPC projects entail procurement of various equipment and materials
which may have direct or indirect linkages to commodity prices like steel (both long and flat steel), copper, aluminum, zinc, lead, nickel,
cement etc. Accordingly, the Company is exposed to the price risk on these commodities. To mitigate the risk of commodity prices, the
company relies on contractual provisions like pass through of prices, price variation provisions etc., and further uses hedging instruments
where available (refer Note 53 (e)(iii)). There is a certain residual risk carried by the Company that cannot be hedged against.

The Company is also exposed to contingent risk on account of commodity price movements that may not be fully offset by contractual
provisions in the projects that it has bid for but which are not awarded yet. Commodity prices have been volatile and have witnessed
substantial two-way movements during the financial year. This may impact the margin on projects where the Company has submitted
bids on a firm price basis. However, for projects where the Company is eligible for an adjustment, based on price variation clause, the
actual impact will depend on the exact project wins and the relative contractual provisions therein.

The table given in the Risk Management section of Management Discussion and Analysis lists out the commodity exposure for the year
(only for projects that been awarded and are under execution).

Notes

^[1] The carrying amounts of trade receivables, loans, advances, investments in CBLO, Commercial Paper and Certificate of Deposit and cash &
other bank balances are considered to be the same as their fair values due to their short-term nature. The carrying amounts of long-term
loans given with floating rate of interest are considered to be close to the fair value

^[2] The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short term nature. The
carrying amounts of current borrowings at fixed rate and other borrowings at floating rate and financial guarantee contracts are considered
to be close to the fair value.

Valuation technique and key inputs used to determine fair value:

A. Level 1: Equity shares, bonds, InvITs, debentures and government securities - Quoted price in the active market and mutual funds -

at published NAV

B. Level 2: Derivative Instruments - Mark to market on forward covers and embedded derivative instruments is based on

forward exchange rates at the end of reporting period and discounted using G-sec rate plus applicable spread.

Redeemable non-convertible fixed rate debentures is based on future cash flows discounted using market rates

C. Level 3: Equity and preference shares using significant unobservable inputs

NOTE [54]

Disclosure pursuant to Ind AS 116 "Leases"

(a) Where the Company is a lessor:

Operating leases: The Company has given land,buildings and plant & equipment under operating lease. The lease income received during
the year is X 252.05 crore (previous year: X 198.81 crore). Leases are renewed only on mutual consent and at a prevalent market price
and sub-lease is generally restricted.

Annual undiscounted lease payments receivable is as under:

i. Interest expense on lease liabilities amounts to X 55.93 crore (previous year: X 26.41 crore).

ii. The expense relating to payments not included in the measurement of lease liability and recognized as expense in the Statement of
Profit and Loss during the year are as follows:

• Low value leases - X 10.96 crore (previous year: X 82.71 crore)

• Short-term leases - X 4293.70 crore (previous year: X 4009.84 crore) and

iii. Total cash out flow for leases amounts to X 4277.95 crore during the year (previous year: X 4099.20 crore) including cash outflow of
short-term and low value leases.

NOTE [59]

Exceptional items (before tax) for 2025-26 is on account of the following:

(i) The Company has signed a Share Purchase Agreement on April 29, 2026, with Hyderabad Metro Rail Limited, a Government of
Telangana Enterprise, to divest its entire equity stake in its subsidiary L&T Metro Rail (Hyderabad) Limited ["LTMRHL"]. The transaction is
subject to satisfaction of customary conditions and expected to get completed by June 30, 2026. Accordingly, the Company has written
down its investment in LTMRHL to its net realisable value and recognised the impairment provision of X 6013.00 crore as Exceptional
items for the year.

(ii) Effective November 21, 2025, the Government of India consolidated 29 existing labour regulations into four Labour codes, namely, The
Code on Wages, 2019, The Industrial Relations Code, 2020, The Code on Social Security, 2020 and the Occupational Safety, Health and
Working Conditions Code, 2020, collectively referred to as the 'New Labour Codes', The New Labour Codes has resulted in a one-time
material increase in provision for employee benefits on account of recognition of past service costs. Based on the requirements of New
Labour Codes and the ICAI clarification, the Company has assessed and accounted the estimated incremental impact of X 1108.73 crore
(before tax) as Exceptional items in the financial statement for the year ended March 31, 2026.

Exceptional items (before tax) for 2024-25 includes the following:

(i) The Company entered into a Joint Venture Termination Agreement with Nuclear Power Corporation of India Limited (NPCIL) on

February 18, 2025, for purchase of NPCIL's 26% equity and preference shareholdings in L&T Special Steels and Heavy Forgings Private
Limited (LTSSHF) and assignment of NPCIL loan to LTSSHF for a consideration of X 170.00 crore. Pursuant to this, LTSSHF has become a
wholly owned subsidiary of the Company with effect from February 18, 2025. The Exceptional Items during the year ended March 31,
2025, represents (a) partial reversal of funded resources impaired in earlier years: X 459.94 crore and (b) reversal of provision towards
constructive obligation: X 14.84 crore.

NOTE [62]

Recent pronouncements:

The below amendments to the existing standard which are notified by Ministry of Corporate affairs but are not yet effective:

Amendment to Ind AS 1 'Presentation of Financial Statements'- Classification of Liabilities as current or non-current and non-current liabilities

with covenants. The amendment includes specific provisions that will take effect for reporting periods beginning on or after 1 April 2026,

retrospectively, as outlined below:

a) Breach of material covenant for long-term loan arrangement on or before end of reporting period with effect that liability becomes
payable on demand as on reporting date, then it shall be classified as current liability, if lender agreed after reporting period and before
approval of financial statements to not demand payment as a consequence of breach.

b) Classify as non-current liability, if lender agreed by end of reporting period to provide grace period ending at least 12 months after
reporting period within which entity can rectify the breach provided lender does not demand immediate repayment.

c) Disclose information about the timing of settlement to understand the impact of the liability on the financial statements.

The Company does not expect this amendment to have an impact on its operations or financial statements.

NOTE [63]

a) Notes with respect to remarks in CARO Report:

L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) has an overdue outstanding loan including interest aggregating to
X 1586.77 crore (the same is due for more than 90 days) to L&T (Company) as on March 31,2026. In February 2025, LTSSHF became a
wholly owned subsidiary of the Company on termination of JV with NPCIL, post which LTSSHF has aligned its business strategies with the
Company and initiated measures to drive business growth and improve profitability. In parallel, Company has undertaken the necessary
business and financial restructuring steps to strengthen the LTSSHF's position to service its debt and interest obligations in coming years.