Dear Members,

The Directors of your Company have the pleasure in presenting the Sixteenth Annual Report together with the audited financial statements for the financial year ("FY") ended March 31, 2024.

The appointed date of the merger of three of the wholly-owned subsidiaries of the Company with itself is April 1, 2023 ("the Merger"). The details in the Board's Report are accordingly at a merged level, wherever applicable.

FINANCIAL RESULTS

The summary of the Company's financial performance, both on a consolidated and standalone basis, for FY24 as compared to the previous FY i.e., FY23 is given below:

* Sale of 100% of the paid-up share capital of L&T Investment Management Limited, a wholly owned subsidiary of the Company and the asset manager of L&T Mutual Fund to HSBC Asset Management (India) Private Limited completed on November 25, 2022. FY23 figures recasted/restated taking into effect the Merger.

FINANCIAL PERFORMANCE

The Company's performance during the year ended March 31, 2024 in comparison with the year ended March 31, 2023 is summarized as follows:

Consolidated

• Total income was Rs. 14,055.12 Cr in FY24 as compared to Rs. 13,301.70 Cr in FY23.

• Profit before exceptional items and tax was Rs. 3,029.03 Cr in FY24 as compared to Rs. 2,130.65 Cr in FY23.

• Profit for the year attributable to owners of the Company was Rs. 2,320.10 Cr in FY24 as compared to Rs. 1,623.25 Cr in FY23.

During the year, the net loan book increased from Rs. 75,154.55 Cr to Rs. 81,359.39 Cr primarily on account of growth in retail loan book and offset by reduction of the wholesale book in line with Lakshya 2026 strategy.

Standalone

• Total income was Rs. 14,043.80 Cr in FY24 as compared to Rs. 13,425.45 Cr in FY23.

• Profit before taxes (including exceptional item) was Rs. 2,986.64 Cr in FY24 as compared to Rs. 2,523.75 Cr in FY23.

• Profit for the year was Rs. 2,286.23 Cr in FY24 as compared to Rs. 1,919.87 Cr in FY23.

APPROPRIATIONS

As required u/s 45–IC of the Reserve Bank of India Act, 1934 ("RBI Act"), Rs. 457.25 Cr has been transferred to Special Reserve during the year (previous year Rs. 514.34 Cr).

COST RECORDS

The Company is not required to maintain cost records as per the provisions of Section 148(1) of the Companies Act, 2013 ("the Act").

INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY

The information on the affairs of the Company has been given as part of the Management Discussion and Analysis section of the Report.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of the Board's Report.

DIVIDEND

The Dividend Distribution Policy of the Company approved by the Board is in line with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The policy is available on the website of the Company at https://www.ltfs.com/investors. Please refer to the section, ‘Policy Compendium' for accessing the policy.

The Board of Directors has recommended a final dividend of Rs. 2.50 per Equity Share (face value of Rs. 10 each) subject to approval of the Members at the ensuing Annual General Meeting ("AGM"). The dividend recommended is in accordance with Dividend Distribution Policy.

In terms of Ind AS 10, events after the reporting period as notified by the Ministry of Corporate Affairs, the proposed dividend of Rs. 622.24 Cr is not recognised as liability as on March 31, 2024.

The dividend, if approved at the ensuing AGM, would be paid to those Members whose names appear in the Register of Members/Beneficial Owners maintained by the depositories as stated in notice of the ensuing AGM.

CREDIT RATING:

Pursuant to the Merger, the debt instruments of L&T Finance Limited and L&T Infra Credit Limited have become the debt instruments of the Company post compliance with all regulatory requirements. Further, the ratings assigned to such debt instruments continue to be unchanged post Merger.

Further during the year under review, CRISIL Ratings Limited ("CRISIL"), CARE Ratings Limited ("CARE") India Ratings and Research Private Limited ("India Ratings") and ICRA Limited ("ICRA") have reviewed and reaffirmed the ratings as stated below:

The instruments/bank facilities with long term ratings of AAA are considered to have highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

The instruments with long-term ratings of AA+ are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

The instruments with a short-term rating of A1+ are considered to have a very strong degree of safety regarding timely payment of financial obligations. Such instruments carry the lowest credit risk.

FUND RAISING

During the year under review, the Company met its funding requirements through borrowings by issuance of Non-Convertible Debentures, Commercial Papers, Inter Corporate Borrowings, Treasury Bills Repurchase and borrowings from banks (in form of term loans & working capital lines).

Further, the consolidated net borrowings have declined by Rs. 6,502.58 Cr during the year under review to

R 76,540.87 Cr as at March 31, 2024 as against Rs. 83,043.45 Cr as at March 31, 2023.

The disclosure with respect to the funds raised through green bonds as prescribed by the Securities and Exchange Board of India ("SEBI") is available on the website of the Company at https://www.ltfs.com/investors.

CHANGES TO THE SHARE CAPITAL

During the year under review, the Company has issued 4,98,750 Equity Shares and 87,70,443 Equity Shares to employees of the Company pursuant to the exercise of stock options under the Employee Stock Option Scheme – 2010 and Employee Stock Option Scheme – 2013 ("ESOP Schemes") respectively.

Pursuant to the allotment of Equity Shares under the ESOP Schemes, the paid-up share capital of the Company was Rs. 2,488.94 Cr as at March 31, 2024 as compared to Rs. 2,479.67 Cr as at March 31, 2023. Pursuant to Merger, the authorised share capital of the Company has automatically increased without any further act, instrument or deed, by an amount equal to the authorised share capital of the companies that have merged with the Company, such that the authorised share capital of the Company is Rs. 1,68,86,55,96,100/- (Rupees Sixteen Thousand Eight Hundred and Eighty Six Crore Fifty Five Lakhs Ninety Six Thousand One Hundred only) divided into 10,87,45,59,610 Equity Shares (One Thousand and Eighty Seven Crore Forty Five Lakhs Fifty Nine Thousand Six Hundred and Ten only) of R10 (Rupees Ten only) each, 50,12,00,000 (Fifty Crore Twelve Lakhs only) preference shares of Rs. 100 (Rupees Hundred only) each and 10,000 (Ten Thousand only) preference shares of Rs. 10,00,000 (Rupees Ten Lakhs only) each without any further act, deed, resolution or writing.

EMPLOYEE STOCK OPTION SCHEME

There has been no change in the ESOP Schemes during the year under review. The ESOP Schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBSE Regulations").

The disclosures required to be made under the Act and SBSE Regulations are available on the website of the Company at https://www.ltfs.com/investors (click-ESOP Disclosure). The certificate from the Secretarial Auditors, confirming compliance with the aforesaid provisions has been appended as Annexure A to the Board's Report.

INVESTMENT IN SUBSIDIARIES

During the year under review, the Company has not made any investments in its subsidiaries.

RBI REGISTRATION

The Company has received a Certificate of Registration ("CoR") as a Non-Banking Financial Company Core Investment Company ("NBFC-CIC"). However, pursuant to the Merger, the Company, being the surviving entity, has applied for CoR as NBFC-ICC, and it complies with the guidelines applicable to a NBFC-ICC, pending receipt of the CoR from RBI.

STATUTORY DISCLAIMER

RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and discharge of liabilities by the Company.

FIXED DEPOSITS

The Company being a non-deposit taking Non-Banking Financial Company ("NBFC"), has not accepted any deposits from the public during the year under review.

DIRECTORS

As on March 31, 2024, the composition of the Board is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Non-Executive Directors and Independent Directors. The list of Directors of the Company has been disclosed as part of the Corporate Governance Report. This year, your Company completed succession planning exercise for critical roles including that for the Managing Director and Chief Executive Officer, post consideration of various aspects. A multi layered search process was followed by the Company including detailed interactions of the Nomination and Remuneration Committee ("NRC")/ Board/its Members. The NRC unanimously approved and recommended the selection of Mr. Sudipta Roy as a successor to Mr. Dinanath Dubhashi and the decision to appoint him as the Chief Operating Officer and then the Managing Director and Chief Executive Officer of the Company.

Mr. Sudipta Roy (DIN: 08069653) was appointed as the Managing Director and Chief Executive Officer of the Company for a term of up to five years with effect from

January 24, 2024 till January 23, 2029 by the Board based on recommendation of the NRC of the Company. Mr. Dinanath Dubhashi (DIN:03545900) was re-designated as the Whole-time Director of the Company with effect from January 24, 2024 until April 30, 2024, by the Board based on recommendation of the NRC of the Company.

The Board records its deepest appreciation for contribution by Mr. Dinanath Dubhashi (DIN:03545900) as the Managing Director and Chief Executive Officer of the Company over the last eight years which has helped the Company to be in the top league of retail financiers. Dr. R. Seetharaman (DIN: 01846777) was appointed as an Independent Director of the Company for a first term of up to five years with effect from January 23, 2024 till January 22, 2029 by the Board based on recommendation of the NRC of the Company.

Ms. Nishi Vasudeva (DIN:03016991) was re-appointed as an Independent Director of the Company for a second term of up to five years with effect from March 15, 2024 till March 14, 2029 by the Board based on recommendation of the NRC of the Company. The Members approved the aforesaid appointments/ redesignation by resolutions passed through postal ballot on March 12, 2024.

Mr. Shailesh Haribhakti, (DIN: 00007347) and Mr. P. V. Bhide (DIN: 03304262) Independent Directors of the Company, who were appointed for a second term of five years, from April 1, 2019 to March 31, 2024, have ceased to be the Independent Directors of the Company w.e.f. April 1, 2024 pursuant to completion of the term. The Board records its deepest appreciation for contribution by Mr. Shailesh Haribhakti, (DIN: 00007347) and Mr. P. V. Bhide (DIN: 03304262) in guiding and supporting the Management during their tenure as the Independent Directors of the Company over last so many years.

The terms and conditions of appointment of Independent Directors are available on the website of the Company at https://www.ltfs.com/investors. Please refer to the section, ‘Policy Compendium' for accessing the policy. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise (including proficiency, as applicable) and hold highest standards of integrity.

Section 152 of the Act provides that unless the Articles of Association provide for retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the Independent Directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation, of which one-third are liable to retire by rotation. Accordingly, Mr. S.N. Subrahmanyan (DIN: 02255382) and Mr. R. Shankar Raman (DIN: 00019798) will retire by rotation at the ensuing AGM and being eligible, have offered themselves for re-appointment.

Declaration by Independent Directors

All Independent Directors have submitted the declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations and they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his/her ability to discharge his/ her duties with an objective independent judgment and without any external influence.

Familiarisation Programme

The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. Additionally, for the Independent Director who joined L&T Finance during the year, specific one to one interactions with the members of the management team were facilitated. Further, a dedicated field visit was also arranged for familiarisation with the on field functioning. The details relating to the familiarisation programme are available on the website of the Company at https://www. ltfs.com/investors (click – Familiarisation Programme).

Fit and Proper Criteria & Code of Conduct

AlltheDirectorsmeetthefitandpropercriteriastipulated by RBI. All the Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct of the Company.

KEY MANAGERIAL PERSONNEL ("KMPs")

As on March 31, 2024, the Company had the following KMPs:

1) Mr. Sudipta Roy – Managing Director and Chief Executive Officer

2) Mr. Dinanath Dubhashi – Whole-time Director

3) Mr. Sachinn Joshi – Chief Financial Officer

4) Ms. Apurva Rathod – Company Secretary

Mr. Dinanath Dubhashi was the Managing Director and Chief Executive Officer until January 23, 2024 and was appointed as the Whole-time Director until April 30, 2024.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION/COMPENSATION FOR DIRECTORS, SENIOR MANAGEMENT PERSONNEL, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES A. Background and objectives

Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the SEBI Listing Regulations, requires the NRC to formulate a policy relating to the remuneration of the Directors, Senior Management Personnel ("SMP")/KMPs and other employees of the Company and recommend the same for approval of the Board.

Further as per requirements under the Scale Based Regulations issued by RBI, the Company is required to put in place a Board approved compensation policy.

Further, Section 134 of the Act stipulates that the Board's Report is required to include a statement on the Company's policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and remuneration for KMPs and other employees ("the Policy").

In view of the aforesaid, the Board of Directors has, based on the recommendation of the NRC of the Company, approved the Policy which is available on the website of the Company at https://www. ltfs.com/investors. Please refer to the section, ‘Policy Compendium' for accessing the Policy.

B. Brief framework of the Policy

The objective of this Policy is: a) to guide the Board in relation to appointment and removal of Directors. b) to formulate criteria for evaluation of Independent Directors and the members of the Board. c) to evaluate the performance of the members of the Board including Independent Directors.

d) to determine criteria for payment of remuneration/compensation to Directors, SMPs/KMPs and employees. e) to recommend to the Board remuneration/ compensation payable to the Directors including SMPs, KMPs and employees, if required. f) to ensure relationship of remuneration/ compensation to performance is clear and meets appropriate performance benchmarks.

C. Appointment of Director(s) – Criteria Identification

The NRC identifies and ascertains the integrity, professional qualification, areas of expertise and experience of the person, who is proposed to be appointed as a director and appropriate recommendation is made to the Board with respect to his/her appointment to maintain balance, ensure effective functioning of the Board and ensure orderly succession planning. The Committee ensures that at least one of the Directors on the Board has relevant experience of having worked in a bank/NBFC.

Appointment of Independent Directors is subject to the provisions of Section 149 of the Act read with Schedule IV and rules thereunder and SEBI Listing Regulations. The NRC satisfies itself that the proposed person satisfies the criteria of independence as stipulated under Section 149(6) of the Act and SEBI Listing Regulations, before the appointment as an Independent Director.

No person is eligible to be appointed as a director, if he/she is subject to any disqualifications as stipulated under the Act or any other law(s) for the time being in force.

Appointment of a Director is subject to the provisions of the Act and rules thereunder, SEBI Listing Regulations, RBI regulations and other applicable regulations, as the case may be. Appointment of Managing Director and Whole-time Director is subject to the provisions of Sections 196, 197, 198 and 203 of the Act read with Schedule V and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, RBI regulations, SEBI Listing Regulations and such other applicable regulations. A person cannot occupy the position as a Managing

Director/Whole-time Director beyond the age of seventy years, unless the appointment is approved by a special resolution passed by the Company in general meeting. No re-appointment is made earlier than one year before the expiry of term.

With effect from April 1, 2024, continuation of the director serving on the Board of the Company is subject to the approval by the shareholders in a general meeting at least once in every five years from the date of appointment or reappointment, as the case may be. The aforesaid is not applicable to Whole-time Director, Managing Director, Manager, Independent Director, Director retiring by rotation, Director appointed by Court/Tribunal, Nominee Director of the Government/Financial Sector on the Board, Director nominated by RBI under lending agreement in the normal course of business or Director nominated by the Debenture Trustee registered with the Board under a subscription agreement for the debentures issued.

D. Evaluation criteria of Directors and SMPs/ KMPs/Employees

• Independent Directors/Non-Executive Directors

The Board/NRC carries out evaluation of performance of Independent Directors/Non-Executive Directors every year ending March 31 on the basis of the following criteria: a) Membership & Attendance - Board and Committee Meetings; b) Contribution during such meetings; c) Active participation in strategic decision making; d) Inputs to executive management on matters of strategic importance; e) Performance of the directors; f) Fulfilment of the independence criteria and their independence from the management; and g) Such other matters, as the NRC/ Board may determine from time to time.

• Executive Directors

The NRC carries out evaluation of performance of Executive Directors ("EDs") every year ending March 31. The evaluation is on the basis of Key Performance Indicators ("KPIs"), which are identified well in advance for EDs and weights assigned for each measure of performance keeping in view the distinct roles of EDs. The identified KPIs for EDs are approved by the Committee or the Board, pursuant to recommendation of the NRC, if required.

• SMPs/KMPs (other than EDs)/Employees

The Human Resource ("HR") department initiates the process of evaluation of the aforementioned persons every year ending March 31, with the Department Head(s)/ Management concerned. KPIs are identified well in advance at the commencement of the financial year. Performance benchmarks are set and evaluation of employees is done by the respective reporting Manager(s)/Management/ Department Head(s)/NRC/as prescribed by law or regulator to determine whether the performance benchmarks are achieved. The payment of remuneration/compensation/ annual increment to the aforementioned persons is determined after the satisfactory completion of evaluation process.

The HR department of the Company is authorised to design the framework for evaluating the EDs/SMPs/KMPs/employees. The objective of carrying out the evaluation by the Company is to identify and reward those with exceptional performances during the financial year. Training and Development Orientation programmes on a need basis are provided to employees, whose performance during any financial year does not meet the benchmark criteria.

E. Criteria for Remuneration

The NRC, while determining and/or recommending the criteria for remuneration/remuneration for Directors, SMPs/KMPs and other employees ensures that: a. the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully; b. the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and c. the remuneration to Directors, SMPs and KMPs involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals. The NRC with respect to SMPs and KMPs, further ensures that: i. the compensation levels are supported by the need to retain earnings of the Company and the need to maintain adequate capital based on Internal Capital Adequacy Assessment Process Policy; ii. the remuneration is reasonable, recognising all relevant factors including adherence to statutory requirements and industry practices; and iii. the remuneration/compensation packages may comprise of fixed and variable pay components aligned effectively with prudent risk taking to ensure that compensation is adjusted for all types of risks, the compensation outcomes are symmetric with risk outcomes, compensation pay-outs are sensitive to the time horizon of the risks, and the mix of cash, equity and other forms of compensation are consistent with risk alignment.

During the year under review, the Policy was amended/updated to carry out the changes required to be incorporated in accordance with requirements pursuant to regulatory changes.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually and the Committees of the Board. During the year under review, the NRC approved the revision to the questionnaires of the Company by broadening the scope of the ESG related aspects in the Board/Committee evaluation questionnaires.

Manner of Evaluation

The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual directors is required to be carried out.

It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent

Directors/Non-Executive Directors/Executive Directors/ Managing Director and Chief Executive Officer and Chairman of the Board, as applicable. During the year under review, the aforesaid annual performance evaluation was conducted through an independent external service provider's platform. The results of the evaluation were sent to the Chairman of the NRC, after which necessary feedback was provided to the NRC/Board. This process ensured that the evaluation process was carried out in a confidential manner and independent feedback was obtained on the performance. The process of the annual performance evaluation broadly comprises:

a) Board and Committee Evaluation:

• Evaluation of Board as a whole and the Committees is done by the individual directors/ members, followed by submission of collation to NRC and feedback to the Board.

b) Independent/Non-Executive Directors Evaluation:

• Evaluation done by Board members excluding the Director being evaluated is received and individual feedback is provided to each Director as per the policy for performance evaluation of the Board/its Committees/ Directors/as per the process approved by the NRC/Board.

c) Chairperson/Managing Director and Chief Executive Officer Evaluation:

• Evaluation as done by the individual directors is submitted to the Chairperson of the NRC and Chairperson of the NRC presents the feedback at the NRC Meeting and subsequently at the Board Meeting.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In accordance with the requirements of Regulation 34 of the SEBI Listing Regulations, the Report includes the Company's Business Responsibility and Sustainability Report ("BRSR"). The Company has followed the framework of the International Integrated Reporting Council (now known as Value Reporting Foundation), the Global Reporting Initiative (‘GRI') and the BRSR principles as prescribed by SEBI.

REPORT ON CORPORATE GOVERNANCE

The report on Corporate Governance for the year under review, is forming a part of the Board's Report and the same is prepared in accordance with SEBI Listing Regulations and other applicable regulations. The certificate from the Secretarial Auditors of the Company confirming compliance with the conditions of corporate governance is appended to the Corporate Governance Report.

STATUTORY AUDITORS

Pursuant to the provisions of Section 139(2) of the Act and the rules made thereunder and RBI requirements, the Members at their Thirteenth AGM held on July 28, 2021, had appointed M/s KKC and Associates LLP (Formerly Khimji Kunverji & Co. LLP), Chartered Accountants (ICAI Registration No. 105146W/ W100621) as the Statutory Auditors of the Company for a term of three years, i.e., from the conclusion of Thirteenth AGM till the conclusion of the Sixteenth AGM. Thus, the tenure of M/s KKC and Associates LLP, Chartered Accountants would end at the conclusion of the ensuing AGM.

Further, pursuant to RBI circular No. RBI/2021-22/25 ref. no. DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021 ("RBI Circular"), NBFCs with asset size of Rs. 15,000 Cr and above are required to appoint joint statutory auditors for a continuous period of three years.

Consequent to the Merger, the asset size of the Company as at March 31, 2024 is more than Rs. 15,000 Cr. Thus, the Company is required to appoint joint statutory auditors in order to comply with the RBI circular from FY25 onwards.

In light of the aforesaid, the Board of Directors of the Company has recommended the appointment of M/s T Rs. Chadha & Co. LLP, Chartered Accountants, (ICAI Registration No. 006711N/N500028) and M/s Brahmayya & Co., Chartered Accountants, (ICAI Registration No. 000515S) as the Joint Statutory Auditors of the Company for a period of three continuous years in accordance with the guidelines stipulated by RBI, to hold office from the conclusion of the forthcoming AGM i.e. Sixteenth AGM till the conclusion of the Nineteenth AGM, subject to the approval of the Members at the ensuing AGM of the Company.

M/s T Rs. Chadha & Co. LLP and M/s Brahmayya & Co., Chartered Accountants, have confirmed that their appointment, if made, will comply with the eligibility criteria in terms of Section 141(3) of the Act and RBI regulations. Further, the Joint Statutory Auditors have confirmed that they have subjected themselves to Peer Review process by the Institute of Chartered Accountants of India ("ICAI") and hold valid certificate issued by the Peer Review Board of ICAI.

AUDITORS' REPORT

The Auditors' Report to the Members for the year under review is unmodified. The notes to the accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, the Company had appointed M/s Alwyn Jay and Co., Practicing Company Secretary (Membership No.: F3058 and Certificate of Practice No.: 6915) to undertake the Secretarial Audit of the Company for FY24.

Further, in terms of the regulatory requirements, M/s Alwyn Jay and Co. has issued the Annual Secretarial Compliance Report, confirming compliance by the Company of the applicable SEBI regulations and circulars/guidelines issued thereunder.

The Secretarial Audit Report is appended as Annexure B to the Board's Report. There is no adverse remark, qualification, reservation or disclaimer in the Secretarial Audit Report.

REPORTING OF FRAUDS BY AUDITORS

There were no frauds reported by the Auditors of the Company under Section 143(12) of the Act to the Audit Committee ("AC").

PARTICULARS OF EMPLOYEES

The information required pursuant to the provisions of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure C to the Board's Report.

In terms of second proviso to Section 136 of the Act, the Report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information is available for inspection by the Members.

The Board of Directors affirms that the remuneration paid to the employees of the Company is as per the policy on Directors' appointment and remuneration/ compensation for Directors, Senior Management Personnel, Key Managerial Personnel and other employees and is in accordance with the requirements of the Act and SEBI Listing Regulations and none of the employees listed in the said Annexure are related to any Directors of the Company.

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

The Company being an NBFC, the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.

The details of conservation of energy, technology absorption and foreign exchange earnings and outgo of the Company are as follows:

a. Conservation of Energy:

The details regarding measures taken towards conservation of energy are covered as part of the Natural Capital section of the Report.

b. Technology Absorption:

The details pertaining to technology absorption at the Company (usage of digital and data analytics to build sustainable competitive advantage) are covered as part of the Management Discussion and Analysis section of the Report.

c. Foreign Exchange Earnings and Outgo:

There were no foreign exchange earnings during the year (previous year also Nil); while the expenditure in foreign currency by the Company during the year was Rs. 90.77 Cr (previous year

R 72.49 Cr towards professional fees) towards professional fees, license fees and finance cost.

DEPOSITORY SYSTEM

The Company's Equity Shares are compulsorily tradable in electronic form. As on March 31, 2024, out of the Company's total equity paid-up share capital comprising of 2,48,89,40,310 Equity Shares, only 17,330 Equity Shares were in physical form the rest being in dematerialised form.

As per SEBI notification no. SEBI/LAD-NRO/GN/2018/24 dated June 8, 2018 and further amendment vide notification No. SEBI/LAD-NRO/GN/2018/49 dated November 30, 2018, requests for effecting transfer of securities are not processed unless the securities are held in the dematerialised form with the depositories. Further, transmission or transposition of securities held in physical or dematerialised form is also effected only in dematerialised form.

Therefore, Members holding securities in physical form are requested to take necessary action to dematerialise their holdings.

SUBSIDIARY AND ASSOCIATE COMPANIES

As on March 31, 2024, the Company had 3 subsidiaries. The list of the subsidiary companies is covered in the Corporate Governance section of the Report.

Merger:

As stated at the beginning of the Board's Report, the Merger of the Company's wholly-owned subsidiaries namely L&T Finance Limited, L&T Infra Credit Limited and L&T Mutual Fund Trustee Limited with the Company was made effective December 4, 2023 post compliance with the necessary regulatory requirements. Further, name of the Company has changed to L&T Finance Limited effective March 28, 2024, consequent upon receipt of fresh certificate of incorporation as per the requirements of the Act.

Divestment:

During the year under review, 100% of the paid-up share capital of Mudit Cement Private Limited, a wholly-owned step down subsidiary of the Company, was divested on September 26, 2023.

MATERIAL SUBSIDIARIES

Subsequent to the Merger, there is no material subsidiary of the Company as on March 31, 2024. Further, as required under Regulations 16(1)(c) and 46 of the SEBI Listing Regulations, the Board of Directors has approved the policy for determining Material Subsidiaries which is available on the website of the Company at https://www.ltfs.com/investors. Please refer to the section, ‘Policy Compendium' for accessing the policy.

PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARY/ASSOCIATE AND JOINT VENTURE COMPANIES

L&T Infra Investment Partners ("AIF Fund") is a private investment fund focused on the Indian infrastructure sector. The AIF Fund is registered as a Category I Alternative Investment Fund Infrastructure Fund with SEBI under the AIF Regulations.

L&T Infra Investment Partners Advisory Private Limited acts as an Investment Manager to the AIF Fund, whereas, L&T Infra Investment Partners Trustee Private Limited acts as the Trustee to the AIF Fund. The Company is the sponsor of the AIF Fund. L&T Financial Consultants Limited is inter alia engaged in the business of leasing of its own properties, rendering consultancy services and advising and assisting in due diligence, providing technical assistance, financing loans or advisory services.

The highlights of performance of the businesses of subsidiaries are available on the website of the Company at https://www.ltfs.com/investors. Further, as required under Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associates of the Company has been appended as Annexure D to the Board's Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors confirm that, to the best of its knowledge and belief: 1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; 2) 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 as at March 31, 2024 and of the profit of the Company for that period; 3) 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;

4) the Directors have prepared the annual accounts on a going concern basis; 5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and 6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SECRETARIAL STANDARDS

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

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. Testing of such systems forms a part of review by the Internal Audit ("IA") function. The scope and authority of the IA function is defined in the IA Charter in line with the Board approved Risk Based Internal Audit Policy.

The IA function of the Company monitors and evaluates the efficacy and adequacy of the internal control system in the Company to ensure that financial reports are reliable, operations are effective and efficient and activities comply with applicable laws and regulations. Based on the report of the IA function, process owners undertake corrective action, if any, in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee ("AC") of the Company from time to time.

BOARD MEETINGS

The details of the Board meetings held during FY24 are disclosed in the Corporate Governance Report appended to the Board's Report.

AUDIT COMMITTEE

The Company has constituted an AC in terms of the requirements of the Act, Regulation 18 of the SEBI Listing Regulations and RBI regulations. The details of the same are disclosed in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the requirements of the provisions of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility ("CSR") and ESG Committee. The composition and terms of reference of the CSR and ESG Committee are covered in the Corporate Governance Report. The Company has also formulated a CSR policy ("CSR Policy") in accordance with the requirements of the Act containing details specified therein. The CSR Policy along with details of the projects approved by the Board are available on the website of the Company at www.ltfs.com. Please refer to the section, ‘Policy Compendium' for accessing the CSR Policy. The Company has a strong commitment towards promoting inclusive social transformation in rural communities through its CSR efforts. The CSR interventions are aligned with the Sustainable Development Goals ("SDGs"), which indicate a holistic approach towards social responsibility. The project-based accountability approach with a focus on social impact, scale, and sustainability reflects the Company's commitment to creating shared value for all stakeholders. The Company updated its CSR Policy in April 2024 by making changes to its thrust areas and creating a new thrust area to address the climate changes namely, ‘Climate Impact Management'. Some of the projects under the thrust area of ‘Disaster Management' pertaining to climate changes are now part of the aforesaid new thrust area and Jal Vaibhav 2.0 has also been added. This change is in alignment with the Company's new mission for bringing scale, collaboration and sustainability, and SDGs through the ‘3S – Strategy' – Social Impact, Scale & Sustainability. Further, the thrust area of ‘Other Initiatives' has been changed to ‘Social Inclusion' indicating the Company's emphasis on various social initiatives inter alia including skilling, healthcare and road safety initiatives. As at the beginning of the year, one of the wholly-owned subsidiaries of the Company, which got merged with the Company effective December 4, 2023, had an unspent amount of Rs. 1.40 Cr for FY23. The unspent amount has been fully utilised in accordance with the requirements of the Act.

During the year, the Company spent Rs. 18.03 Cr in excess of its CSR obligations and the excess amount will be set off against the required 2% CSR spend over the next three immediate succeeding financial years.

The Company's CSR efforts are well-aligned with its business objectives, regulatory requirements, and social responsibility principles. An annual report on activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure E to the Board's Report.

VIGIL MECHANISM

Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations, the Company has adopted a Vigil Mechanism Framework, under whichthe Whistle Blower Investigation Committee has been set up. The objective of the framework is to establish a redressal forum, which addresses all concerns raised on questionable practices and through which all the stakeholders such as employees, Directors and service providers (agency, vendors, contractors or any outsourced partner) can raise actual or suspected violations.

The effectiveness of our vigil mechanism is regularly reviewed by the Audit Committee, which ensures that all grievances are handled promptly and judiciously. The Audit Committee's oversight ensures that the framework is accessible to all stakeholders and that it aligns with best practices. Necessary details pertaining to the framework are disclosed in the Corporate Governance Report appended to the Board's Report.

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

The particulars of loans, guarantees and investments as per Section 186 of the Act by the Company, as applicable, have been disclosed in the financial statements.

PARTICULARSOFCONTRACTSORARRANGEMENTS WITH RELATED PARTIES

The Board of Directors has approved the policy on transactions with related parties ("RPT Policy"), pursuant to the recommendation of the AC. In line with the requirements of the Act, RBI regulations and the SEBI Listing Regulations, the Company has formulated the RPT Policy. The RPT Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the related parties. The RPT Policy is available on the website of the Company at https:// www.ltfs.com/investors. Please refer to the section, ‘Policy Compendium' for accessing the RPT Policy.

Key features of the RPT Policy are as under:

• All transactions with related parties ("RPTs") irrespective of its materiality and any subsequent material modification to any existing RPTs are referred to the AC of the Company for prior approval. The process of approval of RPTs by the AC, Board and shareholders is as under:

a) Audit Committee:

All RPTs and subsequent material modification, irrespective of whether they are in the ordinary course of business or at an arm's length basis require prior approval of AC.

Only those members of the AC who are independent directors approve the RPTs. RPTs to which the subsidiary of the Company is a party but the Company is not a party, require prior approval of the AC if the value of such transaction whether entered into individually or taken together with previous transactions during a financial year exceeds ten per cent of the annual standalone turnover, as per the last audited financial statements of the subsidiary of the Company with effect from April 1, 2023. RPTs between the Company and/or its subsidiaries with unrelated parties, the purpose and effect of which is to benefit the related party of the Company or any of its subsidiaries require prior approval of the AC, with effect from April 1, 2023.

b) Board:

Generally, all RPTs are in the ordinary course of business and at arm's length price.

RPTs which are not at arm's length and which are not in the ordinary course of business and/ or which requires shareholders' approval, are approved by the Board.

c) Shareholders:

All material RPTs and subsequent material modification thereof, require approval of the shareholders, based on recommendation of the Board, through ordinary resolution passed at the general meeting.

Where any contract or arrangement is entered into by a director or any other employee without obtaining the consent of the Board or approval by an ordinary resolution in the general meeting, it is required to be ratified by the Board or the shareholders at a meeting, as the case may be, within three months from the date on which such contract or arrangement was entered into.

The following transactions are exempted from the approval requirements as per SEBI Listing Regulations and/or the Act: • holding company and its wholly-owned subsidiary;

• two wholly-owned subsidiaries of the listed holding company, whose accounts are consolidated with such holding company.

TRANSACTIONS WITH RELATED PARTIES

All RPTs that were entered into during FY24 were on an arm's length basis and in the ordinary course of business and disclosed in the Financial Statements. There were no materially significant RPTs made by the Company with Promoters, Directors, KMPs or body corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of RPTs as required under the provisions of Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The Directors draw attention of the Members to notes to the Financial Statements which sets out related party disclosures.

RISK MANAGEMENT FRAMEWORK

The Company has constituted a Risk Management Committee ("RMC") in terms of the requirements of Regulation 21 of the SEBI Listing Regulations and RBI regulations and has also adopted an Enterprise Risk Management Policy. The details are covered as part of the Corporate Governance Report.

The Company has a risk management framework and Board members are informed about risk assessment and minimization procedures and periodical review to ensure management controls risk by means of a properly designed framework. The AC and the Board are kept apprised of the proceedings of the meetings of the RMC. The Company, as it advances towards its business objectives and goals, is often subjected to various risks. Credit risk, market risk, liquidity risk, climate risk, transition risk, model risk, reputation and strategic risk and operational risk are some of the risks that your Company is exposed to and details of the same are covered in the Management Discussion and Analysis and Sustainability Performance section of the Report.

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has in place a policy for prevention, prohibition and redressal of sexual harassment at workplace. Further, the Company has constituted an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, where complaints in the nature of sexual harassment can be registered. Appropriate reporting mechanisms are in place for ensuring protection against sexual harassment and the right to work with dignity.

During the year under review, the Company had received one complaint in this regard and has been satisfactorily resolved.

ANNUAL RETURN AS PRESCRIBED UNDER THE ACT

The Annual Return in Form MGT-7 as required under Section 92(3) of the Act is available on the website of the Company at https://www.ltfs.com/investors (click - Annual Return).

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators/courts which would impact the going concern status of the Company and its future operations.

RBI REGULATIONS

The Company has complied with the applicable regulations of RBI.

OTHER DISCLOSURES

During the year under review, the Company has obtained the Corporate Agency License under the Insurance Regulatory and Development Authority of India ("IRDAI") (Registration of Corporate Agents) Regulations, 2015 from IRDAI on August 31, 2023 in order to enable the Company to distribute and solicit the policies offered by various insurance companies.

ACKNOWLEDGEMENT

The Directors express their sincere gratitude and appreciation towards all those who have contributed to the success of the Company during the past year. It is through the collective effort and dedication of many stakeholders that we have achieved our goals and milestones.

We express our sincere gratitude to RBI, SEBI, BSE Limited, National Stock Exchange of India Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, National Company Law Tribunal(s), other government and regulatory authorities, lenders, financial institutions and the Company's bankers for the ongoing support extended by them.

We would also like to thank our esteemed customers and shareholders. As we reflect on the accomplishments of the past year, we are deeply grateful for your unwavering support and partnership. Your loyalty and trust have been the cornerstone of our success, empowering us to overcome challenges and pursue new opportunities with confidence. We recognize the importance of your continued commitment, and we remain steadfast in our dedication to delivering value and excellence in all that we do.

Lastly, we extend our deepest appreciation to our employees, whose hard work, commitment, and innovative ideas have been instrumental in driving our growth and success. Their unwavering dedication and professionalism have played a significant role in overcoming challenges and seizing opportunities.