We have audited the accompanying standalone financial
statements of L&T technology Services Limited (“the
Company"), which comprise the Balance Sheet as at March
31, 2026, and the Statement of Profit and Loss, including
Other Comprehensive Income, Statement of Changes in
Equity and Statement of Cash Flows for the year then ended,
and notes to the standalone financial statements, including
material accounting policy information and other explanatory
information (hereinafter referred to as the “standalone
financial statements").
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone
financial statements give the information required by the
Companies Act, 2013 (“the Act") in the manner so required
and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the
Act read with Companies (Indian Accounting Standards)
Rules, 2015, as amended (“Ind AS") and other accounting
principles generally accepted in India, of the state of affairs
of the Company as at March 31, 2026, and profit (including
other comprehensive income), changes in equity and its cash
flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements
in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. Our responsibilities under
those Standards are further described in the 'Auditor's
Responsibilities for the Audit of the Standalone Financial
Statements' section of our report. We are independent of
the Company in accordance with the Code of Ethics issued
by the Institute of Chartered Accountants of India (“ICAI")
together with the ethical requirements that are relevant to
our audit of the standalone financial statements under the
provisions of the Act and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that
the audit evidence obtained by us is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements for the year ended March
31, 2026. These matters were addressed in the context of
our audit of the standalone financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined the
matters described below to be the key audit matters to be
communicated in our report.
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Sr. No Key Audit Matters
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How the Key Audit Matters was addressed in our audit
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1
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Revenue recognition - fixed price
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Our audit procedures in respect of this area included among others, the
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contracts
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following
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Refer Note 2(e) to material accounting
policies, Note 23 and Note 45 to the
standalone financial statements.
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1. Obtained an understanding of the systems, processes and controls
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implemented by the Company with respect to recognition of actual
cost incurred on each contract, estimation of future cost to completion,
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The Company engages in fixed price
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measurement of unbilled revenue, unearned revenue and the total
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contracts with its customers wherein
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contract revenue on its completion.
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revenue from such contracts is
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recognized over time. The Company
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2. Involved Information technology ('IT') specialists to assess the design
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uses input method to recognise
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and operating effectiveness of the key IT controls relating to revenue
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revenue, as it represents efforts
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recognition and in particular:
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expended towards satisfying a
performance obligation relative to
the total expected efforts or inputs to
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• Assessed the IT environment in which the business systems operate
and tested system controls over computation of revenue recognised.
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satisfy the performance obligation.
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• Tested the IT controls over appropriateness of cost and revenue
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This involves computation of actual
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reports generated by the system.
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cost incurred and estimation of total
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• Assessed the appropriateness of actual cost incurred on contracts
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cost on each contract to measure
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including the testing the IT general controls and specific IT application
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progress towards completion.
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controls over information systems used for capturing these costs and
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Sr. No Key Audit Matters
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How the Key Audit Matters was addressed in our audit
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Amount of revenue recognition in
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• Tested the controls pertaining to allocation of resources and budgeting
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respect of fixed price contracts has
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systems which prevent the unauthorized recording/changes to costs
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been identified as a Key Audit Matter
considering that:
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incurred on sample basis.
3. Verified on test check basis whether the revenue recognized is in
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• these contracts involve
identification of actual cost
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accordance with the applicable Indian Accounting Standard, including:
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incurred on each contract;
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• Verification of the underlying agreements and other forms of
supporting documentation to ensure that each party's rights and
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• these contracts require estimation
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obligations regarding the goods or services to be transferred and
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of future cost for completion of
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payment terms are identified and contracts have commercial
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each contract; and
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substance.
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• at the period end a significant
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• Inspection of the underlying agreements and other forms of
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amount of contract assets (unbilled
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supporting documentation to identify performance obligations within
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revenue) or contract liabilities
(unearned revenue) related to each
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a contract.
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contract is to be identified.
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• Inspection of the underlying agreements and other forms of
supporting documentation to ensure that transaction price has been
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For the year ended March 31, 2026,
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properly determined and allocated to relevant performance obligations
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revenue from fixed price contracts
amounts to Rs. 34,281 million.
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on an appropriate basis.
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• Verification of the Company's computation of revenue to be
recognized over a period of time on a sample basis, where we
performed the following:
i. Verified management's process relating to the estimation of
contract costs required to complete the respective projects and
assessed that the estimates of costs to complete were reviewed
and approved by appropriate designated management personnel
and are appropriate.
ii. Verified the reasonableness of management's estimation of cost
projections by comparing actual cost incurred with management
initial/updated estimation of total cost for that project.
iii. Recomputed the amount of revenue recognised on these
contracts and compared the same with the actual revenue
recorded and
iv. Assessed the appropriateness of work in progress (contract assets
and contract liabilities) as at the balance sheet date by evaluating
the underlying documentation to identify possible delays in
achieving milestones which require changes in estimated costs to
complete the remaining performance obligations.
• Assessed the adequacy and appropriateness of disclosures made in
standalone financial statements in compliance with applicable Indian
Accounting Standards and applicable financial reporting framework.
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2
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Derivative financial instruments and
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Our audit procedures in respect of this area included among others, the
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hedge accounting
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following
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Refer Note 2(m)(iii) to material
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1. Obtained understanding of the Company's overall hedge accounting
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accounting policies, Note 7, Note 14 ,
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strategy, forwards and options valuation methodologies and hedge
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Note 18, Note 20, and Note 37 to the
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accounting process from initiation to settlement of derivative financial
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standalone financial statements.
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instruments including assessment of the design and implementation of
controls and tested the operating effectiveness of these controls.
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Sr. No Key Audit Matters
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How the Key Audit Matters was addressed in our audit
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The Company enters into derivative
financial instruments like forward
and option contracts to manage
its exposure of foreign currency
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2.
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Assessed whether the Company's accounting policy for hedge
accounting is in accordance with the applicable Indian Accounting
Standards.
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risk of highly probable forecasted
transactions which arise during the
normal course of its business.
Derivative financial assets and
derivative financial liabilities
measured at fair value amounted to
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3.
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Verified the assertion relating to existence of the derivative contracts
outstanding as at March 31, 2026 by obtaining independent balance
confirmations from the respective counterparties, verification on a
sample basis the underlyinag agreements and other forms of supporting
documentation and verification of supporting documentation for
subsequent realisation or settlement after the end of the reporting year.
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Rs. 230 million and Rs. 5,604 million
respectively as at March 31, 2026.
The net movement of cashflow hedge
reserve (net of taxes) recorded in
other comprehensive income for the
year ended March 31, 2026, amounted
to Rs. (4,579) million.
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4.
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Verified the assertion relating to completeness of derivative transactions
by requesting confirmation from counterparties who are frequently
used but with whom the accounting records indicate there are presently
no derivatives, reading other information, such as minutes of meetings
of the board of directors or other relevant committees, inspecting
documentation in paper or electronic form for activity subsequent to the
end of the reporting period.
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In order to apply hedge accounting,
management is required to
demonstrate that the underlying
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5.
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Verified management's hedge documentation and underlying hedge
contracts, on a sample basis.
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contract is considered to be a highly
probable forecasted transaction, that
the hedges are effective and maintain
adequate hedge documentation. A
degree of subjectivity is also required
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6.
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Verified management's expectation at the inception of the hedge that the
hedging relationship will be highly effective and its periodic assessment
of the ongoing effectiveness of the hedging relationship in accordance
with the applicable Indian Accounting Standards.
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to assess when hedge accounting is to
be considered as ineffective. Fair value
movements of the forward and option
contracts are driven by movements in
financial markets. These transactions
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7.
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Verified that the amounts reclassified from cash flow hedge reserve to
the Statement of Profit and Loss as a reclassification adjustment being
in the period in which the cash flows of the hedged items affect Profit or
Loss.
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may have a significant financial effect
and have extensive accounting and
reporting obligations and accordingly,
this is considered as a Key Audit
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8.
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Re-performed the year-end fair valuations of derivative financial
instruments on a sample basis and compared these valuations with those
recorded by the Company.
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Matter.
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9.
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Assessed the adequacy and appropriateness of disclosures made in
standalone financial statements in compliance with applicable Indian
Accounting Standards and applicable financial reporting framework.
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Information Other than the Standalone
Financial Statements and Auditor's Report
Thereon
The Company's Board of Directors is responsible for the other
information. The other information comprises the information
included in the Director's report and Management discussion
and analysis but does not include the standalone financial
statements and our auditor's report thereon, which we
obtained prior to the date of this auditor's report.
Our opinion on the standalone financial statements does not
cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other
information is materially inconsistent with the standalone
financial statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated.
If, based on the work we have performed on the other
information that we obtained prior to the date of this auditor's
report, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We
have nothing to report in this regard.
Responsibilities of Management and
Those Charged with Governance for the
Standalone Financial Statements
The Company's Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect to
the preparation of these standalone financial statements that
give a true and fair view of the financial position, financial
performance, changes in equity and cash flows of the Company
in accordance with the accounting principles generally
accepted in India, including the Accounting Standards
specified under section 133 of the Act. This responsibility
also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of
the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the standalone
financial statement that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the
Management and Board of Directors are responsible for
assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate the
Company or to cease operations, or has no realistic alternative
but to do so.
The Board of Directors are also responsible for overseeing the
Company's financial reporting process.
Auditor's Responsibilities for the Audit of
the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these standalone
financial statements.
We give in “Annexure A" a detailed description of Auditor's
responsibilities for Audit of the Standalone Financial
Statements.
Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor's Report) Order,
2020 (“the Order"), issued by the Central Government of
India in terms of sub-section (11) of section 143 of the
Act, we give in “Annexure B" a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the
extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
audit.
(b) In our opinion, proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and
Loss including other comprehensive income, the
Statement of Changes in Equity and the Statement
of Cash Flow dealt with by this Report are in
agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards
specified under Section 133 of the Act.
(e) On the basis of the written representations received
from the directors as on March 31, 2026 taken
on record by the Board of Directors, none of the
directors are disqualified as on March 31, 2026 from
being appointed as a director in terms of Section
164 (2) of the Act.
(f) With respect to the adequacy of the internal
financial controls with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer to
our separate Report in “Annexure C".
(g) With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of
pending litigations on its financial position in its
standalone financial statements - (Refer Note
32(a) to the standalone financial statements);
ii. The Company has made provision, as required
under the applicable law or accounting
standards, for material foreseeable losses,
if any, on long-term contracts including
derivative contracts. - (Refer Note 22 to the
standalone financial statements).
iii. There has been no delay in transferring
amounts, to the Investor Education and
Protection Fund by the Company during the
year ended March 31, 2026.
iv. a. The Management has represented, that,
no funds have been advanced or loaned
or invested (either from borrowed funds
or share premium or any other sources or
kind of funds) by the Company to or in any
other person(s) or entity(ies), including
foreign entities (“Intermediaries"), with
the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, directly or indirectly lend or invest
in other persons or entities identified in
any manner whatsoever by or on behalf of
the Company (“Ultimate Beneficiaries") or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.
b. The Management has represented, that,
no funds have been received by the
Company from any person(s) or entity(ies),
including foreign entities (Funding
Parties), with the understanding, whether
recorded in writing or otherwise, that
the Company shall, directly or indirectly,
lend or invest in other persons or entities
identified in any manner whatsoever by or
on behalf of the Funding Party (“Ultimate
Beneficiaries") or provide any guarantee,
security or the like on behalf of the
Ultimate Beneficiaries.
c. Based on the audit procedures performed
that have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e) contain
any material mis-statement.
v. The final dividend paid by the Company during
the year in respect of the same declared for
the previous year is in accordance with section
123 of the Companies Act 2013 to the extent
it applies to payment of dividend.
The interim dividend declared and paid by the
Company during the year and until the date of
this audit report is in accordance with section
123 of the Companies Act 2013.
The Board of Directors of the Company have
proposed final dividend for the year which is
subject to the approval of the members at the
ensuing Annual General Meeting. The dividend
declared is in accordance with section 123 of
the Act to the extent it applies to declaration of
dividend. (Refer Note 16.9(c) to the Standalone
financial statements).
vi. Based on our examination, which included
test checks, the Company has used an
accounting software for maintaining its books
of account which has a feature of recording
audit trail (edit log) facility and the same has
operated throughout the year for all relevant
transactions recorded in the software. Further,
during the course of our audit, we did not come
across any instance of audit trail feature being
tampered with. Additionally, the audit trail prior
years has been preserved by the Company
as per the statutory requirements for record
retention.
3. In our opinion, according to information, explanations
given to us, the remuneration paid or provided by
the Company to its directors is within the limits laid
prescribed under Section 197 of the Act.
For M S K A & Associates LLP (Formerly known as M S K A & Associates)
Chartered Accountants
ICAI Firm Registration No. 105047W/W101187
Nitin Tiwari
Partner
Membership No. 118894
UDIN: 26118894XNXGIL9365
Place: Mumbai
Date: April 22, 2026
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