With reference to the news item appearing in a leading web portal titled “Losses in FY08 from hedging due to volatile commodity mkt in range of Rs 150 - 200 Cr : L&T”, Larsen & Toubro Ltd (L&T) has clarified to BSE that during the year 2007-08, there has been extreme volatility in the markets, especially in commodity prices. The Company has exposure in commodities and part of it is being hedged by it. As per the un-audited numbers, there could be a loss in commodity hedging of around Rs 200 crore. The actual number will get crystalized on finalization of Accounts.

The Company has reduced the exposures to a considerable extent.

However, the Company maintains its guidance on order booking, sales and operating margins for the year with an emphasis on improvement in the operating margins.