Auditors Report to the members of Larsen & Toubro Limited

We have audited the attached balance sheet of Larsen & Toubro Limited, as at March 31, 2007 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In accordance with the provisions of section 227 of the Companies Act, 1956, we report that: (1) As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India under sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: (a) (b) (c) (d) (e) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account; in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; and on the basis of the written representations received from directors as on March 31, 2007 and taken on record by the board of directors, we report that none of the directors is disqualified as on March 31, 2007 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

(2)

In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant accounting policies in schedule Q and notes appearing thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: 1) 2) 3) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2007; in the case of the profit and loss account, of the profit for the year ended on that date; and in the case of the cash flow statement, of the cash flows for the year ended on that date. SHARP & TANNAN Chartered Accountants by the hand of F.M. KOBLA Partner Membership No.15882

Mumbai, May 29, 2007

Annexure to the Auditors Report

(Referred to paragraph (1) of our report of even date) 1 (a) (b) The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets. We are informed that the Company has formulated a programme of physical verification of all the fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the physical verification of the fixed assets has been carried out by management during the year and no material discrepancies were noticed on such verification. The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern status. As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. As per the information given to us, the procedures of physical verification of inventory followed by management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(b), (c) and (d) of the Order are not applicable. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(f) and (g) of the Order are not applicable.

(c) 2 (a) (b) (c) 3 (a)

(b)

In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for purchase of inventory, fixed assets and for sale of goods and services. Further, on

97

the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems. 5 (a) (b) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

The Company has accepted deposits from the public and in our opinion and according to the information and explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the rules framed thereunder, where applicable, have been complied with. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business. We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules prescribed by the central government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of electronic products, viz. industrial electronics including all control instrumentation and automation equipment and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues outstanding as at March 31, 2007 for a period of more than six months from the date they became payable. According to the information and explanations given to us and the records of the Company examined by us, the particulars of sales tax, excise duty, service tax and income tax as at March 31, 2007 which have not been deposited on account of a dispute pending, are as under: Name of the Statute Nature of the disputed dues Amount Rs. crore* 0.38 Period to which the amount relates 2005-2006 Forum where disputes are pending Sales Tax Officer

7 8

(b)

Central Sales Tax Act, Sales in transit consignment Local Sales Tax Acts and seized and local VAT Works Contract Tax Act demanded with penalty Non-submission of forms, classification dispute, disallowance of deemed inter-state sales and export claim disallowance Non-submission of forms, inter-state and branch sales, subcontractors turnover, classification dispute, transit sale, export claim disallowance, rate of tax dispute and other matters Non-submission of forms, transit sales, and other matters Non-submission of forms and inter-state sales Non-submission of forms Deemed interstate sales disallowed, stock transfer claims, rate of tax and inter-state sales Non-submission of forms, inter-state sales, sub-contractor turnover, rate dispute, disallowance under composition scheme and deemed sales in course of imports and other matters Inter-state sales, classification dispute, and disallowance of deemed sales in course of imports and taxability of subcontractors turnover

2.35

1988-1989 to 1991-1992, 1993-1994, 1994-1995, 1996-1997, 1997-1998 and 1999-2000 to 2004-2005 1989-1990, 1991-1992 and 1993-1994 to 2004-2005

Assistant Commissioner (Appeals)

7.49

Deputy Commissioner (Appeals)

1.08 1.45

1994-1995 to 1996-1997, 2001-2002 and 2002-2003 1996-1997, 1997-1998, 1999-2000 to 2003-2004 and 2005-2006 2001-2002 1996-1997 and 1997-1998

Joint Commissioner (Appeals) Additional Commissioner (Appeals) Commissioner (Appeals) Commissioner Commercial Tax (Revision) Sales Tax Tribunal

0.02 1.53

33.99

1987-1988 to 2002-2003 and 2004-2005

4.71

1981-1982, 1986-1987, 1993-1994, 1994-1995, 1997-1998, 1999-2000 and 2001-2002

High Court

98

Name of the Statute The Central Excise Act, 1944 and Service Tax under the Finance Act, 1994

Nature of the disputed dues Valuation disputes

Amount Rs. crore* 0.39

Period to which the amount relates 1997-1998 and 2000-2001

Forum where disputes are pending Commissioner (Appeals)

Classification dispute, exemptions denied and valuation disputes Export rebate claim Dispute on site mix concrete and PSC grinders Demand for service tax on lumpsum turnkey projects Income Tax Dispute regarding tax deducted at source at lower rate on maintenance charges

7.79 0.07 1.52 101.09 0.03

1991-1992, 2001-2002 to 2005-2006 2003-2004 1997-1998 2002-2003 to 2005-2006 2005-2006

CESTAT High Court Supreme Court CESTAT Commissioner (Appeals)

*Net of pre-deposit paid in getting the stay/appeal admitted 10 11 12 13 14 The Company has no accumulated losses as at March 31, 2007 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. The Company has invested surplus funds in marketable securities and mutual funds. According to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The investments in marketable securities and mutual funds have been held by the Company in its own name. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial institutions are not prima facie prejudicial to the interests of the Company. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used for long term investments. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year. According to the information and explanations given to us and the records examined by us, security or charge has been created in respect of the debentures issued. However, the Company has no debentures outstanding at the year end. The Company has not raised any money by public issues during the year. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by management. SHARP & TANNAN Chartered Accountants by the hand of F.M. KOBLA Partner Membership No.15882

15 16 17 18 19 20 21

Mumbai, May 29, 2007

99

Balance Sheet as at March 31, 2007

Schedules SOURCES OF FUNDS: SHAREHOLDERS FUNDS: Share capital Reserves and surplus Employee stock options outstanding (Previous year Rs.134.62 crore) Less : Deferred employee compensation expense (Previous year Rs.99.63 crore) LOAN FUNDS: Secured loans Unsecured loans Deferred tax liabilities (See Note No.23) TOTAL APPLICATION OF FUNDS: Fixed Assets Tangible Assets Gross block Less: Depreciation and Impairment Net block Less: Lease adjustment Capital work-in-progress (net of Impairment) Intangible Assets Gross block Less: Amortisation and Impairment Net block Capital work-in-progress (net of Impairment) Fixed Assets held for sale (Rs.13719) (at lower of cost or estimated realisable value) Investments Deferred tax assets (See Note No.23) Current Assets, Loans and Advances: Interest accrued on investments Inventories Sundry debtors Cash and bank balances Loans and advances E (ii) 80.98 32.77 48.21 32.44 80.65 F G 26.52 3001.14 5504.64 1094.43 2257.93 11884.66 H 8157.13 1180.13 9337.26 Net current assets Miscellaneous expenditure (to the extent not written-off or adjusted) TOTAL CONTINGENT LIABILITIES J SIGNIFICANT ACCOUNTING POLICIES Q (For Notes forming part of Accounts, see page Nos. 128 to 159) As per our report attached SHARP & TANNAN Chartered Accountants by the hand of F.M. KOBLA Partner Membership No.15882 Mumbai, May 29, 2007 A.M. NAIK Chairman & Managing Director J.P. NAYAK Y.M. DEOSTHALEE K. VENKATARAMANAN R.N. MUKHIJA N. HARIHARAN Company Secretary K.V. RANGASWAMI V.K. MAGAPU S.N. TALWAR M.M. CHITALE SURINDER NATH U. SUNDARARAJAN THOMAS MATHEW T. I 2547.40 9.84 8051.06 3104.44 164.69 A B 123.83 72.33 51.50 5768.43 C D 245.40 1832.35 2077.75 204.88 8051.06 As at 31-3-2007 Rs.crore Rs.crore 56.65 5660.28

As at 31-3-2006 Rs.crore Rs.crore 27.48 4577.70

34.99 4640.17 465.79 987.78 1453.57 209.79 6303.53

E (i) 2795.32 1086.99 1708.33 3.07 1705.26 438.78 2144.04

2250.34 954.57 1295.77 3.07 1292.70 258.52 1551.22 50.34 24.58 25.76 27.54 53.30 0.10 1919.52 132.51 17.26 2210.27 4814.16 583.20 1910.56 9535.45 5888.90 1021.65 6910.55 2624.90 21.98 6303.53

Less: Current Liabilities and Provisions: Liabilities Provisions

Directors

Mumbai, May 29, 2007

100

Profit and Loss Account for the year ended March 31, 2007
Schedules INCOME: Sales & Service (Gross) Less: Excise duty Sales & Service (Net) Other operational income Other income EXPENDITURE: Manufacturing, construction and operating expenses Staff expenses Sales, administration and other expenses Interest and brokerage Depreciation, obsolescence and impairment Amortisation of intangible assets K 2006-2007 Rs.crore Rs.crore 17900.59 321.75 17578.84 35.32 426.97 18041.13 M N O P 13078.24 1258.21 1499.15 33.93 161.57 9.88 16040.98 3.30 16037.68 Profit before transfer from Revaluation reserve Add: Transfer from Revaluation reserve Profit before tax before extra-ordinary items Provision for current taxes (See Note No.22) Provision for deferred tax (See Note No.23) Provision for tax on Fringe Benefits Profit after tax before extra-ordinary items Profit on sale/transfer of businesses (net of tax) Profit after tax after extra-ordinary items Add: Balance brought forward from previous year Less: Operating result of acquired entity for previous year (net of tax) (See Note No.42) Dividend paid for previous year Additional tax on dividend paid for previous year Profit available for appropriation Less: Transfer to General Reserve Profit available for distribution Interim dividend Proposed final dividend Additional tax on dividend Balance carried to Balance Sheet 55.70 2.49 5.61 0.79 46.81 1449.83 950.00 499.83 311.60 56.65 53.34 612.32 (25.63) 15.18 601.87 1403.02 1403.02 2003.45 1.44 2004.89

2005-2006 Rs.crore Rs.crore 14965.56 230.76 14734.80 29.23 434.60 15198.63 11560.34 892.54 1244.43 75.07 108.61 7.37 13888.36 1.89 13886.47 1312.16 1.49 1313.65 364.94 (15.35) 21.67 371.26 942.39 69.75 1012.14 55.62 3.88 0.54 51.20 1063.34 663.00 400.34 302.25 42.39 55.70 38.03 36.23 35.41 33.77 2.00

L (i) L (ii)

Less: Overheads charged to fixed assets

Basic Earnings Per Equity Share (Rupees) Diluted Earnings Per Equity Share (Rupees) Basic Earnings Per Equity Share after excluding extra-ordinary items (Rupees) (See Note No.24) Diluted Earnings Per Equity Share after excluding extra-ordinary items (Rupees) Face Value Per Equity Share (Rupees) SIGNIFICANT ACCOUNTING POLICIES Q (For Notes forming part of Accounts, see page Nos. 128 to 159) As per our report attached SHARP & TANNAN Chartered Accountants by the hand of F.M. KOBLA Partner Membership No.15882 Mumbai, May 29, 2007

78.24 50.22 48.36 50.22 48.36 2.00

A.M. NAIK Chairman & Managing Director J.P. NAYAK Y.M. DEOSTHALEE K. VENKATARAMANAN R.N. MUKHIJA N. HARIHARAN Company Secretary K.V. RANGASWAMI V.K. MAGAPU S.N. TALWAR M.M. CHITALE SURINDER NATH U. SUNDARARAJAN THOMAS MATHEW T.

Directors

Mumbai, May 29, 2007

101

Cash Flow Statement for the year ended March 31, 2007
2006-2007 Rs.crore A. Cash flow from Operating Activities: Net Profit before tax (including extra-ordinary items) ... Adjustments for: Dividend Received ... Depreciation (including obsolescence), amortisation and impairment ... Unrealised foreign exchange difference-net (gain)/loss ... Interest(net) ... (Profit)/Loss on sale of fixed assets (net) ... (Profit)/Loss on sale of investments (net) ... Employee Stock Option-Compensation debited to Profit and Loss Account (net) Gain on sale/transfer of Dairy & Milk Processing Equipment Business ... Gain on sale/transfer of Glass Container Business ... (including earnest money deposit received and retained) Loss on reassumption of debt ... Provision/(Reversal) for diminution in value of investments ... Operating profit before working capital changes Adjustments for: (Increase)/Decrease in trade and other receivables (Increase)/Decrease in inventories (Increase)/Decrease in miscellaneous expenditure Increase/(Decrease) in trade payables Cash generated from operations Direct taxes refund/(paid)-net Net Cash from Operating Activities B. Cash flow from Investing Activities: Purchase of fixed assets (Including interest capitalised Rs.0.02 crore, previous year Rs.0.98 crore) Sale of fixed assets Purchase of investments Sale of investments Loans/Deposits made with subsidiaries/associates and third parties (net) Advance towards equity commitment Interest received Dividend received from subsidiaries Dividend received from other investments Cash received on sale/transfer of Dairy & Milk Processing Equipment Business Cash received on sale/transfer of Glass Container Business (net of part refund of earnest money) Net Cash (used in)/ from Investing Activities C. Cash flow from Financing Activities: Proceeds from issue of share capital including securities premium Proceeds from long term borrowings Repayment of long term borrowings (Repayments)/Proceeds from other borrowings (net) Loans (to)/from subsidiaries/associates (net) Dividends paid Additional tax on dividend Interest paid Net Cash (used in)/from Financing Activities ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 2004.89 (187.31) 170.01 (38.09) 33.93 (6.90) (16.17) 55.98 11.95 2028.29 (796.32) (790.77) 12.18 2281.33 2734.71 (604.26) 2130.45 (800.23) 25.01 (22088.06) 21015.48 24.52 (2.00) 49.80 41.71 145.60 (1588.17) 23.94 797.62 (450.41) 392.21 3.39 (619.46) (86.89) (91.45) (31.05) 511.23 583.20 1094.43

2005-2006 Rs.crore 1383.40 (160.14) 114.49 9.69 75.07 (4.12) (128.04) 22.08 (49.22) (30.53) 55.91 1.65 1290.24 (931.74) 89.39 17.92 1233.09 1698.90 (329.65) 1369.25 (682.56) 4.61 (6167.39) 5344.21 (15.55) (108.26) 42.16 67.22 92.92 21.56 74.78 (1326.30) 10.34 552.75 (225.36) (230.28) (4.06) (231.24) (32.43) (127.49) (287.77) (244.82) 828.02 583.20

Net (decrease)/increase in cash and cash equivalents (A + B + C) ... Cash and cash equivalents at beginning of the year ... Cash and cash equivalents at end of the year ...

Notes: 1. Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3: Cash Flow Statements issued by the Institute of Chartered Accountants of India. 2. Purchase of fixed assets includes movement of Capital Work-in-Progress during the year. 3. Cash and cash equivalents at the end of the year represent cash and bank balances and include unrealised gain of Rs.2.83 crore (previous year Rs.2.70 crore) on account of translation of foreign currency bank balances. 4. Previous years figures have been regrouped/reclassified wherever applicable. A.M. NAIK As per our report attached Chairman & Managing Director SHARP & TANNAN Chartered Accountants by the hand of F.M. KOBLA Partner Membership No.15882 Mumbai, May 29, 2007 J.P. NAYAK Y.M. DEOSTHALEE K. VENKATARAMANAN R.N. MUKHIJA N. HARIHARAN Company Secretary K.V. RANGASWAMI V.K. MAGAPU S.N. TALWAR M.M. CHITALE SURINDER NATH U. SUNDARARAJAN THOMAS MATHEW T.

Directors

Mumbai, May 29, 2007

102

Schedules forming part of Accounts

As at 31-3-2007 Rs.crore Schedule A Share Capital: Authorised: 162,50,00,000 Equity shares of Rs.2 each (Previous year 162,50,00,000 Equity shares of Rs.2 each) Issued: 28,32,70,748 Equity shares of Rs.2 each (Previous year 13,73,85,777 Equity shares of Rs.2 each) Subscribed and paid up: 28,32,70,748 Equity shares of Rs.2 each (See Note No.1) (Previous year 13,73,85,777 Equity shares of Rs.2 each) Rs.crore

As at 31-3-2006 Rs.crore Rs.crore

325.00

325.00

56.65

27.48

56.65 56.65

27.48 27.48

As at 31-3-2007 Rs.crore Schedule B Reserves and Surplus: Revaluation Reserve: As per last Balance Sheet Less: On assets sold or obsoleted during the year Transferred to Profit and Loss Account Cash Subsidy Reserve: As per last Balance Sheet Less: Transferred to General Reserve Capital Redemption Reserve: As per last Balance Sheet Capital Reserve: As per last Balance Sheet Addition during the year (See Note No.42) Debenture Redemption Reserve: As per last Balance Sheet Less: Transferred to General Reserve Securities Premium Account: As per last Balance Sheet Addition during the year 0.12 10.40 10.52 18.75 18.75 1927.82 164.11 2091.93 28.00 0.38 2.40 Rs.crore

As at 31-3-2006 Rs.crore Rs.crore

29.37 1.44 27.93 0.25 0.25 0.02

30.90 0.04 1.49 29.37 0.25 0.25 0.02 0.12 0.12 50.80 32.05 18.75 1326.63 601.20 1927.83 3.52 0.62

Less: Issue of bonus shares Debenture/Bond issue expenses (net of tax) Share issue expenses Amortisation of premium payable on redemption of Debentures/Bonds (net of tax) (Previous year Rs.3.21 crore) Less: Write-back of provision made in previous year pursuant to conversion of Bonds (Previous year Rs.7.34 crore)

3.20 (0.80) 2064.35

(4.13) 1927.82 1976.33

2102.82

Carried forward

103

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule B (Contd.) Brought forward Foreign Projects Reserve: As per last Balance Sheet 28.34 9.15 19.19 Housing Projects Reserve: As per last Balance Sheet 21.31 13.35 7.96 General Reserve: As per last Balance Sheet 2496.02 9.15 13.35 18.75 0.25 950.00 3487.52 Rs.crore

As at 31-3-2006 Rs.crore Rs.crore

2102.82

1976.33 46.34 18.00 28.34 29.81 8.50 21.31 1774.47 18.00 8.50 32.05 663.00 2496.02 -

Less: Transferred to General Reserve

Less: Transferred to General Reserve

Add: Transferred from:

Foreign Projects Reserve Housing Projects Reserve Debenture Redemption Reserve Cash Subsidy Reserve Profit and Loss Account

Less: Liabilities on account of Employee Benefits [net of tax] (See Note No.13)
Profit and Loss Account

35.45 3452.07 78.24 5660.28

2496.02 55.70 4577.70

As at 31-3-2007 Rs.crore Schedule C Secured Loans: Secured Redeemable Non-convertible Debentures: Fixed Rate Debentures Loans from banks: Cash Credits/Working Capital Demand Loans Other Loans Interest accrued and due Loans from others 199.19 46.16 0.05 245.40 245.40 Rs.crore

As at 31-3-2006 Rs.crore Rs.crore

75.00 120.11 47.57 0.03 167.71 223.08 465.79

104

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule D Unsecured Loans: 1.25% Foreign Currency Convertible Bonds Zero coupon Foreign Currency Convertible Bonds Fixed Deposits (including loans from shareholders Rs. Nil; previous year Rs.0.49 crore) Loans from subsidiary companies Short term loans and advances: From banks Lease finance Sales tax deferment loan Interest accrued and due Other loans and advances: From banks Lease finance Sales tax deferment loan From others Rs.crore

As at 31-3-2006 Rs.crore Rs.crore

422.27 -

96.95 438.70 4.05

5.49 464.74 1.32 5.10 0.04 471.20 711.44 0.69 136.26 85.00 933.39 1832.35

2.10 172.46 3.25 5.10 180.81 115.60 1.33 148.24 265.17 987.78

Schedule E (i)
Cost / Valuation Fixed Assets - Tangible As at Transfer on 1-4-2006 Amalga- Additions mation Rs.crore Rs.crore Rs.crore 99.07 7.53 545.53 0.25 1425.43 74.59 57.37 9.26 19.22 2238.25 2.33 9.76 12.09 2250.34 2.76 23.97 26.73 26.73 2.21 164.83 383.68 26.00 2.88 579.60 0.77 0.77 580.37 As at Up to Transfer on Deductions 31-3-2007 31-3-2006 Amalgamation Rs.crore Rs.crore Rs.crore Rs.crore 0.08 5.59 40.86 2.48 6.38 55.39 0.75 5.98 6.73 62.12 101.20 7.53 707.53 0.25 1792.22 98.11 53.87 9.26 19.22 2789.19 2.35 3.78 6.13 2795.32 0.46 137.09 0.25 699.79 43.42 45.22 6.48 9.22 941.93 1.00 6.93 7.93 949.86 1.66 19.47 21.13 21.13 Depreciation For the Up to year Deductions 31-3-2007 Rs.crore 0.53 13.95 119.64 10.60 3.56 0.51 148.79 1.11 1.23 2.34 151.13 Rs.crore 1.09 27.20 2.34 5.36 35.99 0.70 5.37 6.07 42.06 Rs.crore 0.99 151.61 0.25 811.70 51.68 43.42 6.99 9.22 1075.86 1.41 2.79 4.20 1080.06 Impairment Book Value

As at As at As at 31-3-2007 31-3-2007 31-3-2006

Rs. crore 6.93 6.93 6.93 Rs.crore 101.20 6.54 555.92 980.52 46.43 10.45 2.27 3.07 (3.07) 1703.33 0.94 0.99 1.93 1705.26

Rs.crore 99.07 7.07 408.44 725.64 31.17 12.15 2.78 5.29 (3.07) 1288.54 1.33 2.83 4.16 1292.70

OWNED ASSETS: Land - Freehold Ships Buildings Railway sidings Plant and machinery Furniture and fixtures Vehicles Aircraft Owned Assets Leased Out: Plant and machinery Lease Adjustment Owned Assets (sub total - A) LEASED ASSETS: Plant and machinery Vehicles Leased Assets (sub total - B) Total (A+B)

Previous year

2060.51

452.91

263.08

2250.34

992.85

103.84

146.83

949.86

4.71
438.78 2144.04

Add: Capital work-in-progress (net of deductions on account of obsolescence Rs.6.17 crore; Previous year Rs.Nil)

258.52 1551.22

105

Schedules forming part of Accounts (contd.)

Schedule E (ii) Cost / Valuation Fixed Assets - Intangible Amortisation Book Value

As at As at Up to For the Up to As at As at 1-4-2006 Additions Deductions 31-3-2007 31-3-2006 year Deductions 31-3-2007 31-3-2007 31-3-2006 Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore 19.32 27.74 3.28 50.34 10.90 9.54 11.89 32.33 1.69 1.69 30.22 35.59 15.17 80.98 3.92 18.78 1.88 24.58 0.26 7.18 2.44 9.88 1.69 1.69 4.18 24.27 4.32 32.77 26.04 11.32 10.85 48.21

Land - Leasehold Specialised Softwares Lumpsum fees for technical knowhow Total

15.40 8.96 1.40 25.76

Previous year Add: Capital work-in-progress

46.04

11.90

7.60

50.34

21.91

7.37

4.70

24.58
32.44 80.65

27.54 53.30

Notes : 1 Cost/Valuation of: (i) (ii) Freehold land includes Rs.0.14 crore for which conveyance is yet to be completed. Leasehold land includes: (a) Rs.5.95 crore for land taken at Bangalore on lease from KIADB vide agreement dated January 21, 2002. The lease agreement is for a period of six years with extension of 3 years, at the end of which sale deed would be executed, on fulfilment of certain conditions by the Company. Rs.0.22 crore for land taken at Hubli on lease from KIADB vide agreement dated December 8, 2005. The lease agreement is for a period of six years, at the end of which sale deed would be executed, on fulfilment of certain conditions by the Company. in various co-operative societies and apartments and shop-owners associations: Rs.88.14 crore, including 1715 shares of Rs.50 each, 177 shares of Rs.100 each and 1 share of Rs.250. in proposed co-operative societies Rs.19.05 crore.

(b) 2

Cost/Valuation of Buildings includes ownership accommodation: (i) (a) (b) (ii) (iii)

of Rs.4.36 crore in respect of which the deed of conveyance is yet to be executed. of Rs.3.36 crore representing undivided share in a property at a certain location. Rs.3.81 crore being the exchange gain; and Rs.1.61 crore being borrowing cost capitalised in accordance with Accounting Standard (AS)16 on Borrowing Costs issued by the Institute of Chartered Accountants of India.

Additions during the year and capital work-in-progress include: (i) (ii)

4 5 6 7 8

Additions to leasehold land include Rs.0.40 crore on account of transfer on amalgamation. During the year, the Company has reviewed the useful life of certain categories of assets. Consequently, the depreciation rates have been revised, resulting in an additional charge of Rs.21.39 crore. Capital work-in-progress includes advances Rs.26.61 crore ( previous year Rs.34.28 crore). Impairment of Plant & Machinery includes Rs.2.22 crore for the year. The Company had revalued as at October 1, 1984 some of its land, buildings, plant and machinery and railway sidings at replacement/market value which resulted in a net increase of Rs.108.05 crore.

106

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule F Investments (At cost, unless otherwise specified): A) Long Term Investments: Government and trust securities Fully paid equity shares of subsidiary companies Partly paid equity shares in subsidiary companies Application money pending allotment of equity shares in a subsidiary company Fully paid preference shares of subsidiary companies Fully paid equity shares - Trade investments Other fully paid equity shares Bonds Mutual funds B) Current Investments: Government and trust securities Other fully paid equity shares Bonds Mutual funds C) Investment in Integrated Joint Ventures Rs.crore

As at 31-3-2006 Rs.crore Rs.crore

5.91 1210.07 53.68 42.49 111.70 21.23 470.46 0.53 1916.07 98.85 42.60 34.24 984.77 1160.46 27.91 3104.44

5.91 496.94 0.45 31.22 97.61 21.23 469.96 2.21 1125.53 48.74 715.87 764.61 29.38 1919.52

Particulars Quoted Investments Book value Market value Unquoted Investments Book value Particulars of Investments:

As at 31-3-2007 Rs.crore 187.33 1289.46 2917.11

As at 31-3-2006 Rs.crore 25.60 999.29 1893.92

All Unquoted, unless otherwise specified A) Long Term Investments: Government and trust securities: 1 8.07 % Government of India Bond 2017 of Rs.5 crore (Quoted) Subsidiary Companies: Fully paid equity shares: L&T Finance Limited 12,41,91,500 shares of Rs.10 each (2,50,00,006 shares of Rs.10 each subscribed during the year) Larsen & Toubro Infotech Limited 3,00,00,000 shares of Rs.5 each L&T Transportation Infrastructure Limited 1,08,64,000 shares of Rs.10 each Narmada Infrastructure Construction Enterprise Limited 1,26,48,507 shares of Rs.10 each India Infrastructure Developers Limited 5,60,60,000 shares of Rs.10 each (2,10,60,000 shares of Rs.10 each allotted as per the scheme of amalgamation) [See Note No.41] L&T Infrastruture Development Projects Limited 19,30,31,352 shares of Rs.10 each (4,19,90,585 shares of Rs.10 each subscribed during the year) Larsen & Toubro International FZE 266 shares of Dhs 550,500 each (200 shares of Dhs 550,500 each subscribed during the year) Carried forward 5.91 5.91

5.91 5.91

240.98

140.98

15.00 10.86 12.65 56.06

15.00 10.86 12.65 35.00

383.42

151.04

180.38 899.35 5.91

43.72 409.25 5.91

107

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule F (Contd.) Brought forward Tractor Engineers Limited 68,000 shares of Rs.1000 each Larsen & Toubro LLC 50,000 shares of USD 1 each L&T-Sargent & Lundy Limited 27,52,129 shares of Rs.10 each Larsen & Toubro (Wuxi) Electric Company Limited USD 36,33,212.97 subscribed during the year USD 47,89,240.44 sold during the year Spectrum Infotech Private Limited 4,40,000 shares of Rs.10 each HPL Cogeneration Limited 3,12,12,000 shares of Rs.10 each [See Note No.39(a)] L&T Western India Tollbridge Limited 1,39,50,007 shares of Rs.10 each L&T Power Investments Private Limited (See Note No.41) (2,10,60,000 shares of Rs.10 each transferred to India Infrastructure Developers Limited as per the scheme of amalgamation) Bhilai Power Supply Company Limited 49,950 shares of Rs.10 each International Seaports Pte. Limited 18,15,000shares of USD 1 each L&T Capital Company Limited 50,00,000 shares of Rs.10 each L&T Power Projects Limited 50,000 shares of Rs.10 each (subscribed during the year) International Seaport Dredging Limited 8,600 shares of Rs.10000 each (subscribed during the year) L&T Infrastructure Finance Company Limited 24,30,00,000 shares of Rs.10 each (subscribed during the year) 899.35 0.30 0.23 1.53 Rs.crore 5.91

As at 31-3-2006 Rs.crore 409.25 0.30 0.23 1.53 Rs.crore 5.91

6.80 31.21 13.95

5.20 6.80 31.21 13.95

21.06

0.05 2.36 5.00 0.05 8.60 243.00 1212.43 2.36 1210.07

0.05 2.36 5.00 496.94 496.94

Less: Provision for diminution in value

Partly paid equity shares in Subsidiary Companies (See Note No.14) L&T Infrastruture Development Projects Limited 67,69,518 shares of Rs.10 each, Re.1 paid up (subscribed during the year) Larsen & Toubro Infotech Limited 22,50,000 shares of Rs.5 each, Rs.2.20 paid up (subscribed during the year) Application money pending allotment of equity shares Larsen & Toubro International FZE (USD 1,00,000-allotment of equity shares during the year) Fully paid preference shares of Subsidiary Companies: HPL Cogeneration Limited 3,12,12,000 15% Cumulative Redeemable Preference shares of Rs.10 each International Seaport Dredging Limited 11,267 13% Preference shares of Rs.10000 each (subscribed during the year)

0.68 53.00 53.68

0.45

34.88

34.88

11.27 46.15 3.66 42.49 1312.15

34.88 3.66 31.22 534.52

Less: Provision for diminution in value

Carried forward

108

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule F (Contd.) Brought forward Other fully paid equity shares - Trade Investments (i) Fully paid equity shares in Associate Companies: Ewac Alloys Limited 4,14,720 shares of Rs.100 each Audco India Limited 9,00,000 shares of Rs.100 each Gujarat Leather Industries Limited 7,35,000 shares of Rs.10 each L&T-Chiyoda Limited 45,00,000 shares of Rs.10 each L&T-Komatsu Limited 6,00,00,000 shares of Rs.10 each L&T-Ramboll Consulting Engineers Limited 18,00,000 shares of Rs.10 each L&T-Case Equipment Private Limited 1,20,05,000 shares of Rs.10 each L&T-Crossroads Private Limited (90,00,000 shares of Rs.10 each sold during the year) Voith Paper Technology (India) Limited 15,00,000 shares of Rs.10 each 0.04 0.06 0.56 4.50 60.00 1.80 12.00 1.00 79.96 0.56 79.40 (ii) Fully paid equity shares in Incorporated Joint Ventures: L&T-Valdel Engineering Limited 6,55,000 shares of Rs.10 each L&T-Demag Plastics Machinery Private Limited 30,00,000 shares of Rs.10 each (purchased during the year) Rs.crore 1312.15

As at 31-3-2006 Rs.crore Rs.crore 534.52

0.04 0.06 0.56 4.50 60.00 1.80 12.00 9.00 1.00 88.96 0.56 88.40

Less: Provision for diminution in value

9.02 3.00 12.02

9.02 9.02

(iii) Fully paid equity shares in other companies: Tullow India Operations Limited (1,000 shares of GBP 1 each sold during the year) City Union Bank Limited (Quoted) [See Note No.39(b)] 12,00,000 shares of Rs.10 each (subscribed during the year) 20.28 20.28 111.70 Other fully paid equity shares: Housing Development Finance Corporation Limited (Quoted) 74,356 shares of Rs.10 each Gujarat Ambuja Cements Limited (Quoted) 5,00,310 shares of Rs.2 each UltraTech Cement Limited (Quoted) 1,43,03,294 shares of Rs.10 each John Deere Equipment Private Limited 35,00,000 shares of Rs.10 each Utmal Multi purpose Service Co-operative Society Limited 300 B class shares of Rs.100 each:Rs.30000 (as at 31-3-2006: Rs.30000) Carried forward 0.10 3.33 14.30 3.50 21.23 1445.08

0.19 0.19 97.61

0.10 3.33 14.30 3.50 21.23 653.36

109

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule F (Contd.) Brought forward Bonds: Unit Trust of India-Tax free Bonds (Quoted) 1,96,400 6.75% bonds of Rs.100 each NABARD-Capital Gain Bonds 1,00,000 5.40% bonds of Rs.10000 each National Housing Bank-Capital Gain Bonds 1,80,000 5.45% bonds of Rs.10000 each Small Industries Development Bank of India-Capital Gain Bonds 53,000 5.50% bonds of Rs.10000 each National Highway Authority of India-Capital Gain Bonds 85,000 5.50% bonds of Rs.10000 each 50,000 5.65% bonds of Rs.10000 each Rural Electrification Corporation Limited-Capital Gain Bonds 500 5.25% bonds of Rs.10000 each (purchased during the year) Mutual funds: India Project Development Fund 5.263863 units of Rs.10,00,000 each (16.841831units of Rs.10,00,000 each sold during the year) B) Current Investments: Government and trust securities: 10 8.07% Government of India Bond 2017 of Rs.5 crore each (Quoted) (5 bonds of face value of Rs.25 crore purchased and sold during the year) 10 7.59% Government of India Bond 2016 of Rs.5 crore each (Quoted) (27 bonds of face value of Rs.135 crore purchased and sold during the year) Rs.crore 1445.08

As at 31-3-2006 Rs.crore Rs.crore 653.36

1.96 100.00 180.00 53.00 85.00 50.00 0.50 470.46

1.96 100.00 180.00 53.00 85.00 50.00 469.96

0.53

2.21

50.72

49.82 100.54 1.69 98.85

Less: Provision for diminution in value

Other fully paid equity shares: Gujarat Ambuja Cements Limited (Quoted) 2,55,998 shares of Rs.2 each (purchased during the year) ACC Limited (Quoted) 74,996 shares of Rs.10 each (purchased during the year) Hindustan Zinc Limited (Quoted) 1,73,976 shares of Rs.10 each (purchased during the year) Hindalco Industries Limited (Quoted) 3,65,000 shares of Re.1 each (purchased during the year) Steel Authority of India Limited (Quoted) 11,25,000 shares of Rs.10 each (purchased during the year) Sterlite Industries Limited (Quoted) 1,60,000 shares of Rs.2 each (purchased during the year)

3.54 7.23 12.77 6.11 11.46 8.58 49.69 7.09 42.60

Less: Provision for diminution in value

Bonds: Gujarat Urja Vikas Nigam Limited Bonds 2009 (Formerly known as Gujarat Electricity Board) 11 11.25% bonds of Rs.1,00,000 each Housing Development Finance Corporation Limited 90 7.65% 2016 bonds of Rs.10,00,000 each 210 8.00% 2017 bonds of Rs.10,00,000 each Carried forward

0.11 8.56 20.67 29.34 2057.52

0.11 8.56 20.67 29.34 1125.53

110

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule F (Contd.) Brought forward State Bank of India (50 7.45% 2015 bonds of Rs.10,00,000 each sold during the year) Power Finance Corporation (100 7.95% 2016 bonds of Rs.10,00,000 each sold during the year) Indian Overseas Bank 50 8.00% 2016 bonds of Rs.10,00,000 each 29.34 4.90 34.24 Mutual funds: ABN Amro FTP Quarterly Plan-C-Dividend Reinvestment 5,12,83,438 Units of Rs.10 each purchased during the year Birla FTP Quarterly Series 6 Dividend Payout 5,00,00,000 Units of Rs.10 each purchased during the year Birla Income Plus Quarterly Dividend-Reinvestment 3,46,34,666 Units of Rs.10 each purchased during the year (4,44,30,194 Units of Rs.10 each purchased and sold during the year) DBS Chola Treasury Management Fund-Daily Dividend 8,81,42,042 Units of Rs.10 each purchased during the year (9,50,25,541 Units of Rs.10 each purchased and sold during the year) DSP Merryl Lynch-Liquidity Fund Institutional Daily Dividend -Dividend Reinvestment 5,00,086 Units of Rs.1000 each purchased during the year (9,75,064 Units of Rs.1000 each sold during the year) (41,30,718 Units of Rs.1000 each purchased and sold during the year) DSP Merryl Lynch-FTP Series 1 H-Institutional -Dividend Reinvestment 2,51,990 Units of Rs.1000 each purchased during the year (2,50,00,000 Units of Rs.1000 each purchased and sold during the year) HDFC Cash Management-Call Plan-Dividend Reinvestment 11,52,06,180 Units of Rs.10 each purchased during the year (29,44,54,095 Units of Rs.10 each purchased and sold during the year) HDFC FMP-90 Day February 2007($) Wholesale Plan -Dividend Reinvestment 2,50,00,000 Units of Rs.10 each purchased during the year HDFC Income Fund-Dividend Reinvestment 2,44,37,046 Units of Rs.10 each purchased during the year (4,43,16,122 Units of Rs.10 each purchased and sold during the year) HSBC Cash Fund Institutional Plus-Daily Dividend -Dividend Reinvestment 95,01,558 Units of Rs.10 each purchased during the year (40,92,67,016 Units of Rs.10 each purchased and sold during the year) ING Vysya FMF Series XX-Dividend Reinvestment 1,50,00,000 Units of Rs.10 each purchased during the year ING Vysya Liquid Super Institutional-Daily Dividend Option -Dividend Reinvestment 1,99,98,728 Units of Rs.10 each purchased during the year (1,64,58,20,875 Units of Rs.10 each purchased and sold during the year) JM Fixed Maturity Fund Series IV-Quarterly Plan 3-F2 -Dividend Reinvestment 2,52,48,768 Units of Rs.10 each purchased during the year Carried forward 51.29 50.00 35.64 Rs.crore 2057.52

As at 31-3-2006 Rs.crore 29.34 4.72 9.78 4.90 48.74 Rs.crore 1125.53

88.14

50.02

97.52

25.20

120.12

25.00 25.23

9.51

15.00

20.00

25.25 540.40 2091.76

97.52 1174.27

111

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule F (Contd.) Brought forward JM Fixed Maturity Fund Series IV-Quarterly Plan 4-F3 -Dividend Reinvestment 1,51,14,854 Units of Rs.10 each purchased during the year JM Money Manager Fund Super Plan-Daily Dividend -Dividend Reinvestment 5,00,45,757 Units of Rs.10 each purchased during the year (11,10,74,966 Units of Rs.10 each purchased and sold during the year) Principal Cash Management Fund Liquid Option Inst. Prem. Plan -Dividend Reinvestment 7,00,48,873 Units of Rs.10 each purchased during the year (5,19,04,195 Units of Rs.10 each sold during the year) (132,25,96,265 Units of Rs.10 each purchased and sold during the year) Principal Income Fund Institutional Plan-Quarterly Dividend -Dividend Reinvestment 2,23,49,765 Units of Rs.10 each purchased during the year (2,02,46,358 Units of Rs.10 each purchased and sold during the year) Principal PNB Fixed Maturity Plan-91 Days (FMP-35) Sr.VIII Feb.07-Dividend Reinvestment 1,50,00,000 Units of Rs.10 each purchased during the year Prudential ICICI FMP Sr.35 Three Month Plan C-Retail -Dividend Payout 2,00,00,000 Units of Rs.10 each purchased during the year Prudential ICICI Flexible Income Plan-Dividend Fortnightly -Dividend Reinvestment 5,69,36,271 Units of Rs.10 each purchased during the year Prudential ICICI Institutional Income Plan (Quarterly) -Dividend Reinvestment 4,89,19,194 Units of Rs.10 each purchased during the year (2,01,28,721 Units of Rs.10 each purchased and sold during the year) SBI Debt Fund Series-90 Days(Feb.07)-Dividend Reinvestment 1,00,49,257 Units of Rs.10 each purchased during the year Tata Fixed Horizon Fund Series 8 Scheme F-Periodic Dividend Plan -Dividend Reinvestment 5,04,52,260 Units of Rs.10 each purchased during the year Templeton Fixed Horizon Fund-3 Month Plan-Dividend Reinvestment 2,50,00,000 Units of Rs.10 each purchased during the year Templeton India Income Fund-Dividend Reinvestment 2,40,91,367 Units of Rs.10 each purchased during the year Templeton India Income Fund-Growth Quarterly Dividend-Growth Plan 77,89,254 Units of Rs.10 each purchased during the year UTI Mutual Fund- Money Market Fund-Daily Dividend -Dividend Reinvestment 56,91,701 Units of Rs.10 each purchased during the year (9,84,09,155 Units of Rs.10 each purchased and 11,85,41,528 units sold during the year) HDFC Core & Satellite Fund-Dividend Reinvestment Option (25,63,708 Units of Rs.10 each sold during the year) HSBC Mutual Fund-Midcap Equity Fund-Dividend Reinvestment Option (29,34,289 Units of Rs.10 each sold during the year) Carried forward 540.40 Rs.crore 2091.76

As at 31-3-2006 Rs.crore 97.52 Rs.crore 1174.27

15.11

50.05

70.05

51.91

25.00

15.00

20.00

60.40

50.79

10.05

50.45 25.00 25.57 20.00

10.01

45.01

987.88 2091.76

5.00 5.00 204.44 1174.27

112

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule F (Contd.) Brought forward IDBI Principal Mutual Fund-Principal Growth Fund -Dividend Reinvestment (21,80,549 Units of Rs.10 each sold during the year) ING Vysya Mutual Fund-Fixed Maturity Plan-Series IX -Dividend Reinvestment (2,50,00,000 Units of Rs.10 each sold during the year) Prudential ICICI-Emerging Star Fund-Dividend Reinvestment (23,49,624 Units of Rs.10 each sold during the year) Reliance Mutual Fund-Vision Fund-Dividend Reinvestment (10,76,851 Units of Rs.10 each sold during the year) SBI Multi Cap Fund-Dividend Reinvestment (35,81,662 Units of Rs.10 each sold during the year) Tata Mutual Fund-Pure Equity Fund-Dividend Reinvestment (19,55,608 Units of Rs.10 each sold during the year) Birla Cash Plus-Institutional-Premium Plan -Daily Dividend Reinvestment (59,06,81,389 Units of Rs.10 each purchased during the year; 63,56,00,991 Units of Rs.10 each sold during the year) Birla Sunlife Basic Industries Fund-Dividend Reinvestment Option (1,26,65,264 Units of Rs.10 each purchased during the year; 1,41,04,304 Units of Rs.10 each sold during the year) Deutsche Bank Insta Cash Plus Fund-Institutional Plan -Daily Dividend Option (44,56,58,735 Units of Rs.10 each purchased during the year; 49,05,78,406 Units of Rs.10 each sold during the year) DSP Merill Lynch Mutual Fund-Top-100 Equity Fund -Dividend Reinvestment (78,88,673 Units of Rs.10 each purchased during the year; 99,17,894 Units of Rs.10 each sold during the year) DSP Merrill Lynch-T.I.G.E.R. Fund-Dividend Reinvestment (1,24,99,816 Units of Rs.10 each purchased during the year; 1,80,62,296 Units of Rs.10 each sold during the year) Franklin India Flexi Cap Fund-Dividend Reinvestment (1,04,09,442 Units of Rs.10 each purchased during the year; 1,36,49,298 Units of Rs.10 each sold during the year) HDFC Mutual Fund-Growth Fund-Dividend Reinvestment (41,73,797 Units of Rs.10 each purchased during the year; 62,17,032 Units of Rs.10 each sold during the year) HSBC Mutual Fund-HSBC Advantage India Fund -Dividend Reinvestment Option (1,57,56,402 Units of Rs.10 each purchased during the year; 2,04,75,297 Units of Rs.10 each sold during the year) IDBI Principal Mutual Fund-Large Cap. Fund Dividend Reinvestment (4,11,21,730 Units of Rs.10 each purchased during the year; 4,85,83,212 Units of Rs.10 each sold during the year) Kotak Mahindra Mutual Fund-Liquid Plan Institutional Premium Plan-Dividend Reinvestment (78,62,52,032 Units of Rs.10 each purchased during the year; 82,30,58,250 Units of Rs.10 each sold during the year) Kotak Mahindra Mutual Fund-Mid Cap-Dividend Reinvestment (14,42,491 Units of Rs.10 each purchased during the year; 71,85,768 Units of Rs.10 each sold during the year) Kotak Mutual Fund-Fixed Maturity Plan-Dividend Reinvestment (3,31,311 Units of Rs.10 each purchased during the year; 2,03,31,311 Units of Rs.10 each sold during the year) Carried forward 987.88 Rs.crore 2091.76

As at 31-3-2006 Rs.crore 204.44 5.00 Rs.crore 1174.27

25.00 5.00 5.70 5.00 5.00

45.01

6.12

45.01

5.00

10.00

5.57

5.00

5.00

10.00

45.00

10.00

20.00

987.88

2091.76

466.85

1174.27

113

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule F (Contd.) Brought forward Kotak-30 Dividend Reinvestment (1,74,64,976 Units of Rs.10 each purchased during the year; 1,89,95,854 Units of Rs.10 each sold during the year) LIC Mutual Fund Liquid Plan-Dividend Reinvestment (93,25,99,350 Units of Rs.10 each purchased during the year; 1,05,29,22,789 Units of Rs.10 each sold during the year) Prudential ICICI Mutual Fund-Dynamic Plan -Dividend Reinvestment (2,52,130 Units of Rs.10 each purchased during the year; 27,38,888 Units of Rs.10 each sold during the year) Prudential ICICI Mutual Fund-Power Fund -Dividend Reinvestment (3,59,38,611 Units of Rs.10 each purchased during the year; 3,85,27,943 Units of Rs.10 each sold during the year) Reliance Equity Opportunities Fund-Dividend Reinvestment (4,57,81,839 Units of Rs.10 each purchased during the year; 5,16,54,766 Units of Rs.10 each sold during the year) SBI Mutual Fund -Magnum Sector Umbrella Contra Fund -Dividend Reinvestment (2,99,110 Units of Rs.10 each purchased during the year; 21,55,086 Units of Rs.10 each sold during the year) Tata Mutual Fund-Fixed Maturity Plan-Dividend Reinvestment (3,44,341 Units of Rs.10 each purchased during the year; 2,03,44,341 Units of Rs.10 each sold during the year) Tata Mutual Fund-Liquid Super High Institutional Premium -Dividend Reinvestment-Daily Dividend (40,98,247 Units of Rs.1000 each purchased during the year; 42,19,418 Units of Rs.1000 each sold during the year) Tata Mutual Fund-Equity Opp. Fund-Plan A -Dividend Reinvestment (5,19,043 Units of Rs.10 each purchased during the year; 56,12,584 Units of Rs.10 each sold during the year) Prudential ICICI-Super Institutional-Liquid Plan -Daily Dividend Option (33,51,29,876 Units of Rs.10 each purchased during the year; 38,01,37,415 units sold during the year) 987.88 Rs.crore 2091.76

As at 31-3-2006 Rs.crore 466.85 5.00 Rs.crore 1174.27

131.77

5.00

5.00

10.00

5.00

20.00

13.50

11.04

987.88

45.01 718.17 2.30

984.77 3076.53

Less: Provision for diminution in value

3.11

715.87 1890.14 7.31 0.07 12.63 0.15 8.10 0.31 0.81 -

C) Investments in Integrated Joint Ventures: L&T-Hochtief Seabird Joint Venture Desbuild-L&T Joint Venture International Metro Civil Contractors Joint Venture Bauer-L&T Diaphragm Wall Joint Venture HCC-L&T Purulia Joint Venture Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited (Ebene-CyberCity Project) Joint Venture Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited (Les Pailles Exhibition Centre) Joint Venture L&T-AM Tapovan Joint Venture Metro Tunneling Group Joint Venture

4.21 0.07 6.93 0.23 8.78 0.29 5.47 1.93 27.91 3104.44

29.38 1919.52

114

Schedules forming part of Accounts (contd.)

Schedule F (Contd.) Details of investments purchased and sold during 2006-2007 Government Securities Face Value Rs.crore 255.00 Cost Rs.crore 257.21

Face Value Rs.Per Unit Mutual Funds: DWS Money Plus Fund-Dividend Reinvest-Weekly DWS Alpha Equity Fund-Dividend Reinvest DSP Merrill Lynch Equity Opportunity Fund-Dividend Reinvest HDFC Mutual Fund Equity Top 200-Dividend Reinvest HDFC Capital Builder Fund-Dividend Reinvest HDFC Equity Diversified-Dividend Reinvest HDFC Cash Management Fund-Savings Plan-Daily Dividend Reinvest IDBI Principal Mutual Fund-Income Short Term-Dividend Reinvest Principal Focussed Advantage Fund JM Equity & Derivative Fund-Dividend Prudential ICICI Infrastructure Fund-Dividend Reinvest Prudential ICICI Discovery Fund-Dividend Reinvest Prudential ICICI Blended Plan-Option B-Dividend Reinvest Reliance Mutual Fund-Liquidity Fund-Daily Dividend Reinvest SBI Magnum Global Fund-94-Dividend Reinvest Standard Chartered Liquidity Manager Plus-Dividend Reinvest Standard Chartered Imperial Fund-Dividend Reinvest Tata Liquidity Management Fund-Daily Dividend Tata Mid Cap Fund-Dividend Reinvest Tata Infrastructure Fund-Dividend Templeton India Short Term Plan Institutional-Monthly Dividend Reinvest Templeton India Growth Fund-Dividend Reinvest Templeton India Treasury Management Liquid Plan Daily Dividend Reliance Growth Fund-Equity-Dividend Reinvest Franklin Templeton India Prima Fund SBI Magnum Institutional Income Fund-Savings-Daily Dividend JM Mutual High Liquidity-Super Institutional Plan-Daily Dividend Fidelity Equity Fund-Dividend SBI Mutual Fund-Commodity Fund UTI Liquid Cash Plan Institutional-Daily Dividend ABN Amro Opportunities Fund-Dividend HSBC India Opportunities Fund-Dividend Reinvest ABN Amro Fixed Term Plan-Series 4-Plan-C-Monthly Dividend SBI Bluechip-Dividend Reinvest Tata Fixed Horizon Fund Series 5-Scheme B-Dividend Franklin BlueChip Fund LIC Mutual Fund FMP Series 8-3 Monthly Prudential ICICI Flexible Income Plan Dividend-Monthly JM Mutual Fund MP Fund-Series III-Quarterly Plan-FMF-Dividend Option Birla Top 100 Fund-Dividend Reinvestment 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 1000 10 1000 10 10 1000 10 1000 10 10 10 10 10 10 1000 10 10 10 10 10 10 10 10 10 10

Nos.

Cost Rs.crore

28,49,44,355 3,36,22,806 34,87,967 1,38,90,830 1,30,78,421 3,18,31,668 134,83,03,303 3,71,67,465 60,31,363 8,88,62,312 69,83,240 45,37,205 6,01,29,363 72,03,44,678 34,30,532 3,23,13,877 1,79,69,452 13,84,973 2,45,84,951 1,18,26,270 3,69,946 49,00,760 1,69,83,319 1,01,52,055 64,99,133 21,80,06,675 39,59,01,788 1,22,91,808 65,65,988 1,40,96,006 1,18,69,765 46,11,759 6,27,89,982 2,41,83,797 2,06,88,683 2,11,95,228 10,00,00,000 4,89,29,231 5,07,16,067 13,16,00,486

285.90 56.25 9.45 51.11 29.62 113.56 1434.11 40.57 9.43 91.82 9.89 9.42 61.58 720.57 10.23 3231.71 19.16 138.81 31.56 23.95 38.72 19.17 1698.76 51.27 30.86 218.72 396.51 19.14 9.86 1437.00 18.77 9.42 111.30 21.05 20.70 71.90 100.92 51.66 50.72 182.20

115

Schedules forming part of Accounts (contd.)

Schedule F (Contd.) Details of investments purchased and sold during 2006-2007 (Contd.) Face Value Rs.Per Unit UTI Bond Fund (Income-Reinvestment) Tata Fixed Horizon Fund Series 5 Scheme D-Dividend Option Reliance RLF Treasury Plan-Institutional Option-Monthly Dividend DSP Merrill Lynch Liquidity Plus Fund-Daily Dividend LIC Mutual Fund FMP Series 9-3 Monthy Dividend Plan JM Mutual Fund MP Series III-Quarterly Plan-FMF Q2-Dividend Plan (163) Reliance Fixed Horizon Fund-Monthly Plan A-Series VI-Dividend Option SBI Magnum Midcap Fund-Dividend Option HDFC Cash Management Fund-Savings Plus Plan-Dividend UTI Equity Fund-Dividend Reinvest DBS Chola Liquid Fund HDFC Liquid Fund Premium Plan-Daily Dividend Reinvest Principal Income Fund-Short Term-Institutional Plan-Monthly Dividend ABN Amro Institutional Plus-Daily Dividend ING Vysya Income Fund-Short Term-Dividend Reinvest Prudential ICICI STIP-Dividend Reinvest Reliance Fixed Horizon Fund I-Monthly Plan Series 1 Prudential ICICI FMP Series 32-Dividend UTI Fixed Maturity Plan Quarterly Series QFMP/1006/II-Dividend Reinvest ABN Amro FTP Series 3 Quarterly Plan E-Dividend LIC Mutual Fund Index Fund-NIFTY Dividend Plan Grindlays Cash Fund Plan C-Super Institutional-Daily Dividend HSBC Liquid Plus Fund-Institutional Plus Plan-Dividend Reinvest HDFC Liquid Fund-Premium Plus-Dividend Reinvest Principal Resurgent India Equity Fund-Dividend Reinvest Grindlays Super Saver Income Fund-Medium Term Fidelity Cash Fund Super Institutional-Daily Dividend Reinvest Reliance Fixed Maturity Plan Series III Tata Liquidity Management Fund-Daily Dividend LIC Mutual Fund FRF Short Term-Daily Dividend Principal Floating Rate Fund-SMP-IP Standard Chartered Liquidity Manager Birla Floating Rate Fund-STP-Dividend Reinvest DBS Chola Short Term Mutual Fund Floating Rate Fund-Daily Dividend Reinvest Tata Floating rate Fund-Short Term-Institutional Plan-Daily Dividend Reinvest SBI Mutual Fund Magnum Cash Plan-Weekly Dividend Reinvest Templeton Floating Rate Income Fund Short Term-Weekly Dividend Reinvest Kotak Floater-Short Term Dividend-Daily Dividend Reinvest JM Money Manager Fund-Super Plus Plan-Daily Dividend Reinvest Birla Income Plus Reliance Fixed Horizon Fund II MP INS-Dividend Plan Reliance Fixed Horizon Fund-Monthly Plan Series IV SBI Mutual Fund Magnum Insta Cash Plus Plan Prudential ICICI Sweep Plan-Cash Plan 10 10 10 1000 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 1000 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 Nos. 6,50,55,264 10,14,29,201 7,61,20,081 32,89,154 10,14,54,590 10,14,70,859 10,00,00,000 1,95,43,974 26,07,56,609 1,81,09,381 100,10,21,043 1,30,61,219 1,19,65,278 28,77,19,804 4,55,23,291 7,38,59,737 10,04,98,203 20,32,28,000 20,30,83,960 10,15,35,510 6,55,69,901 22,00,91,880 36,67,50,693 22,47,68,097 8,51,66,888 5,07,45,132 1,01,97,375 20,10,27,442 25,00,300 38,37,14,219 2,30,10,031 19,31,15,306 6,02,05,755 40,10,01,825 19,83,72,888 28,73,20,862 3,99,96,176 5,99,29,283 5,00,75,766 66,04,409 20,21,58,673 20,21,58,673 59,78,762 15,80,78,840 Cost Rs.crore 70.81 101.45 106.20 328.98 101.45 101.47 100.00 30.14 261.25 51.90 1004.19 16.01 12.25 287.72 51.02 81.53 100.50 203.23 203.17 101.54 101.36 220.09 366.92 236.85 133.65 50.82 10.20 201.03 250.59 389.70 23.01 193.13 60.21 401.66 198.48 305.51 40.04 60.02 50.08 20.00 202.16 202.16 10.01 158.08

116

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule G Current Assets, Loans and Advances: Current Assets: Interest accrued on investments Inventories: Stock-in-trade, at cost or net realisable value whichever is lower: Raw materials Components Construction materials Stores, spare parts and loose tools Finished goods Work-in-Progress: Manufacturing work-in-progress at cost or net realisable value whichever is lower Construction and Project related work-in-progress At cost At estimated realisable value on sale Rs.crore

As at 31-3-2006 Rs.crore Rs.crore

26.52

17.26

187.86 147.85 6.42 58.88 246.93 647.94

169.55 100.48 4.92 58.43 190.42 523.80

276.73 1092.43 10317.35 11409.78 9333.31 2076.47 2353.20 3001.14

248.20 933.69 7208.71 8142.40 6704.13 1438.27 1686.47 2210.27

Less: Progress bills raised

Due from customers Total Work-in-Progress Sundry Debtors: [See Note No.17(a)] Unsecured: Debts outstanding for more than 6 months: Considered good Considered doubtful Other Debts: Considered good

1523.66 222.86 1746.52 3980.98 5727.50 222.86 5504.64

1384.90 208.43 1593.33 3429.26 5022.59 208.43 4814.16 3.12 90.30 104.60 184.49 (0.03) 200.72
1094.43

Less: Provision for doubtful debts

Cash and bank balances: Cash on hand Cheques on hand Balances with scheduled banks: on current accounts on fixed deposits including interest accrued thereon on margin money deposit accounts Balances with non-scheduled banks (See Note No.4) Loans and advances: Secured, Considered good: Loans against mortgage of house property Unsecured: Considered good: Subsidiary companies Loans including interest accrued thereon Others Carried forward

3.33 249.48 292.72 99.13 1.62 448.15

583.20

28.77

35.37

41.14 77.29 147.20 9626.73

121.82 59.62 216.81 7624.89

117

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule G (Contd.) Brought forward Associate companies Advances recoverable [See Note No.17(b)] Advances towards equity commitment Subsidiary companies Inter-Corporate deposits Subsidiary companies Associate companies [See Note No.17(b)] Others Advances recoverable in cash or in kind (See Note No.16) Balance with customs, port trust, etc. Considered doubtful: Deferred credit against sale of ships Advances recoverable in cash or in kind 147.20 3.55 2.16 95.32 10.00 15.00 1967.86 16.84 18.08 23.40 2299.41 41.48 2257.93 11884.66 Rs.crore 9626.73

As at 31-3-2006 Rs.crore 216.81 3.77 108.28 41.13 10.00 1482.63 47.94 18.55 49.12 1978.23 67.67 1910.56 9535.45 Rs.crore 7624.89

Less: Provision for doubtful loans and advances

As at 31-3-2007 Rs.crore Schedule H Current Liabilities and Provisions: Liabilities: Acceptances Sundry creditors: Due to: Subsidiary Companies Small Scale Industries Others (See Note No.7) Due to customers: Progress bills raised Less: Construction and Project related work-in-progress At cost (Previous year Rs.758.43 crore) At estimated realisable value (Previous year Rs.8264.52 crore) Rs.crore

As at 31-3-2006 Rs.crore Rs.crore

91.92 226.03 46.11 3699.61 3971.75 13430.24 686.24 11116.82 11803.06 1627.18 2405.91 33.90 0.22 2.20 0.05 36.37 14.70 8.81 0.49 8157.13

75.49 172.08 36.34 2830.51 3038.93 9963.79

9022.95 940.84 1800.29 9.34 0.61 2.90 0.09 12.94 10.68 8.12 1.61 5888.90

Advances from customers Items covered by Investor Education and Protection Fund (See Note No.43) Unpaid dividend Unpaid matured deposits Unpaid matured debentures/bonds Interest accrued on bonds Due to Directors Interest accrued but not due on loans Pension payable under Voluntary Retirement-cum-Pension Scheme (payable within one year: Rs.0.34 crore) Carried forward

118

Schedules forming part of Accounts (contd.)

As at 31-3-2007 Rs.crore Schedule H (Contd.) Brought forward Provisions for: Current Taxes Tax on Fringe Benefits Proposed dividend Additional tax on dividend Gratuity Compensated absences Employee pension schemes Post-retirement medical benefit plan (See Note No.12) Long service awards Premium payable on redemption of FCCBs Other Provisions (See Note No.25) 607.07 15.18 56.65 9.63 0.38 209.03 118.56 46.36 16.26 3.63 97.38 1180.13 9337.26 Rs.crore 8157.13

As at 31-3-2006 Rs.crore Rs.crore 5888.90 368.56 21.67 302.25 42.39 0.31 123.86 92.92 1.44 4.84 63.41 1021.65 6910.55

As at 31-3-2007 Rs.crore Schedule I Miscellaneous Expenditure: (to the extent not written off or adjusted) Voluntary Retirement-cum-Pension Schemes/Voluntary Retirement Schemes 9.84 9.84

As at 31-3-2006 Rs.crore

21.98 21.98

As at 31-3-2007 Rs.crore Schedule J Contingent Liabilities: (a) Claims against the Company not acknowledged as debts (b) Sales tax liability that may arise in respect of matters in appeal (c) Excise duty/Service tax liability that may arise in respect of matters in appeal/challenged by the Company in writ (d) Income tax liability (including penalty) that may arise in respect of which the Company is in appeal (e) Guarantees given on behalf of Subsidiary Companies (f) Guarantees given on behalf of Associate Companies Notes: 1. The Company does not expect any reimbursements in respect of the above contingent liabilities. 133.61 58.42 7.44

As at 31-3-2006 Rs.crore

48.05 61.18 16.86

0.22 60.53 10.00

0.16 6.95 91.53

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. 3. In respect of matters at (e) and (f), the cash outflows, if any, could generally occur during the next three 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.

119

Schedules forming part of Accounts (contd.)

2006-2007 Rs.crore Schedule K Sales & Service: Manufacturing, trading and property development activity Construction and project related activity Servicing Commission Compensation, engineering and service fees 4798.92 12622.50 141.84 146.94 190.39 17900.59

2005-2006 Rs.crore

4278.95 10392.03 114.73 81.96 97.89 14965.56

2006-2007 Rs.crore Schedule L (i) Other Operational Income: Income from hire of plant and machinery Commercial leadership fees received from Integrated Joint Ventures Technical fees Companys share in profit of Integrated Joint Ventures (net of tax) [See Note No.15] 12.06 1.95 14.90 6.41 35.32

2005-2006 Rs.crore

2.73 4.86 15.20 6.44 29.23

2006-2007 Rs.crore Schedule L (ii) Other Income: Dividend income from long term investments: Investments in Subsidiary companies Trade investments Other investments Income from current investments in Mutual Funds Lease rental Profit on sale of long term investments (net) [See Note No.10(i)] Profit on sale of fixed assets (net) Gain on extinguishment of debt [See Note No.10(ii)] Miscellaneous income Unclaimed credit balances 41.71 35.23 10.81 87.75 99.56 16.13 23.43 6.90 0.51 189.14 3.55 426.97 Rs.crore

2005-2006 Rs.crore Rs.crore

67.22 12.30 2.49 82.01 78.13 11.92 145.14 4.12 1.01 104.56 7.71 434.60

120

Schedules forming part of Accounts (contd.)

2006-2007 Rs.crore Schedule M Manufacturing, Construction and Operating Expenses: Raw materials and components consumed Add: Purchase of trading goods 3617.19 1181.00 4798.19 53.87 4744.32 3639.96 3274.87 469.26 493.00 12621.41 (Increase)/Decrease in manufacturing and trading stocks: Closing stock: Finished goods Work-in-progress 246.93 698.55 945.48 Rs.crore

2005-2006 Rs.crore Rs.crore

2925.37 1145.80 4071.17 43.41 4027.76 2998.48 3259.85 357.57 331.44 10975.10 190.42 633.20 823.62

Less: Scrap sales

Construction materials Sub-contracting charges Stores, spares and tools Direct expenses on jobs

Less : Opening stock: Finished goods (including stock of Rs.0.06 crore acquired on amalgamation) Work-in-progress (including stock of Rs.0.04 crore acquired on amalgamation)

(See Note No.42)

190.48 633.24 823.72 (121.76)

252.23 699.77 952.00 128.38 (15.14) 23.10 221.50 8.34 57.92 117.81 33.72 9.61
52.19 13078.24

Value of materials,tools,work-in-progress and finished goods transferred on sale of undertaking Excise duty Power & fuel Royalty and technical know-how fees Packing and forwarding Hire charges-Plant & machinery and others Repairs to: Plant and machinery Buildings

16.33 292.23 2.32 53.53 161.99 40.92 11.27

43.33 11560.34

2006-2007 Rs.crore Schedule N Staff Expenses: Salaries, wages and bonus Contribution to and provision for: Provident funds and pension fund Superannuation/Employee pension schemes (including provision of Rs.36.98 crore; previous year Rs.14.58 crore) Gratuity funds (including provision of Rs.0.07 crore; previous year Rs.0.02 crore) Compensated absences/Leave encashment Welfare and other expenses 829.84 54.10 64.55 50.79 47.19 216.63 211.74 1258.21 Rs.crore

2005-2006 Rs.crore Rs.crore

637.54 42.35 33.06 6.97 19.85 102.23 152.77 892.54

121

Schedules forming part of Accounts (contd.)

2006-2007 Rs.crore Schedule O Sales, Administration and Other Expenses: Rent (including lease rental Rs.31.81 crore; previous year Rs.31.16 crore) Rates and taxes Packing and forwarding Travelling and conveyance Directors fees Telephone, postage and telegrams Advertising and publicity Stationery and printing Insurance Power and fuel Repairs to buildings Commission: Distributors and agents Employees and others Bank charges General repairs and maintenance Professional fees Miscellaneous expenses Bad debts and advances written off Less: Provision for doubtful debts and advances written back Loss on sale of current investments (net) Loss on reassumption of debt Discount on sales Provision for doubtful debts and advances (net) Provision for foreseeable losses on construction contracts Provision for diminution in value of investments Other Provisions (See Note No.25) 112.65 53.70 49.58 278.13 0.26 50.00 48.95 23.70 107.41 15.90 9.74 33.17 32.07 65.24 44.67 106.21 214.66 135.18 95.80 94.26 1.54 7.26 37.07 82.50 8.27 11.95 34.58 1499.15 Rs.crore

2005-2006 Rs.crore Rs.crore

96.57 37.99 58.25 224.76 0.26 42.53 29.97 20.93 68.32 13.25 7.28 29.79 7.05 36.84 41.83 92.99 124.58 82.32 74.52 62.61 11.91 17.10 55.91 31.68 39.89 74.58 1.65 33.04 1244.43

2006-2007 Rs.crore Schedule P Interest & Brokerage: Debentures and fixed loans Others 35.84 57.15 92.99 Rs.crore

2005-2006 Rs.crore Rs.crore

59.57 70.97 130.54 35.48

Less: (i)

Received on inter-corporate deposits, from subsidiary and associate companies, customers and others (tax deducted at source Rs.1.83 crore; previous year Rs.1.43 crore) Income from long term investments: Interest on debentures, bonds and Government Securities (tax deducted at source Rs.Nil; previous year Rs.40532) Income from current investments: Interest on debentures, bonds, Government Securities and Commercial paper (tax deducted at source Rs.0.62 crore; previous year Rs.Nil)

28.11

(ii)

26.16

17.37

(iii)

4.79 59.06 33.93

2.62 55.47 75.07

122

Schedules forming part of Accounts (contd.)

Schedule Q SIGNIFICANT ACCOUNTING POLICIES: 1. Basis of Accounting The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles [GAAP] except for the revaluation of certain fixed assets, and in compliance with the Accounting Standards referred to in Section 211(3C) and other requirements of the Companies Act, 1956. However, certain escalation and other claims, which are not ascertainable/ acknowledged by customers, are not taken into account. The preparation of financial statements in conformity with GAAP 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 at the date of the financial statements. Examples of such estimates include the useful life of tangible and intangible fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates. 2. Revenue Recognition (a) Sales and service include excise duty and adjustments made towards liquidated damages, price variation and charges paid for discounting of receivables on a non-recourse basis as per construction/project contracts, wherever applicable. (b) Revenue is recognised based on the nature of activity, when consideration can be reasonably measured and there exists reasonable certainty of its recovery. (i) Revenue from sale of goods is recognised when substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract. (ii) Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and equipment is recognised as follows: a) Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer. b) Fixed price contracts received up to March 31, 2003: Contract revenue is recognised by applying percentage of completion to the contract value. Percentage of completion is determined as follows: i in the case of item rate contracts, as a proportion of the progress billing to contract value; and ii in the case of other contracts, as a proportion of the cost incurred-to-date to the total estimated cost. c) Fixed price contracts received on or after April 1, 2003: Contract revenue is recognised by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred-to-date to the total estimated contract cost. Full provision is made for any loss in the period in which it is foreseen. (iii) Revenue from property development activity is recognised when all significant risks and rewards of ownership in the land and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from the customer exists. (iv) Revenue from service related activities is recognised using the proportionate completion method. (v) Commission income is recognised as and when the terms of the contract are fulfilled. (vi) Revenues from construction/project related activity and contracts executed in Joint Ventures under work-sharing arrangement [being Jointly Controlled Operations, in terms of Accounting Standard (AS) 27 Financial Reporting of Interests in Joint Ventures], are recognised on the same basis as similar contracts independently executed by the Company. (c) Other operational income is recognised on rendering of related services, as per the terms of the contracts. (d) Profit/Loss on contracts executed by Integrated Joint Ventures under profit-sharing arrangement [being Jointly Controlled Entities, in terms of Accounting Standard (AS) 27 Financial Reporting of Interests in Joint Ventures], is accounted as and when the same is determined by the Joint Venture. Revenue from services rendered to such Joint Ventures is accounted on accrual basis. (e) Other items of income are accounted as and when the right to receive arises. 3. Research and Development Revenue expenditure on research and development is charged under respective heads of account. Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets. 4. Employee Benefits (a) Short Term Employee Benefits All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service. (b) Post-Employment Benefits (i) Defined Contribution Plans: The Companys superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. (ii) Defined Benefit Plans: The employees gratuity fund schemes, post-retirement medical benefit plan, pension scheme and provident fund scheme managed by Trust are the Companys defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cashflows. The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognised immediately in the Profit & Loss Account. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognise the obligation on net basis. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs. Past service cost is recognised as expense on a straight-line basis over the average period until the benefits become vested.

123

Schedules forming part of Accounts (contd.)

Schedule Q (Contd.) Long Term Employee Benefits The obligation for long term employee benefits such as long term compensated absences, long service awards etc. is recognised in the same manner as in the case of defined benefit plans as mentioned in (b) (ii) above. (d) Termination Benefits Where termination benefits such as compensation under voluntary retirement cum pension scheme are payable within a year of the balance sheet date, the actual amount of termination benefits is amortised over a defined period. Where termination benefits are payable beyond one year of the balance sheet date, the discounted amount of termination benefits is amortised over the defined period. The defined period of amortisation is five years or the period till March 31, 2010, whichever is earlier. Fixed Assets Fixed assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation, accumulated amortisation and cumulative impairment and those which were revalued as on October 1,1984 are stated at the values determined by the valuers less accumulated depreciation, accumulated amortisation and cumulative impairment. Assets acquired on hire purchase basis are stated at their cash values. Specific know-how fees paid, if any, relating to plant and machinery is treated as part of cost thereof. Revenue expenses incurred in connection with project implementation insofar as such expenses relate to the period prior to the commencement of commercial production are treated as part of project cost and capitalised. Own manufactured assets are capitalised at cost including an appropriate share of overheads. (Also refer to policy on Leases, Borrowing Costs, Impairment of Assets and Foreign Currency Transactions, infra.) Leases (a) Lease transactions entered into prior to April 1, 2001: Assets leased out are stated at original cost. Lease equalisation adjustment is the difference between capital recovery included in the lease rentals and depreciation provided in the books of account. Lease rentals in respect of assets acquired under lease are charged to Profit and Loss Account. (b) Lease transactions entered into on or after April 1, 2001: (i) Assets acquired under leases where the Company has substantially transferred all the risks and rewards of ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of fair value or present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. (ii) Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis. (iii) Assets given under finance lease are recognised as receivables at an amount equal to the net investment in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. (iv) Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease term. (v) Initial direct costs relating to assets given on finance leases are charged to Profit and Loss Account. (Also refer to policy on Depreciation, infra) Depreciation (a) Owned assets (i) Revalued Assets: Depreciation is provided for based on straight line method on the values and at the rates given by the valuers. The difference between depreciation provided based on revalued amount and that on historical cost is transferred from Revaluation Reserve to Profit and Loss Account. (ii) Assets carried at historical cost: Depreciation on assets carried at historical cost is provided on written down value basis on assets acquired up to March 31, 1968 (at the rates prescribed under Schedule XIV to the Companies Act, 1956) and on straight line basis on assets acquired subsequently (at the rates prevailing at the time of their acquisition) on assets acquired up to September 30, 1987 and at the rates prescribed under Schedule XIV on assets acquired after that date). However, in respect of the following asset categories, depreciation is provided at higher rates in line with their estimated useful life. Category of assets Rate of Depreciation (% p.a.) Furniture and Fixtures 10.00 Plant and Machinery: i) Office Equipment 6.67 ii) Cranes above 1000 ton capacity used in construction activity 6.67 iii) Minor Plant & Machinery used in construction activity 20.00 iv) Heavy Lift Equipment used in construction activity 5.00 v) Earthmoving, tunnelling & transmission line equipment (other than employed in heavy construction work) 10.00 vi) Air conditioning and Refrigeration Equipment 8.33 vii) Laboratory and Canteen Equipment 12.50 Motor cars 14.14 (iii) Depreciation for additions to/deductions from owned assets is calculated pro rata from/to the month of additions/deductions. Extra shift depreciation is provided on a location basis. (c)

5.

6.

7.

124

Schedules forming part of Accounts (contd.)

Schedule Q (Contd.) (iv) Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Leased assets (i) Lease transactions entered into prior to April 1, 2001: Assets given on lease are depreciated over the primary period of the lease. Accordingly, while the statutory depreciation on such assets is provided for on straight line method as per Schedule XIV to the Companies Act, 1956, the difference is adjusted through lease equalisation and lease adjustment account. (ii) Lease transactions entered into on or after April 1, 2001: Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the Company shall obtain ownership of the assets at the end of the lease term, such assets are depreciated at the rates prescribed under Schedule XIV to the Companies Act, 1956 or at the higher rates adopted by the Company for similar assets.

(b)

8.

Intangible Assets and Amortisation Intangible assets are recognised as per the criteria specified in Accounting Standard (AS) 26 Intangible Assets issued by the Institute of Chartered Accountants of India and are amortised as follows: (a) Leasehold land: over the period of lease (b) Specialised software: Over a period of three years (c) Lump sum fees for technical know-how: Over a period of six years in the case of foreign technology and three years in the case of indigenous technology Amortisation on impaired assets is provided by adjusting the amortisation charges in the remaining periods so as to allocate the assets revised carrying amount over its remaining useful life. Impairment of Assets As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine: (a) the provision for impairment loss required, if any, or (b) the reversal required of impairment loss recognised in previous periods, if any. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: (a) in the case of an individual asset, at higher of the net selling price and the value in use; (b) in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at higher of the cash generating units net selling price and the value in use. (Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life)

9.

10. Investments Long term investments including interests in incorporated Jointly Controlled Entities, are carried at cost, after providing for any diminution in value, if such diminution is of other than temporary nature. Current investments are carried at lower of cost or market value. The determination of carrying amount of such investments is done on the basis of specific identification. Investments in Integrated Joint Ventures are carried at cost net of adjustments for Companys share in profits or losses as recognised. 11. Inventories Inventories are valued after providing for obsolescence, as under: (a) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. (b) Work-in-progress (i) Work-in-progress (other than project and construction-related) at lower of cost including related overheads or net realisable value. (ii) Project and construction-related work-in-progress at cost till such time the outcome of the job cannot be ascertained reliably and at realisable value thereafter. In the case of qualifying assets, cost includes applicable borrowing costs vide policy relating to Borrowing Costs, (c) Finished goods at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty paid/payable on such goods. (d) Property development land at lower of cost or net realisable value. 12. Securities Premium Account (a) Securities premium includes: (i) The difference between the market value and the consideration received in respect of shares issued pursuant to Stock Appreciation Rights Scheme. (ii) The discount allowed, if any, in respect of shares allotted pursuant to Stock Option Schemes. (b) The following expenses are written off against securities premium account: (i) Expenses pertaining to issue of shares. (ii) Expenses pertaining to issue of debentures/bonds, net of tax. (iii) Premium on redemption of debentures/bonds, net of tax.

125

Schedules forming part of Accounts (contd.)

Schedule Q (Contd.) 13. Borrowing Costs Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such asset till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred. 14. Employee Stock Ownership Schemes In respect of stock options granted pursuant to the Companys Employee Stock Option Schemes, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation cost over the vesting period. 15. Miscellaneous Expenditure Lump sum compensation paid under Voluntary Retirement-cum-Pension Schemes are amortised over a period of five years. The future pensions under Voluntary Retirement-cum-Pension Schemes are amortised over the period for which pensions are payable. 16. Foreign Currency Transactions, Foreign Operations, Forward Contracts and Derivatives (a) The reporting currency of the Company is the Indian Rupee. (b) Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Companys monetary items at the closing rate are: (i) adjusted in the cost of fixed assets acquired upto March 31, 2004 and specifically financed by the borrowings to which the exchange differences relate. (ii) adjusted in the cost of fixed assets specifically financed by borrowings contracted after April 1, 2004 and to which the exchange differences relate, provided the assets are acquired from outside India. (iii) recognised as income or expense in the period in which they arise, in cases other than (i) and (ii) above. (c) Financial statements of foreign operations comprising jobs contracted prior to April 1, 2004, are translated as follows: (i) Closing inventories at rates prevailing at the end of the year. (ii) Fixed assets as at April 1, 1991 at rates prevailing at the end of the year in which the additions were made. Subsequent additions are at rates prevailing on the dates of the additions. Depreciation is accounted at the same rate at which the assets are translated. (iii) Other assets and liabilities at rates prevailing at the end of the year. (iv) Net revenues at the average rate for the year. (d) Financial statements of foreign operations comprising jobs contracted on or after April 1, 2004, are treated as Integral operations and translated as in the same manner as foreign currency transactions, as described in (b) above. Exchange differences arising on such translation are recognised as income or expense of the period in which they arise. (e) Forward contracts other than those entered into to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognised in the period in which they arise and the premium paid/received is accounted as expense/income over the period of the contract. Cash flows arising on account of roll over/cancellation of forward contracts are recognised as income/expense of the period in line with the movement in the underlying exposures. (f) Derivative transactions are considered as off-balance sheet items and cash flows arising therefrom are recognised in the books of account as and when the settlements take place in accordance with the terms of the respective contracts over the tenor thereof. 17. Segment Accounting (a) Segment accounting policies Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting: (i) Segment revenue includes sales and other income directly identifiable with/allocable to the segment, including inter segment revenue. (ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result. Expenses which relate to the Company as a whole and not allocable to segments are included under Unallocable Corporate Expenditure. (iii) Income which relates to the Company as a whole and not allocable to segments is included in Unallocable Corporate Income. (iv) Segment Result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Company. (v) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment. Unallocable assets mainly comprise trade investments in Subsidiary and Associate companies that constitute or relate to the portfolio of the Companys core/thrust areas of business such as infrastructure development and software solutions. Unallocable liabilities include mainly loan funds, provisions for employee retirement benefits and proposed dividend. (b) Inter-segment transfer pricing Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis. 18. Taxes on Income Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961, and based on the expected outcome of assessments/appeals.

126

Schedules forming part of Accounts (contd.)

Schedule Q (Contd.) Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. 19. Accounting for Interests in Joint Ventures Interests in Joint Ventures are accounted as follows: Type of Joint Venture Jointly Controlled Operations Jointly Controlled Assets Accounting treatment Companys share of revenues, common expenses, assets and liabilities are included in Revenues, Expenses, Assets and Liabilities respectively. Share of the Assets, according to nature of the assets, and share of the Liabilities are shown as part of Gross Block and Liabilities respectively. Share of expenses incurred on maintenance of the assets is accounted as expense. Monetary benefits, if any, from use of the assets are reflected as income. (i) Integrated Joint Ventures: a) b) (ii) Companys share in profits or losses of Integrated Joint Ventures is accounted on determination of the profits or losses by the Joint Ventures. Investments in Integrated Joint Ventures are carried at cost net of Companys share in recognised profits or losses. Income on investments in incorporated Jointly Controlled Entities is recognised when the right to receive the same is established. Investment in such Joint Ventures is carried at cost after providing for any permanent diminution in value.

Jointly Controlled Entities

Incorporated Jointly Controlled Entities: a) b)

Joint Venture interests accounted as above, other than investments in Incorporated Jointly Controlled Entities, are included in the segments to which they relate. 20. Provisions, Contingent Liabilities and Contingent Assets Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if (a) (b) (c) the Company has a present obligation as a result of a past event, a probable outflow of resources is expected to settle the obligation; and the amount of the obligation can be reliably estimated.

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 (a) (b) (c) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation, a present obligation when no reliable estimate is possible; and a possible obligation arising from past events where the probability of outflow of resources is not remote.

Contingent Assets are neither recognised, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

127

Notes forming part of Accounts

1. a) Of the Equity Shares of Rs.2 each comprised in the subscribed and paid-up capital of the Company: i) 9,19,943 (previous year 9,19,941) Equity shares were allotted as fully paid up, pursuant to contracts, without payment being received in cash. ii) 15,70,84,226 (previous year 1,70,64,871) Equity shares were issued as bonus shares by way of capitalisation of General Reserve: Rs.2.35 crore (previous year Rs.2.35 crore), Securities Premium: Rs.28.97 crore (previous year Rs.0.97 crore) and Capital Redemption Reserve: Rs.0.10 crore (previous year Rs.0.10 crore). iii) 1,25,98,166 (previous year 78,96,749) Equity shares were allotted as fully paid up on exercise of grants under Employees Stock Ownership Scheme.# iv) 63,05,167 (previous year 51,75,099) Equity shares were allotted as fully paid up pursuant to exercise of options by bond-holders of 5 Year 1.25 % US$ denominated Foreign Currency Convertible Bonds convertible into International Global Depository Shares representing equity shares of the Company.# v) 34,129 (previous year NIL) Equity shares were allotted as fully paid up pursuant to exercise of options by bondholders of 5 Year Zero Coupon Japanese Yen Foreign Currency Convertible Bonds convertible into International Global Depository Shares representing equity shares of the Company.# Options outstanding as at the end of the year on unissued share capital: Particulars On conversion of 5 Year 1.25% US$ Foreign Currency Convertible Bonds On conversion of 5 Year Zero coupon Japanese Yen Foreign Currency Convertible Bonds# c) Number of equity shares to be issued as fully paid As at 31-3-2007 Nil 35,55,693

b)

As at 31-3-2006 8,76,741 17,94,911

2.

Employee Stock Options granted and outstanding# 1,20,43,601 39,58,827 The Directors recommend payment of final dividend of Rs.2 per equity share of Rs.2 each on the number of shares outstanding as on the record date. Provision for final dividend has been made in the books of account for 28,32,70,748 shares outstanding as at March 31, 2007 amounting to Rs.56.65 crore. # The number of options have been adjusted consequent to bonus issue wherever applicable. Stock Option Schemes a) The grant of Options to the employees under the Stock Option Schemes is on the basis of their performance and other eligibility criteria. The Options are vested over a period of four years, subject to the discretion of the Management and fulfilment of certain conditions. b) The details of the grants under the aforesaid Schemes under various series are summarised below:
Series reference 1 2 3 4 5 Grant Price (Prior to Bonus Issue)-Rupees Grant Price (Post Bonus Issue)-Rupees Grant Dates Vesting commences on Options granted and outstanding at the beginning of the year Options lapsed during the period 1-4-2006 to 29-9-2006/ during previous year Options granted during the period 1-4-2006 to 29-9-2006/ during previous year Options exercised during the period 1-4-2006 to 29-9-2006 / during previous year for which shares are allotted Options outstanding as on 29-9-2006 prior to Bonus issue Adjusted options consequent to Bonus issue as on 29-9-2006 Options lapsed post bonus issue Options granted post bonus issue Options exercised post bonus issue for which shares are allotted Options granted and outstanding at the end of the year of which Options vested Options yet to vest 1999 NA NA 1-9-1999 1-9-2000 2000 2002 (A) 2002 (B) 2003 (A) 2003(B) 2006
2006-2007 2005-2006 2006-2007 2005-2006 2006-2007 2005-2006 2006-2007 2005-2006 2006-2007 2005-2006 2006-2007 2005-2006 2006-2007 2005-2006

14 -

14 7 1-6-2000 1-6-2001

14 -

14 7 19-4-2002 19-4-2003

14 -

14 7 19-4-2002 19-4-2003

14 -

70 35 23-5-2003 onwards 23-5-2004 onwards

70 -

70 35 23-5-2003 onwards 23-5-2004 onwards

70 -

2404 1202 1-9-2006 onwards 1-9-2007 onwards -

1875

8600

28675

360703

798500

389561

836353 1298417 2051662 1901546 1980738

2113

3257

9601

33572

31372

16208

56460

602670 5335750

1875 -

4400 4200 8400 -

20075 8600 8600 -

355328 5375 10750 -

435684 360703 4500 356203

374636 14925 29850 10000 19850 19850 -

443535 -

641656 647160

719673

634227

665654

8 9 10 11 12 13

- 1292407 2584814 56339 216040

- 5335750
- 10671500 -

- 1294320 24564 - 1236540 389561 13250 376311

8400 8400 -

10750 10750 -

- 1444630

33216 1298417 1299885 1901546 10671500 16898 11450 20984 9502 16318 1286967 1278901 1892044 10671500

Note: Consequent to the issue of Bonus shares, the total number of options outstanding as above as at the record date for Bonus Issue i.e 29-9-2006 was readjusted in number in the ratio of Bonus Issue (1:1) and the exercise price of Rs.14, Rs.70 and Rs.2404 was readjusted to Rs.7, Rs.35 and Rs.1202 respectively.

128

Notes forming part of Accounts (contd.)

3. a) Loans in foreign currencies equivalent to Rs.46.16 crore (forming part of Loans from Banks Other Loans) are secured by a first mortgage on the Companys immovable properties at certain locations and / or by hypothecation of movables at those locations (save and except book debts) both present and future, having pari passu rights, subject to prior charges, on specific assets in favour of the Companys bankers. Cash Credit facilities including Working Capital Demand Loans from banks are secured by hypothecation of stocks, stores and book debts. The total charge on these assets is Rs.724.07 crore, including bank guarantees as on March 31, 2007. Other loans and advances from banks grouped under Unsecured Loans include loans availed from banks outside India amounting to Rs.132.94 crore secured by corporate guarantee & project-specific receivables. Balances with Non-scheduled banks represent the balances with Indian banks classified as non-scheduled banks by the Reserve Bank of India and with all overseas branches of foreign banks. The balances with Non-Scheduled banks held in: Particulars As at 31-3-2007 Rs.crore i) Current Accounts Abu Dhabi Commercial Bank, Abu Dhabi Abu Dhabi Commercial Bank, UAE Abu Dhabi Islamic Bank, UAE Arab Bank PLC, Amman Arab Bank PLC, Bahrain Arab Bank PLC, Bahrain Arab Bank, Jordan Bank of Baroda (Kenya) Limited, Kenya Bank of Bhutan Bank of Commerce & Development, Libya Bank of Ceylon, Colombo, Sri Lanka Bank of Foreign Economic Affairs, CIS, Moscow (As at 31-3-2007: Rs.Nil, as at 31-3-2006: Rs.Nil. Maximum outstanding in 2006-2007 Rs.Nil and in 2005-2006 Rs.12000) Bank of Foreign Trade of Russian Federation (As at 31-3-2007: Rs.112, as at 31-3-2006: Rs.2405. Maximum outstanding in 2006-2007 Rs.76303 and in 2005-2006 Rs.10894) Bank of Nova Scotia, Barbados Bank of Thimpu, Bhutan (As at 31-3-2007: Rs.Nil, as at 31-3-2006: Rs.Nil. Maximum outstanding in 2006-2007 Rs.Nil and in 2005-06 Rs.1095). Bank Tuanalem, Kazakhstan BFTRF US$ Moscow Office, Moscow (As at 31-3-2007: Rs.Nil, as at 31-3-2006: Rs.Nil. Maximum outstanding in 2006-2007 Rs.Nil and in 2005-2006: Rs.11735) Citibank, Dubai Citibank, New York Citibank, Tanzania Citibank, Tokyo (JPY) Citibank, Tokyo (USD) Deutsche Bank, Singapore Hakrin Bank NV, (USD) Surinam Hakrin Bank NV, (Guilder) Surinam (As at 31-3-2006: Rs.2655) Hongkong & Shanghai Banking Corporation (RMD), China Hongkong & Shanghai Banking Corporation (USD), China HSBC Bank Middle East Limited, Abu Dhabi HSBC Bank Middle East Limited, Dubai HSBC Bank, UAE Mashreq Bank, Dubai Mashreq Bank, UAE National Bank of Kuwait, Kuwait Nepal Indo Suez Bank, Kathmandu, Nepal Nepal Investment Bank Limited, Nepal Rafidian Bank, Abu Dhabi Rafidian Bank, Iraq Standard Chartered Bank, Dubai 0.09 17.10 0.33 0.53 3.87 0.58 0.38 -

b) c) 4. a)

As at 31-3-2006 Rs.crore 0.09 4.40 0.57 3.44 3.33 10.59 0.36 -

Maximum amount outstanding at any time during 2006-2007 Rs.crore 0.89 17.10 1.57 3.44 5.42 10.59 0.38 -

2005-2006 Rs.crore 2.36 4.40 4.41 0.08 7.45 0.46 17.21 0.38 14.92 0.36 0.01 -

2.56 -

8.47 -

20.20 -

15.42 -

0.01 -

0.03 -

0.03 -

0.04 -

0.02 0.02 0.22 0.16 0.24 4.47 0.02 0.43 33.24 8.93 0.81

0.22 3.44 0.14 2.31 0.02 0.17 5.93 0.20 1.16 (0.30) 0.05 0.32 0.01 9.17 2.69

0.22 3.44 0.14 2.33 0.02 0.22 0.31 11.70 9.13 7.20 13.50 25.83 33.39 0.07 9.17 2.69

0.02 1.67 0.29 107.65 235.56 2.31 0.17 0.35 0.13 0.24 33.40 5.97 6.23 16.46 22.82 21.06 0.05 2.72 8.99 9.17 25.30

129

Notes forming part of Accounts (contd.)

Particulars As at 31-3-2007 Rs.crore Standard Chartered Bank, Tanzania Standard Chartered Bank, Malaysia State Bank of Mauritius, Mauritius Union Bank of Bhutan, Jongkhar, Bhutan Union National Bank, Abu Dhabi Uttara Bank Limited, Bangladesh Total (i) ii) Call Deposits a) Mashreq Bank, Dubai b) Standard Chartered Bank, Dubai c) The Bank of Nova Scotia, Barbados Total (ii) iii) Fixed Deposits Bank of India, Singapore Deutsche Bank, Singapore Hongkong & Shanghai Banking Corporation, Abu Dhabi Hongkong & Shanghai Banking Corporation, Dubai HSBC Bank Middle East Limited, Abu Dhabi HSBC Bank Middle East Limited, Dubai HSBC Middle East Fixed Deposit Account, UAE Mashreq Bank, Dubai National Bank of Kuwait, Kuwait Standard Chartered Bank, Malaysia Union National Bank, Abu Dhabi Total (iii) Total (i) + (ii) + (iii) b) 0.36 6.02 0.56 80.95 0.75 7.24 7.99 152.19 1.98 4.56 2.74 197.74 359.21 448.15

As at 31-3-2006 Rs.crore 0.15 1.08 2.70 0.04 60.78 0.77 0.77 3.35 7.96 116.96 10.90 139.17 200.72

Maximum amount outstanding at any time during 2006-2007 Rs.crore 0.15 4.20 16.47 2.50

2005-2006 Rs.crore 3.50 1.08 0.96 7.24 36.08 4.17

0.77 7.24

0.77 0.12 -

152.19 1.98 4.56 9.07 7.96 203.22 10.90 -

1.97 6.56 2.30 20.68 3.15 7.96 176.45 8.61 10.90 35.29

Call deposit with Mashreq Bank, Dubai, UAE, Rs.0.75 crore is subject to an escrow arrangement duly approved by the Reserve Bank of India, whereby the proceeds of the deposit, together with interest thereon, would be applied towards full and final settlement of loan taken from Rafidian Bank, Iraq, which is included under Unsecured Loans. Once the UN embargo against Iraq is lifted, the settlement would be effected. amount due from an officer of the Company: Rs.Nil (previous year Rs.0.04 crore). Maximum amount outstanding at any time during the year: Rs.0.04 crore (previous year Rs.0.06 crore). rent deposit with whole-time directors: Rs.0.07 crore ( previous year Rs.0.07 crore). Maximum amount outstanding at any time during the year: Rs.0.07 crore (previous year Rs.0.07 crore). amount, including interest, due from the Managing Director and whole-time directors in respect of Housing Loan: Rs.0.76 crore (including interest accrued) (previous year Rs.1.13 crore). Maximum amount outstanding at any time during the year: Rs.1.79 crore (previous year Rs.1.13 crore).

5.

Loans and advances include: i) ii) iii)

6. 7.

Sundry creditors include overdue amounts (mainly unclaimed) of Rs.1.35 crore (including interest of Rs.0.39 crore) payable to Small Scale and Ancillary Industries. Sundry creditors Others include Rs.4.61 crore (previous year Rs.12.25 crore), being contribution received from the employees of the Company and some of its Subsidiary & Associate Companies, on behalf of L&T Employees Welfare Foundation Trust and held on account for it. Sales and Service include Rs.119.24 crore (previous year Rs.23.74 crore) for price variations net of liquidated damages in terms of contracts with the customers and receivable discounting charges. Disclosures pursuant to Accounting Standard (AS) 7 (Revised):

8. 9.

Rs.crore
i) Contract revenue recognised for the year ended March 31, 2007 12622.50 23212.84 2004.62 1062.96 ii) Aggregate amount of contract costs incurred and recognised profits (less recognised losses) up to March 31, 2007 for all contracts in progress as at that date iii) Amount of customer advances outstanding for contracts in progress as at March 31, 2007 iv) Retention amounts due from customers for contracts in progress as at March 31, 2007

130

Notes forming part of Accounts (contd.)

10. Other income for the year ended March 31, 2007 includes: i) Profit on sale of long-term investments: Rs.22.88 crore on sale of investments in Equity shares of Tullow India Operations Limited. ii) Gain on extinguishment of debt of Rs.0.51 crore (previous year Rs.1.01 crore). 11. The Company has reviewed the useful life of certain categories of fixed assets during the year. Consequently, depreciation rates of these categories of assets have been revised, resulting in additional charge of depreciation of Rs.21.39 crore and profit before tax for the year is lower to that extent. 12. The expenditure/charge on account of Post Retirement Medical Benefit Plan was accounted on cash basis till March 31, 2006. The liability on this account has now been determined based on actuarial valuation as on March 31, 2007. Due to this change in accounting policy, the profit for the year is lower by Rs.46.36 crore. 13. i. Pursuant to the transitional provisions of Accounting Standard (AS) 15 (Revised) on Employee Benefits, an amount of Rs.35.45 crore (net of tax) has been debited to the General Reserve. The said amount represents the difference between the liability in respect of various employee benefits determined under AS 15 (Revised) as on April 1, 2006 and the liability that existed as on that date as per AS 15 prior to the revision. ii. Defined Contribution Plans: Amount of Rs.43.26 crore is recognised as an expense and included in Staff Expenses (Schedule N) in the Profit and Loss Account iii. Defined Benefit Plans: a) The amounts recognised in Balance Sheet are as follows: Rs.crore As at 31-3-2007 Particulars Gratuity Plan A. Amount to be recognised in Balance Sheet Present Value of Defined Benefit Obligation - Wholly Funded - Wholly Unfunded Less: Fair value of Plan Assets Unrecognised Past Service Costs B. Amount to be recognised as liability or (asset) Amounts reflected in the Balance Sheet Liabilities Assets Net liability/(asset) b) The amounts recognised in Profit and Loss Account are as follows: Postretirement Medical Benefit Plan Company Pension Plan Trust Managed Provident Fund Plan

203.07 0.38 203.45 152.93 50.52 50.52 50.52

46.36 46.36 46.36 46.36 46.36

119.76 119.76 1.20 118.56 118.56 118.56

827.24 827.24 839.86 (12.62)@ 0.75 0.75 #

Rs.crore
2006-2007 Particulars Gratuity Plan 1. 2. 3. 4. 5. 6. 7. 8. Current Service Cost Interest Cost Expected Return on Plan Assets Actuarial Losses/(Gains) Past Service Cost Effect of any curtailment or settlement Actuarial Gain not recognised in books Adjustment for earlier years Total included in Staff Expenses (1 to 8) Actual Return on Plan Assets 11.91 12.41 (11.08) 20.56 16.99 50.79 8.17 Postretirement Medical Benefit Plan See Note Below* See Note below* 46.36 Company Pension Plan 3.59 8.18 2.40 25.12 39.29 Trust Managed Provident Fund Plan 32.88** 64.60 (62.71)+ (5.16)+ 3.27+ 32.88 67.87

131

Notes forming part of Accounts (contd.)

c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: Rs.crore Particulars Gratuity Plan Balance of the present value of Defined Benefit Obligation as at 1-4-2006 Add: Current Service Cost Add: Interest Cost 173.24 11.91 12.41 Postretirement Medical Benefit Plan 46.36* See Note below* 46.36 Company Pension Plan 106.69 3.59 8.18 Trust Managed Provident Fund Plan 757.87 64.60

Add: Contribution by plan participants i) Employer ii) Employee Add/(less): Actuarial losses / (gains) Less: Benefits paid Add: Past service cost Add: Liabilities assumed on amalgamation Balance of the present value of Defined Benefit Obligation as at 31-3-2007

17.64 (12.27) 0.52 203.45

2.40 (2.30) 1.20 119.76

32.88** 69.10 (97.21) 827.24

d)

Notes: @ Asset is not recognised in the Balance Sheet. # Employers and employees contribution (Net) for March 2007 paid in April 2007. * Pursuant to change in accounting policy, the liability for post-retirement medical benefits has been determined on actuarial basis during the year and the amounts for current service cost & interest cost are not determined separately. ** Employers contribution to Provident Fund. + The actual return on plan assets is higher than interest cost, but no credit has been taken to the Profit and Loss Account for the same. Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:

Rs.crore
Particulars Gratuity Plan Opening balance of the fair value of the plan assets as at 1-4-2006 Add: Expected Return on plan assets Add/(less): Actuarial gains/(losses) Add: Contribution by the employer Add: Contribution by plan participants Less: Benefits paid Add: Business combinations Less: Settlements Closing balance of the plan assets as at 31-3-2007 147.77 11.08 (2.91) 9.26 (12.27) 152.93 Trust-Managed Provident Fund Plan (See Note below) 768.86 62.71 5.16 32.19 68.15 (97.21) 839.86

Note: The fair value of the plan assets under the Trust-Managed Provident Fund plan has been determined at amounts based on their value at the time of redemption, assuming a constant rate of return to maturity. The company expects to fund Rs.49.62 crore towards its gratuity plan and Rs.34.85 crore towards its Trust-managed provident fund plan during the year 2007-2008. e) The broad categories of plan assets as a percentage of total plan assets as at 31-3-2007, are as follows: Particulars 1. 2. 3. 4. 5. 6. 7. 8. Government of India Securities State Government Securities Corporate Bonds Equity Shares of Listed Companies Fixed Deposits under Special Deposit Scheme framed by Central Government for Provident Funds Insurer Managed Funds Public Sector Unit Bonds Others Gratuity Plan 34% 36% 1% 22% 3% 4% Trust-Managed Provident Fund Plan 20% 13% 5% 33% 29% -

132

Notes forming part of Accounts (contd.)

Basis used to determine the overall expected return: The Trust formed by the Company manages the investments of Provident Fund and Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on the portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. Principal actuarial assumptions at the balance sheet date (expressed as weighted averages): 1 Discount rate as at 31-3-2007 8.23% 2 3 4 Expected return on plan assets as at 31-3-2007 Annual increase in healthcare costs (see note below) Salary growth rate: a) Gratuity scheme b) Company pension scheme 5 Attrition rate: a) For post-retirement medical benefits and Companys pension scheme, the attrition rate varies from 2% to 8% for various age groups. b) For gratuity scheme the attrition rate varies from 1% to 7% for various age groups. 6 7 8 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. 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% p.a. A one percentage point change in assumed healthcare cost trend rates would have the following effects on the aggregate of the service cost and interest cost and defined benefit obligation: 6% 7% 7.50% 5.00%

f)

Rs.crore
Effect of Particulars Effect on the aggregate of the service cost and interest cost Effect on defined benefit obligation g) The amounts pertaining to defined benefit plans are as follows: 1% increase 0.67 3.05 1% decrease (0.54) (2.50)

Rs.crore
Particulars 1. 2. Post-Retirement Medical Benefit Plan (Unfunded) Defined Benefit Obligation Gratuity Plan Defined Benefit Obligation Plan Assets Surplus/(deficit) Post-Retirement Pension Plan (Unfunded) Defined Benefit Obligation 4. Trust-managed Provident Fund Plan Defined Benefit Obligation Plan Assets Surplus/(deficit) 118.56 827.24 839.86 12.62 As at 31-3-2007 46.36 203.45 152.93 (50.52)

3.

Note: The current year ended March 31, 2007, being the first year of adoption of AS 15 Revised-Employee Benefits, the figures for the previous year are not applicable. h) General descriptions of defined benefit plans: 1. Gratuity Plan: The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days salary last 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 Companys scheme is more favorable compared to the obligation under Payment of Gratuity Act, 1972. 2. Post-retirement Medical Benefit 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 at the time of retirement. The ceiling is based on cadre of the employee at the time of retirement.

133

Notes forming part of Accounts (contd.)

Companys Pension Plan: In addition to contribution to State managed Pension plan (EPS scheme), the Company operates a pension scheme, which is discretionary in nature, for certain cadre of employees wherein a pre-determined percentage of salary is provided as pension, post retirement. The quantum of pension depends on the cadre of the employee at the time of retirement. 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 envisages contribution by employer and employees and guarantees interest at the rate notified by the Provident Fund Authority. 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. 14. Uncalled liability on shares partly paid is Rs.102.88 crore net of advance paid against equity commitment (previous year: Rs.Nil). 15. Disclosures in respect of Joint Ventures: a) List of Joint Ventures:
Sr. No. Name of Joint Venture Description of interest/ (Description of job) Proportion of Ownership Interest Country of Incorporation Residence

3.

1 2 3

L&T Valdel Engineering Limited L&T-Hochtief Seabird Joint Venture International Metro Civil Contractors HCC-L&T Purulia Joint Venture Desbuild-L&T Joint Venture Bauer-L&T Diaphragm Wall Joint Venture Larsen & Toubro Ltd-Shapoorji Pallonji & Co. Limited Joint Venture (Ebene Cybercity) Larsen & Toubro Ltd-Shapoorji Pallonji & Co. Limited Joint Venture (Les Pailles Exh. Centre) L&T-AM Tapovan Joint Venture

Incorporated Jointly Controlled Entity (Upstream Oil & Gas and design & engineering) Integrated Joint Venture (Construction of breakwater at Karwar) Integrated Joint Venture (Construction of Delhi Metro Corridor Phase I Tunnel Project) Integrated Joint Venture (Construction of Pumped Storage Project) Integrated Joint Venture (Renovation of US Consulate, Chennai) Integrated Joint Venture (Construction of Diaphragm Wall for International Metro Civil Contractors) Integrated Joint Venture (Execution of civil & associated works for Ebene Cybercity Project, Mauritius) Integrated Joint Venture (Execution of civil & associated works for Les Pailles Exhibition Centre, Mauritius) Integrated Joint Venture (Construction of Head Race Tunnel for Tapovan Vishnugad Hydro Electric project at Chamoli, Uttaranchal) Integrated Joint Venture (Construction of Delhi Metro CorridorPhase II Tunnel Project) Jointly Controlled Operation (Four laning and strengthening of existing two lane sections from 240 Km to 320 Km on NH2) Jointly Controlled Operation (Hydro Electric Project) Jointly Controlled Operation (Execution of Vasai East Development project of ONGC Ltd.) Jointly Controlled Operation (Execution of Pipeline Replacement project of ONGC Ltd.) Jointly Controlled Operation (Execution of Melaka Group 3 Lubricant Base Oil Plant for Petronas) Jointly Controlled Operation (Execution of Naptha Cracker Associated Unit for IOCL, Panipat)

0.50 0.90

India #

India India

0.26 0.43 0.49

# # #

India India India

4 5 6

0.50

India

0.50

Mauritius

0.50

Mauritius

0.65

India

10

Metro Tunnelling Group

0.26

India

11

L &T-HCC Joint Venture

# #

India India

12 13

Patel L&T Consortium Consortium of Samsung Heavy Industries Co. Ltd., Korea and L&T Consortium of Global Industries Offshore LLC, USA and L&T Lurgi L&T KQKS Consortium

India

14

India

15

Malaysia

16

Consortium of Toyo Engineering Company & L&T

India

# Country of Incorporation not applicable as these are Unincorporated Joint Ventures.

134

Notes forming part of Accounts (contd.)

b) Financial interest in Jointly Controlled Entities

Rs.crore
Sr. No. 1 2 3 4 5 6 7 Name of the Joint Venture L&T Valdel Engineering Private Limited L&T-Hochtief Seabird Joint Venture International Metro Civil Contractors HCC-L&T Purulia Joint Venture Desbuild-L&T Joint Venture Bauer-L&T Diaphragm Wall Joint Venture Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited Joint Venture (Ebene Cybercity) Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited Joint Venture (Les Pailles Exhibition Centre) L&T-AM Tapovan Joint Venture Metro Tunnelling Group Total Share of Net Assets/Profit after tax in Integrated Joint Ventures # Rs.10327, ## Rs.27745 Notes: i. Figures in brackets relate to previous year. ii. Item Nos.2 to 10 above are Integrated Joint Ventures. c) Contingent liabilities, if any, incurred in relation to interests in Joint Ventures as at March 31, 2007: Rs.Nil (previous year: Rs.Nil); and share in contingent liabilities incurred jointly with other venturers as at March 31, 2007: Rs.Nil (previous year: Rs.Nil). d) Share in Contingent Liabilities of Joint Ventures themselves for which the Company is contingently liable as at March 31, 2007: Rs.68.75 crore (previous year: Rs.26.10 crore). e) Contingent liabilities in respect of liabilities of other venturers of Joint Ventures as at March 31, 2007: Rs.Nil (previous year: Rs.Nil). f) Capital commitments, if any, in relation to interests in Joint Ventures as at March 31, 2007: Rs.0.19 crore (previous year: Rs.Nil). 16. Advances recoverable in cash or in kind includes: a) an interest-free loan of Rs.225 crore (previous year: Rs.250 crore) to L&T Employees Welfare Foundation Trust to part-finance its acquisition of the equity shares in the company held by Grasim Industries Limited and its subsidiary. The loan is repayable in 9 years commencing from May 2005, with a minimum repayment of Rs.25 crore in a year. b) Rs.69.11 crore, being portfolio of financial assets (comprising lease/hire purchase receivables and term loans) purchased from L&T Finance Limited, a wholly-owned subsidiary of the Company. The income from the portfolio is accounted as and when the cash flows are realised, by using the implicit rate of discount at which the portfolio was acquired. 17. a) Sundry debtors (Unsecured, considered good) include the following amounts due from private limited companies in which the Directors of the Company are Directors: Rs.crore As at 31-3-2007 Name of the Company Outstanding for more than 6 months Others Assets 8.51 (4.95) 50.70 (53.86) 14.04 (27.83) 15.21 (16.62) 0.35 (0.51) 0.33 (0.25) 3.83 (4.40) 2.07 (3.64) 6.44 (-) 14.46 (-) 115.94 (112.06) 30.47 (31.20) As at 31-3-2007 5.78 (3.13) 46.49 (46.56) 7.11 (15.20) 6.43 (8.51) 0.28 (0.44) 0.10 (0.10) 4.00 (4.09) 1.78 (2.83) 0.97 (-) 12.53 (-) 85.47 (80.86) Companys share of Liabilities Income 12.54 (7.79) 0.56 (6.37) 14.71 (71.45) 12.76 (23.20) (-) 0.40 (0.13) 0.03 (2.18) 1.15 (-) 0.51 (-) 42.66 (111.12) 8.45 (8.05) Expenses 10.18 (5.62) 0.03 (1.45) 9.35 (71.41) 10.99 (19.35) 0.02 (0.02) 0.18 (-) 0.02 (1.14) 1.15 (-) 0.48 (-) 32.40 (98.99) Tax 0.32 (0.56) 0.18 (1.77) 0.61 (0.04) 0.61 (1.32) # (-) 0.08 (0.04) ## (0.35) (-) 0.01 (-) 1.81 (4.08) For the year 2006-2007

9 10

As at 31-3-2006 Outstanding for more than 6 months Others

L&T Valdel Engineering Private Limited #

0.08

# L&T Valdel Engineering Private Limited has become a Public Limited Company with effect from February 22, 2007.

135

Notes forming part of Accounts (contd.)

b) Loans and advances Unsecured and considered good, and Inter-Corporate deposits include the following amounts due from private limited companies in which the Directors of the Company are Directors: Rs.crore Sr. No. 1 2 Name of the Company L&T-Case Equipment Private Limited # L&T-Valdel Engineering Private Limited ## Advances Recoverable As at 31-3-2007 Inter-Corporate Deposits As at 31-3-2007 -

As at 31-3-2006 1.70 0.81

As at 31-3-2006 10.00
-

# No Director of the Company is a Director in L&T-Case Equipment Private Limited as at March 31, 2007. ## L&T Valdel Engineering Private Limited has become a Public Limited Company with effect from February 22, 2007. 18. Particulars in respect of Loans and Advances in the nature of loans as required by the Listing Agreement:

Rs.crore
Name of the Company/Firm/Director Balance as at 31-3-2007 A Loans and advances in the nature of Loans given to Subsidiaries: 1 2 3 4 5 6 B Larsen & Toubro Infotech Limited India Infrastructure Developers Limited Bhilai Power Supply Company Limited Tractor Engineers Limited L&T Finance Limited International Seaport Dredging Private Limited Total Loans and advances in the nature of loans given to Associates: 1 2 C L&T-Case Equipment Private Limited The Dhamra Port Company Limited Total Loans and advances in the nature of loans where repayment schedule is not specified/is beyond 7 years: 1 2 D India Infrastructure Developers Limited [See Note (b) below] Bhilai Power Supply Company Limited Total Loans and advances in the nature of loans where interest is not charged or charged below bank rate: 1 2 India Infrastructure Developers Limited [See Note (b) below] Bhilai Power Supply Company Limited Total 36.33 4.81 41.14 36.33 4.81 41.14 10.00 10.00 36.33 4.81 85.31 10.00 136.45 Maximum outstanding during 2006-2007

31-3-2006

2005-2006

5.50 36.33 85.49 35.63 162.95

5.50 36.33 85.49 85.31 10.00

5.50 36.33 85.49 3.00 35.63 -

10.00 10.00

10.00 -

10.00 0.58

36.33 85.49 121.82

36.33 85.49

36.33 85.49

36.33 85.49 121.82

36.33 85.49

36.33 85.49

Notes: a) Loans to employees (including Directors) under various schemes of the Company (such as housing loan, furniture loan, education loan, etc.) have been considered to be outside the purview of disclosure requirements. b) The Company constructed a Captive Power Plant for being given on lease to Indian Petrochemicals Corporation Limited. India Infrastructure Developers Limited (IIDL), a wholly-owned subsidiary of the Company, was used as a Special Purpose Vehicle to finance the lease of the said power plant. The amount advanced to IIDL as above, to optimise its capital structure and to fund its cash flow gaps, would be repaid out of surpluses generated over the tenor of the lease. Accordingly, no repayment period has been prescribed in respect of the said loan. Further, the amount has been granted as an interest-free loan, as IIDL is a wholly-owned subsidiary and is mandated to remain so over the lease tenor.

136

Notes forming part of Accounts (contd.)

19. Segment Reporting: a) During the year, segment reporting has been reconstituted in line with the revised internal reporting norms of the Company. Consequently, segment figures for the previous year have been regrouped. b) Information about Business Segments (Information provided in respect of revenue items for the year ended March 31, 2007 and in respect of assets/liabilities as at March 31, 2007 denoted as CY below, previous year denoted as PY) i) Primary Segments (Business Segments): Rs.crore Particulars Revenue including excise duty External Inter-Segment Total Revenue Result Segment Result Less: Inter-Segment margins 0n capital jobs Unallocated Corporate income/ (expenditure) (net) Operating Profit (PBIT) Interest expense Interest income Profit before tax (PBT) Provision for current taxes Provision for deferred tax Provision for tax on fringe benefit Profit after tax (before extra-ordinary items) Profit from extra-ordinary items Profit after tax (after extra-ordinary items) Other information: Segment assets Unallocable corporate assets Total assets Segment liabilities Unallocable corporate liabilities Total liabilities Capital expenditure Depreciation (including obsolescence, amortisation and impairment) included in segment expense Non-cash expenses other than Depreciation included in segment expense 9799.52 Engineering & Construction CY Electrical & Electronics CY Machinery & Industrial Products CY Others CY Elimination Total CY

PY

PY

PY

PY

CY

PY

PY

13276.39 11424.59 1983.27 1504.30 1832.77 1473.34 148.66 145.77 83.81 45.68 10.23 0.49 13425.05 11570.36 2067.08 1549.98 1843.00 1473.83 1407.57

843.48 97.82 941.30 73.23

592.56 79.67 672.23 53.59

- 17935.91 14994.79 (340.52) (271.61) (340.52) (271.61) 17935.91 14994.79 -

860.93

307.60

227.31

313.14

198.65

2101.54 13.42 2088.12 (49.30) 2038.82 (92.99) 59.06 2004.89 612.32 (25.63) 15.18 1403.02 1403.02

1340.48 24.49 1315.99 72.73 1388.72 (130.54) 55.47 1313.65 364.94 (15.35) 21.67 942.39 69.75 1012.14

7929.29 1226.34

723.31

805.24

571.76

419.72

249.76

6912.97

4981.79

516.43

359.92

493.11

361.58

225.68

61.58

- 12250.82 9474.12 5137.50 3739.96 17388.32 13214.08 - 8148.19 5764.87 3471.70 2809.04 11619.89 8573.91

673.88

418.56

89.40

35.24

15.27

9.61

21.08

34.86

108.82 36.84

65.54 4.94

21.06 6.70

11.69 6.51

9.83 7.72

12.45 1.31

13.64 4.07

9.69 3.34

(ii) Secondary Segments (Geographical segments):

Rs.crore
Particulars Domestic CY External Revenue by location of customers Carrying amount of Segment Assets by location of assets Cost incurred on acquisition of tangible and intangible fixed assets Overseas Total

PY

CY 3147.07 1592.60 0.73

PY

CY

PY

14788.84 12352.44 10658.22 798.90

2642.35 17935.91 14994.79 880.26 12250.82 34.36

799.63

8593.86 463.91

9474.12 498.27

137

Notes forming part of Accounts (contd.)

c) i) Segment Reporting: Segment Identification, Reportable Segments and definition of each reportable segment: Primary/Secondary Segment Reporting Format: (a) (b) ii) The risk-return profile of the Companys business is determined predominantly by the nature of its products and services. Accordingly, the business segments constitute the primary segments for disclosure of segment information. In respect of secondary segment information, the Company has identified its geographical segments as (i) Domestic and (ii) Overseas. The secondary segment information has been disclosed accordingly.

Segment Identification: Business segments have been identified on the basis of the nature of products/services, the risk-return profile of individual businesses, the organizational structure and the internal reporting system of the Company.

iii)

Reportable Segments: Reportable segments have been identified as per the criteria specified in Accounting Standard (AS) 17 Segment Reporting issued by the Institute of Chartered Accountants of India.

iv)

Segment Composition: Engineering & Construction Segment comprises execution of Engineering and Construction projects to provide solutions in civil, mechanical, electrical and instrumentation engineering (on turnkey basis or otherwise) to core sectors/infrastructure industries, shipbuilding and supply of complex plant and equipment to core sectors. The segment capabilities include basic/detailed engineering, equipment fabrication/supply, erection & commissioning, procurement/construction and project management. Electrical & Electronics Segment comprises manufacture and sale of low voltage switchgear and control gear, custom-built switchboards, petroleum dispensing pumps & systems, electronic energy meters/protection (relays) systems, control & automation products and medical equipment. Machinery & Industrial Products Segment comprises manufacture and sale of industrial machinery & equipment, marketing of industrial valves, construction equipment and welding/industrial products. Others includes (a) ready mix concrete (b) property development activity, and (c) e-engineering services & embedded systems.

20. Disclosure of related parties/related party transactions: i. List of related parties over which control exists Sr. No. Name of the Related Party 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Tractor Engineers Limited L&T Finance Limited L&T Capital Company Limited Larsen & Toubro Infotech Limited Larsen & Toubro Infotech GmbH L&T Transportation Infrastructure Limited HPL Cogeneration Limited Narmada Infrastructure Construction Enterprise Limited L&T Western India Tollbridge Limited India Infrastructure Developers Limited Larsen & Toubro LLC Larsen & Toubro International FZE L&T Infrastructure Development Projects Limited L&T Infocity Limited Hyderabad International Trade Expositions Limited Andhra Pradesh Expositions Private Limited L&T-ECC Construction (M) SDN. BHD. Bhilai Power Supply Company Limited Larsen & Toubro (Oman) LLC Raykal Aluminum Company Private Limited Cyber Park Development & Construction Limited L&T-Sargent & Lundy Limited Larsen & Toubro Qatar LLC L&T Overseas Projects Nigeria Limited L&T Infocity Infrastructure Limited Relationship Wholly Owned Subsidiary Wholly Owned Subsidiary Subsidiary of L&T Finance Limited# Wholly Owned Subsidiary Wholly Owned Subsidiary of Larsen & Toubro Infotech Limited Subsidiary of L&T Infrastructure Development Projects Limited# Subsidiary* Subsidiary of L&T Infrastructure Development Projects Limited# Subsidiary of L&T Infrastructure Development Projects Limited# Wholly Owned Subsidiary Subsidiary* Wholly Owned Subsidiary Subsidiary* Subsidiary of L&T Urban Infrastructure Limited# Subsidiary of L&T Infocity Limited# Wholly Owned Subsidiary of Hyderabad International Trade Expositions Limited Subsidiary of Larsen & Toubro International FZE## Subsidiary* Subsidiary of Larsen & Toubro International FZE# Subsidiary of India Infrastructure Developers Limited# Subsidiary of L&T Infrastructure Development Projects Limited# Subsidiary* Subsidiary of Larsen & Toubro International FZE## Wholly Owned Subsidiary of Larsen & Toubro International FZE Subsidiary of L&T Infocity Limited#

138

Notes forming part of Accounts (contd.)

Sr. No. Name of the Related Party 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 Larsen & Toubro Electromech LLC L&T Infocity Lanka Private Limited L & T (Wuxi) Electric Company Limited International Seaports Pte. Limited International Seaports (India) Private Limited L&T Panipat Elevated Corridor Private Limited L&T Tech Park Limited L&T Krishnagiri Thopur Toll Road Limited L&T Western Andhra Tollways Limited L&T Vadodara Bharuch Tollway Limited L&T Interstate Road Corridor Limited Spectrum Infotech Private Limited L&T Urban Infrastructure Limited Larsen & Toubro Information Technology Canada Limited L&T Infrastructure Finance Company Limited L&T Power Projects Limited International Seaport Dredging Limited L&T Modular Fabrication Yard LLC L&T Saudi Arabia LLC Larsen & Toubro Readymix Concrete Industries LLC, UAE L&T Infrastructure Development Projects (Lanka) Private Limited L&T Electricals Saudi Arabia LLC Larsen & Toubro Kuwait Construction General Contracting Company WLL Larsen & Toubro (Qingdao) Rubber Machinery Company Limited Larsen & Toubro (Jiangsu) Valve Company Limited L&T Boilers Private Limited L&T Uttaranchal Hydropower Limited L&T Bangalore Airport Hotel Limited L&T Turbo Generator Private Limited L&T Vision Ventures Limited L&T Phoenix Infoparks Private Limited L&T South City Projects Limited GDA Technologies Inc. GDA Systems Private Limited GDA Technologies Limited CSJ Infrastructure Private Limited Relationship Subsidiary of Larsen & Toubro International FZE# Subsidiary of L&T Infocity Limited# Wholly Owned Subsidiary of Larsen & Toubro International FZE Wholly Owned Subsidiary Wholly Owned Subsidiary of International Seaports Pte. Limited Wholly Owned Subsidiary of L&T Infrastructure Development Projects Limited Subsidiary of L&T Infrastructure Development Projects Limited# Wholly Owned Subsidiary of L&T Infrastructure Development Projects Limited Wholly Owned Subsidiary of L&T Infrastructure Development Projects Limited Wholly Owned Subsidiary of L&T Infrastructure Development Projects Limited Wholly Owned Subsidiary of L&T Infrastructure Development Projects Limited Wholly Owned Subsidiary Subsidiary of L&T Infrastructure Development Projects Limited# Wholly Owned Subsidiary of Larsen & Toubro Infotech Limited Wholly Owned Subsidiary Wholly Owned Subsidiary Subsidiary* Subsidiary of Larsen & Toubro International FZE# Wholly Owned Subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE## Subsidiary of L&T Infrastructure Development Projects Limited# Subsidiary of Larsen & Toubro International FZE# Subsidiary of Larsen & Toubro International FZE## Subsidiary of Larsen & Toubro International FZE# Subsidiary of Larsen & Toubro International FZE# Wholly Owned Subsidiary of L&T Power Projects Limited. Wholly Owned Subsidiary of India Infrastructure Developers Limited Wholly Owned Subsidiary of L&T Urban Infrastructure Limited Wholly Owned Subsidiary of L&T Power Projects Limited. Subsidiary of L&T Urban Infrastructure Limited# Subsidiary of L&T Urban Infrastructure Limited# Subsidiary of L&T Urban Infrastructure Limited# Wholly Owned Subsidiary of Larsen & Toubro Infotech Limited Wholly Owned Subsidiary of GDA Technologies Limited Wholly Owned Subsidiary of GDA Technologies Inc. Subsidiary of L&T Urban Infrastructure Limited#

*The Company holds more than one-half in nominal value of the equity share capital. **The Company controls the composition of the Board of Directors. #The Company, together with its subsidiaries, holds more than one-half in nominal value of the equity share capital. ##The Company, together with its subsidiaries, controls the composition of the Board of Directors.

139

Notes forming part of Accounts (contd.)

ii. Names of the related parties with whom transactions were carried out during the year and description of relationship: Subsidiary Companies: 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 Cyber Park Development & Construction Limited L & T (Wuxi) Electric Company Limited L&T Capital Company Limited L&T Finance Limited L&T Infrastructure Development Projects Limited L&T Krishnagiri Thopur Toll Road Private Limited L&T Panipat Elevated Corridor Private Limited L&T Tech Park Limited L&T Urban Infrastructure Limited L&T Western Andhra Tollways Private Limited Larsen & Toubro (Oman) LLC Larsen & Toubro Information Technology Canada Limited Larsen & Toubro Infotech Limited Narmada Infrastructure Construction Enterprise Limited L&T Saudi Arabia LLC L&T Modular Fabrication Yard LLC, Oman L&T Electricals Saudi Arabia LLC L&T Uttaranchal Hydropower Limited International Seaport Dredging Limited L&T Bangalore Airport Hotel Limited Spectrum Infotech Private Limited Larsen & Toubro Qatar LLC Larsen & Toubro LLC 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 HPL Cogeneration Limited India Infrastructure Developers Limited L&T - Sargent & Lundy Limited L&T - ECC Construction (M) SDN. BHD. L&T Infocity Limited L&T Interstate Road Corridor Limited L&T Overseas Projects Nigeria Limited L&T Transportation Infrastructure Limited L&T Vadodara Bharuch Tollway Limited L&T Western India Tollbridge Limited Larsen & Toubro Infotech GmbH Larsen & Toubro International FZE Raykal Aluminum Company Private Limited Tractor Engineers Limited L&T South City Projects Limited L&T (Quingdao) Rubber Machinery Company Limited L&T Infrastructure Finance Company Limited L&T Power Projects Limited Bhilai Power Supply Company Limited L&T Phoenix Info Parks Private Limited Larsen & Toubro Electromech LLC L&T Infocity Lanka Private Limited Hyderabad International Trade Expositions Limited

Associate Companies: 1 3 5 7 9 11 13 Audco India Limited L&T-Chiyoda Limited L&T-Ramboll Consulting Engineers Limited Voith Paper Technology (India) Limited International Seaport (Haldia) Private Limited Vishakhapatnam Industrial Water Supply Company Limited L&T-Ascendas Private Limited 2 4 6 8 10 12 Ewac Alloys Limited L&T-Komatsu Limited L&T-Case Equipment Private Limited Kakinada Seaports Limited Second Vivekananda Bridge Tollway Company Private Limited GVK Jaipur Kishengarh Expressway Private Limited

Joint Ventures (Other than Associates): 1 3 5 7 9 11 International Metro Civil Contractors Joint Venture The Dhamra Port Company Limited 2 4 Bauer-L&T Diaphragm Wall Joint Venture L&T-Demag Plastics Machinery Limited (formerly L&T-Demag Plastics Machinery Private Limited) L&T-Hochtief Seabird Joint Venture HCC-L&T Purulia Joint Venture Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited Joint Venture (Eben Cybercity) Metro Tunnelling Group Joint Venture

L&T-Valdel Engineering Limited 6 (Formerly, L&T-Valdel Engineering Private Limited) Desbuild-L&T Joint Venture 8 Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited 10 Joint Venture (Les Palles Exhibition Centre) L&T-AM Tapovan Joint Venture 12 (Tapovan Vishnugarh Hydro Project)

Key Management Personnel & their relatives: 1 3 5 7 Mr. A.M. Naik (Chairman & Managing Director) Mr. Y. M. Deosthalee (Whole-time Director) Mrs. Leena Y. Deosthalee (Wife) Mr. R. N. Mukhija (Whole-time Director) Mrs. Sushma Mukhija (Wife) Mr. V. K. Magapu (Whole-time Director) 2 4 6 8 Mr. J.P. Nayak (Whole-time Director) Mrs. Neeta J. Nayak (Wife) Mr. K. Venkataramanan (Whole-time Director) Mrs. Jyothi Venkataramanan (Wife) Mr. K. V. Rangaswami (Whole-time Director) Mr. M. V. Kotwal (Whole-time Director)

140

Notes forming part of Accounts (contd.)

iii. Disclosure of related party transactions:

Rs.crore
Sr. Nature of transaction/relationship/major parties No. 2006-2007 Amount Amounts for major parties

2005-2006 Amount Amounts for major parties

Purchase of goods & services (including Commission paid) Subsidiaries Associates & Joint Ventures, including: Audco India Limited Ewac Alloys Limited Total

173.69 783.96 598.11 108.94 957.65

118.49 674.78 507.50 84.10 793.27

Sale of goods/power/contract revenue & services Subsidiaries, including: Larsen & Toubro Infotech Limited L&T Infocity Limited L&T Panipat Elevated Corridor Private Limited Associates & Joint Ventures, including: L&T Komatsu Limited Second Vivekananda Bridge Tollway Company Private Limited Visakhapatnam Industrial Water Supply Company Limited Total

524.39 121.96 113.74 119.67 215.37 44.22 143.44 2.71 739.76

230.58 55.48 125.65 9.10 294.95 0.67 184.21 32.15 525.53

Purchase/Lease of Fixed Assets Subsidiaries, including: Tractor Engineers Limited L&T Finance Limited Larsen & Toubro Infotech Limited Associates & Joint Ventures: Ewac Alloys Limited Total

8.57 7.76 0.76 4.83 4.83 13.40

1.94 0.34 1.60 1.64 1.64 3.58

Sale of Fixed Assets Associates & Joint Ventures: L&T-Case Equipment Limited (During 2006-2007: Rs.3745; During 2005-2006: Rs.Nil) Total

Subscription to equity and preference shares (incl. application money paid) Subsidiaries, including: L&T Finance Limited L&T Infrastructure Development Projects Limited L&T Infrastructure Finance Company Limited Larsen & Toubro International FZE Total

806.25 100.00 233.06 243.00 136.21 806.25 52.69 52.69 52.69

141.49 50.00 66.99 7.50 141.49 -

Purchase of Investments Subsidiary: L&T Finance Limited Total

141

Notes forming part of Accounts (contd.)

Rs.crore
Sr. Nature of transaction/relationship/major parties No. 2006-2007 Amount Amounts for major parties

2005-2006 Amount Amounts for major parties

Sale of Investments/Buyback of Shares Subsidiaries, including: L&T Infrastructure Development Projects Limited Larsen & Toubro International FZE Total 14.20 14.20 9.00 5.20

39.75 39.75 39.75

Receiving of services/overheads charged by related parties Subsidiaries, including: L&T Finance Limited Larsen & Toubro Infotech Limited L&T Infrastructure Development Projects Limited Associates & Joint Ventures, including: L&T-Ramboll Consulting Engineers Limited Total 6.21 0.23 5.98 0.15 5.83 -

13.73 3.52 3.19 6.64 0.84 0.71 14.57

Rent paid, including lease rentals under leasing/hire purchase arrangements including loss sharing on equipment finance Subsidiaries, including: L&T Finance Limited Associates & Joint Ventures Key Management Personnel Relatives of Key Management Personnel Total 0.86 0.14 0.10 15.66 14.56 13.97

11.48 10.59 0.60 0.14 0.10 12.32

10

Charges for deputation of employees to related parties Subsidiaries, including: Larsen & Toubro Infotech Limited Larsen & Toubro (Oman) LLC Associates & Joint Ventures, including: L&T-Case Equipment Private Limited HCC-L&T Purulia Joint Venture Total 11.18 2.24 0.69 0.54 8.94 3.56 2.54

4.13 2.54 1.54 0.01 0.93 5.67

11

Dividend Received Subsidiaries, including: HPL Cogeneration Limited Larsen & Toubro Infotech Limited Associates & Joint Ventures: L&T-Komatsu Limited Ewac Alloys Limited Audco India Limited Total 76.93 35.22 18.00 9.12 8.10 41.71 25.72 15.01

67.22 47.58 15.00 12.30 5.10 7.20 79.52

142

Notes forming part of Accounts (contd.)

Rs.crore
Sr. Nature of transaction/relationship/major parties No. 2006-2007 Amount Amounts for major parties

2005-2006 Amount Amounts for major parties

12

Commission received, including those under agency arrangements Subsidiaries Associates & Joint Ventures, including: L&T-Komatsu Limited Total

0.61 140.20 125.20 140.81

0.12 76.50 64.36 76.62

13

Rent received, Overheads recovered and Miscellaneous income Subsidiaries, including: Larsen & Toubro Infotech Limited Larsen & Toubro (Oman) LLC Narmada Infrastructure Construction Enterprise Limited Associates & Joint Ventures, including: L&T-Case Equipment Private Limited International Metro Civil Contractors Total 49.81 8.87 1.90 40.94 30.99 -

37.59 12.27 7.24 6.22 13.20 1.93 4.79 50.79

14

Interest Received Subsidiaries, including: HPL Cogeneration Limited L&T Infrastructure Development Projects Limited L&T Finance Limited Bhilai Power Supply Company Limited Associates & Joint Ventures, including: L&T-Case Equipment Private Limited Key Management Personnel Total

3.61 0.63 1.93 0.77 1.17 0.80 0.02 4.80

2.91 2.87 0.04 2.95

15

Interest Paid Subsidiaries, including: L&T Finance Limited L&T Power Investments Private Limited India Infrastructure Developers Limited Associates & Joint Ventures: Audco India Limited Key Management Personnel (During 2006-2007: Rs.Nil; During 2005-2006: Rs.361) Total

5.01 3.50 0.59 1.56 1.56 6.57

3.28 0.26 0.85 2.08 2.31 2.31 5.59

16

Amounts written off Associates & Joint Ventures: L&T-Demag Plastics Machinery Limited Total

0.06 0.06 0.06

143

Notes forming part of Accounts (contd.)

Rs.crore
Sr. Nature of transaction/relationship/major parties No. 2006-2007 Amount Amounts for major parties

2005-2006 Amount Amounts for major parties

17

Payment of Salaries/Perquisites Key Management Personnel: A.M. Naik J. P. Nayak Y.M. Deosthalee K. Venkataramanan R.N. Mukhija K.V. Rangaswami V.K. Magapu M.V. Kotwal Total

27.20 5.85 3.04 3.53 3.48 3.44 2.51 2.52 2.83 27.20

17.18 3.99 2.07 2.23 2.20 2.16 1.76 1.76 1.01 17.18

18

Shares allotted to Whole time Directors under Employee Stock Option Schemes Key Management Personnel: A.M. Naik J. P. Nayak Y.M. Deosthalee K. Venkataramanan R.N. Mukhija K.V. Rangaswami V.K. Magapu M.V. Kotwal Total

2.71 0.77 0.46 0.46 0.46 0.33 0.07 0.09 0.07 2.71

1.48 0.42 0.25 0.25 0.25 0.18 0.04 0.05 0.04 1.48

19

Amount provided for: Associates & Joint Ventures: Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited Joint Venture (Ebene Cybercity) Total

0.14 0.14 0.14

Major parties denote entities who account for 10% or more of the aggregate for that category of transaction.
iv. Amount due to/from related parties:

Rs.crore
Sr. Nature of transaction/relationship/major parties No. As at 31-3-2007 Amount 1 Accounts Receivable Subsidiaries, including: Larsen & Toubro Infotech Limited L&T Finance Limited L&T Saudi Arabia LLC Associates & Joint Ventures, including: Visakhapatnam Industrial Water Supply Company Limited International Metro Civil Contractors Joint Venture Second Vivekanand Bridge Tollway Company Private Limited GVK Jaipur Kishengarh Expressway Private Limited Total Amounts for major parties

As at 31-3-2006 Amount Amounts for major parties

361.08 65.34 69.29 1.34 48.31 17.90 0.92 409.39

148.35 53.02 0.24 38.55 192.99 24.96 16.73 67.04 26.77 341.34

144

Notes forming part of Accounts (contd.)

Rs.crore
Sr. Nature of transaction/relationship/major parties No. As at 31-3-2007 Amount 2 Accounts Payable Subsidiaries, including: Larsen & Toubro Infotech Limited L&T Finance Limited Associates & Joint Ventures, including: Audco India Limited Total 3 Loans & Advances recoverable Subsidiaries, including: Bhilai Power Supply Company Limited India Infrastructure Developers Limited L&T Finance Limited Associates & Joint Ventures, including: L&T-Case Equipment Private Limited L&T-Demag Plastics Machinery Limited L&T-Valdel Engineering Limited Key Management Personnel Relatives of Key Management Personnel Total 4 Advances against equity contribution Subsidiaries: L&T Infrastructure Finance Company Limited L&T Infrastructure Development Projects Limited Total 5 Unsecured loans Subsidiaries, including: Tractor Engineers Limited L&T Finance Limited Total 6 Advances received in the capacity of supplier of goods/services classified as Advances from Customers in the Balance Sheet Subsidiaries, including: L&T Infocity Limited L&T Krishnagiri Thopur Toll Road Limited L&T Western Andhra Tollways Limited L&T Vadodara Bharuch Tollway Limited L&T Panipat Elevated Corridor Private Limited Associates & Joint Ventures, including: Second Vivekananda Bridge Tollway Company Private Limited The Dhamra Port Company Limited Total 7 Due to Whole time Directors Key Management Personnel: A.M. Naik J. P. Nayak Y.M. Deosthalee K. Venkataramanan R.N. Mukhija K.V. Rangaswami V.K. Magapu M.V. Kotwal Total Amounts for major parties 23.93 91.70 247.65 209.74 473.68 142.64 4.81 37.64 86.48 26.62 11.27 15.10 0.19 0.83 0.06 170.15 2.16 2.00 0.16 2.16 6.34 5.00 0.85 6.34

As at 31-3-2006 Amount Amounts for major parties 7.70 143.74 177.41 146.27 349.49 131.01 85.49 36.33 0.72 2.56 1.67 0.88 1.20 0.05 134.82 108.28 108.28 108.28 1.67 1.67 1.67

226.03

172.08

180.53 2.33 38.63 26.87 73.32 20.40 56.33 2.62 52.45 236.86 13.80 3.28 1.64 1.64 1.64 1.64 1.32 1.32 1.32 13.80

23.20 8.44 14.66 13.92 13.61 37.12 9.78 2.42 1.21 1.21 1.21 1.21 0.97 0.97 0.58 9.78

Major parties denote entities who account for 10% or more of the aggregate for that category of transaction.

145

Notes forming part of Accounts (contd.)

Notes to related party transactions: a) The Company had a sole-selling agency agreement with L&T-Komatsu Limited (LTK), an associate company since February 1, 1998. The agreement shall be in effect as long as the Joint Venture Agreement between the Parent Company and M/s Komatsu Asia Pacific Pte. Ltd., Singapore (which is a subsidiary of Komatsu Ltd., Japan) remains in force. As per the terms of the agreement, the Company is the exclusive agent of L&T-Komatsu Limited to market LTK machines and provide product support. Pursuant to the aforesaid agreement, LTK is required to pay commission to the Company at specified rates on the sales effected by the Company. As per provisions of the Companies Act, 1956, a sole-selling agency agreement requires approval from Government of India (GOI) every five years. LTK has sought revision in some of the conditions granted vide the last GOI approval dated January 7, 2005. Pending receipt of the revised approval from GOI, LTK has entered into a non-exclusive agreement with the Company for sale of its products with effect from March 1, 2004. b) The Company has entered into a five year distributorship agreement from April 26, 2002 with Audco India Limited (AIL), an associate company. Pursuant to the aforesaid agreement, AIL is required to pay commission to the Company at specified rates on the sales effected by the Company. Further, as per the terms of the agreement, the Company is the non-exclusive distributor of AIL products and is authorised to purchase and resell the same in accordance with the terms stipulated in the agreement. c) The Company has renewed the selling agency agreement from October 1, 2003 with Ewac Alloys Limited (EWAC), an associate company. The agreement shall remain valid until either party gives 12 months prior written notice to the other for termination. As per the terms of the agreement, the Company is the selling agent authorised to purchase and resell EWAC products in accordance with the prices and other conditions stipulated in the agreement. d) The Company has a selling agency agreement with L&T-Demag Plastics Machinery Limited (LTDPML), a joint venture company effective January 1, 2001. As per the terms of the agreement, the Company is a selling and servicing agent of LTDPML. Pursuant to the aforesaid agreement, LTDPML is required to pay commission to the Company at specified rates on sales effected by the Company. Note: The financial impact of the agreements mentioned at (a) to (d) above has been included in/disclosed vide Note 20(iii) supra . 21. Leases: Where the Company is a Lessee: a) Finance Leases: i. [a] Assets acquired on finance lease mainly comprise cars and personal computers. The leases have a primary period, which is fixed and non-cancellable. In the case of cars, the Company has an option to renew the lease for a secondary period. The agreements provide for revision of lease rentals in the event of changes in (a) taxes, if any, leviable on the lease rentals (b) rates of depreciation under the Income-tax Act, 1961, and (c) change in the lessors cost of borrowings. There are no exceptional/ restrictive covenants in the lease agreements. [b] The minimum lease payments and the present value thereof as at March 31, 2007 in respect of assets acquired under finance leases are as follows: Rs.crore Particulars Minimum Lease Payments As at As at 31-3-2007 31-3-2006 1.50 0.71 2.21 0.20 2.01 Present Value of Minimum Lease Payments As at As at 31-3-2007 31-3-2006 1.32 0.69 2.01 v.

i) ii) iii)

Payable not later than 1 year Payable later than 1 year and not later than 5 years Payable later than 5 years Total (i + ii + iii)

3.64 1.49 5.13 0.55 4.58

3.25 1.33 4.58

Less: Future finance charges

Present Value of Minimum Lease Payments ii. b)

Contingent rent recognised/(adjusted) in the Profit and Loss Account in respect of finance leases: Rs.Nil [previous year: Rs.(0.01) crore] The Company has taken various residential/commercial premises and plant and machinery under cancellable operating leases. These lease agreements are normally renewed on expiry. a) The Company has taken certain assets like cars, technology assets, etc. on non-cancellable operating leases, the future minimum lease payments in respect of which, as at March 31, 2007 are as follows: Minimum Lease Payments Rs.crore i Payable not later than 1 year 23.31 ii Payable later than 1 year and not later than 5 years 38.65 iii. b) Payable later than 5 years Total 0.10 62.06

Operating leases: i. ii.

iii. iv.

The lease agreements provide for an option to the Company to renew the lease period at the end of the non-cancellable period. There are no exceptional/restrictive covenants in the lease agreements. Lease rental expense in respect of operating leases: Rs.29.08 crore (previous year: Rs.28.57 crore) Contingent rent recognised in the Profit and Loss Account: Rs.Nil (previous year: Rs.Nil)

146

Notes forming part of Accounts (contd.)

22. Provision for current taxes: a) includes provision for wealth tax Rs.0.88 crore (previous year: Rs.0.75 crore) b) is net of Rs 0.03 crore being provision for wealth tax of earlier year written back (previous year: Rs.Nil) 23. Major components of Deferred Tax Assets and Deferred Tax Liabilities:

Rs.crore
As at 31-3-2007 Particulars Deferred Tax Assets 82.68 20.52 49.09 32.92 164.69 40.19 (25.63) 1.01 (12.88) 0.41 204.88 Deferred Tax Liabilities 184.36

As at 31-3-2006 Deferred Tax Assets 86.82 19.81 35.39 10.30 132.51 77.28 (15.35) (1.90) Deferred Tax Liabilities 189.57

Difference between book depreciation and tax depreciation Provision for doubtful debts and advances debited to Profit and Loss Account Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Profit and Loss Account Unpaid statutory liabilities/provision for Leave Encashment debited to Profit and Loss Account Other items giving rise to timing differences Total Net Deferred Tax Liability Net incremental liability charged/(credited) to Profit and Loss Account Net Deferred Tax Liability assumed on amalgamation Charged/(credited) to General Reserve Charged/(credited) to Securities Premium Account

0.41 209.79

24. Basic and Diluted Earnings per share [EPS] computed in accordance with Accounting Standard (AS) 20 Earnings per Share Particulars Basic Profit after tax as per Accounts (Rs.crore) Weighted average number of shares outstanding Basic EPS (Rupees) Diluted Profit after tax as per Accounts (Rs.crore) Add: Interest/Exchange difference (gain)/loss on bonds convertible into equity shares (net of tax) Adjusted profit for diluted earnings per share Weighted average number of shares outstanding Add: Weighted average number of potential equity shares that could arise on conversion of FCCBs Add: Weighted average number of potential equity shares on account of employee stock options Weighted average number of shares outstanding Diluted EPS (Rupees) Including extra-ordinary items 2006-2007 2005-2006 A B A/B A B C=A+B D E F G=D+E+F C/G 1403.02 27,93,66,027 50.22 1403.02 (7.62) 1395.40 27,93,66,027 40,11,908 51,94,370 28,85,72,305 48.36 Excluding extra-ordinary items 2006-2007 2005-2006 1403.02 942.39 27,93,66,027 26,61,49,962 50.22 1403.02 (7.62) 1395.40

1012.14 26,61,49,962 38.03 1012.14 15.50 1027.64 26,61,49,962 98,58,972 76,51,318 28,36,60,252 36.23

35.41 942.39 15.50 957.89

27,93,66,027 26,61,49,962 40,11,908

98,58,972

51,94,370 76,51,318 28,85,72,305 28,36,60,252 48.36

33.77

EPS data for the periods above have been adjusted for issue of bonus shares as per Accounting Standard (AS) 20-Earnings Per Share. 25. Disclosures required by Accounting Standard (AS) 29 Provisions, Contingent Liabilities and Contingent Assets: a) Movement in provisions:

Rs.crore
Sr. No. 1 2 3 4 5 Particulars of disclosure Product Warranties 22.77 18.31 0.45 3.77 36.86 Class of Provisions Excise Sales Litigation Duty Tax related obligation 0.10 0.10 8.56 9.94 0.16 0.91 17.43 30.42 0.11 0.56 29.97 Others Total

Balance as at 1-4-2006 Additional provision during the year Provision used during the year Provision reversed during the year Balance as at 31-3-2007 (5=1+2-3-4)

1.56 11.46 13.02

63.41 39.82 0.61 5.24 97.38

147

Notes forming part of Accounts (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 31-3-2007 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 two years. ii. Provision for Excise duty represents the differential duty liability that is expected to materialise in respect of matters in appeal. iii. Provision for Sales Tax represents mainly the differential sales tax liability on account of non-collection of declaration forms for the period prior to 5 years. iv. Provision for litigation-related obligations represents liabilities that are expected to materialise in respect of matters in appeal. Disclosure in respect of Contingent Liabilities is given as part of Schedule J to the Balance Sheet.

c)

26. The expenditure on Research and Development activities, as certified by the Management, is Rs.55.47 crore (including capital expenditure of Rs.4.12 crore) [previous year: Rs.39.26 crore including capital expenditure of Rs.1.80 crore]. 27. The exchange difference arising on foreign currency transactions amounting to Rs.43.22 crore (net gain) has been accounted under respective revenue heads. 28. As a part of Companys risk management policy, the various financial risks mainly relating to changes in the exchange rates, interest rates and commodity prices are hedged by using a combination of forward contracts, swaps and other derivative products, besides the natural hedges. a) The particulars of derivative contracts entered into for hedging purposes, outstanding as at March 31, 2007 are as under:

Rs.crore
For hedging foreign currency and interest rate risks Forward contracts: Receivables Payables Interest rate Swaps 2) For hedging commodity price related risks Futures Un-hedged foreign currency exposures as at March 31, 2007 are as under: Receivables Payables 1)

1630.47 2642.30 25.00 35.18 6796.35 5460.39

b)

29. Estimated amount of contracts remaining to be executed on capital account (net of advances): Rs.346.39 crore (previous year Rs.80.70 crore). 30. Managerial Remuneration a) Managing and Whole-time Directors remuneration:

Rs.crore
Particulars Salary Perquisites Commission Contribution to Provident / Superannuation Fund Total 2006-2007 5.40 2.82 13.80 5.18 27.20

2005-2006 2.40 1.71 9.78 3.29

17.18

b)

Note: The above figures do not include contribution to gratuity fund, pension scheme and provision for leave encashment benefit as separate figures are not available for the managing/whole time directors. Computation of Managerial Remuneration: Rs.crore Profit before tax before extra-ordinary items as per Profit and Loss Account Add: Managing and Whole-time Directors remuneration and commission Commission paid to non-executive directors (net) Directors fees Depreciation, obsolescence and amortisation charged to the Accounts Less: Transfer from Revaluation Reserve Loss on sale of current investments Provision for diminution in value of investments Provision for doubtful debts and advances (Net) Provision for foreseeable losses on construction contracts Profit (net) on sale of fixed assets as per Section 349 of the Companies Act, 1956 (net of capital profits) Carried forward 2004.89 27.20 0.90 0.26 171.45 1.44 170.01 7.26 11.95 82.50 8.27 (3.35) 305.00 2309.89

148

Notes forming part of Accounts (contd.)

Computation of Managerial Remuneration (Contd.)

Rs.crore
Brought forward Less: Profit on sale of fixed assets as per Profit and Loss Account (Net) Profit on sale of long-term investments as per Profit and Loss Account (net) Share issue expenses charged to Securities Premium Account Premium on redemption of debentures charged to Securities Premium Account Employee benefits debited to General Reserve Depreciation and obsolescence as per Section 350 of the Companies Act, 1956 (net) Depreciation on leased assets Net Profit as per Section 198 of the Companies Act, 1956 Maximum permissible remuneration to whole-time directors under Section 198 of the Companies Act, 1956 @ 10 % of the profits computed as above 2309.89 6.90 23.43 0.38 (0.80) 35.45 139.65 1.19 206.20 2103.69 210.37 27.20 21.04 0.90

Restricted as per service agreements to

Maximum permissible managerial remuneration to non-executive directors under Section 198 of the Companies Act, 1956 @ 1 %

Restricted as per shareholders approval to

c)

Miscellaneous expenses include provision of Rs.0.90 crore (net) [previous year: Rs.0.90 crore (net)] towards commission payable to nonexecutive directors of the Company, in terms of the special resolution passed at the Annual General Meeting held on August 26, 2005. 2006-2007 Rs.crore

2005-2006 Rs.crore 0.38 0.36 0.12 0.06 0.09

31. Auditors remuneration (excluding service tax) and expenses charged to the accounts: Audit fees Certification work Tax audit fees Other services Expenses reimbursed* *Excludes fees paid for FCCB issue of Rs.Nil (Previous Year Rs.0.03 crore), charged to Securities Premium Account. 32. Value of Imports (on C.I.F. basis): Raw materials Components and spare parts Spare parts for sale Capital goods 33. Expenditure in foreign currency: On overseas contracts Royalty and technical know-how fees Interest Professional/Consultation fees Other matters 34. Dividends remitted in foreign currency: Dividend for the year ended March 31, 2007 to: i. 9 non-resident shareholders on 7,850 shares held by them (previous year: 3,925 shares)# ii. Custodian of Global Depositary Receipts: 68,88,179 shares (previous year: 59,79,728 shares) # # The number of shares have been adjusted consequent to issue of bonus shares, wherever applicable 35. Earnings in foreign exchange: Export of goods [including Rs.1106.29 crore on FOB basis (previous year Rs.774.42 crore)] Construction and project related activities Export of services Commission Interest and dividend received Other receipts

0.50 0.55 0.11 0.11

531.29 1148.51 174.19 161.48 898.87 4.29 32.31 78.19 455.39

502.72 796.95 129.34 30.75 1075.54 8.31 28.04 10.90 344.10

0.01 7.58

0.01 10.46

1115.83 2420.85 174.28 3.77 5.78 50.08

790.40 2229.59 100.45 3.48 16.44 37.63

149

Notes forming part of Accounts (contd.)

36. List of Small Scale Industrial Undertakings to whom the Company owes monies for more than 30 days as at March 31, 2007: 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100 103 106 109 112 115 118 121 124 127 130 133 136 139 142 145 148 151 154 157 160 163 166 A Bond Strands Private Limited A G Mechanical Enterprises Private Limited Aarsha Chemicals Private Limited Acetech Machinery Components Adino Telecom Limited Aluminium Rolling & Spinning Mills Ambico Inter-Allied Marketing Private Limited Ampson Engineering Private Limited Ansons Electro Mechanical Works APS Technocrats Apurva Industries Arun Engineering Asian Ancillary Corporation Atlas Adco Engineers B R Industries Baj Enterprises Bharat Metal Process Billets Electro Werke Limited Britto Energy Engineers Careprint Chauhan Engineering Classic Canteen Systems Classic Packaging Connectwell Industries Private Limited Corrosion Controls D C Metal Corporation Dalal Plastic Corporation Deepak Hardware Mart Duralloy India Eagle Rubber Industries Efficient Engineering Works Eleven Lever Engineering Emaco Engineering Private Limited Emcolite Industries Enpro Engineering Essen Deinki Excel Electric Industries Extrudex Plastics Corporation Ferrocare Machines Private Limited Flowlines Engineering Private Limited Fluorokraft Private Limited Friends Industrial Works Ganesh Engineering Gaurav Engineering General Engineering Geo Chem Laboratories Private Limited Goa Sintered Products Private Limited Haji Iron and Steel Works Heavy Fab Industries Henkel Chembond Surface Technologies Limited Hi-Tech Forgings (Bangalore) Private Limited Hyd-Air Engineering Works Goa IMI Machine Tools Private Limited Inder Engineering Works Indo German Tool Room Industrial Springs Manufacturing Company 2 5 8 11 14 17 20 23 26 29 32 35 38 41 44 47 50 53 56 59 62 65 68 71 74 77 80 83 86 89 92 95 98 101 104 107 110 113 116 119 122 125 128 131 134 137 140 143 146 149 A K Enterprises A R Industries Aarsons Industries Acura Engineering Company Advance Cooling Systems Private Limited Alu-Fin Amit Engineering Works Anandji Cables Apollo Seals Company APT Controls & Appliances Private Limited Arc Light Trading Corporation Ashok Leather Works Asmira Paint Manufacturing Private Limited Atlas Engineering Company B T Solders Private Limited Baka Liftec (India) Private Limited Bharath Trailers Bombay Brazing Company C.Gopal Naicker & Son Chandra Engg. And Mech.Private Limited Chennai Hydro-Maatics Private Limited Classic Engineering Corporation Comet Brass Products Consolidated Dynamics Private Limited Crystal Industrial Syndicate D P Polymer Products Damodar Engineers Delta Control Engineering Corporation Dynamics Engineering Works Eastern Enterprises Electromech Engineers Elm Components Emco Lenze Private Limited Engi Chem Eonour Technologies Limited Esteem Gases Private Limited Excel Graphics Private Limited Fabtech Projects & Engineers Fitwel Gasket Company Flowtech Fork Lift India G S Alloy Castings Limited Ganesh Industries Gayatri Engineers General Industries German Plastics Industries Graphic Creation Hariram Steels Private Limited Hemant Tools Private Limited Heramb Industries 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99 102 105 108 111 114 117 120 123 126 129 132 135 138 141 144 147 150 A S Enterprises Aakansha Arts Accurate Forge Private Limited Adhar Equipments Private Limited Alfa Enterprises Aman Engineering Amita Enterprise Aniruddha Wire Cut Tools Apollo-Soyuz Electricals Private Limited APT Pneumatics Private Limited Armatech Associates Ashwin Plastic Industries Atlanta Forms Private Limited Autoalarm Industries Baid Engineering Private Limited Balkrishna Pattern Shop Bharati Engineering Works Bonus Stationers Cadd Centre India Private Limited Chandra Udyog Chirag Engineering Classic Enterprises Computerised Numercial Control Continental Coatings Private Limited Cue Chem Industries D S M Soft Private Limited Daniel Measurement and Control (Industries) Private Limited Divya Electro Technica Private Limited Dynetic Products Private Limited Eastwell Asbestos Industries Electronic Relays (India) Private Limited Elmex Controls Private Limited Emcolite Electroplaters English Tools & Castings Private Limited Epsilon Automotive Private Limited Evans Industrial Works Private Limited Excel Process Private Limited Famous Ladders Manufacturing Company Flexpro Electricals Private Limited Fluoro Plast Forward Alloys & Castings Gajanan Industries Garg Associates Private Limited Geldhof Limited General Instruments Corporation Giridhari Explosives Private Limited Grover Forging Heatreaters & Engineers Hempronics Systems Private Limited Hinode Technologies Private Limited

152 Hitech NDT Services 155 158 161 164 167 IEC Air Tools Private Limited Inca Radiant Engg. (I) Private Limited India Die Services Indus Forms Private Limited Innovative Equipments

153 HRC Engineers 156 159 162 165 168 IGP Engineers Private Limited Indcoil Transformers Private Limited Indian Cancer Society Industrial Insulators International Chemical Industries

150

Notes forming part of Accounts (contd.)

169 172 175 178 181 184 187 190 193 196 199 202 205 208 211 214 217 220 223 226 229 232 235 238 241 244 247 250 253 Ion Electricals Private Limited J C Engineering Works J K Forgings Janaki Enterprises Jayaram Engineering Works Jethwa Tailors Jude Engineering Works K C Metal Industries Kala Gear Engineering Private Limited Kalpana Gears Private Limited Kantilal Chhotalal & Company Keepsake Engg. Consultancy Private Limited Khullar Technical Services Kooverji Devshi & Company Private Limited Kromo Prints Lakshmi Enterprises Line Pro M M Enterprises Macrotherm Industries Madura Steel Industries Private Limited Mahamumbai Chhatri Utpadak Sahakari Mahavir Industries Mahisa Electronics Mardia Non-Ferrous Foundry Master Engineers Mec Fab Engineering Works Metal Craft Engineering & Spring Metalix Equipment Micro Fits 170 173 176 179 182 185 188 191 194 197 200 203 206 209 212 215 218 221 224 227 230 233 236 239 242 245 248 251 254 Iresco Electricals Private Limited J K Enterprises Jagannathan Engineering Works Jay Industries Jayco Industries Jobin Engineering Works Jupiter Enterprises K Dhandapani & Company Limited Kalantri Chemical Industries Kalyani Mould Base Private Limited Kaveri Engineering Khandekar Engineering Works Kitana Industries Kramp Products Kubo Chemicals Private Limited Lakshmi Industries Lonestar Industries M R International Madhubabu Industries Private Limited Magdalene Industries Mahant Tool Room Mahavir Lock Mart Maini Materials Movement Private Limited Mardia Tubes Limited Maya Plastics Megawin Switchgear Metal Craft Industries Metallurgical Services Micro Screw Manufacturing Company Private Limited 257 Mini Industries 260 Modern Engineering 263 Monochem Industries 266 Nana Udyog 269 National Industries 272 Nazareth Metals 275 278 281 284 287 290 293 296 299 302 305 308 311 314 317 320 323 326 329 332 New Stanpack Industries Nilesh Enterprise Okay Industries Omkar Puf Insulation Private Limited Orissa Engineers Private Limited Packshield Industries Paramount Seals and Packings Patlon Industries Pipe Fit Engineers Private Limited Pluto Plastic Private Limited Polytech India Powerflex Industries Prakash Industries Pratik Corporation Precihole Machine Tools Private Limited Precision Metal Work Precision Tools & Fasteners Premier CNC Press Shop Private Limited Press Metal Industries Progress Industries 171 174 177 180 183 186 189 192 195 198 201 204 207 210 213 216 219 222 225 228 231 234 237 240 243 246 249 252 255 ITW Signode India Limited J Mangsun & Company Jai Bhawani Mata Industries Jayalakshmi Engineering Works Jaywant Engineering Works Joy Engineering Company Jyoti Plastic Works Private Limited K D Chemicals Kalinga Industrial Fasteners Kamal Saw Mill Kay Bee Engineering Enterprises Kheraj Electrical Industries Private Limited Kiyosh Electronics Kritisheela Engineering Kun-Chem Pretreatments Private Limited Libraflex Lucky Forms Private Limited Macro Engineering Madras Hardtools Private Limited Magna Cranes Private Limited Maharashtra Automatic Works Mahesh Industries Malnad Alloy Castings Private Limited Master Base and Moulds Private Limited Mazda Industries Meghna Fabrics Metal Products Metro Eyelet Industries Micron Cut (Mumbai) Private Limited

256 Mihir Industries 259 Mister-Mesh Wire Products 262 Monalisa Electronic Design Centre Private Limited 265 Nagindas Kalidas Chapadia 268 Narayan Powertech Private Limited 271 Navbharat Engineers 274 277 280 283 286 289 292 295 298 301 304 307 310 313 316 319 322 325 328 331 334 New India Cable Corporation Nfotec (Division of Sika Interplant) NR Hytech Engineers Private Limited Omega Engineering Works Oriental Engineering Specialities Packing Consultants & Services Pankaj Engineering Company Pasuma Industries Perfect & Precision Plastics Plastic Products Engineering Company Polyrub Extrusions (India) Popular Switchgears Private Limited Prageet Engineers Prathamesh Industries Pravin Rubber Company Precision Machine & Auto Components Private Limited Precision Spring Works Premier Brass Industries President Engineering Works Process Technique Electronics Private Limited Prospect Electrical & Engg Company

258 Mipak Polymers Limited 261 Modern Industries 264 N D Industries 267 Narandas Engineering Works Private Limited 270 National Refinery Private Limited 273 New Delta Gear Manufacturers Private Limited 276 New Tech Industries 279 Nordson India Private Limited 282 Om Powder Coaters & Painters 285 Orbital Systems (Bombay) Private Limited 288 P M Electro-Auto Private Limited 291 Panchal Electro Controls Private Limited 294 Parool Industries 297 Peacefort Chem Ind. Engg. Private Limited. 300 PLA TEC Industries 303 Polymetallurgical Corporation 306 Pony Motors 309 Pragati Industries 312 Prashant Engineering Works 315 Pratimesh Industries 318 Precision Engineers 321 Precision Press Tools Private Limited 324 327 330 333 Premauni Tools Premier Industries Pressform Industries Proins Technologies Private Limited

335 Protochem Industries

336 Protosys Technologies Private Limited

151

Notes forming part of Accounts (contd.)

337 Quality Product Finishers 340 R K Industries 343 Ramakant Metal Industries 346 349 352 355 358 361 364 367 370 373 376 379 382 385 388 391 394 397 400 403 406 409 412 415 418 421 424 427 430 433 436 439 442 445 448 451 454 457 460 463 466 469 472 475 478 481 484 487 490 493 496 499 Reliable Engineering Industries Rohini Engineering Works Runa Enterprise SKM Industries Sai Industries Sainath Fabrication Samarth Engineering Industries Saras Industries Satish Industries SCR Elektroniks Selwin Industries Setwel Industries Sharada Industrial and Engg. Works Shekam Fasteners Shinograph Shivalik Engineering Shree Ganesh Engineering Works Shree Manjunath Industrial & Commercial Corporation Shreyas Enterprises Private Limited Sicco Engineering Works Sivram & Company Smart Engineering Works Southern Gasket Products Sparklet Engineers Sri Ganeshraman Industries Sri Viji Steel Engineering Star Testing Systems Sterling Motors Super Automats Super Sales Agencies Suraj Pressings Private Limited Suryadipta Projects Private Limited Swasthik Machine Works System Support Services Teekay Tubes Private Limited Telser Electronics Private Limited The Bharat Tanks Thermoflex Cable Industries Todi & Company Trionex Truegraph Charts Private Limited Ujwal Plastic Industries Private Limited United Industrial Corporation Universal Industries Vaishnav Fastners Vardhman Sales Corporation Vee Yes Engineering Works Vidhi Vidhan Viksan Spring Vitech Fabricators Private Limited Vivid Electromech Private Limited Wiperdrive Engineering 338 R J Industrial Corporation 341 Raju Converters Private Limited 344 Ramesh Silicate & Chemical Industries 347 350 353 356 359 362 365 368 371 374 377 380 383 386 389 392 395 398 401 404 407 410 413 416 419 422 425 428 431 434 437 440 443 446 449 452 455 458 461 464 467 470 473 476 479 482 485 488 491 494 497 500 Reliable Rainwear Rotomag Motors & Controls Private Limited Rush Art Printers S S Wandler Private Limited Sai Rubber Industries Sajin Industries San Industries Saras Plastics Sawarmal Engineering Seco Industries Senzo Engineering & Plastic Company Shakti Wire Products Sheetal Metal Products Shepherd Transformer Industries Shiv Shakti Industries Shraddha Engineering Works Shree Ganesh Rivets & Fasteners Shree Rasayani Shri Jayaveeraa Enterprises Siddhalaxmi Industries Size Control Gauges and Tools Soham Industries Southern Pressings Spiraseal Gaskets Private Limited Sri Saravanaa Fabs Standard Spring & Metal Pressing Works Starflex Sealing India Private Limited Subhash Enterprises Super Label Manufacturing Company Superlite Industries Suresh Art Printers Suyog Engineers Private Limited Swastik Enterprises Tachometric Controls Teknic Controls Tender Care International The Megha Engg. Enterprises Industries Theta Controls Transmeasurements Company Tristar Industrial Tools Private Limited Tulip Corporation Unique Industrial Handlers Private Limited Unity Printing Press V H Engineers Vako Seals Private Limited Vasantha Tool Crafts Private Limited Veejay Engineering Vijay Engineering Vileco Electrical Industries Vitronics VR Associates Wood Kraft 339 R C Industries 342 Rama Engineering 345 Reliable Electronic Components Private Limited 348 Rocks Fabricators 351 Rukmani Engineering 354 S and S Enterprises 357 Sachet Homewell 360 Sainath Enterprises 363 Sakthi Electroplaters 366 Sang Fasteners Private Limited 369 Sargam Metals Private Limited 372 Scaanray Metallurgical Services 375 Selectron Process Controls Private Limited 378 Seth Engineering Works 381 Sharad Metacom Private Limited 384 Sheetart 387 Sheth Impression 390 Shivalik Bimetal Controls Limited 393 Shree Electricals 396 Shree Industry 399 Shree Stampings 402 405 408 411 414 417 420 423 426 429 432 435 438 441 444 447 450 453 456 459 462 465 468 471 474 477 480 483 486 489 492 495 498 501 504 Shri Santoshi Pipe Fitting Centre Sigma Engineers Skill Tech Engineers Sound Auto & Engineering Company Span Chem Technologies Sri Balamurugan Engineering Enterprises Sri Akhandalmani Saw Mill Star Drive Busducts Private Limited Stellar Paints Sudha Ventilating Systems Private Limited Super Platers Supra Heater Industries Surya Springs Private Limited Swaamy Industries Swift Electroniks Tee Vee Tools & Engineering Teknovation Engineers Private Limited Tespa Tools Private Limited Thermcon Engineers Thriarr Polymers Private Limited Trimurti Enterprises Tri-Vision Engineering Ujwal Electrical Stampings Private Limited United Electric Co. (Delhi) Private Limited Universal Engineering Works Vaiman Industries Vanjax Sales Private Limited Vedvyas Engineering Works Velmurugan Heavy Engg. Industries Private Limited Vikas Engineering Enterprises Vimal Textiles Waste Company Vivek Printers Welset Moulders Xylus Flow Tech Engineering Private Limited Zebra Weblift Private Limited

502 Yuflow Engineering Private Limited 503 Zaveri Bros. Silver Platers Private Limited 505 Zoom-D Consultancy Services Private Limited

152

Notes forming part of Accounts (contd.)

37. The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, (MSMED Act) as at 31-3-2007. The disclosure pursuant to the said Act is as under: Particulars Principal amount due to suppliers under MSMED Act, 2006 Interest accrued and due to suppliers under MSMED Act, on the above amount Payment made to suppliers (other than interest) beyond the appointed day, during the year Interest paid to suppliers under MSMED Act, (other than Section 16) Interest paid to suppliers under MSMED Act, (Section 16) Interest due and payable to suppliers under MSMED Act, for payments already made (Rs.13148) Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act.

Rs.crore
0.93 0.01 1.02 0.02 0.01

Note: The information has been given in respect of such vendors to the extent they could be identified as Micro and Small enterprises on the basis of information available with the Company. 38. The Company has given, inter alia, the following undertakings in respect of its investments: a) To the debenture holders of India Infrastructure Developers Limited (IIDL), a wholly owned subsidiary, in connection with financing the lease of a captive power plant to a third party: i. ii. b) not to reduce its shareholding in IIDL below 100% and/or relinquish management control and/or majority representation on the Board of Directors, without the specific approval of the Trustees, and to compensate the subsidiary for any shortfall in receivables on account of variations in rates of interest, depreciation, corporate taxes, other statutory levies etc., during the currency of the lease.

Jointly with L&T Infrastructure Development Projects Limited (a subsidiary of the Company), to the term lenders of its subsidiary companies L&T Transportation Infrastructure Limited (LTTIL) and Narmada Infrastructure Construction Enterprise Limited (NICE): i. ii. not to reduce their joint shareholding in LTTIL & NICE below 51% until the financial assistance received from the term lenders is repaid in full by LTTIL & NICE, and to jointly meet the shortfall in the Working Capital requirements of LTTIL & NICE until the financial assistance received from the term lenders is repaid in full by LTTIL & NICE.

c) d) e) 39. a) b) 40.

To one of the term lenders of NICE to meet the shortfall, if any, in repayment of the FCNR-B loans availed by NICE on account of fluctuation in exchange rates. In terms of Companys Concession Agreement with Government of India and Government of Gujarat, not to change the control over L&T Western India Tollbridge Limited (a subsidiary of L&T Infrastructure Development Projects Limited) during the period of the Agreement. To the debenture holders of L&T Infrastructure Development Projects Limited (a subsidiary of the Company) and to the lenders of its subsidiaries L&T Panipat Elevated Corridor Private Limited & L&T Krishnagiri Thopur Toll Road Limited, not to dilute Companys shareholding below 51%. The Companys investment in HPL Cogeneration Limited (a subsidiary of the Company) has been pledged as security in favour of the consortium of lenders in respect of the term loans provided to HPL Cogeneration Limited. The Companys investment in 12,00,000 shares of Rs.10 each of City Union Bank Limited has a lock-in period of 1 year starting from the date of allotment i.e. March 29, 2007.

During the year, the Company transferred the equity investments held by it in the following Companies, to its wholly owned subsidiaries: Details of Investment Sr. No. 1 2 Name of the Company Larsen & Toubro (Wuxi) Electric Company Limited L&T-Crossroads Private Limited No. of Equity shares NA 90,00,000 Face Value NA Rs 10 each Amount invested (Rs.crore) 21.80 9.00 Sold to Larsen & Toubro International FZE L&T Infrastructure Development Projects Limited

The transfers have been effected at book value. 41. The Scheme of Amalgamation (the Scheme) of L&T Power Investments Private Limited (a wholly owned subsidiary of the Company) [Transferor Company] with India Infrastructure Developers Limited (a wholly owned subsidiary of the Company) [Transferee Company], has been sanctioned by the High Court of Judicature at Bombay on May 26, 2006. In terms of the Scheme, the assets and liabilities of the Transferor Company have been transferred at book value to the Transferee Company with effect from April 1, 2005. Consequent upon the Scheme becoming effective on June 5, 2006, the shares held by the Company in the Transferor Ccompany have been extinguished and in lieu thereof, the Transferee Company has allotted to the Company 2,10,60,000 fully paid up equity shares of Rs.10 each in the proportion of one share for each equity share of Rs.10 held in the Transferor Company. a) Datar Switchgear Limited (hereinafter referred to as the Transferor Company), engaged in electrical business, was acquired by way of amalgamation, with effect from April 1, 2005 (the Transfer Date) under the Scheme of Rehabilitation sanctioned by the Board for Industrial and Financial Reconstruction (the BIFR Scheme). The amalgamation was given effect on October 3, 2006 (the Effective Date) consequent upon compliance with requirements under the BIFR Scheme.

42.

b)

153

Notes forming part of Accounts (contd.)

c) d) e) The result (net of tax) of operations of the Transferor Company during the financial year April 1, 2005 to March 31, 2006 has been adjusted against the opening balance of Profit and Loss account. The financial transactions arising out of operations of the Transferor Company during the current financial year have been incorporated in the books of the Company under respective heads of account. The amalgamation has been accounted for under the Purchase method as prescribed under the Accounting Standard (AS) 14 Accounting for Amalgamations issued by the Institute of Chartered Accountants of India as follows: i. ii. iii. iv. The assets (except deferred tax assets) and liabilities of the Transferor Company, have been incorporated in the financial statements of the Company as on the Effective Date at their respective carrying value. The deferred tax assets have been recognised as on March 31, 2007 to the extent there is a virtual certainty of realisation. Two fully paid equity shares of face value of Rs.2 each have been issued as consideration for the amalgamation. As at March 31, 2007, the capital reserve arising out of the amalgamation stood as follows: Particulars (A) Net assets acquired on amalgamation: 1 2 Fixed Assets (net) Current Assets 0.10 29.94 (29.84) 3 4 Deferred tax liabilities Deferred tax assets recognised [as per point (ii) above] (1.22) 28.38 10.40 13.08

Rs.crore

Less : Current liabilities

Net assets acquired (B) Excess of value of net assets acquired on amalgamation over the amount of consideration [as per point (iii) above], transferred to Capital Reserve

10.40

43. 44. 45.

There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2007. According to the Company, Construction is a service activity and therefore, the same is covered under para 3(ii)(c) of Part II of Schedule VI to the Companies Act, 1956. Details of sales, raw materials and components consumed, capacities & production, inventories and purchase of trading goods: a) SALES: 2006-2007 Class of Goods Unit Quantity Value Rs.crore Earthmoving and agricultural machinery and spares Welding alloys & accessories Industrial Machinery Nuclear purpose equipment, deaerators, ultra high pressure vessels including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate Plant & equipment and modules for nuclear power projects, heavy water projects, nuclear and space research and allied projects including items for Chemical, Oil & Gas, etc. industries Powder metallurgy and industrial products Industrial electronic control panels Valves and accessories Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery and solvent extraction plants, evaporator and crystallizer plants and pollution control equipment in aggregate Tonnes 11,841 207.45 166.89 250.72

2005-2006 Quantity Value Rs.crore 170.82 137.18 10,730 185.76

Tonnes

22

59.43

110

55.00

Tonnes

21,457

2663.95 95.55 113.07 647.29

10,877

2703.21 73.02 70.26 539.54

Tonnes

5,705

790.99

5,052

1147.06

154

Notes forming part of Accounts (contd.)

2006-2007 Class of Goods Switchgear, all types Electro surgical unit and accessories Petrol dispensing and metering pumps Ship auxiliaries and components of mechanised sailing vessels Complete cement making machinery, including rotary kilns and fluxo packers in aggregate Transmission line tower Steel structural fabrication Nos Tonnes Nos Tonnes Tonnes Nos Rubber processing machinery and accessories Ultrasound equipment and accessories Patient monitoring system and accessories Electricity meters Ready mix concrete Others Total Cu.m. 25,61,553 Nos 7,987 95 Parts for 2 Plants 27,119 16,320 10,45,472 314 Unit Quantity Value Rs.crore 872.66 5.39 64.44 98.08 93.52 50.30 130.40 36.40 236.46 24.70 58.50 183.80 754.90 980.46 8585.35@

2005-2006 Quantity Value Rs.crore 638.00 5.40 6,902 Parts for 2 Plants 35,708 24,703 12,09,841 216 91.10 176.74 57.60 171.80 31.20 183.70 25.90 45.40 121.30 16,43,698 346.30 1132.76
8109.05@

@ includes Rs.3786.43 crore of construction & project related activity (Previous Year: Rs.3830.10 crore) b) RAW MATERIALS AND COMPONENTS CONSUMED: 2006-2007 Class of Goods Unit Quantity Value Rs.crore (i) Items Steel Tonnes Metres Sq. mtrs Non-ferrous metals Nos / Pcs Tonnes Metres Sq. mtrs Bakelite Cement machinery components Nuclear equipment components, including items for Oil & Gas industries, etc. in aggregate Chemical Plant components Switchgear components Electronic devices, test & measuring instruments and industrial electronic control panel components Metering & Protection system and Medical Equipment components Industrial Machinery Components Power plant & machinery components Others TOTAL Tonnes 1,24,490 8,80,438 2,49,849 8,75,616 3,768 8,72,607 1,247 256 304.17 95.76 254.01 187.83 118.09 0.91 8.84 2.73 83.56 1034.69 268.86 509.43 77.03 177.78 35.21 35.93 422.36 3617.19

2005-2006 Quantity Value Rs.crore

57,012 7,26,512 4,06,957 4,41,944 1,915 7,98,247 831 240

116.14 48.93 115.75 120.03 42.73 0.61 0.39 2.53 379.61 818.30 493.18 365.35 61.00 118.00 25.70 26.48 190.64 2925.37

155

Notes forming part of Accounts (contd.)

(ii) Raw materials and components consumed : 2006-2007 Particulars % to total consumption Amount Rs.crore Imported (including through canalising agencies) Indigenous TOTAL c) CAPACITIES & PRODUCTION: Licensed Capacity 250 (250) 150 (150) 35,584 (35,584) Installed Capacity 250 (250) 150 (150) 35,584 (35,584) Actual Production (-) (-) (-) 49 51 100 1782.58 1834.61 3617.19

2005-2006 % to total consumption Amount Rs.crore 43 57 100 1244.92 1680.45 2925.37

Class of Goods Scrapper, bulldozer, ripper and loader attachments Road rollers, hot mix plants and other road construction and bridge construction machinery Dairy machinery and equipment various items in aggregate Chemical plant and machinery, including pharmaceutical, dyestuff, distillery, brewery and solvent extraction plants, evaporator and crystalliser plants and pollution control equipment in aggregate Equipment for food processing industry Complete cement making machinery, including rotary kilns and fluxo packers in aggregate

Unit Nos

Nos Nos

Tonnes Tonnes

6,067 (6,067) 65 (65) 2

6,567 (6,567) 65 (65) 2

5,705 (5,052) (-) Parts for 2 plants

Nos

(2)
Sugarcane and beet diffusion, beet preparation and beet pulp dehydration plants Nuclear purpose equipment, deaerators, ultra high pressure vessels, including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate Plant and equipment and modules for nuclear power projects, heavy water projects, nuclear and space research and allied projects, including items for chemical, oil and gas, etc. industries Complete high speed bottling plants Pulp and paper making plants Suspended particles drying plants Containers for liquefied gases and chemicals

(2)

(Parts for 2 plants)

(-)

Nos

2 (2)

2 (2)

Tonnes

5,000 (5,000)

3,950 (3,950)

22 (110)

Tonnes Nos Tonnes Nos Nos

10,000 (10,000) 6 (6) 2,000 (2,000) 6 (6) Not applicable*

10,000 (10,000) 6 (6) 800 (800) 6 (6) 1,000 tonnes carrying capacity

21,457# (10,877) (-) (-) (-) -

(Not applicable)*
Steel plant valves Ship auxiliaries and components of mechanised sailing vessels Rubber processing machinery Nos Tonnes Nos 40 (40) 1,000 (1,000) 109 (109)

(1,000 tonnes carrying capacity)

40 (40) 1,000 (1,000) 109 (109)

(-)
(-) 95 (-) 316 (211)

156

Notes forming part of Accounts (contd.)

Class of Goods Switchgear, all types Miscellaneous electrical items Petrol dispensing and metering pumps Press tools, jigs, fixtures, dies for pressure castings, moulds for plastic injection and bakelite Glass bottles and jars Industrial machinery Industrial electronic control panels Electronic devices Electro surgical unit and accessories Ultrasound equipment and accessories Patient monitoring system and accessories Relays Control & relay panels Electricity meters Transmission line tower Steel structural fabrication Steel re-rolling Ready mix concrete Figures in brackets pertain to previous year. *Licensing not applicable. Installed capacity is based on one of the following : 1. 2. 3. 4. ** @ $ # Entrepreneurs Memoranda filed with Govt. of India, Ministry of Industry, New Delhi; Registration with the Directorate General of Technical Development Approval obtained from the Govt. of India, Ministry of Industry, New Delhi; Agreement with Govt. of India, Ministry of Petroleum & Natural Gas. As per Entrepreneurs Memorandum no. 2327/SIA/IMO/94 dated July 19, 1994 filed with Government of India, Ministry of Industry, New Delhi. Excludes Rs.200 lakh in respect of Memorandum No.1322/SIA/IMO/92 dated March 27, 1992 of which capacity of Rs.75 lakh has been installed. Excludes 6,96,250 nos. in respect of Memoranda Nos. 924/SIA/IMO/91 and 922/SIA/IMO/91 dated September 11, 1991 of which capacity of 4,96,250 Nos. has been installed. Includes production from external sources. Unit Nos Nos Nos Licensed Capacity 26,78,500 (26,78,500)$ 10,49,100 (10,49,100) 4,800 (4,800) Rs. 220 lakhs (Rs.220 lakh)@ (Not applicable)** 12,000 (12,000) 2,500 (2,500) 30,000 (30,000) Not applicable* (Not applicable)* Not applicable* (Not applicable)* Not applicable* (Not applicable)* Not applicable* (Not applicable)* Not applicable* (Not applicable)* Not applicable* (Not applicable)* 51,000 (54,000) 12,000 (18,000) 40,000 (40,000) 41,66,600 (6,60,400) Installed Capacity 31,74,750 (31,74,750) 10,39,100 (10,39,100) 4,800 (4,800) Rs. 295 lakhs (Rs.295 lakh) (400) 12,000 (12,000) 2,500 (2,500) 30,000 (30,000) 1,250 (1,250) 1,000 (1,000) 7,000 (5,500) 60,000 (55,000) 100 (100) 7,00,000 (4,80,000) 51,000 (54,000) 12,000 (18,000) 40,000 (40,000) 41,66,600 (31,28,000) Actual Production 44,03,446 (36,66,597) (-) 7,898 (6,466) 226 nos (471 nos) (107.9) 11,953 (10,565) 559 (459) 6,930 (936) 492 (556) 658 (715) 6,872 (4,704) 58,341 (48,583) (-) 6,60,383 (4,12,741) 54,615 (65,333) 36,223 (32,277) 14,101 (25,584) 27,37,523 (20,17,662)

Rs.L /Nos Nos. in millions Tonnes Nos Nos Nos Nos Nos Nos Nos Nos Tonnes Metric Tonnes Tonnes Cu.m.

157

Notes forming part of Accounts (contd.)

d) INVENTORIES: Class of Goods Unit As at 31-3-2007 Quantity Value Rs.crore Electronic, medical and other instruments, accessories and spares Industrial machinery Switchgear, all types Complete cement making machinery, including rotary kilns and fluxo packers in aggregate Patient monitoring systems and accessories Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery and solvent extraction plants, evaporator and crystalliser plants and pollution control equipment in aggregate Tonnes Industrial electronic control panels Spares for earthmoving and agricultural machinery Nuclear purpose equipment, deaerators, ultra high pressure vessels including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate Ultrasound equipment and accessories Powder metallurgy and industrial products Petrol dispensing and metering pumps Valves and accessories Earthmoving and agricultural machinery and spares Welding alloys and accessories Electronic test & measuring instruments Plant and equipment and modules for nuclear power projects, heavy water projects, nuclear and space research and allied projects including items for Chemical, Oil & Gas, etc. industries Others Total Nos 173 Nos Parts for 2 Plants Tonnes 221 0.17 4.49 120.03 38.40 7.07

As at 31-3-2006 Quantity Value Rs.crore 0.18 109 1.92 90.83 Parts for 2 Plants 145.20 2.47

As at 31-3-2005 Quantity Value Rs.crore 0.51 274 4.10 87.85 Parts for 2 Plants 52.89 5.28

152

568.94 0.04 38.49

152

302.12 0.04 28.41

152

114.40 0.45 25.96

96.48 6.13 8.18 4.74 2.56 6.22 16.56 0.49

51.36 4.95 6.81 262 4.43 1.70 0.99 11.18 0.15 816

24.69 10.22 6.01 7.71 2.33 0.50 11.94 1.00

1386.27 530.82 2836.08@

555.87 379.92 @ 1588.53@

326.73 311.58 994.15

@ includes Rs.2589.15 crore shown as construction-related WIP (Previous Year: Rs.1398.11 crore) e) PURCHASE OF TRADING GOODS: Class of Goods Earthmoving and agricultural machinery and spares Welding alloys and accessories Valves and accessories Electronic, medical & other instruments, accessories and spares Powder metallurgy and industrial products Others Total Notes: (a) (b) (c) 46. The installed capacities are as certified by Managing/Whole-time Directors on which certificates the auditors have placed reliance. In terms of note 3 to para 3 of Part II of Schedule VI, items like spare parts and accessories are given without quantities in respect of sales, purchases and stocks. Quantitative figures for sales are after exclusion of inter-divisional transfers, capitalisation/captive consumption, samples, etc. 2006-2007 Rs.crore 161.53 113.40 559.28 23.85 64.90 258.04 1181.00

2005-2006 Rs.crore 125.75 105.90 470.54 192.91 48.28 202.42 1145.80

Figures for the previous year have been regrouped/reclassified wherever necessary.

158

Notes forming part of Accounts (contd.)

47 Balance Sheet Abstract and Companys General Business Profile I Registration Details Registration No. 1 1 - 0 4 7 6 8 State Code 1 1 Balance Sheet Date 3 1 0 3 2 0 0 7 II Capital Raised during the Year (Amount in Rs. thousands)@ Public Issue Rights Issue N I L N I Bonus Issue Private Placement# 2 8 0 0 3 9 2 3 2 # Conversion of Foreign Currency Convertible Bonds @ The Company also raised capital during the year by way of allotment of shares under Employee Stock Ownership Schemes amounting to Rs.9403 Thousand III Position of Mobilisation and Deployment of funds (Amount in Rs. thousands) Total Liabilities Total Assets 8 0 5 1 0 6 7 5 8 0 5 1 0 6 7 Sources of Funds Paid-Up Capital Reserves & Surplus * 5 6 6 5 4 1 5 7 1 1 7 7 9 *Including employee stock options Rs.514974 Thousand. Secured Loans Unsecured Loans 2 4 5 4 0 2 1 1 8 3 2 3 4 8 Deferred Tax Liabilities 2 0 4 8 8 3 4 Application of Funds Net Fixed Assets and net Intangible Assets Investments 2 2 2 4 6 9 5 4 3 1 0 4 4 4 6 Net Current Assets Deferred Tax Assets 2 5 4 7 3 9 2 2 1 6 4 6 9 3 Misc. Expenditure Accumulated Losses 9 8 4 0 0 N I IV Performance of Company (amount in Rs. thousands) Turnover (Including other income) Total Expenditure 1 8 0 4 1 1 2 4 2 1 6 0 3 6 2 3 8 + Profit/Loss Before Tax + 2 0 0 4 8 8 6 1 Please tick Appropriate box + for Profit, - for Loss Basic Earnings Per Share in Rs. 5 0 . 2 2 Generic Names of Three Principal Products/Services of the Company (as per monetary terms) Item Code No. N . A . (ITC Code) Product Description Construction and project related activity Item Code No. (ITC Code) Product Description 8 4 7 9 8 9 . 0 2 + + Profit/Loss After Tax 1 4 0 3 0 2 5 Dividend Rate % 6 5

L 8

5 3

4 5 L

1 8

Plant and equipment and modules for nuclear power projects, heavy water projects, nuclear and space reaserch and allied projects including items for Chemical, Oil and Gas, etc. industries 8 5 3 6 . 0 0

Item Code No. (ITC Code) Product Description

Switchgear, all types Signatures to Schedules A to Q and Notes

As per our report attached SHARP & TANNAN Chartered Accountants by the hand of F.M. KOBLA Partner Membership No.15882 Mumbai, May 29, 2007

A.M. NAIK Chairman & Managing Director J.P. NAYAK Y.M. DEOSTHALEE K. VENKATARAMANAN R.N. MUKHIJA N. HARIHARAN Company Secretary K.V. RANGASWAMI V.K. MAGAPU S.N. TALWAR M.M. CHITALE SURINDER NATH U. SUNDARARAJAN THOMAS MATHEW T.

Directors

Mumbai, May 29, 2007

159

Statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies:
Name of the subsidiary company L&T Finance Limited 31-3-2007 Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i) Larsen & Toubro Infotech Limited 31-3-2007 HPL Cogeneration Limited 31-3-2007 Larsen & Toubro (Oman) LLC 31-12-2006 India Infrastructure Developers Limited 31-3-2007 L&T Infocity Limited 31-3-2007 Larsen & Toubro International FZE 31-12-2006

12,41,91,500 Nil

3,00,00,000 Nil

3,12,12,000 3,12,12,000

Nil Nil

5,60,60,000 Nil

Nil Nil

266 Nil

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs crore

Nil 30.55

15.01 113.25

25.72 123.05

Nil 2.30

Nil Nil

Nil 5.28

Nil Nil

62.61 78.41

134.02 176.34

16.85 41.85

16.50 18.49

(12.20) 16.92

22.24 41.82

132.91 53.36

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

40 Nil Nil Nil Nil

Name of the subsidiary company

Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i)

Narmada Infrastructure Construction Enterprise Limited 31-3-2007

L&T Transportation Infrastructure Limited 31-3-2007

L&T-Sargent & Lundy Limited 31-3-2007

L&T-ECC Construction (M) SDN.BHD. 31-12-2006

L&T Western India Tollbridge Limited 31-3-2007

L&T Infrastructure Development Projects Limited 31-3-2007

Cyber Park Development and Construction Limited 31-3-2007

1,26,48,507 Nil

1,08,64,000 Nil

27,52,129 Nil

Nil Nil

1,39,50,007 Nil

19,30,31,352 Nil

Nil Nil

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Nil Nil

0.98 Nil

Nil 0.03

Nil 1.08

Nil 1.95

Nil Nil

Nil Nil

8.59 (7.30)

5.49 (1.43)

0.62 (1.99)

(0.02) (0.26)

1.93 3.13

128.40 (13.13)

3.47 (1.93)

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

160

Statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies (contd.)
Name of the subsidiary company L&T Capital Company Limited 31-3-2007 Larsen & Toubro Infotech GmbH 31-3-2007 Hyderabad International Trade Expositions Limited 31-3-2007 Tractor Engineers Limited Larsen & Toubro LLC Larsen & Toubro Qatar LLC 31-12-2006 Larsen & Toubro (Wuxi) Electric Company Limited 31-12-2006

Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i)

31-3-2007

31-12-2006

50,00,000 Nil

Nil Nil

Nil Nil

68,000 Nil

50,000 Nil

Nil Nil

Nil Nil

Rs crore

Rs.crore

Rs.crore

Rs.crore

Rs crore

Rs crore

Rs.crore

Nil 0.55

Nil Nil

Nil Nil

Nil 2.38

Nil Nil

Nil Nil

Nil Nil

2.51 2.59

0.39 3.16

0.22 (1.88)

13.26 11.49

0.24 (0.16)

(5.24) (1.09)

(1.12) Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil 8.83 Nil 0.10 Nil

Name of the subsidiary company

Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i)

International Seaports (India) Private Limited 31-3-2007

International Seaports Pte. Limited 31-12-2006

L&T Panipat Elevated Corridor Limited 31-3-2007

L&T Tech Park Limited 31-3-2007

L&T Krishnagiri Thopur Toll Road Limited 31-3-2007

L&T Western Andhra Tollways Limited 31-3-2007

L&T Vadodara Bharuch Tollway Limited 31-3-2007

Nil Nil

18,15,000 Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs crore

Rs.crore

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

(0.28) (0.59)

(2.66) 0.11

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

161

Statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies (contd.)
Name of the subsidiary company L&T Interstate Road Corridor Limited 31-3-2007 Spectrum Infotech Private Limited 31-3-2007 L&T Urban Infrastructure Limited 31-3-2007 Larsen & Toubro Information Technology Canada Limted 31-3-2007 L&T Infocity Infrastructure Limited 31-3-2007 L&T Infocity Lanka Private Limited 31-3-2007 L&T Overseas Projects Nigeria Limited 31-12-2006

Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i)

Nil Nil

4,40,000 Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

(0.70) Nil

0.18 Nil

0.37 (0.34)

0.39 0.06

0.40 0.52

Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Name of the subsidiary company

L&T Infrastructure Finance Company Limited 31-3-2007

L&T Power Projects Limited

International Seaport Dredging Limited

L&T Modular Fabrication Yard LLC

Larsen & Toubro Saudi Arabia LLC 31-12-2006

Larsen & Toubro Readymix Concrete Industries LLC 31-12-2006

Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i)

31-3-2007

31-3-2007

31-12-2006

L&T Infrastructure Development Projects (Lanka) Private Limited 31-3-2007

24,30,00,000 Nil

50,000 Nil

8,600 11,267

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

(2.77) Nil

Nil Nil

2.86 Nil

(1.25) Nil

(5.75) Nil

Nil Nil

Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

162

Statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies (contd.)
Name of the subsidiary company L&T Electricals Saudi Arabia LLC 31-3-2007 Larsen & Toubro Kuwait Construction General Contracting Co. WLL 31-12-2006 Larsen & Toubro (Qingdao) Rubber Machinery Company Limited 31-12-2006 Larsen & Toubro (Jiangsu) Valve Company Limited 31-12-2006 L&T Boilers Private Limited L&T Uttaranchal Hydropower Limited L&T Bangalore Airport Hotel Limited 31-3-2007

Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i)

31-3-2007

31-3-2007

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

(0.06) Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Name of the subsidiary company

Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to : (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i)

L&T Turbo Generator Private Limited 31-3-2007

L&T Vision Ventures Limited 31-3-2007

L&T Phoenix Infoparks Private Limited 31-3-2007

Larsen & Toubro Electromech LLC 31-12-2006

GDA Technologies Inc. 31-3-2007

GDA Systems Private Limited 31-3-2007

GDA Technologies Limited 31-3-2007

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Rs.crore

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

Nil Nil

4.83 Nil

(0.03) Nil

Nil Nil

0.50 Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

Nil Nil Nil Nil Nil

163

Statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies (contd.)
Name of the subsidiary company Financial year of the subsidiary company ended on Number of Shares in the subsidiary company held by Larsen & Toubro Limited at the above date - Equity shares - Preference shares The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Limited: Dealt with in the accounts of Larsen & Toubro Limited amounted to : (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited (ii) Not dealt with in the accounts of Larsen & Toubro Limited amounted to: (a) for the subsidiarys financial year ended March 31, 2007 and December 31, 2006 (b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Limited Changes in the interest of Larsen & Toubro Limited between the end of the subsidiarys financial year and March 31, 2007 Number of shares acquired Material changes between the end of the subsidiarys financial year and March 31, 2007 (i) Fixed assets (net additions) (ii) Investments (iii) Moneys lent by the subsidiary (iv) Moneys borrowed by the subsidiary company other than for meeting current liabilities (i) CSJ Infrastructure Private Limited 31-3-2007 Bhilai Power Supply Company Limited 31-3-2007 Andhra Pradesh Expositions Private Limited 31-3-2007 Raykal Aluminium Company Private Limited 31-3-2007 L&T South City Projects Limited 31-3-2007

Nil Nil

49,950 Nil

Nil Nil

Nil Nil

Nil Nil

Rs crore

Rs crore

Rs.crore

Rs crore

Rs.crore

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil Nil Nil Nil

Nil Nil Nil Nil

Nil Nil Nil Nil

Nil Nil Nil Nil

Nil Nil Nil Nil

Note: L&T Panipat Elevated Corridor Private Limited, L&T Tech Park Limited, L&T Krishnagiri Thopur Toll Road Limited, L&T Western Andhra Tollways Limited, L&T Vadodara Bharuch Tollway Limited, L&T Interstate Road Corridor Limited, L&T Overseas Projects Nigeria Limited, L&T Power Projects Limited, Larsen & Toubro Readymix Concrete Industries LLC, L&T Infrastructure Development Projects Lanka (Private) Limited, L&T Electricals Saudi Arabia LLC, Larsen & Toubro Kuwait Construction General Contracting Co. WLL, Larsen & Toubro (Jiangsu) Valve Company Limited, L&T Boilers Private Limited, L&T Uttaranchal Hydropower Limited, L&T Bangalore Airport Hotel Limited, L&T Turbo Generator Private Limited, L&T Vision Ventures Limited, L&T Phoenix Info Parks Private Limited, CSJ Infrastructure Private Limited, Bhilai Power Supply Company Limited, Andhra Pradesh Expositions Private Limited, Raykal Aluminium Company Private Limited and L&T South City Projects Limited are yet to commence business.

A.M. NAIK Chairman & Managing Director J.P. NAYAK Y.M. DEOSTHALEE K. VENKATARAMANAN R.N. MUKHIJA K.V. RANGASWAMI V.K. MAGAPU S.N. TALWAR M.M. CHITALE SURINDER NATH U. SUNDARARAJAN THOMAS MATHEW T.

N. HARIHARAN Company Secretary

Mumbai, May 29, 2007

Directors

Mumbai, May 29, 2007

164

INDEPENDENT FINANCIALS-10 YEAR HIGHLIGHTS

Rs. crore
Description
2006-2007 2005-2006 2004-2005 2003-2004 2002-2003 2001-2002 2000-2001 1999-2000 1998-1999 1997-1998

Profit and Loss Account

Gross Sales & Service Other Income Gross Revenues Net Sales & Service PBDIT Profit before Tax and extraordinary items Extraordinary Items Profit after Tax Dividend including dividend distribution tax 17901 462 18363 17579 2209 2005 1403 428 14966 464 15430 14735 1503 1314 70 1012 349 13255 698 13953 13050 1434 1286 984 407 9807 398 10205 9561 890 769 533 225 9870 254 10124 9360 999 510 433 211 8167 218 8385 7726 1042 401 347 174 7825 207 8032 7390 1013 339 315 178 7424 175 7599 6956 994 369 13 342 180 7292 110 7402 6883 870 441 81 471 180 5677 91 5768 5305 766 482 108 531 178

Balance Sheet
Share Capital Reserves Net Worth Deferred Tax Liability (Net) Loan Funds Capital Employed Net Fixed and Intangible Assets Investments Net Working Capital (NWC) 57 5712 5769 84 2078 7931 2225 3104 2547 27 4613 4640 77 1454 6171 1605 1920 2625 26 3343 3369 95 1859 5323 1083 961 3238 25 2750 2775 114 1324 4213 1015 966 2185 249 3314 3563 841 3176 7580 4056 1160 2300 249 3095 3344 853 3463 7660 4264 885 2484 249 3751 4000 4263 8263 4671 813 2735 248 3616 3864 3974 7838 4589 774 2439 248 3458 3706 3359 7065 4555 489 2004 248 3174 3422 2819 6241 4297 348 1580

Ratios and Statistics

PBDIT as % of Total Income PAT before extra-ordinary items as % of Total Income ROCE % * RONW % ** Gross Debt:Equity Ratio NWC as % of Gross Sales & Service Current Ratio Basic Earnings per Equity Share (Rs.)@ Book Value per Equity Share (Rs.) No. of Equity Shareholders No.of Employees 12.24 7.78 20.41 27.19 0.36:1 14.23 1.27 50.22 202.28## 4,28,504 27,191 9.89 6.20 17.45 23.90 0.32:1 17.54 1.38 38.03# 334.01 10.43 7.16 21.69 32.83 0.56:1 24.43 1.58 38.81 253.91 8.95 5.35 13.52 20.66 0.49:1 22.28 1.47 21.41 216.74 10.39 4.50 7.27 12.91 0.92:1 23.30 1.58 17.42 139.15 13.12 4.37 6.84 9.69 1.07:1 30.42 1.81 13.95 130.25 13.33 4.15 6.74 8.18 1.09:1 34.95 2.11 12.67 157.31 13.94 4.61 7.38 8.85 1.05:1 32.85 2.07 13.74# 152.13 6,05,031 24,448 12.44 5.58 7.51 11.13 0.92:1 27.48 1.84 18.94# 146.48 7,56,852 25,596 14.20 7.84 8.30 13.22 0.84:1 27.83 1.74 21.39# 134.99 7,98,947 25,362

3,27,778 3,23,908 3,65,824 4,90,628 5,09,922 5,13,562 23,148 19,848 18,996 21,873 22,922 23,988

Figures for the years 1996-1997 to 2002-2003 include demerged Cement business PBDIT [Profit before extra-ordinary items, Depreciation, Interest & Tax] Total Income = (Net Sales+Other Income) *ROCE [(PAT before extraordinary items+Interest-Tax on interest)/Average Capital Employed] ** RONW (PAT before extraordinary items/Average Net Worth) #Including extraordinary items @EPS for all years restated on the basis of restructured capital/increase in capital on account of issue of bonus shares in the ratio of 1:1 ## After considering issue of bonus shares in the ratio of 1:1

38

CONSOLIDATED FINANCIALS - HIGHLIGHTS

Rs. crore
Description 2006-2007 2005-2006 2004-2005 2003-2004 2002-2003 2001-2002

Profit and Loss Account

Gross Sales & Service Other Income Gross Revenues Net Sales & Service PBDIT Profit before tax and extraordinary Items Extraordinary Items Profit attributable to Group Shareholders Dividend including dividend distribution tax 20700 994 21694 20348 3404 3005 2240 428 16747 519 17266 16500 2042 1668 70 1317 349 14599 659 15258 14379 1720 1405 1050 407 11107 431 11538 10849 1215 921 147 747 225 10857 226 11083 10327 1200 469 380 211 9195 185 9380 8714 1287 414 290 174

Balance Sheet
Share Capital Reserves Net Worth Minority Interest Loan Funds Deferred Tax Liability (Net) Capital Employed Net Fixed & Intangible Assets Investments Net Working Capital (NWC) 57 6865 6922 646 6432 107 14107 5454 2479 6157 27 4937 4964 107 3499 127 8697 2973 1676 4023 26 3290 3316 105 3454 137 7012 2215 615 4141 25 2622 2647 54 2769 214 5684 2140 624 2872 249 2968 3217 50 4701 913 8881 5539 528 2715 249 2889 3138 44 4978 928 9088 5824 358 2831

Ratios and Statistics

PBDIT as % of Total Income PAT before extra-ordinary items as % of Total Income ROCE % * RONW % ** Gross Debt:Equity Ratio NWC as % to Gross sales Current Ratio Basic Earnings per Equity Share (Rs.)@ Book Value per Equity Share (Rs.) 15.95 10.50 19.96 37.69 0.94:1 29.74 1.58 80.19 242.77 ## 12.00 7.33 16.98 30.13 0.71:1 24.02 1.53 49.49 # 357.43 11.44 6.98 17.56 35.20 1.06:1 28.37 1.71 41.40 249.75 10.77 5.32 11.54 20.47 1.08:1 25.86 1.58 30.02 # 206.33 11.37 3.60 6.25 11.97 1.52:1 25.00 1.63 15.29 123.98 14.46 3.26 5.88 9.24 1.65:1 30.78 1.86 11.66 121.64

Figures for the years 2001-2002 & 2002-2003 include demerged Cement business PBDIT = [ Profit before extra ordinary items, Depreciation, Interest & Tax] Total Income = (Net Sales + Other Income) * ROCE [(Profit available for appropriation before extraordinary items+Interest-Tax on interest)/Average Capital Employed] ** RONW (Profit available for appropriation before extraordinary items/Average Net Worth) # Including extraordinary items @ EPS for all years restated on the basis of restructured capital/increase in capital on account of issue of bonus shares in the ratio of 1:1 ## After considering issue of bonus shares in the ratio of 1:1

39

ORDER INFLOW Rs.crore

32000

SALES Rs.crore 30602 22370 20000 17901 14966 15000 13255 9807 10000 7443

24000

14942
16000

13062 10784

8000
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

5000
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

DISTRIBUTION OF REVENUE

2005-2006

2006-2007

Mfg. Constn. & Operating Expenses 75.7% Staff Expenses 5.9% Sales, Admn. & Other Expenses 8.1% Interest & Brokerage 0.5% Depreciation & Amortisation 0.7% Taxes 2.4% Dividend 2.3% Retained Earnings 4.4%

Mfg. Constn. & Operating Expenses 72.5% Staff Expenses 7.0% Sales, Admn. & Other Expenses 8.3% Interest & Brokerage 0.2% Depreciation & Amortisation 0.9% Taxes 3.3% Dividend 2.4% Retained Earnings 5.4%

PBDIT AS % OF TOTAL INCOME

Rs.crore 2500 2000 1500

OPERATING CASH FLOW AS % OF GROSS REVENUE

2209

15

20

15

14.9 10.6 11.0

Percentage

1434 670 890 8.9% 10.4%

1503

12.2%
10

10

1000

9.9% 8.9%

500 0
5

4.5 2.8

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

PBDIT

Operating Cash Flow as % of Gross Revenue PBDIT as %of Total Income

40

SEGMENT-WISE ORDER INFLOW 2006-2007

SEGMENT-WISE CUSTOMER SALES 2006-2007

Machinery & Industrial Products 7% Others 3%

Machinery & Industrial Products 10%

Others 1%

Electrical & Electronics 7%

Electrical & Electronics 11%

Engineering & Construction 83%

Total order inflow Rs.30,602 crore

Engineering & Construction 78% Total customer sales Rs.17,901 crore

SEGMENT-WISE REVENUE & RESULT

Rs.crore

SECTOR-WISE ORDER BOOK AS AT MARCH 31, 2007

Others 14% Power 16%

20000

18276 15266
941 1843 2067

3000

16000

2102
73 313 308

2500 2000 1500 1000 500 0

Infrastructure 39%

Revenue

1341
13425 54 199 227 861

8000
11570

1408

4000 0
2005-2006 2006-2007

Result

12000

672 1474 1550

2005-2006

2006-2007
Process 12% Total order Book Rs.36,882 crore

Hydrocarbon 19%

Revenue
Engineering & Construction Electrical & Electronics

Result
Machinery & Industrial Products Others

L & T GROUP - SALES

Rs.crore

L & T GROUP - PAT & EPS

Rupees

Rs.crore

2500
2240 80.19

100

25000
20700
1900

16747

1300
1050 41.40

1247

15000
11107

14599
700
380 24.12 15.29 2002-2003* 2003-2004 2004-2005 600

46.87

40

10000
8430

100

2005-2006

2006-2007

10

5000
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

PAT

EPS

* Including demerged Cement business

EPS

PAT

20000

70

41