2007

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Auditors’ Report to the members of Larsen & Toubro LimitedAuditors’ Report to the members of Larsen & Toubro LimitedAuditors’ Report to the members of Larsen & Toubro LimitedAuditors’ Report to the members of Larsen & Toubro LimitedAuditors’ Report to the members of Larsen & Toubro LimitedWe 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 flowstatement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Ourresponsibility 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 theaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our auditprovides 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 (Auditor’s Report) Order, 2003, issued by the Central Government of India under sub-section (4A) of section 227of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and5 of the said Order.

(2) Further to our comments in the Annexure referred to above, we report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes ofour audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination ofthose books;

(c) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accountingstandards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; and

(e) on the basis of the written representations received from directors as on March 31, 2007 and taken on record by the board of directors, wereport 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.

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 significantaccounting policies in schedule Q and notes appearing thereon, give the information required by the Companies Act, 1956 in the manner so requiredand give a true and fair view in conformity with the accounting principles generally accepted in India:

1) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2007;

2) in the case of the profit and loss account, of the profit for the year ended on that date; and

3) in the case of the cash flow statement, of the cash flows for the year ended on that date.

SHARP & TANNANChartered Accountants

by the hand of

F.M. KOBLAPartner

Mumbai, May 29, 2007 Membership No.15882

Annexure to the Auditors’ ReportAnnexure to the Auditors’ ReportAnnexure to the Auditors’ ReportAnnexure to the Auditors’ ReportAnnexure to the Auditors’ Report(Referred to paragraph (1) of our report of even date)

1 (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets.

(b) We are informed that the Company has formulated a programme of physical verification of all the fixed assets over a period of three yearswhich, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the physicalverification of the fixed assets has been carried out by management during the year and no material discrepancies were noticed on suchverification.

(c) The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern status.

2 (a) As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, thefrequency of such verification is reasonable.

(b) 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.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and thebook records were not material.

3 (a) 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.

(b) 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.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate withthe 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

98

the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we haveneither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

5 (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that needto be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts orarrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees fivelakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market pricesat the relevant time.

6 The Company has accepted deposits from the public and in our opinion and according to the information and explanations given to us, thedirectives 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 theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

7 In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8 We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules prescribed by the centralgovernment 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 prescribedaccounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

9 (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Companyis generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employeesstate insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues asapplicable with the appropriate authorities. According to the information and explanations given to us, there were no undisputed amountspayable 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 monthsfrom the date they became payable.

(b) 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 asunder:

Name of the Statute Nature of the disputed dues Amount Period to which the Forum where disputesRs. crore* amount relates are pending

Central Sales Tax Act, Sales in transit – consignment 0.38 2005-2006 Sales Tax OfficerLocal Sales Tax Acts and seized and local VATWorks Contract Tax Act demanded with penalty

Non-submission of forms, 2.35 1988-1989 to 1991-1992, Assistant Commissionerclassification dispute, disallowance 1993-1994, 1994-1995, (Appeals)of deemed inter-state sales and 1996-1997, 1997-1998 andexport claim disallowance 1999-2000 to 2004-2005

Non-submission of forms, inter-state 7.49 1989-1990, 1991-1992 and Deputy Commissionerand branch sales, subcontractor’s 1993-1994 to 2004-2005 (Appeals)turnover, classification dispute,transit sale, export claimdisallowance, rate of tax disputeand other matters

Non-submission of forms, transit 1.08 1994-1995 to 1996-1997, Joint Commissionersales, and other matters 2001-2002 and 2002-2003 (Appeals)

Non-submission of forms and 1.45 1996-1997, 1997-1998, Additional Commissionerinter-state sales 1999-2000 to 2003-2004 (Appeals)

and 2005-2006

Non-submission of forms 0.02 2001-2002 Commissioner (Appeals)

Deemed interstate sales disallowed, 1.53 1996-1997 and 1997-1998 Commissionerstock transfer claims, rate of tax and Commercial Taxinter-state sales (Revision)

Non-submission of forms, inter-state 33.99 1987-1988 to 2002-2003 Sales Taxsales, sub-contractor turnover, and 2004-2005 Tribunalrate dispute, disallowance undercomposition scheme and deemedsales in course of imports andother matters

Inter-state sales, classification dispute, 4.71 1981-1982, 1986-1987, High Courtand disallowance of deemed sales in 1993-1994, 1994-1995,course of imports and taxability of 1997-1998, 1999-2000subcontractors turnover and 2001-2002

99

The Central Excise Valuation disputes 0.39 1997-1998 and 2000-2001 Commissioner (Appeals)Act, 1944 andService Tax under theFinance Act, 1994

Classification dispute, exemptions 7.79 1991-1992, CESTATdenied and valuation disputes 2001-2002 to 2005-2006

Export rebate claim 0.07 2003-2004 High Court

Dispute on site mix concrete 1.52 1997-1998 Supreme Courtand PSC grinders

Demand for service tax on 101.09 2002-2003 to 2005-2006 CESTATlumpsum turnkey projects

Income Tax Dispute regarding tax deducted 0.03 2005-2006 Commissioner (Appeals)at source at lower rate onmaintenance charges

*Net of pre-deposit paid in getting the stay/appeal admitted

10 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 dateor in the immediately preceding financial year.

11 According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted inrepayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12 According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by wayof pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14 In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. The Companyhas invested surplus funds in marketable securities and mutual funds. According to the information and explanations given to us, proper recordshave been maintained of the transactions and contracts and timely entries have been made therein. The investments in marketable securitiesand mutual funds have been held by the Company in its own name.

15 In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees given by the Company forloans taken by others from banks or financial institutions are not prima facie prejudicial to the interests of the Company.

16 In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for thepurposes for which they were obtained.

17 According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report thatno funds raised on short term basis have been used for long term investments.

18 The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301of the Companies Act, 1956 during the year.

19 According to the information and explanations given to us and the records examined by us, security or charge has been created in respect ofthe debentures issued. However, the Company has no debentures outstanding at the year end.

20 The Company has not raised any money by public issues during the year.

21 During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditingpractices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraudon or by the Company, noticed or reported during the year, nor have we been informed of such case by management.

SHARP & TANNANChartered Accountants

by the hand of

F.M. KOBLAPartner

Mumbai, May 29, 2007 Membership No.15882

Name of the Statute Nature of the disputed dues Amount Period to which the Forum where disputesRs. crore* amount relates are pending

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Balance Sheet as at March 31, 2007Balance Sheet as at March 31, 2007Balance Sheet as at March 31, 2007Balance Sheet as at March 31, 2007Balance Sheet as at March 31, 2007As at 31-3-2007 As at 31-3-2006

Schedules Rs.crore Rs.crore Rs.crore Rs.croreSOURCES OF FUNDS:SHAREHOLDERS’ FUNDS:

Share capital A 56.65 27.48Reserves and surplus B 5660.28 4577.70Employee stock options outstanding

(Previous year Rs.134.62 crore) 123.83Less : Deferred employee compensation expense 72.33

(Previous year Rs.99.63 crore) 51.50 34.995768.43 4640.17

LOAN FUNDS:Secured loans C 245.40 465.79Unsecured loans D 1832.35 987.78

2077.75 1453.57Deferred tax liabilities (See Note No.23) 204.88 209.79

TOTAL 8051.06 6303.53

APPLICATION OF FUNDS:Fixed Assets

Tangible Assets E (i)Gross block 2795.32 2250.34Less: Depreciation and Impairment 1086.99 954.57

Net block 1708.33 1295.77Less: Lease adjustment 3.07 3.07

1705.26 1292.70Capital work-in-progress (net of Impairment) 438.78 258.52

2144.04 1551.22Intangible Assets E (ii)

Gross block 80.98 50.34Less: Amortisation and Impairment 32.77 24.58

Net block 48.21 25.76Capital work-in-progress (net of Impairment) 32.44 27.54

80.65 53.30Fixed Assets held for sale (Rs.13719) - 0.10

(at lower of cost or estimated realisable value)Investments F 3104.44 1919.52Deferred tax assets (See Note No.23) 164.69 132.51Current Assets, Loans and Advances: G

Interest accrued on investments 26.52 17.26Inventories 3001.14 2210.27Sundry debtors 5504.64 4814.16Cash and bank balances 1094.43 583.20Loans and advances 2257.93 1910.56

11884.66 9535.45Less: Current Liabilities and Provisions: H

Liabilities 8157.13 5888.90Provisions 1180.13 1021.65

9337.26 6910.55Net current assets 2547.40 2624.90Miscellaneous expenditure I 9.84 21.98

(to the extent not written-off or adjusted)

TOTAL 8051.06 6303.53

CONTINGENT LIABILITIES JSIGNIFICANT ACCOUNTING POLICIES Q(For Notes forming part of Accounts, see page Nos. 128 to 159)

A.M. NAIKAs per our report attached Chairman & Managing Director

SHARP & TANNANChartered Accountants J.P. NAYAK K.V. RANGASWAMI SURINDER NATHby the hand of Y.M. DEOSTHALEE V.K. MAGAPU U. SUNDARARAJANF.M. KOBLA K. VENKATARAMANAN S.N. TALWAR THOMAS MATHEW T.Partner R.N. MUKHIJA M.M. CHITALEMembership No.15882 N. HARIHARANMumbai, May 29, 2007 Company Secretary Directors Mumbai, May 29, 2007

101

Profit and Loss Account for the year ended March 31, 2007Profit and Loss Account for the year ended March 31, 2007Profit and Loss Account for the year ended March 31, 2007Profit and Loss Account for the year ended March 31, 2007Profit and Loss Account for the year ended March 31, 20072006-2007 2005-2006

Schedules Rs.crore Rs.crore Rs.crore Rs.croreINCOME:Sales & Service (Gross) K 17900.59 14965.56Less: Excise duty 321.75 230.76Sales & Service (Net) 17578.84 14734.80Other operational income L (i) 35.32 29.23Other income L (ii) 426.97 434.60

18041.13 15198.63EXPENDITURE:Manufacturing, construction and operating expenses M 13078.24 11560.34Staff expenses N 1258.21 892.54Sales, administration and other expenses O 1499.15 1244.43Interest and brokerage P 33.93 75.07Depreciation, obsolescence and impairment 161.57 108.61Amortisation of intangible assets 9.88 7.37

16040.98 13888.36Less: Overheads charged to fixed assets 3.30 1.89

16037.68 13886.47

Profit before transfer from Revaluation reserve 2003.45 1312.16Add: Transfer from Revaluation reserve 1.44 1.49

Profit before tax before extra-ordinary items 2004.89 1313.65Provision for current taxes (See Note No.22) 612.32 364.94Provision for deferred tax (See Note No.23) (25.63) (15.35)Provision for tax on Fringe Benefits 15.18 21.67

601.87 371.26

Profit after tax before extra-ordinary items 1403.02 942.39Profit on sale/transfer of businesses (net of tax) - 69.75

Profit after tax after extra-ordinary items 1403.02 1012.14Add: Balance brought forward from previous year 55.70 55.62

Less: Operating result of acquired entity for previous year (net of tax) 2.49 -(See Note No.42)

Dividend paid for previous year 5.61 3.88Additional tax on dividend paid for previous year 0.79 0.54

46.81 51.20

Profit available for appropriation 1449.83 1063.34Less: Transfer to General Reserve 950.00 663.00

Profit available for distribution 499.83 400.34Interim dividend 311.60 -Proposed final dividend 56.65 302.25Additional tax on dividend 53.34 42.39

Balance carried to Balance Sheet 78.24 55.70

Basic Earnings Per Equity Share (Rupees) 50.22 38.03Diluted Earnings Per Equity Share (Rupees) 48.36 36.23Basic Earnings Per Equity Share after excluding

extra-ordinary items (Rupees) (See Note No.24) 50.22 35.41Diluted Earnings Per Equity Share after excluding

extra-ordinary items (Rupees) 48.36 33.77Face Value Per Equity Share (Rupees) 2.00 2.00SIGNIFICANT ACCOUNTING POLICIES Q(For Notes forming part of Accounts, see page Nos. 128 to 159)



}

102

Cash Flow Statement for the year ended March 31, 2007Cash Flow Statement for the year ended March 31, 2007Cash Flow Statement for the year ended March 31, 2007Cash Flow Statement for the year ended March 31, 2007Cash Flow Statement for the year ended March 31, 20072006-2007 2005-2006

Rs.crore Rs.croreA. Cash flow from Operating Activities:

Net Profit before tax (including extra-ordinary items) ... ... ... 2004.89 1383.40Adjustments for:Dividend Received ... ... ... (187.31) (160.14)Depreciation (including obsolescence), amortisation and impairment ... ... ... 170.01 114.49Unrealised foreign exchange difference-net (gain)/loss ... ... ... (38.09) 9.69Interest(net) ... ... ... 33.93 75.07(Profit)/Loss on sale of fixed assets (net) ... ... ... (6.90) (4.12)(Profit)/Loss on sale of investments (net) ... ... ... (16.17) (128.04)Employee Stock Option-Compensation debited to Profit and Loss Account (net) ... ... 55.98 22.08Gain on sale/transfer of Dairy & Milk Processing Equipment Business ... ... - (49.22)Gain on sale/transfer of Glass Container Business ... ... ... - (30.53)

(including earnest money deposit received and retained)Loss on reassumption of debt ... ... ... - 55.91Provision/(Reversal) for diminution in value of investments ... ... ... 11.95 1.65

Operating profit before working capital changes ... ... ... 2028.29 1290.24Adjustments for:(Increase)/Decrease in trade and other receivables ... ... ... (796.32) (931.74)(Increase)/Decrease in inventories ... ... ... (790.77) 89.39(Increase)/Decrease in miscellaneous expenditure ... ... ... 12.18 17.92Increase/(Decrease) in trade payables ... ... ... 2281.33 1233.09

Cash generated from operations ... ... ... 2734.71 1698.90Direct taxes refund/(paid)-net ... ... ... (604.26) (329.65)

Net Cash from Operating Activities ... ... ... 2130.45 1369.25B. Cash flow from Investing Activities:

Purchase of fixed assets ... ... ... (800.23) (682.56)(Including interest capitalised Rs.0.02 crore, previous year Rs.0.98 crore)

Sale of fixed assets ... ... ... 25.01 4.61Purchase of investments ... ... ... (22088.06) (6167.39)Sale of investments ... ... ... 21015.48 5344.21Loans/Deposits made with subsidiaries/associates and third parties (net) ... ... ... 24.52 (15.55)Advance towards equity commitment ... ... ... (2.00) (108.26)Interest received ... ... ... 49.80 42.16Dividend received from subsidiaries ... ... ... 41.71 67.22Dividend received from other investments ... ... ... 145.60 92.92Cash received on sale/transfer of Dairy & Milk

Processing Equipment Business ... ... ... - 21.56Cash received on sale/transfer of Glass Container Business ... ... ... - 74.78

(net of part refund of earnest money)

Net Cash (used in)/ from Investing Activities ... ... ... (1588.17) (1326.30)C. Cash flow from Financing Activities:

Proceeds from issue of share capital including securities premium ... ... ... 23.94 10.34Proceeds from long term borrowings ... ... ... 797.62 552.75Repayment of long term borrowings ... ... ... (450.41) (225.36)(Repayments)/Proceeds from other borrowings (net) ... ... ... 392.21 (230.28)Loans (to)/from subsidiaries/associates (net) ... ... ... 3.39 (4.06)Dividends paid ... ... ... (619.46) (231.24)Additional tax on dividend ... ... ... (86.89) (32.43)Interest paid ... ... ... (91.45) (127.49)Net Cash (used in)/from Financing Activities ... ... ... (31.05) (287.77)

Net (decrease)/increase in cash and cash equivalents (A + B + C) ... ... ... 511.23 (244.82)Cash and cash equivalents at beginning of the year ... ... ... 583.20 828.02Cash and cash equivalents at end of the year ... ... ... 1094.43 583.20

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 year’s figures have been regrouped/reclassified wherever applicable.



103

Schedules forming part of AccountsSchedules forming part of AccountsSchedules forming part of AccountsSchedules forming part of AccountsSchedules forming part of AccountsAs at 31-3-2007 As at 31-3-2006

Rs.crore Rs.crore Rs.crore Rs.croreSchedule AShare Capital:Authorised:162,50,00,000 Equity shares of Rs.2 each 325.00 325.00

(Previous year 162,50,00,000 Equity shares of Rs.2 each)

Issued:28,32,70,748 Equity shares of Rs.2 each 56.65 27.48


Subscribed and paid up:28,32,70,748 Equity shares of Rs.2 each (See Note No.1) 56.65 27.48


56.65 27.48

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

Rs.crore Rs.crore Rs.crore Rs.croreSchedule BReserves and Surplus:Revaluation Reserve:

As per last Balance Sheet 29.37 30.90Less: On assets sold or obsoleted during the year - 0.04

Transferred to Profit and Loss Account 1.44 1.49

27.93 29.37Cash Subsidy Reserve:

As per last Balance Sheet 0.25 0.25Less: Transferred to General Reserve 0.25 -

- 0.25Capital Redemption Reserve:

As per last Balance Sheet 0.02 0.02

Capital Reserve:As per last Balance Sheet 0.12 0.12Addition during the year (See Note No.42) 10.40 -

10.52 0.12Debenture Redemption Reserve:

As per last Balance Sheet 18.75 50.80Less: Transferred to General Reserve 18.75 32.05

- 18.75Securities Premium Account:

As per last Balance Sheet 1927.82 1326.63Addition during the year 164.11 601.20

2091.93 1927.83Less: Issue of bonus shares 28.00 -

Debenture/Bond issue expenses (net of tax) - 3.52Share issue expenses 0.38 0.62Amortisation of premium payable on redemption of

Debentures/Bonds (net of tax) 2.40(Previous year Rs.3.21 crore)

Less: Write-back of provision made in previous yearpursuant to conversion of Bonds 3.20(Previous year Rs.7.34 crore)

(0.80) (4.13)

2064.35 1927.82

Carried forward 2102.82 1976.33

104

Schedule B (Contd.)Brought forward 2102.82 1976.33

Foreign Projects Reserve:


Less: Transferred to General Reserve 9.15 18.00

19.19 28.34

Housing Projects Reserve:


Less: Transferred to General Reserve 13.35 8.50

7.96 21.31

General Reserve:


Add: Transferred from:

Foreign Projects Reserve 9.15 18.00

Housing Projects Reserve 13.35 8.50

Debenture Redemption Reserve 18.75 32.05

Cash Subsidy Reserve 0.25 -

Profit and Loss Account 950.00 663.00

3487.52 2496.02

Less: Liabilities on account of Employee Benefits[net of tax] (See Note No.13) 35.45 -

3452.07 2496.02

Profit and Loss Account 78.24 55.70

5660.28 4577.70

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

Rs.crore Rs.crore Rs.crore Rs.crore

Schedule CSecured Loans:

Secured Redeemable Non-convertible Debentures:

Fixed Rate Debentures - 75.00

Loans from banks:

Cash Credits/Working Capital Demand Loans 199.19 120.11

Other Loans 46.16 47.57

Interest accrued and due 0.05 0.03

245.40 167.71

Loans from others - 223.08

245.40 465.79

Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)As at 31-3-2007 As at 31-3-2006


105



Schedule DUnsecured Loans:1.25% Foreign Currency Convertible Bonds - 96.95Zero coupon Foreign Currency Convertible Bonds 422.27 438.70Fixed Deposits - 4.05

(including loans from shareholders Rs. Nil;previous year Rs.0.49 crore)

Loans from subsidiary companies 5.49 2.10Short term loans and advances:

From banks 464.74 172.46Lease finance 1.32 3.25Sales tax deferment loan 5.10 5.10Interest accrued and due 0.04 -

471.20 180.81Other loans and advances:

From banks 711.44 115.60Lease finance 0.69 1.33Sales tax deferment loan 136.26 148.24From others 85.00 -

933.39 265.17

1832.35 987.78

Schedule E (i)

Cost / Valuation Depreciation Impairment Book Value

Fixed Assets - Tangible As at Transfer on As at Up to Transfer on For the Up to As at As at As at1-4-2006 Amalga- Additions Deductions 31-3-2007 31-3-2006 Amalga- year Deductions 31-3-2007 31-3-2007 31-3-2007 31-3-2006

mation mationRs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs. crore Rs.crore Rs.crore

OWNED ASSETS:

Land - Freehold 99.07 - 2.21 0.08 101.20 - - - - - - 101.20 99.07

Ships 7.53 - - - 7.53 0.46 - 0.53 - 0.99 - 6.54 7.07

Buildings 545.53 2.76 164.83 5.59 707.53 137.09 1.66 13.95 1.09 151.61 - 555.92 408.44

Railway sidings 0.25 - - - 0.25 0.25 - - - 0.25 - - -

Plant and machinery 1425.43 23.97 383.68 40.86 1792.22 699.79 19.47 119.64 27.20 811.70 - 980.52 725.64

Furniture and fixtures 74.59 - 26.00 2.48 98.11 43.42 - 10.60 2.34 51.68 - 46.43 31.17

Vehicles 57.37 - 2.88 6.38 53.87 45.22 - 3.56 5.36 43.42 - 10.45 12.15

Aircraft 9.26 - - - 9.26 6.48 - 0.51 - 6.99 - 2.27 2.78

Owned Assets Leased Out:

Plant and machinery 19.22 - - - 19.22 9.22 - - - 9.22 6.93 3.07 5.29

Lease Adjustment - - - - - - - - - - - (3.07) (3.07)

Owned Assets (sub total - A) 2238.25 26.73 579.60 55.39 2789.19 941.93 21.13 148.79 35.99 1075.86 6.93 1703.33 1288.54

LEASED ASSETS:Plant and machinery 2.33 - 0.77 0.75 2.35 1.00 - 1.11 0.70 1.41 - 0.94 1.33Vehicles 9.76 - - 5.98 3.78 6.93 - 1.23 5.37 2.79 - 0.99 2.83

Leased Assets (sub total - B) 12.09 - 0.77 6.73 6.13 7.93 - 2.34 6.07 4.20 - 1.93 4.16

Total (A+B) 2250.34 26.73 580.37 62.12 2795.32 949.86 21.13 151.13 42.06 1080.06 6.93 1705.26 1292.70

Previous year 2060.51 - 452.91 263.08 2250.34 992.85 - 103.84 146.83 949.86 4.71

Add: Capital work-in-progress (net of deductions on account of obsolescence Rs.6.17 crore; Previous year Rs.Nil) 438.78 258.52

2144.04 1551.22

106

Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedule E (ii)

Cost / Valuation Amortisation Book Value

Fixed Assets - Intangible As at As at Up to For the Up to As at As at1-4-2006 Additions Deductions 31-3-2007 31-3-2006 year Deductions 31-3-2007 31-3-2007 31-3-2006Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore

Land - Leasehold 19.32 10.90 - 30.22 3.92 0.26 - 4.18 26.04 15.40

Specialised Softwares 27.74 9.54 1.69 35.59 18.78 7.18 1.69 24.27 11.32 8.96

Lumpsum fees for technicalknowhow 3.28 11.89 - 15.17 1.88 2.44 - 4.32 10.85 1.40

Total 50.34 32.33 1.69 80.98 24.58 9.88 1.69 32.77 48.21 25.76

Previous year 46.04 11.90 7.60 50.34 21.91 7.37 4.70 24.58

Add: Capital work-in-progress 32.44 27.54

80.65 53.30

Notes :

1 Cost/Valuation of:

(i) Freehold land includes Rs.0.14 crore for which conveyance is yet to be completed.

(ii) 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 fora period of six years with extension of 3 years, at the end of which sale deed would be executed, on fulfilment of certain conditions bythe Company.

(b) Rs.0.22 crore for land taken at Hubli on lease from KIADB vide agreement dated December 8, 2005. The lease agreement is for aperiod of six years, at the end of which sale deed would be executed, on fulfilment of certain conditions by the Company.

2 Cost/Valuation of Buildings includes ownership accommodation:

(i) (a) in various co-operative societies and apartments and shop-owners’ associations: Rs.88.14 crore, including 1715 shares of Rs.50each, 177 shares of Rs.100 each and 1 share of Rs.250.

(b) in proposed co-operative societies Rs.19.05 crore.

(ii) of Rs.4.36 crore in respect of which the deed of conveyance is yet to be executed.

(iii) of Rs.3.36 crore representing undivided share in a property at a certain location.

3 Additions during the year and capital work-in-progress include:

(i) Rs.3.81 crore being the exchange gain; and

(ii) Rs.1.61 crore being borrowing cost capitalised in accordance with Accounting Standard (AS)16 on “Borrowing Costs” issued by the Instituteof Chartered Accountants of India.

4 Additions to leasehold land include Rs.0.40 crore on account of transfer on amalgamation.

5 During the year, the Company has reviewed the useful life of certain categories of assets. Consequently, the depreciation rates have beenrevised, resulting in an additional charge of Rs.21.39 crore.

6 Capital work-in-progress includes advances Rs.26.61 crore (previous year Rs.34.28 crore).

7 Impairment of Plant & Machinery includes Rs.2.22 crore for the year.

8 The Company had revalued as at October 1, 1984 some of its land, buildings, plant and machinery and railway sidings at replacement/marketvalue which resulted in a net increase of Rs.108.05 crore.

107


Rs.crore Rs.crore Rs.crore Rs.croreSchedule F

Investments (At cost, unless otherwise specified):A) Long Term Investments:

Government and trust securities 5.91 5.91Fully paid equity shares of subsidiary companies 1210.07 496.94Partly paid equity shares in subsidiary companies 53.68 -Application money pending allotment of equity shares in a

subsidiary company - 0.45Fully paid preference shares of subsidiary companies 42.49 31.22Fully paid equity shares - Trade investments 111.70 97.61Other fully paid equity shares 21.23 21.23Bonds 470.46 469.96Mutual funds 0.53 2.21

1916.07 1125.53B) Current Investments:

Government and trust securities 98.85 -Other fully paid equity shares 42.60 -Bonds 34.24 48.74Mutual funds 984.77 715.87

1160.46 764.61C) Investment in Integrated Joint Ventures 27.91 29.38

3104.44 1919.52

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

Rs.crore Rs.croreQuoted Investments

Book value 187.33 25.60Market value 1289.46 999.29

Unquoted InvestmentsBook value 2917.11 1893.92

Particulars of Investments:

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) 5.91 5.91

5.91 5.91Subsidiary Companies:

Fully paid equity shares:L&T Finance Limited

12,41,91,500 shares of Rs.10 each 240.98 140.98(2,50,00,006 shares of Rs.10 each subscribed during the year)

Larsen & Toubro Infotech Limited3,00,00,000 shares of Rs.5 each 15.00 15.00

L&T Transportation Infrastructure Limited1,08,64,000 shares of Rs.10 each 10.86 10.86

Narmada Infrastructure Construction Enterprise Limited1,26,48,507 shares of Rs.10 each 12.65 12.65

India Infrastructure Developers Limited5,60,60,000 shares of Rs.10 each 56.06 35.00(2,10,60,000 shares of Rs.10 each allotted as per thescheme of amalgamation) [See Note No.41]

L&T Infrastruture Development Projects Limited19,30,31,352 shares of Rs.10 each 383.42 151.04(4,19,90,585 shares of Rs.10 each subscribed during the year)

Larsen & Toubro International FZE266 shares of Dhs 550,500 each 180.38 43.72(200 shares of Dhs 550,500 each subscribed during the year)

Carried forward 899.35 5.91 409.25 5.91

108


Rs.crore Rs.crore Rs.crore Rs.croreSchedule F (Contd.)Brought forward 899.35 5.91 409.25 5.91

Tractor Engineers Limited68,000 shares of Rs.1000 each 0.30 0.30

Larsen & Toubro LLC50,000 shares of USD 1 each 0.23 0.23

L&T-Sargent & Lundy Limited27,52,129 shares of Rs.10 each 1.53 1.53

Larsen & Toubro (Wuxi) Electric Company LimitedUSD 36,33,212.97 subscribed during the yearUSD 47,89,240.44 sold during the year - 5.20

Spectrum Infotech Private Limited4,40,000 shares of Rs.10 each 6.80 6.80

HPL Cogeneration Limited3,12,12,000 shares of Rs.10 each [See Note No.39(a)] 31.21 31.21

L&T Western India Tollbridge Limited1,39,50,007 shares of Rs.10 each 13.95 13.95

L&T Power Investments Private Limited (See Note No.41)(2,10,60,000 shares of Rs.10 each transferred to IndiaInfrastructure Developers Limited as per the scheme of - 21.06amalgamation)

Bhilai Power Supply Company Limited49,950 shares of Rs.10 each 0.05 0.05

International Seaports Pte. Limited18,15,000shares of USD 1 each 2.36 2.36

L&T Capital Company Limited50,00,000 shares of Rs.10 each 5.00 5.00

L&T Power Projects Limited50,000 shares of Rs.10 each (subscribed during the year) 0.05 -

International Seaport Dredging Limited8,600 shares of Rs.10000 each (subscribed during the year) 8.60 -

L&T Infrastructure Finance Company Limited24,30,00,000 shares of Rs.10 each (subscribed during the year) 243.00 -

1212.43 496.94Less: Provision for diminution in value 2.36 -

1210.07 496.94

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) 0.68 -Larsen & Toubro Infotech Limited

22,50,000 shares of Rs.5 each, Rs.2.20 paid up (subscribed during the year) 53.00 -

53.68 -

Application money pending allotment of equity sharesLarsen & Toubro International FZE

(USD 1,00,000-allotment of equity shares during the year) - 0.45

Fully paid preference shares of Subsidiary Companies:HPL Cogeneration Limited

3,12,12,000 15% Cumulative Redeemable Preference shares of Rs.10 each 34.88 34.88

International Seaport Dredging Limited11,267 13% Preference shares of Rs.10000 each(subscribed during the year) 11.27 -

46.15 34.88

Less: Provision for diminution in value 3.66 3.66

42.49 31.22


109


Rs.crore Rs.crore Rs.crore Rs.croreSchedule F (Contd.)Brought forward 1312.15 534.52

Other fully paid equity shares - Trade Investments(i) Fully paid equity shares in Associate Companies:

Ewac Alloys Limited4,14,720 shares of Rs.100 each 0.04 0.04

Audco India Limited9,00,000 shares of Rs.100 each 0.06 0.06

Gujarat Leather Industries Limited7,35,000 shares of Rs.10 each 0.56 0.56

L&T-Chiyoda Limited45,00,000 shares of Rs.10 each 4.50 4.50

L&T-Komatsu Limited6,00,00,000 shares of Rs.10 each 60.00 60.00

L&T-Ramboll Consulting Engineers Limited18,00,000 shares of Rs.10 each 1.80 1.80

L&T-Case Equipment Private Limited1,20,05,000 shares of Rs.10 each 12.00 12.00

L&T-Crossroads Private Limited(90,00,000 shares of Rs.10 each sold during the year) - 9.00

Voith Paper Technology (India) Limited15,00,000 shares of Rs.10 each 1.00 1.00

79.96 88.96


79.40 88.40

(ii) Fully paid equity shares in Incorporated Joint Ventures:L&T-Valdel Engineering Limited

6,55,000 shares of Rs.10 each 9.02 9.02

L&T-Demag Plastics Machinery Private Limited30,00,000 shares of Rs.10 each (purchased during the year) 3.00 -

12.02 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) - 0.19

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 0.19

111.70 97.61

Other fully paid equity shares:

Housing Development Finance Corporation Limited (Quoted)74,356 shares of Rs.10 each 0.10 0.10

Gujarat Ambuja Cements Limited (Quoted)5,00,310 shares of Rs.2 each 3.33 3.33

UltraTech Cement Limited (Quoted)1,43,03,294 shares of Rs.10 each 14.30 14.30

John Deere Equipment Private Limited35,00,000 shares of Rs.10 each 3.50 3.50

Utmal Multi purpose Service Co-operative Society Limited300 “B” class shares of Rs.100 each:Rs.30000 - -(as at 31-3-2006: Rs.30000)

21.23 21.23


110


Rs.crore Rs.crore Rs.crore Rs.croreSchedule F (Contd.)Brought forward 1445.08 653.36

Bonds:Unit Trust of India-Tax free Bonds (Quoted)

1,96,400 6.75% bonds of Rs.100 each 1.96 1.96

NABARD-Capital Gain Bonds1,00,000 5.40% bonds of Rs.10000 each 100.00 100.00

National Housing Bank-Capital Gain Bonds1,80,000 5.45% bonds of Rs.10000 each 180.00 180.00

Small Industries Development Bank of India-Capital Gain Bonds53,000 5.50% bonds of Rs.10000 each 53.00 53.00

National Highway Authority of India-Capital Gain Bonds85,000 5.50% bonds of Rs.10000 each 85.00 85.0050,000 5.65% bonds of Rs.10000 each 50.00 50.00

Rural Electrification Corporation Limited-Capital Gain Bonds500 5.25% bonds of Rs.10000 each (purchased during the year) 0.50 -

470.46 469.96

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) 0.53 2.21

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 crorepurchased and sold during the year) 50.72 -

10 7.59% Government of India Bond 2016 of Rs.5 crore each (Quoted)(27 bonds of face value of Rs.135 crorepurchased and sold during the year) 49.82 -

100.54 -Less: Provision for diminution in value 1.69 -

98.85 -Other fully paid equity shares:

Gujarat Ambuja Cements Limited (Quoted)2,55,998 shares of Rs.2 each (purchased during the year) 3.54 -

ACC Limited (Quoted)74,996 shares of Rs.10 each (purchased during the year) 7.23 -

Hindustan Zinc Limited (Quoted)1,73,976 shares of Rs.10 each (purchased during the year) 12.77 -

Hindalco Industries Limited (Quoted)3,65,000 shares of Re.1 each (purchased during the year) 6.11 -

Steel Authority of India Limited (Quoted)11,25,000 shares of Rs.10 each (purchased during the year) 11.46 -

Sterlite Industries Limited (Quoted)1,60,000 shares of Rs.2 each (purchased during the year) 8.58 -

49.69 -Less: Provision for diminution in value 7.09 -

42.60 -

Bonds:Gujarat Urja Vikas Nigam Limited Bonds 2009

(Formerly known as Gujarat Electricity Board)11 11.25% bonds of Rs.1,00,000 each 0.11 0.11

Housing Development Finance Corporation Limited90 7.65% 2016 bonds of Rs.10,00,000 each 8.56 8.56210 8.00% 2017 bonds of Rs.10,00,000 each 20.67 20.67

Carried forward 29.34 2057.52 29.34 1125.53

111



State Bank of India(50 7.45% 2015 bonds of Rs.10,00,000 each sold during the year) - 4.72

Power Finance Corporation(100 7.95% 2016 bonds of Rs.10,00,000 each sold during the year) - 9.78

Indian Overseas Bank50 8.00% 2016 bonds of Rs.10,00,000 each 4.90 4.90

34.24 48.74

Mutual funds:

ABN Amro FTP Quarterly Plan-C-Dividend Reinvestment5,12,83,438 Units of Rs.10 each purchased during the year 51.29 -

Birla FTP Quarterly Series 6 Dividend Payout5,00,00,000 Units of Rs.10 each purchased during the year 50.00 -

Birla Income Plus Quarterly Dividend-Reinvestment3,46,34,666 Units of Rs.10 each purchased during the year 35.64 -

(4,44,30,194 Units of Rs.10 each purchased and sold during the year)

DBS Chola Treasury Management Fund-Daily Dividend8,81,42,042 Units of Rs.10 each purchased during the year 88.14 -(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 50.02 97.52(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 25.20 -(2,50,00,000 Units of Rs.1000 each purchased andsold during the year)

HDFC Cash Management-Call Plan-Dividend Reinvestment11,52,06,180 Units of Rs.10 each purchased during the year 120.12 -(29,44,54,095 Units of Rs.10 each purchased andsold 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 25.00 -

HDFC Income Fund-Dividend Reinvestment2,44,37,046 Units of Rs.10 each purchased during the year 25.23 -(4,43,16,122 Units of Rs.10 each purchased andsold during the year)

HSBC Cash Fund Institutional Plus-Daily Dividend-Dividend Reinvestment

95,01,558 Units of Rs.10 each purchased during the year 9.51 -(40,92,67,016 Units of Rs.10 each purchased andsold during the year)

ING Vysya FMF Series XX-Dividend Reinvestment1,50,00,000 Units of Rs.10 each purchased during the year 15.00 -

ING Vysya Liquid Super Institutional-Daily Dividend Option-Dividend Reinvestment

1,99,98,728 Units of Rs.10 each purchased during the year 20.00 -(1,64,58,20,875 Units of Rs.10 each purchased andsold during the year)

JM Fixed Maturity Fund Series IV-Quarterly Plan 3-F2-Dividend Reinvestment


Carried forward 540.40 2091.76 97.52 1174.27

112



JM Fixed Maturity Fund Series IV-Quarterly Plan 4-F3-Dividend Reinvestment


JM Money Manager Fund Super Plan-Daily Dividend-Dividend Reinvestment

5,00,45,757 Units of Rs.10 each purchased during the year 50.05 -(11,10,74,966 Units of Rs.10 each purchased andsold 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 70.05 51.91(5,19,04,195 Units of Rs.10 each sold during the year)(132,25,96,265 Units of Rs.10 each purchased andsold during the year)

Principal Income Fund Institutional Plan-Quarterly Dividend-Dividend Reinvestment


Principal PNB Fixed Maturity Plan-91 Days (FMP-35)Sr.VIII Feb.07-Dividend Reinvestment


Prudential ICICI FMP Sr.35 Three Month Plan C-Retail-Dividend Payout


Prudential ICICI Flexible Income Plan-Dividend Fortnightly-Dividend Reinvestment


Prudential ICICI Institutional Income Plan (Quarterly)-Dividend Reinvestment


SBI Debt Fund Series-90 Days(Feb.07)-Dividend Reinvestment1,00,49,257 Units of Rs.10 each purchased during the year 10.05 -

Tata Fixed Horizon Fund Series 8 Scheme F-Periodic Dividend Plan-Dividend Reinvestment


Templeton Fixed Horizon Fund-3 Month Plan-Dividend Reinvestment2,50,00,000 Units of Rs.10 each purchased during the year 25.00 -

Templeton India Income Fund-Dividend Reinvestment2,40,91,367 Units of Rs.10 each purchased during the year 25.57 -

Templeton India Income Fund-Growth Quarterly Dividend-Growth Plan77,89,254 Units of Rs.10 each purchased during the year 20.00 -

UTI Mutual Fund- Money Market Fund-Daily Dividend-Dividend Reinvestment

56,91,701 Units of Rs.10 each purchased during the year 10.01 45.01(9,84,09,155 Units of Rs.10 each purchased and11,85,41,528 units sold during the year)

HDFC Core & Satellite Fund-Dividend Reinvestment Option - 5.00(25,63,708 Units of Rs.10 each sold during the year)

HSBC Mutual Fund-Midcap Equity Fund-Dividend Reinvestment Option - 5.00(29,34,289 Units of Rs.10 each sold during the year)

Carried forward 987.88 2091.76 204.44 1174.27

113



IDBI Principal Mutual Fund-Principal Growth Fund-Dividend Reinvestment - 5.00

(21,80,549 Units of Rs.10 each sold during the year)

ING Vysya Mutual Fund-Fixed Maturity Plan-Series IX-Dividend Reinvestment - 25.00

(2,50,00,000 Units of Rs.10 each sold during the year)

Prudential ICICI-Emerging Star Fund-Dividend Reinvestment - 5.00(23,49,624 Units of Rs.10 each sold during the year)

Reliance Mutual Fund-Vision Fund-Dividend Reinvestment - 5.70(10,76,851 Units of Rs.10 each sold during the year)

SBI Multi Cap Fund-Dividend Reinvestment - 5.00(35,81,662 Units of Rs.10 each sold during the year)

Tata Mutual Fund-Pure Equity Fund-Dividend Reinvestment - 5.00(19,55,608 Units of Rs.10 each sold during the year)

Birla Cash Plus-Institutional-Premium Plan-Daily Dividend Reinvestment - 45.01

(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 - 6.12(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 - 45.01


DSP Merill Lynch Mutual Fund-Top-100 Equity Fund-Dividend Reinvestment - 5.00

(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 - 10.00(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 - 5.57(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 - 5.00(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 - 5.00


IDBI Principal Mutual Fund-Large Cap. Fund Dividend Reinvestment - 10.00(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 InstitutionalPremium Plan-Dividend Reinvestment - 45.00


Kotak Mahindra Mutual Fund-Mid Cap-Dividend Reinvestment - 10.00

(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 - 20.00(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 2091.76 466.85 1174.27

114



Kotak-30 Dividend Reinvestment - 5.00(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 - 131.77(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 - 5.00


Prudential ICICI Mutual Fund-Power Fund-Dividend Reinvestment - 5.00


Reliance Equity Opportunities Fund-Dividend Reinvestment - 10.00

(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 - 5.00


Tata Mutual Fund-Fixed Maturity Plan-Dividend Reinvestment - 20.00(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 - 13.50


Tata Mutual Fund-Equity Opp. Fund-Plan A-Dividend Reinvestment - 11.04


Prudential ICICI-Super Institutional-Liquid Plan-Daily Dividend Option - 45.01

(33,51,29,876 Units of Rs.10 each purchased during the year;38,01,37,415 units sold during the year)

987.88 718.17


984.77 715.87

3076.53 1890.14C) Investments in Integrated Joint Ventures:

L&T-Hochtief Seabird Joint Venture 4.21 7.31Desbuild-L&T Joint Venture 0.07 0.07International Metro Civil Contractors Joint Venture 6.93 12.63Bauer-L&T Diaphragm Wall Joint Venture 0.23 0.15HCC-L&T Purulia Joint Venture 8.78 8.10Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited

(Ebene-CyberCity Project) Joint Venture - 0.31Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited

(Les Pailles Exhibition Centre) Joint Venture 0.29 0.81L&T-AM Tapovan Joint Venture 5.47 -Metro Tunneling Group Joint Venture 1.93 -

27.91 29.38

3104.44 1919.52

115

Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedule F (Contd.)Details of investments purchased and sold during 2006-2007 Face Value Cost

Rs.crore Rs.crore

Government Securities 255.00 257.21

Face Value CostRs.Per Unit Nos. Rs.crore

Mutual Funds:

DWS Money Plus Fund-Dividend Reinvest-Weekly 10 28,49,44,355 285.90

DWS Alpha Equity Fund-Dividend Reinvest 10 3,36,22,806 56.25

DSP Merrill Lynch Equity Opportunity Fund-Dividend Reinvest 10 34,87,967 9.45

HDFC Mutual Fund Equity Top 200-Dividend Reinvest 10 1,38,90,830 51.11

HDFC Capital Builder Fund-Dividend Reinvest 10 1,30,78,421 29.62

HDFC Equity Diversified-Dividend Reinvest 10 3,18,31,668 113.56

HDFC Cash Management Fund-Savings Plan-Daily Dividend Reinvest 10 134,83,03,303 1434.11

IDBI Principal Mutual Fund-Income Short Term-Dividend Reinvest 10 3,71,67,465 40.57

Principal Focussed Advantage Fund 10 60,31,363 9.43

JM Equity & Derivative Fund-Dividend 10 8,88,62,312 91.82

Prudential ICICI Infrastructure Fund-Dividend Reinvest 10 69,83,240 9.89

Prudential ICICI Discovery Fund-Dividend Reinvest 10 45,37,205 9.42

Prudential ICICI Blended Plan-Option B-Dividend Reinvest 10 6,01,29,363 61.58

Reliance Mutual Fund-Liquidity Fund-Daily Dividend Reinvest 10 72,03,44,678 720.57

SBI Magnum Global Fund-94-Dividend Reinvest 10 34,30,532 10.23

Standard Chartered Liquidity Manager Plus-Dividend Reinvest 1000 3,23,13,877 3231.71

Standard Chartered Imperial Fund-Dividend Reinvest 10 1,79,69,452 19.16

Tata Liquidity Management Fund-Daily Dividend 1000 13,84,973 138.81

Tata Mid Cap Fund-Dividend Reinvest 10 2,45,84,951 31.56

Tata Infrastructure Fund-Dividend 10 1,18,26,270 23.95

Templeton India Short Term Plan Institutional-Monthly Dividend Reinvest 1000 3,69,946 38.72

Templeton India Growth Fund-Dividend Reinvest 10 49,00,760 19.17

Templeton India Treasury Management Liquid Plan Daily Dividend 1000 1,69,83,319 1698.76

Reliance Growth Fund-Equity-Dividend Reinvest 10 1,01,52,055 51.27

Franklin Templeton India Prima Fund 10 64,99,133 30.86

SBI Magnum Institutional Income Fund-Savings-Daily Dividend 10 21,80,06,675 218.72

JM Mutual High Liquidity-Super Institutional Plan-Daily Dividend 10 39,59,01,788 396.51

Fidelity Equity Fund-Dividend 10 1,22,91,808 19.14

SBI Mutual Fund-Commodity Fund 10 65,65,988 9.86

UTI Liquid Cash Plan Institutional-Daily Dividend 1000 1,40,96,006 1437.00

ABN Amro Opportunities Fund-Dividend 10 1,18,69,765 18.77

HSBC India Opportunities Fund-Dividend Reinvest 10 46,11,759 9.42

ABN Amro Fixed Term Plan-Series 4-Plan-C-Monthly Dividend 10 6,27,89,982 111.30

SBI Bluechip-Dividend Reinvest 10 2,41,83,797 21.05

Tata Fixed Horizon Fund Series 5-Scheme B-Dividend 10 2,06,88,683 20.70

Franklin BlueChip Fund 10 2,11,95,228 71.90

LIC Mutual Fund FMP Series 8-3 Monthly 10 10,00,00,000 100.92

Prudential ICICI Flexible Income Plan Dividend-Monthly 10 4,89,29,231 51.66

JM Mutual Fund MP Fund-Series III-Quarterly Plan-FMF-Dividend Option 10 5,07,16,067 50.72

Birla Top 100 Fund-Dividend Reinvestment 10 13,16,00,486 182.20

116

Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedule F (Contd.)Details of investments purchased and sold during 2006-2007 (Contd.)

Face Value CostRs.Per Unit Nos. Rs.crore

UTI Bond Fund (Income-Reinvestment) 10 6,50,55,264 70.81

Tata Fixed Horizon Fund Series 5 Scheme D-Dividend Option 10 10,14,29,201 101.45

Reliance RLF Treasury Plan-Institutional Option-Monthly Dividend 10 7,61,20,081 106.20

DSP Merrill Lynch Liquidity Plus Fund-Daily Dividend 1000 32,89,154 328.98

LIC Mutual Fund FMP Series 9-3 Monthy Dividend Plan 10 10,14,54,590 101.45

JM Mutual Fund MP Series III-Quarterly Plan-FMF Q2-Dividend Plan (163) 10 10,14,70,859 101.47

Reliance Fixed Horizon Fund-Monthly Plan A-Series VI-Dividend Option 10 10,00,00,000 100.00

SBI Magnum Midcap Fund-Dividend Option 10 1,95,43,974 30.14

HDFC Cash Management Fund-Savings Plus Plan-Dividend 10 26,07,56,609 261.25

UTI Equity Fund-Dividend Reinvest 10 1,81,09,381 51.90

DBS Chola Liquid Fund 10 100,10,21,043 1004.19

HDFC Liquid Fund Premium Plan-Daily Dividend Reinvest 10 1,30,61,219 16.01

Principal Income Fund-Short Term-Institutional Plan-Monthly Dividend 10 1,19,65,278 12.25

ABN Amro Institutional Plus-Daily Dividend 10 28,77,19,804 287.72

ING Vysya Income Fund-Short Term-Dividend Reinvest 10 4,55,23,291 51.02

Prudential ICICI STIP-Dividend Reinvest 10 7,38,59,737 81.53

Reliance Fixed Horizon Fund I-Monthly Plan Series 1 10 10,04,98,203 100.50

Prudential ICICI FMP Series 32-Dividend 10 20,32,28,000 203.23

UTI Fixed Maturity Plan Quarterly Series QFMP/1006/II-Dividend Reinvest 10 20,30,83,960 203.17

ABN Amro FTP Series 3 Quarterly Plan E-Dividend 10 10,15,35,510 101.54

LIC Mutual Fund Index Fund-NIFTY Dividend Plan 10 6,55,69,901 101.36

Grindlays Cash Fund Plan C-Super Institutional-Daily Dividend 10 22,00,91,880 220.09

HSBC Liquid Plus Fund-Institutional Plus Plan-Dividend Reinvest 10 36,67,50,693 366.92

HDFC Liquid Fund-Premium Plus-Dividend Reinvest 10 22,47,68,097 236.85

Principal Resurgent India Equity Fund-Dividend Reinvest 10 8,51,66,888 133.65

Grindlays Super Saver Income Fund-Medium Term 10 5,07,45,132 50.82

Fidelity Cash Fund Super Institutional-Daily Dividend Reinvest 10 1,01,97,375 10.20

Reliance Fixed Maturity Plan Series III 10 20,10,27,442 201.03

Tata Liquidity Management Fund-Daily Dividend 1000 25,00,300 250.59

LIC Mutual Fund FRF Short Term-Daily Dividend 10 38,37,14,219 389.70

Principal Floating Rate Fund-SMP-IP 10 2,30,10,031 23.01

Standard Chartered Liquidity Manager 10 19,31,15,306 193.13

Birla Floating Rate Fund-STP-Dividend Reinvest 10 6,02,05,755 60.21

DBS Chola Short Term Mutual Fund Floating Rate Fund-Daily Dividend Reinvest 10 40,10,01,825 401.66

Tata Floating rate Fund-Short Term-Institutional Plan-Daily Dividend Reinvest 10 19,83,72,888 198.48

SBI Mutual Fund Magnum Cash Plan-Weekly Dividend Reinvest 10 28,73,20,862 305.51

Templeton Floating Rate Income Fund Short Term-Weekly Dividend Reinvest 10 3,99,96,176 40.04

Kotak Floater-Short Term Dividend-Daily Dividend Reinvest 10 5,99,29,283 60.02

JM Money Manager Fund-Super Plus Plan-Daily Dividend Reinvest 10 5,00,75,766 50.08

Birla Income Plus 10 66,04,409 20.00

Reliance Fixed Horizon Fund II MP INS-Dividend Plan 10 20,21,58,673 202.16

Reliance Fixed Horizon Fund-Monthly Plan Series IV 10 20,21,58,673 202.16

SBI Mutual Fund Magnum Insta Cash Plus Plan 10 59,78,762 10.01

Prudential ICICI Sweep Plan-Cash Plan 10 15,80,78,840 158.08

117


Rs.crore Rs.crore Rs.crore Rs.croreSchedule GCurrent Assets, Loans and Advances:Current Assets:

Interest accrued on investments 26.52 17.26Inventories:

Stock-in-trade, at cost or net realisable value whichever is lower:Raw materials 187.86 169.55Components 147.85 100.48Construction materials 6.42 4.92Stores, spare parts and loose tools 58.88 58.43Finished goods 246.93 190.42

647.94 523.80

Work-in-Progress:Manufacturing work-in-progress at cost or net realisable

value whichever is lower 276.73 248.20

Construction and Project related work-in-progressAt cost 1092.43 933.69At estimated realisable value on sale 10317.35 7208.71

11409.78 8142.40Less: Progress bills raised 9333.31 6704.13

Due from customers 2076.47 1438.27

Total Work-in-Progress 2353.20 1686.47

3001.14 2210.27Sundry Debtors: [See Note No.17(a)]

Unsecured:Debts outstanding for more than 6 months:

Considered good 1523.66 1384.90Considered doubtful 222.86 208.43

1746.52 1593.33Other Debts:

Considered good 3980.98 3429.26

5727.50 5022.59Less: Provision for doubtful debts 222.86 208.43

5504.64 4814.16Cash and bank balances:

Cash on hand 3.33 3.12Cheques on hand 249.48 90.30Balances with scheduled banks:

on current accounts 292.72 104.60on fixed deposits including interest accrued thereon 99.13 184.49on margin money deposit accounts 1.62 (0.03)

Balances with non-scheduled banks (See Note No.4) 448.15 200.72

1094.43 583.20Loans and advances:

Secured, Considered good:Loans against mortgage of house property 28.77 35.37

Unsecured:Considered good:

Subsidiary companiesLoans including interest accrued thereon 41.14 121.82Others 77.29 59.62

Carried forward 147.20 9626.73 216.81 7624.89

118

Associate companiesAdvances recoverable [See Note No.17(b)] 3.55 3.77

Advances towards equity commitmentSubsidiary companies 2.16 108.28

Inter-Corporate depositsSubsidiary companies 95.32 41.13Associate companies [See Note No.17(b)] 10.00 10.00Others 15.00 -

Advances recoverable in cash or in kind (See Note No.16) 1967.86 1482.63Balance with customs, port trust, etc. 16.84 47.94

Considered doubtful:Deferred credit against sale of ships 18.08 18.55Advances recoverable in cash or in kind 23.40 49.12

2299.41 1978.23Less: Provision for doubtful loans and advances 41.48 67.67

2257.93 1910.56

11884.66 9535.45


Rs.crore Rs.crore Rs.crore Rs.croreSchedule G (Contd.)Brought forward 147.20 9626.73 216.81 7624.89

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

Rs.crore Rs.crore Rs.crore Rs.croreSchedule HCurrent Liabilities and Provisions:

Liabilities:Acceptances 91.92 75.49Sundry creditors:

Due to: Subsidiary Companies 226.03 172.08Small Scale Industries 46.11 36.34Others (See Note No.7) 3699.61 2830.51

3971.75 3038.93Due to customers:

Progress bills raised 13430.24 9963.79Less: Construction and Project related work-in-progress

At cost (Previous year Rs.758.43 crore) 686.24At estimated realisable value 11116.82

(Previous year Rs.8264.52 crore) 11803.06 9022.95

1627.18 940.84Advances from customers 2405.91 1800.29Items covered by Investor Education and Protection Fund (See Note No.43)

Unpaid dividend 33.90 9.34Unpaid matured deposits 0.22 0.61Unpaid matured debentures/bonds 2.20 2.90Interest accrued on bonds 0.05 0.09

36.37 12.94Due to Directors 14.70 10.68Interest accrued but not due on loans 8.81 8.12Pension payable under Voluntary Retirement-cum-Pension Scheme 0.49 1.61

(payable within one year: Rs.0.34 crore)


119

Provisions for:Current Taxes 607.07 368.56

Tax on Fringe Benefits 15.18 21.67

Proposed dividend 56.65 302.25

Additional tax on dividend 9.63 42.39

Gratuity 0.38 0.31

Compensated absences 209.03 123.86

Employee pension schemes 118.56 92.92

Post-retirement medical benefit plan (See Note No.12) 46.36 -

Long service awards 16.26 1.44

Premium payable on redemption of FCCBs 3.63 4.84

Other Provisions (See Note No.25) 97.38 63.41

1180.13 1021.65

9337.26 6910.55

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

Rs.crore Rs.croreSchedule IMiscellaneous Expenditure:

(to the extent not written off or adjusted)Voluntary Retirement-cum-Pension Schemes/Voluntary Retirement Schemes 9.84 21.98

9.84 21.98

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

Rs.crore Rs.croreSchedule JContingent Liabilities:

(a) Claims against the Company not acknowledged as debts 133.61 48.05

(b) Sales tax liability that may arise in respect of matters in appeal 58.42 61.18

(c) Excise duty/Service tax liability that may arise in respect of 7.44 16.86matters in appeal/challenged by the Company in writ

(d) Income tax liability (including penalty) that may arise in respectof which the Company is in appeal 0.22 0.16

(e) Guarantees given on behalf of Subsidiary Companies 60.53 6.95

(f) Guarantees given on behalf of Associate Companies 10.00 91.53

Notes:

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

2. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above, pending resolution of the arbitration/appellate proceedings.

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 thevalidity of the guarantees extends, except in a few cases where the cash outflows, if any, could occur any time during the subsistence of theborrowing to which the guarantees relate.


Rs.crore Rs.crore Rs.crore Rs.croreSchedule H (Contd.)Brought forward 8157.13 5888.90

120

Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)2006-2007 2005-2006

Rs.crore Rs.croreSchedule K

Sales & Service:

Manufacturing, trading and property development activity 4798.92 4278.95

Construction and project related activity 12622.50 10392.03

Servicing 141.84 114.73

Commission 146.94 81.96

Compensation, engineering and service fees 190.39 97.89

17900.59 14965.56

2006-2007 2005-2006

Rs.crore Rs.croreSchedule L (i)

Other Operational Income:

Income from hire of plant and machinery 12.06 2.73

Commercial leadership fees received from Integrated Joint Ventures 1.95 4.86

Technical fees 14.90 15.20

Company’s share in profit of Integrated Joint Ventures (net of tax) 6.41 6.44[See Note No.15]

35.32 29.23

2006-2007 2005-2006

Rs.crore Rs.crore Rs.crore Rs.croreSchedule L (ii)

Other Income:

Dividend income from long term investments:

Investments in Subsidiary companies 41.71 67.22

Trade investments 35.23 12.30

Other investments 10.81 2.49

87.75 82.01

Income from current investments in Mutual Funds 99.56 78.13

Lease rental 16.13 11.92

Profit on sale of long term investments (net) [See Note No.10(i)] 23.43 145.14

Profit on sale of fixed assets (net) 6.90 4.12

Gain on extinguishment of debt [See Note No.10(ii)] 0.51 1.01

Miscellaneous income 189.14 104.56

Unclaimed credit balances 3.55 7.71

426.97 434.60

121


Rs.crore Rs.crore Rs.crore Rs.croreSchedule M

Manufacturing, Construction and Operating Expenses:Raw materials and components consumed 3617.19 2925.37Add: Purchase of trading goods 1181.00 1145.80

4798.19 4071.17Less: Scrap sales 53.87 43.41

4744.32 4027.76Construction materials 3639.96 2998.48Sub-contracting charges 3274.87 3259.85Stores, spares and tools 469.26 357.57Direct expenses on jobs 493.00 331.44

12621.41 10975.10(Increase)/Decrease in manufacturing and trading stocks:

Closing stock:Finished goods 246.93 190.42Work-in-progress 698.55 633.20

945.48 823.62

Less : Opening stock:Finished goods (including stock of Rs.0.06 crore

acquired on amalgamation) (See Note No.42) 190.48 252.23Work-in-progress (including stock of Rs.0.04 crore

acquired on amalgamation) 633.24 699.77

823.72 952.00

(121.76) 128.38Value of materials,tools,work-in-progress and finished goods

transferred on sale of undertaking - (15.14)Excise duty 16.33 23.10Power & fuel 292.23 221.50Royalty and technical know-how fees 2.32 8.34Packing and forwarding 53.53 57.92Hire charges-Plant & machinery and others 161.99 117.81Repairs to:

Plant and machinery 40.92 33.72Buildings 11.27 9.61

52.19 43.33

13078.24 11560.34

2006-2007 2005-2006

Rs.crore Rs.crore Rs.crore Rs.croreSchedule N

Staff Expenses:Salaries, wages and bonus 829.84 637.54Contribution to and provision for:

Provident funds and pension fund 54.10 42.35Superannuation/Employee pension schemes (including provision of

Rs.36.98 crore; previous year Rs.14.58 crore) 64.55 33.06Gratuity funds

(including provision of Rs.0.07 crore; previous year Rs.0.02 crore) 50.79 6.97Compensated absences/Leave encashment 47.19 19.85

216.63 102.23Welfare and other expenses 211.74 152.77

1258.21 892.54

}

122


Rs.crore Rs.crore Rs.crore Rs.croreSchedule O

Sales, Administration and Other Expenses:Rent (including lease rental Rs.31.81 crore; previous year Rs.31.16 crore) 112.65 96.57Rates and taxes 53.70 37.99Packing and forwarding 49.58 58.25Travelling and conveyance 278.13 224.76Directors’ fees 0.26 0.26Telephone, postage and telegrams 50.00 42.53Advertising and publicity 48.95 29.97Stationery and printing 23.70 20.93Insurance 107.41 68.32Power and fuel 15.90 13.25Repairs to buildings 9.74 7.28Commission:

Distributors and agents 33.17 29.79Employees and others 32.07 7.05

65.24 36.84Bank charges 44.67 41.83General repairs and maintenance 106.21 92.99Professional fees 214.66 124.58Miscellaneous expenses 135.18 82.32Bad debts and advances written off 95.80 74.52Less: Provision for doubtful debts and advances written back 94.26 62.61

1.54 11.91Loss on sale of current investments (net) 7.26 17.10Loss on reassumption of debt - 55.91Discount on sales 37.07 31.68Provision for doubtful debts and advances (net) 82.50 39.89Provision for foreseeable losses on construction contracts 8.27 74.58Provision for diminution in value of investments 11.95 1.65Other Provisions (See Note No.25) 34.58 33.04

1499.15 1244.43

2006-2007 2005-2006

Rs.crore Rs.crore Rs.crore Rs.croreSchedule P

Interest & Brokerage:Debentures and fixed loans 35.84 59.57Others 57.15 70.97

92.99 130.54Less: (i) Received on inter-corporate deposits, from subsidiary and

associate companies, customers and others 28.11 35.48(tax deducted at source Rs.1.83 crore; previous year Rs.1.43 crore)

(ii) Income from long term investments:Interest on debentures, bonds and Government Securities 26.16 17.37(tax deducted at source Rs.Nil; previous year Rs.40532)

(iii) Income from current investments:Interest on debentures, bonds, Government Securities andCommercial paper 4.79 2.62(tax deducted at source Rs.0.62 crore; previous year Rs.Nil)

59.06 55.47

33.93 75.07

123

Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedule QSIGNIFICANT ACCOUNTING POLICIES:1. Basis of Accounting

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accountingprinciples [“GAAP”] except for the revaluation of certain fixed assets, and in compliance with the Accounting Standards referred to in Section211(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 thataffect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating tocontingent 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; andii 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 andproportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of costincurred-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/orbuilding 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”], arerecognised 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 bythe 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 anddevelopment 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. Benefitssuch as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognised in the period inwhich the employee renders the related service.

(b) Post-Employment Benefits(i) Defined Contribution Plans: The Company’s 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 recognisedduring 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 fundscheme managed by Trust are the Company’s defined benefit plans. The present value of the obligation under such defined benefit plansis determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving riseto 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 presentvalue of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheetdate, 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, torecognise 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.

124

Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedules forming part of Accounts (contd.)Schedule Q (Contd.)

(c) Long Term Employee BenefitsThe obligation for long term employee benefits such as long term compensated absences, long service awards etc. is recognised in thesame manner as in the case of defined benefit plans as mentioned in (b) (ii) above.

(d) Termination BenefitsWhere termination benefits such as compensation under voluntary retirement cum pension scheme are payable within a year of the balancesheet date, the actual amount of termination benefits is amortised over a defined period. Where termination benefits are payable beyondone 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.

5. Fixed AssetsFixed assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation, accumulated amortisation andcumulative impairment and those which were revalued as on October 1,1984 are stated at the values determined by the valuers less accumulateddepreciation, 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 commencementof 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.)

6. 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 leaserentals 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 minimumlease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and theinterest 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 classifiedas 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 incomeis 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)

7. 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 betweendepreciation provided based on revalued amount and that on historical cost is transferred from Revaluation Reserve to Profit and LossAccount.

(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 (atthe rates prescribed under Schedule XIV to the Companies Act, 1956) and on straight line basis on assets acquired subsequently (atthe rates prevailing at the time of their acquisition) on assets acquired up to September 30, 1987 and at the rates prescribed underSchedule XIV on assets acquired after that date). However, in respect of the following asset categories, depreciation is provided athigher rates in line with their estimated useful life.

Category of assets Rate of Depreciation (% p.a.)Furniture and Fixtures 10.00Plant and Machinery:

i) Office Equipment 6.67ii) Cranes above 1000 ton capacity used in construction activity 6.67iii) Minor Plant & Machinery used in construction activity 20.00iv) Heavy Lift Equipment used in construction activity 5.00v) Earthmoving, tunnelling & transmission line equipment

(other than employed in heavy construction work) 10.00vi) Air conditioning and Refrigeration Equipment 8.33vii) 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.

125

(iv) Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the assetis allocated over its remaining useful life.

(b) 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 suchassets is provided for on straight line method as per Schedule XIV to the Companies Act, 1956, the difference is adjusted throughlease 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 certaintythat the Company shall obtain ownership of the assets at the end of the lease term, such assets are depreciated at the ratesprescribed under Schedule XIV to the Companies Act, 1956 or at the higher rates adopted by the Company for similar assets.

8. Intangible Assets and AmortisationIntangible assets are recognised as per the criteria specified in Accounting Standard (AS) 26 “Intangible Assets” issued by the Institute ofChartered 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 technologyAmortisation on impaired assets is provided by adjusting the amortisation charges in the remaining periods so as to allocate the asset’s revisedcarrying amount over its remaining useful life.

9. Impairment of AssetsAs 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

unit’s 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 theend of its useful life)

10. InvestmentsLong term investments including interests in incorporated Jointly Controlled Entities, are carried at cost, after providing for any diminution invalue, if such diminution is of other than temporary nature. Current investments are carried at lower of cost or market value. The determinationof carrying amount of such investments is done on the basis of specific identification. Investments in Integrated Joint Ventures are carried at costnet of adjustments for Company’s share in profits or losses as recognised.

11. InventoriesInventories 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 onsuch 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 AppreciationRights 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.


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13. Borrowing CostsBorrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of suchasset 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 periodof 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 SchemesIn respect of stock options granted pursuant to the Company’s Employee Stock Option Schemes, the intrinsic value of the options (excess ofmarket price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation cost over thevesting period.

15. Miscellaneous ExpenditureLump sum compensation paid under Voluntary Retirement-cum-Pension Schemes are amortised over a period of five years. The future pensionsunder 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 whichare 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 Company’s monetaryitems 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 andtranslated as in the same manner as foreign currency transactions, as described in (b) above. Exchange differences arising on suchtranslation 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 probableforecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on suchcontracts are recognised in the period in which they arise and the premium paid/received is accounted as expense/income over the periodof 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 themovement 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 accountas 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 policieshave 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. Unallocableassets mainly comprise trade investments in Subsidiary and Associate companies that constitute or relate to the portfolio of theCompany’s core/thrust areas of business such as infrastructure development and software solutions. Unallocable liabilities includemainly loan funds, provisions for employee retirement benefits and proposed dividend.

(b) Inter-segment transfer pricingSegment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between thesegments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis.

18. Taxes on IncomeTax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisionsof the Income Tax Act, 1961, and based on the expected outcome of assessments/appeals.

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Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year, and quantified using thetax 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 willbe 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 Accounting treatment

Jointly Controlled Operations Company’s share of revenues, common expenses, assets and liabilities are included in Revenues,Expenses, Assets and Liabilities respectively.

Jointly Controlled Assets Share of the Assets, according to nature of the assets, and share of the Liabilities are shown as partof Gross Block and Liabilities respectively. Share of expenses incurred on maintenance of the assetsis accounted as expense. Monetary benefits, if any, from use of the assets are reflected as income.

Jointly Controlled Entities (i) Integrated Joint Ventures:

a) Company’s share in profits or losses of Integrated Joint Ventures is accounted ondetermination of the profits or losses by the Joint Ventures.

b) Investments in Integrated Joint Ventures are carried at cost net of Company’s share inrecognised profits or losses.

(ii) Incorporated Jointly Controlled Entities:

a) Income on investments in incorporated Jointly Controlled Entities is recognised when theright to receive the same is established.

b) Investment in such Joint Ventures is carried at cost after providing for any permanentdiminution in value.

Joint Venture interests accounted as above, other than investments in Incorporated Jointly Controlled Entities, are included in the segments towhich 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) the Company has a present obligation as a result of a past event,

(b) a probable outflow of resources is expected to settle the obligation; and

(c) 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 thereimbursement will be received.

Contingent liability is disclosed in case of

(a) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

(b) a present obligation when no reliable estimate is possible; and

(c) 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.

128

Notes forming part of AccountsNotes forming part of AccountsNotes forming part of AccountsNotes forming part of AccountsNotes forming part of Accounts1. 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 RedemptionReserve: 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’ StockOwnership 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 5Year 1.25 % US$ denominated Foreign Currency Convertible Bonds convertible into International Global Depository Shares representingequity 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 ZeroCoupon Japanese Yen Foreign Currency Convertible Bonds convertible into International Global Depository Shares representingequity shares of the Company.#

b) Options outstanding as at the end of the year on unissued share capital:

Number of equity sharesParticulars to be issued as fully paid

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

On conversion of 5 Year 1.25% US$ Foreign Currency Convertible Bonds Nil 8,76,741

On conversion of 5 Year Zero coupon Japanese Yen Foreign Currency Convertible Bonds# 35,55,693 17,94,911

Employee Stock Options granted and outstanding# 1,20,43,601 39,58,827c) 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.

2. 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 1999 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

1 Grant Price (Prior to Bonus Issue)-Rupees NA 14 14 14 14 14 14 14 70 70 70 70 2404 -Grant Price (Post Bonus Issue)-Rupees NA - 7 - 7 - 7 - 35 - 35 - 1202 -

2 Grant Dates 1-9-1999 1-6-2000 19-4-2002 19-4-2002 23-5-2003 23-5-2003 1-9-2006

onwards onwards onwards

3 Vesting commences on 1-9-2000 1-6-2001 19-4-2003 19-4-2003 23-5-2004 23-5-2004 1-9-2007

onwards onwards onwards

4 Options granted and outstandingat the beginning of the year - 1875 8600 28675 360703 798500 389561 836353 1298417 2051662 1901546 1980738 - -

5 Options lapsed during the period1-4-2006 to 29-9-2006/during previous year - - - - - 2113 - 3257 9601 33572 31372 16208 - -

6 Options granted during the period1-4-2006 to 29-9-2006/during previous year - - - - - - - - - - 56460 602670 5335750 -

7 Options exercised during the period1-4-2006 to 29-9-2006 /during previous year for whichshares are allotted - 1875 4400 20075 355328 435684 374636 443535 641656 719673 634227 665654 - -

8 Options outstanding as on29-9-2006 prior to Bonus issue - - 4200 - 5375 - 14925 - 647160 - 1292407 - 5335750 -

9 Adjusted options consequent toBonus issue as on 29-9-2006 - - 8400 - 10750 - 29850 - 1294320 - 2584814 - 10671500 -

10 Options lapsed post bonus issue - - - - - - - - 24564 - 56339 - - -11 Options granted post bonus issue - - - - - - - - - - 216040 - - -

12 Options exercised post bonus issuefor which shares are allotted - - - - - - 10000 - 1236540 - 1444630 - - -

13 Options granted and outstandingat the end of the year - - 8400 8600 10750 360703 19850 389561 33216 1298417 1299885 1901546 10671500 -of which –Options vested - - 8400 8600 10750 4500 19850 13250 16898 11450 20984 9502 - -Options yet to vest - - - - - 356203 - 376311 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 ofBonus 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.

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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 mortgageon the Company’s immovable properties at certain locations and / or by hypothecation of movables at those locations (save and exceptbook debts) both present and future, having pari passu rights, subject to prior charges, on specific assets in favour of the Company’sbankers.

b) 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.

c) Other loans and advances from banks grouped under Unsecured Loans include loans availed from banks outside India amounting toRs.132.94 crore secured by corporate guarantee & project-specific receivables.

4. a) Balances with Non-scheduled banks represent the balances with Indian banks classified as non-scheduled banks by the Reserve Bank ofIndia and with all overseas branches of foreign banks. The balances with Non-Scheduled banks held in:

Maximum amount outstandingParticulars As at As at at any time during

31-3-2007 31-3-2006 2006-2007 2005-2006


i) Current AccountsAbu Dhabi Commercial Bank, Abu Dhabi 0.09 0.09 0.89 2.36Abu Dhabi Commercial Bank, UAE 17.10 4.40 17.10 4.40Abu Dhabi Islamic Bank, UAE 0.33 0.57 1.57 4.41Arab Bank PLC, Amman - - - 0.08Arab Bank PLC, Bahrain 0.53 3.44 3.44 7.45Arab Bank PLC, Bahrain - - - 0.46Arab Bank, Jordan 3.87 3.33 5.42 17.21Bank of Baroda (Kenya) Limited, Kenya - - - 0.38Bank of Bhutan 0.58 10.59 10.59 14.92Bank of Commerce & Development, Libya 0.38 0.36 0.38 0.36Bank of Ceylon, Colombo, Sri Lanka - - - 0.01Bank of Foreign Economic Affairs, CIS, Moscow - - - -

(As at 31-3-2007: Rs.Nil, as at 31-3-2006: Rs.Nil. Maximumoutstanding 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 outstandingin 2006-2007 Rs.76303 and in 2005-2006 Rs.10894)

Bank of Nova Scotia, Barbados 2.56 8.47 20.20 15.42Bank of Thimpu, Bhutan (As at 31-3-2007: Rs.Nil, - - - -

as at 31-3-2006: Rs.Nil. Maximum outstandingin 2006-2007 Rs.Nil and in 2005-06 Rs.1095).

Bank Tuanalem, Kazakhstan 0.01 0.03 0.03 0.04BFTRF US$ Moscow Office, Moscow (As at 31-3-2007: Rs.Nil, - - - -

as at 31-3-2006: Rs.Nil. Maximum outstandingin 2006-2007 Rs.Nil and in 2005-2006: Rs.11735)

Citibank, Dubai - - - 0.02Citibank, New York - - - 1.67Citibank, Tanzania - 0.22 0.22 0.29Citibank, Tokyo (JPY) - 3.44 3.44 107.65Citibank, Tokyo (USD) - 0.14 0.14 235.56Deutsche Bank, Singapore 0.02 2.31 2.33 2.31Hakrin Bank NV, (USD) Surinam - - - 0.17Hakrin Bank NV, (Guilder) Surinam (As at 31-3-2006: Rs.2655) 0.02 - 0.02 0.35Hongkong & Shanghai Banking Corporation (RMD), China 0.22 0.02 0.22 0.13Hongkong & Shanghai Banking Corporation (USD), China 0.16 0.17 0.31 0.24HSBC Bank Middle East Limited, Abu Dhabi 0.24 5.93 11.70 33.40HSBC Bank Middle East Limited, Dubai - 0.20 9.13 5.97HSBC Bank, UAE 4.47 1.16 7.20 6.23Mashreq Bank, Dubai 0.02 (0.30) 13.50 16.46Mashreq Bank, UAE 0.43 0.05 25.83 22.82National Bank of Kuwait, Kuwait 33.24 0.32 33.39 21.06Nepal Indo Suez Bank, Kathmandu, Nepal - - - 0.05Nepal Investment Bank Limited, Nepal - 0.01 0.07 2.72Rafidian Bank, Abu Dhabi - - - 8.99Rafidian Bank, Iraq 8.93 9.17 9.17 9.17Standard Chartered Bank, Dubai 0.81 2.69 2.69 25.30

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)

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Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Maximum amount outstanding

Particulars As at As at at any time during

31-3-2007 31-3-2006 2006-2007 2005-2006


Standard Chartered Bank, Tanzania - 0.15 0.15 3.50Standard Chartered Bank, Malaysia 0.36 1.08 4.20 1.08State Bank of Mauritius, Mauritius - - - 0.96Union Bank of Bhutan, Jongkhar, Bhutan - - - 7.24Union National Bank, Abu Dhabi 6.02 2.70 16.47 36.08Uttara Bank Limited, Bangladesh 0.56 0.04 2.50 4.17

Total (i) 80.95 60.78

ii) Call Depositsa) Mashreq Bank, Dubai 0.75 0.77 0.77 0.77b) Standard Chartered Bank, Dubai - - - 0.12c) The Bank of Nova Scotia, Barbados 7.24 - 7.24 -

Total (ii) 7.99 0.77

iii) Fixed DepositsBank of India, Singapore 152.19 - 152.19 -Deutsche Bank, Singapore 1.98 - 1.98 1.97Hongkong & Shanghai Banking Corporation, Abu Dhabi - - - 6.56Hongkong & Shanghai Banking Corporation, Dubai - - - 2.30HSBC Bank Middle East Limited, Abu Dhabi 4.56 3.35 4.56 20.68HSBC Bank Middle East Limited, Dubai 2.74 - 9.07 3.15HSBC Middle East Fixed Deposit Account, UAE - 7.96 7.96 7.96Mashreq Bank, Dubai 197.74 116.96 203.22 176.45National Bank of Kuwait, Kuwait - - - 8.61Standard Chartered Bank, Malaysia - 10.90 10.90 10.90Union National Bank, Abu Dhabi - - - 35.29

Total (iii) 359.21 139.17

Total (i) + (ii) + (iii) 448.15 200.72

b) Call deposit with Mashreq Bank, Dubai, UAE, Rs.0.75 crore is subject to an escrow arrangement duly approved by the Reserve Bank ofIndia, whereby the proceeds of the deposit, together with interest thereon, would be applied towards full and final settlement of loan takenfrom Rafidian Bank, Iraq, which is included under Unsecured Loans. Once the UN embargo against Iraq is lifted, the settlement would beeffected.

5. Loans and advances include:

i) amount due from an officer of the Company: Rs.Nil (previous year Rs.0.04 crore). Maximum amount outstanding at any time during theyear: Rs.0.04 crore (previous year Rs.0.06 crore).

ii) rent deposit with whole-time directors: Rs.0.07 crore (previous year Rs.0.07 crore). Maximum amount outstanding at any time during theyear: Rs.0.07 crore (previous year Rs.0.07 crore).

iii) amount, including interest, due from the Managing Director and whole-time directors in respect of Housing Loan: Rs.0.76 crore (includinginterest accrued) (previous year Rs.1.13 crore). Maximum amount outstanding at any time during the year: Rs.1.79 crore (previous yearRs.1.13 crore).

6. Sundry creditors include overdue amounts (mainly unclaimed) of Rs.1.35 crore (including interest of Rs.0.39 crore) payable to Small Scale andAncillary Industries.

7. Sundry creditors – Others include Rs.4.61 crore (previous year Rs.12.25 crore), being contribution received from the employees of the Companyand some of its Subsidiary & Associate Companies, on behalf of L&T Employees’ Welfare Foundation Trust and held on accountfor it.

8. Sales and Service include Rs.119.24 crore (previous year Rs.23.74 crore) for price variations net of liquidated damages in terms of contractswith the customers and receivable discounting charges.

9. Disclosures pursuant to Accounting Standard (AS) 7 (Revised):Rs.crore

i) Contract revenue recognised for the year ended March 31, 2007 12622.50

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 23212.84

iii) Amount of customer advances outstanding for contracts in progress as at March 31, 2007 2004.62

iv) Retention amounts due from customers for contracts in progress as at March 31, 2007 1062.96

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Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)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 thesecategories of assets have been revised, resulting in additional charge of depreciation of Rs.21.39 crore and profit before tax for the year is lowerto 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 onthis account has now been determined based on actuarial valuation as on March 31, 2007. Due to this change in accounting policy, the profit forthe 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 (netof tax) has been debited to the General Reserve. The said amount represents the difference between the liability in respect of variousemployee benefits determined under AS 15 (Revised) as on April 1, 2006 and the liability that existed as on that date as per AS 15 priorto 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

Post- TrustParticulars retirement Company Managed

Gratuity Medical Pension ProvidentPlan Benefit Plan Plan Fund Plan

A. Amount to be recognised in Balance SheetPresent Value of Defined Benefit Obligation- Wholly Funded 203.07 - - 827.24- Wholly Unfunded 0.38 46.36 119.76 -

203.45 46.36 119.76 827.24Less: Fair value of Plan Assets 152.93 - - 839.86

Unrecognised Past Service Costs - - 1.20 -

Amount to be recognised as liability or (asset) 50.52 46.36 118.56 (12.62)@B. Amounts reflected in the Balance Sheet

Liabilities 50.52 46.36 118.56 0.75Assets - - - -

Net liability/(asset) 50.52 46.36 118.56 0.75 #

b) The amounts recognised in Profit and Loss Account are as follows:Rs.crore

2006-2007



1. Current Service Cost 11.91 See Note 3.59 32.88**Below*

2. Interest Cost 12.41 See Note 8.18 64.60below*

3. Expected Return on Plan Assets (11.08) - - (62.71)+

4. Actuarial Losses/(Gains) 20.56 - 2.40 (5.16)+

5. Past Service Cost - - - -

6. Effect of any curtailment or settlement - - - -

7. Actuarial Gain not recognised in books - - - 3.27+

8. Adjustment for earlier years 16.99 - 25.12 -

Total included in “Staff Expenses” (1 to 8) 50.79 46.36 39.29 32.88

Actual Return on Plan Assets 8.17 - - 67.87

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c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereofare as follows:

Rs.crore



Balance of the present value ofDefined Benefit Obligation as at 1-4-2006 173.24 - 106.69 757.87

Add: Current Service Cost 11.91 46.36* 3.59 -Add: Interest Cost 12.41 See Note 8.18 64.60

below*Add: Contribution by plan participants

i) Employer - - - 32.88**ii) Employee - - - 69.10

Add/(less): Actuarial losses / (gains) 17.64 - 2.40 -Less: Benefits paid (12.27) - (2.30) (97.21)Add: Past service cost - - 1.20 -Add: Liabilities assumed on amalgamation 0.52 - - -Balance of the present value of

Defined Benefit Obligation as at 31-3-2007 203.45 46.36 119.76 827.24

Notes: @ Asset is not recognised in the Balance Sheet.# Employer’s 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.** Employer’s 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.d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:

Rs.crore

Particulars Trust-ManagedProvident Fund Plan

Gratuity Plan (See Note below)

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

Note: The fair value of the plan assets under the Trust-Managed Provident Fund plan has been determined at amounts based ontheir 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 providentfund 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 Trust-ManagedGratuity Plan Provident Fund Plan

1. Government of India Securities 34% 20%2. State Government Securities - 13%3. Corporate Bonds 36% 5%4. Equity Shares of Listed Companies 1% -5. Fixed Deposits under Special Deposit Scheme framed by

Central Government for Provident Funds 22% 33%6. Insurer Managed Funds 3% -7. Public Sector Unit Bonds - 29%8. Others 4% -


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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 oninvestments is determined based on the assessment made by the Company at the beginning of the year on the return expected on itsexisting portfolio, along with the estimated incremental investments to be made during the year. Yield on the portfolio is calculatedbased on a suitable mark-up over the benchmark Government securities of similar maturities.

f) Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):1 Discount rate as at 31-3-2007 8.23%

2 Expected return on plan assets as at 31-3-2007 7.50%

3 Annual increase in healthcare costs (see note below) 5.00%

4 Salary growth rate:

a) Gratuity scheme 6%

b) Company pension scheme 7%

5 Attrition rate:

a) For post-retirement medical benefits and Company’s pension scheme, the attrition rate varies from 2% to 8% for variousage groups.

b) For gratuity scheme the attrition rate varies from 1% to 7% for various age groups.

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

7 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.

8 A one percentage point change in assumed healthcare cost trend rates would have the following effects on the aggregate of theservice cost and interest cost and defined benefit obligation:

Rs.croreEffect of

Particulars 1% increase 1% decrease

Effect on the aggregate of the service cost and interest cost 0.67 (0.54)

Effect on defined benefit obligation 3.05 (2.50)

g) The amounts pertaining to defined benefit plans are as follows:

Rs.crore

Particulars As at 31-3-2007

1. Post-Retirement Medical Benefit Plan (Unfunded)Defined Benefit Obligation 46.36

2. Gratuity PlanDefined Benefit Obligation 203.45Plan Assets 152.93Surplus/(deficit) (50.52)

3. Post-Retirement Pension Plan (Unfunded)

Defined Benefit Obligation 118.56

4. Trust-managed Provident Fund PlanDefined Benefit Obligation 827.24Plan Assets 839.86Surplus/(deficit) 12.62

Note: The current year ended March 31, 2007, being the first year of adoption of AS 15 Revised-Employee Benefits, the figures forthe 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 drawnfor each completed year of service. The same is payable on termination of service, or retirement, whichever is earlier. Thebenefit vests after five years of continuous service. The Company’s scheme is more favorable compared to the obligation underPayment 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 employeespost their retirement. The reimbursement is subject to an overall ceiling sanctioned at the time of retirement. The ceiling is basedon cadre of the employee at the time of retirement.


134

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)3. Company’s Pension Plan:

In addition to contribution to State managed Pension plan (EPS scheme), the Company operates a pension scheme, which isdiscretionary 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 TheEmployees’ Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and employeesand 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 underthis 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. Name of Joint Venture Description of interest/ Proportion of Country ofNo. (Description of job) Ownership

Interest Incorporation Residence

1 L&T Valdel Engineering Limited Incorporated Jointly Controlled Entity(Upstream Oil & Gas and design & engineering) 0.50 India India

2 L&T-Hochtief Seabird Integrated Joint VentureJoint Venture (Construction of breakwater at Karwar) 0.90 # India

3 International Metro Civil Integrated Joint VentureContractors (Construction of Delhi Metro Corridor Phase

I Tunnel Project) 0.26 # India

4 HCC-L&T Purulia Joint Venture Integrated Joint Venture(Construction of Pumped Storage Project) 0.43 # India

5 Desbuild-L&T Joint Venture Integrated Joint Venture(Renovation of US Consulate, Chennai) 0.49 # India

6 Bauer-L&T Diaphragm Wall Integrated Joint VentureJoint Venture (Construction of Diaphragm Wall for

International Metro Civil Contractors) 0.50 # India

7 Larsen & Toubro Ltd-Shapoorji Integrated Joint VenturePallonji & Co. Limited (Execution of civil & associated works forJoint Venture (Ebene Cybercity) Ebene Cybercity Project, Mauritius) 0.50 # Mauritius

8 Larsen & Toubro Ltd-Shapoorji Integrated Joint VenturePallonji & Co. Limited Joint (Execution of civil & associated works forVenture (Les Pailles Exh. Centre) Les Pailles Exhibition Centre, Mauritius) 0.50 # Mauritius

9 L&T-AM Tapovan Integrated Joint VentureJoint Venture (Construction of Head Race Tunnel for

Tapovan Vishnugad Hydro Electric projectat Chamoli, Uttaranchal) 0.65 # India

10 Metro Tunnelling Group Integrated Joint Venture(Construction of Delhi Metro Corridor-Phase II Tunnel Project) 0.26 # India

11 L &T-HCC Joint Venture Jointly Controlled Operation(Four laning and strengthening of existing twolane sections from 240 Km to 320 Km on NH2) - # India

12 Patel – L&T Consortium Jointly Controlled Operation(Hydro Electric Project) - # India

13 Consortium of Samsung Heavy Jointly Controlled OperationIndustries Co. Ltd., (Execution of Vasai East DevelopmentKorea and L&T project of ONGC Ltd.) - # India

14 Consortium of Global Industries Jointly Controlled OperationOffshore LLC, USA and L&T (Execution of Pipeline Replacement project

of ONGC Ltd.) - # India

15 Lurgi L&T KQKS Consortium Jointly Controlled Operation(Execution of Melaka Group 3 LubricantBase Oil Plant for Petronas) - # Malaysia

16 Consortium of Toyo Engineering Jointly Controlled OperationCompany & L&T (Execution of Naptha Cracker Associated

Unit for IOCL, Panipat) - # India

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

135

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)b) Financial interest in Jointly Controlled Entities

Rs.crore

Sr. Company’s share of

No. Name of the Joint Venture Assets Liabilities Income Expenses Tax

As at 31-3-2007 For the year 2006-2007

1 L&T Valdel Engineering Private Limited 8.51 5.78 12.54 10.18 0.32(4.95) (3.13) (7.79) (5.62) (0.56)

2 L&T-Hochtief Seabird Joint Venture 50.70 46.49 0.56 0.03 0.18(53.86) (46.56) (6.37) (1.45) (1.77)

3 International Metro Civil Contractors 14.04 7.11 14.71 9.35 0.61(27.83) (15.20) (71.45) (71.41) (0.04)

4 HCC-L&T Purulia Joint Venture 15.21 6.43 12.76 10.99 0.61(16.62) (8.51) (23.20) (19.35) (1.32)

5 Desbuild-L&T Joint Venture 0.35 0.28 - - #(0.51) (0.44) - - -

6 Bauer-L&T Diaphragm Wall Joint Venture 0.33 0.10 - 0.02 -(0.25) (0.10) (-) (0.02) (-)

7 Larsen & Toubro Limited-Shapoorji Pallonji &Company Limited Joint Venture (Ebene Cybercity) 3.83 4.00 0.40 0.18 0.08

(4.40) (4.09) (0.13) (-) (0.04)

8 Larsen & Toubro Limited-Shapoorji Pallonji & CompanyLimited Joint Venture (Les Pailles Exhibition Centre) 2.07 1.78 0.03 0.02 ##

(3.64) (2.83) (2.18) (1.14) (0.35)

9 L&T-AM Tapovan Joint Venture 6.44 0.97 1.15 1.15 -(-) (-) (-) (-) (-)

10 Metro Tunnelling Group 14.46 12.53 0.51 0.48 0.01(-) (-) (-) (-) (-)

Total 115.94 85.47 42.66 32.40 1.81(112.06) (80.86) (111.12) (98.99) (4.08)

Share of Net Assets/Profit after tax in 30.47 8.45Integrated Joint Ventures (31.20)(31.20)(31.20)(31.20)(31.20) (8.05)(8.05)(8.05)(8.05)(8.05)

# 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 sharein 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.68.75crore (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 yearscommencing 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 FinanceLimited, 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 Directorsof the Company are Directors:

Rs.crore

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

Name of the Company Outstanding Others Outstanding Others for more than for more than

6 months 6 months

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.

136

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)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. Advances Recoverable Inter-Corporate Deposits

No. Name of the Company As at As at As at As at 31-3-2007 31-3-2006 31-3-2007 31-3-2006

1 L&T-Case Equipment Private Limited # - 1.70 - 10.00

2 L&T-Valdel Engineering Private Limited ## - 0.81 - -

# 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 Maximum outstanding during

31-3-2007 31-3-2006 2006-2007 2005-2006

A Loans and advances in the nature of Loans given toSubsidiaries:

1 Larsen & Toubro Infotech Limited - 5.50 5.50 5.50

2 India Infrastructure Developers Limited 36.33 36.33 36.33 36.33

3 Bhilai Power Supply Company Limited 4.81 85.49 85.49 85.49

4 Tractor Engineers Limited - - - 3.00

5 L&T Finance Limited 85.31 35.63 85.31 35.63

6 International Seaport Dredging Private Limited 10.00 - 10.00 -

Total 136.45 162.95

B Loans and advances in the nature of loans given toAssociates:

1 L&T-Case Equipment Private Limited 10.00 10.00 10.00 10.00

2 The Dhamra Port Company Limited - - - 0.58

Total 10.00 10.00

C Loans and advances in the nature of loans whererepayment schedule is not specified/is beyond 7 years:

1 India Infrastructure Developers Limited 36.33 36.33 36.33 36.33[See Note (b) below]


Total 41.14 121.82

D Loans and advances in the nature of loans whereinterest is not charged or charged below bank rate:

1 India Infrastructure Developers Limited 36.33 36.33 36.33 36.33[See Note (b) below]


Total 41.14 121.82

Notes: a) Loans to employees (including Directors) under various schemes of the Company (such as housing loan, furniture loan, educationloan, 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. IndiaInfrastructure Developers Limited (IIDL), a wholly-owned subsidiary of the Company, was used as a Special Purpose Vehicle tofinance the lease of the said power plant. The amount advanced to IIDL as above, to optimise its capital structure and to fund itscash flow gaps, would be repaid out of surpluses generated over the tenor of the lease. Accordingly, no repayment period has beenprescribed in respect of the said loan. Further, the amount has been granted as an interest-free loan, as IIDL is a wholly-ownedsubsidiary and is mandated to remain so over the lease tenor.

137

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)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 respectof assets/liabilities as at March 31, 2007 – denoted as “CY” below, previous year denoted as “PY”)i) Primary Segments (Business Segments):

Rs.crore

Engineering Electrical Machinery & Others Elimination TotalParticulars & Construction & Electronics Industrial Products

CY PY CY PY CY PY CY PY CY PY CY PY

Revenue – includingexcise duty

External 13276.39 11424.59 1983.27 1504.30 1832.77 1473.34 843.48 592.56 - - 17935.91 14994.79Inter-Segment 148.66 145.77 83.81 45.68 10.23 0.49 97.82 79.67 (340.52) (271.61) - -Total Revenue 13425.05 11570.36 2067.08 1549.98 1843.00 1473.83 941.30 672.23 (340.52) (271.61) 17935.91 14994.79

ResultSegment Result 1407.57 860.93 307.60 227.31 313.14 198.65 73.23 53.59 - - 2101.54 1340.48Less: Inter-Segment margins

0n capital jobs 13.42 24.492088.12 1315.99

Unallocated Corporate income/(expenditure) (net) (49.30) 72.73

Operating Profit (PBIT) 2038.82 1388.72Interest expense (92.99) (130.54)Interest income 59.06 55.47Profit before tax (PBT) 2004.89 1313.65Provision for current taxes 612.32 364.94Provision for deferred tax (25.63) (15.35)Provision for tax on fringe benefit 15.18 21.67Profit after tax 1403.02 942.39

(before extra-ordinary items)Profit from extra-ordinary items - 69.75Profit after tax 1403.02 1012.14

(after extra-ordinary items)

Other information:Segment assets 9799.52 7929.29 1226.34 723.31 805.24 571.76 419.72 249.76 - - 12250.82 9474.12Unallocable corporate assets 5137.50 3739.96Total assets 17388.32 13214.08Segment liabilities 6912.97 4981.79 516.43 359.92 493.11 361.58 225.68 61.58 - - 8148.19 5764.87Unallocable corporate liabilities 3471.70 2809.04Total liabilities 11619.89 8573.91Capital expenditure 673.88 418.56 89.40 35.24 15.27 9.61 21.08 34.86Depreciation

(including obsolescence,amortisation and impairment)included in segment expense 108.82 65.54 21.06 11.69 9.83 12.45 13.64 9.69

Non-cash expensesother than Depreciationincluded in segment expense 36.84 4.94 6.70 6.51 7.72 1.31 4.07 3.34

(ii) Secondary Segments (Geographical segments):Rs.crore

Particulars Domestic Overseas Total

CY PY CY PY CY PY

External Revenue by location of customers 14788.84 12352.44 3147.07 2642.35 17935.91 14994.79

Carrying amount of Segment Assets by location of assets 10658.22 8593.86 1592.60 880.26 12250.82 9474.12

Cost incurred on acquisition of tangible and intangible fixed assets 798.90 463.91 0.73 34.36 799.63 498.27

138

c) Segment Reporting: Segment Identification, Reportable Segments and definition of each reportable segment:

i) Primary/Secondary Segment Reporting Format:

(a) The risk-return profile of the Company’s 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.

(b) 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.

ii) 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 bythe Institute of Chartered Accountants of India.

iv) Segment Composition:

• Engineering & Construction Segment comprises execution of Engineering and Construction projects to provide solutions incivil, 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/detailedengineering, 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-builtswitchboards, petroleum dispensing pumps & systems, electronic energy meters/protection (relays) systems, control & automationproducts and medical equipment.

• Machinery & Industrial Products Segment comprises manufacture and sale of industrial machinery & equipment, marketing ofindustrial 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 Relationship

1 Tractor Engineers Limited Wholly Owned Subsidiary

2 L&T Finance Limited Wholly Owned Subsidiary

3 L&T Capital Company Limited Subsidiary of L&T Finance Limited#

4 Larsen & Toubro Infotech Limited Wholly Owned Subsidiary

5 Larsen & Toubro Infotech GmbH Wholly Owned Subsidiary of Larsen & Toubro Infotech Limited

6 L&T Transportation Infrastructure Limited Subsidiary of L&T Infrastructure Development Projects Limited#

7 HPL Cogeneration Limited Subsidiary*

8 Narmada Infrastructure Construction Enterprise Limited Subsidiary of L&T Infrastructure Development Projects Limited#

9 L&T Western India Tollbridge Limited Subsidiary of L&T Infrastructure Development Projects Limited#

10 India Infrastructure Developers Limited Wholly Owned Subsidiary

11 Larsen & Toubro LLC Subsidiary*

12 Larsen & Toubro International FZE Wholly Owned Subsidiary

13 L&T Infrastructure Development Projects Limited Subsidiary*

14 L&T Infocity Limited Subsidiary of L&T Urban Infrastructure Limited#

15 Hyderabad International Trade Expositions Limited Subsidiary of L&T Infocity Limited#

16 Andhra Pradesh Expositions Private Limited Wholly Owned Subsidiary of Hyderabad International TradeExpositions Limited

17 L&T-ECC Construction (M) SDN. BHD. Subsidiary of Larsen & Toubro International FZE##

18 Bhilai Power Supply Company Limited Subsidiary*

19 Larsen & Toubro (Oman) LLC Subsidiary of Larsen & Toubro International FZE#

20 Raykal Aluminum Company Private Limited Subsidiary of India Infrastructure Developers Limited#

21 Cyber Park Development & Construction Limited Subsidiary of L&T Infrastructure Development Projects Limited#

22 L&T-Sargent & Lundy Limited Subsidiary*

23 Larsen & Toubro Qatar LLC Subsidiary of Larsen & Toubro International FZE##

24 L&T Overseas Projects Nigeria Limited Wholly Owned Subsidiary of Larsen & Toubro International FZE

25 L&T Infocity Infrastructure Limited Subsidiary of L&T Infocity Limited#

139

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Sr. No. Name of the Related Party Relationship

26 Larsen & Toubro Electromech LLC Subsidiary of Larsen & Toubro International FZE#

27 L&T Infocity Lanka Private Limited Subsidiary of L&T Infocity Limited#

28 L & T (Wuxi) Electric Company Limited Wholly Owned Subsidiary of Larsen & Toubro International FZE

29 International Seaports Pte. Limited Wholly Owned Subsidiary

30 International Seaports (India) Private Limited Wholly Owned Subsidiary of International Seaports Pte. Limited

31 L&T Panipat Elevated Corridor Private Limited Wholly Owned Subsidiary of L&T Infrastructure DevelopmentProjects Limited

32 L&T Tech Park Limited Subsidiary of L&T Infrastructure Development Projects Limited#

33 L&T Krishnagiri Thopur Toll Road Limited Wholly Owned Subsidiary of L&T Infrastructure DevelopmentProjects Limited

34 L&T Western Andhra Tollways Limited Wholly Owned Subsidiary of L&T Infrastructure DevelopmentProjects Limited

35 L&T Vadodara Bharuch Tollway Limited Wholly Owned Subsidiary of L&T Infrastructure DevelopmentProjects Limited

36 L&T Interstate Road Corridor Limited Wholly Owned Subsidiary of L&T Infrastructure DevelopmentProjects Limited

37 Spectrum Infotech Private Limited Wholly Owned Subsidiary

38 L&T Urban Infrastructure Limited Subsidiary of L&T Infrastructure Development Projects Limited#

39 Larsen & Toubro Information Technology Wholly Owned Subsidiary of Larsen & Toubro Infotech LimitedCanada Limited

40 L&T Infrastructure Finance Company Limited Wholly Owned Subsidiary

41 L&T Power Projects Limited Wholly Owned Subsidiary

42 International Seaport Dredging Limited Subsidiary*

43 L&T Modular Fabrication Yard LLC Subsidiary of Larsen & Toubro International FZE#

44 L&T Saudi Arabia LLC Wholly Owned Subsidiary of Larsen & Toubro International FZE

45 Larsen & Toubro Readymix Concrete Industries Subsidiary of Larsen & Toubro International FZE##LLC, UAE

46 L&T Infrastructure Development Projects (Lanka) Subsidiary of L&T Infrastructure Development Projects Limited#Private Limited

47 L&T Electricals Saudi Arabia LLC Subsidiary of Larsen & Toubro International FZE#

48 Larsen & Toubro Kuwait Construction General Subsidiary of Larsen & Toubro International FZE##Contracting Company WLL

49 Larsen & Toubro (Qingdao) Rubber Machinery Subsidiary of Larsen & Toubro International FZE#Company Limited

50 Larsen & Toubro (Jiangsu) Valve Company Limited Subsidiary of Larsen & Toubro International FZE#

51 L&T Boilers Private Limited Wholly Owned Subsidiary of L&T Power Projects Limited.

52 L&T Uttaranchal Hydropower Limited Wholly Owned Subsidiary of India Infrastructure Developers Limited

53 L&T Bangalore Airport Hotel Limited Wholly Owned Subsidiary of L&T Urban Infrastructure Limited

54 L&T Turbo Generator Private Limited Wholly Owned Subsidiary of L&T Power Projects Limited.

55 L&T Vision Ventures Limited Subsidiary of L&T Urban Infrastructure Limited#

56 L&T Phoenix Infoparks Private Limited Subsidiary of L&T Urban Infrastructure Limited#

57 L&T South City Projects Limited Subsidiary of L&T Urban Infrastructure Limited#

58 GDA Technologies Inc. Wholly Owned Subsidiary of Larsen & Toubro Infotech Limited

59 GDA Systems Private Limited Wholly Owned Subsidiary of GDA Technologies Limited

60 GDA Technologies Limited Wholly Owned Subsidiary of GDA Technologies Inc.

61 CSJ Infrastructure Private Limited 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.

140

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)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 Cyber Park Development & Construction Limited 2 HPL Cogeneration Limited3 L & T (Wuxi) Electric Company Limited 4 India Infrastructure Developers Limited5 L&T Capital Company Limited 6 L&T - Sargent & Lundy Limited7 L&T Finance Limited 8 L&T - ECC Construction (M) SDN. BHD.9 L&T Infrastructure Development Projects Limited 10 L&T Infocity Limited11 L&T Krishnagiri Thopur Toll Road Private Limited 12 L&T Interstate Road Corridor Limited13 L&T Panipat Elevated Corridor Private Limited 14 L&T Overseas Projects Nigeria Limited15 L&T Tech Park Limited 16 L&T Transportation Infrastructure Limited17 L&T Urban Infrastructure Limited 18 L&T Vadodara Bharuch Tollway Limited19 L&T Western Andhra Tollways Private Limited 20 L&T Western India Tollbridge Limited21 Larsen & Toubro (Oman) LLC 22 Larsen & Toubro Infotech GmbH23 Larsen & Toubro Information Technology Canada Limited 24 Larsen & Toubro International FZE25 Larsen & Toubro Infotech Limited 26 Raykal Aluminum Company Private Limited27 Narmada Infrastructure Construction Enterprise Limited 28 Tractor Engineers Limited29 L&T Saudi Arabia LLC 30 L&T South City Projects Limited31 L&T Modular Fabrication Yard LLC, Oman 32 L&T (Quingdao) Rubber Machinery Company Limited33 L&T Electricals Saudi Arabia LLC 34 L&T Infrastructure Finance Company Limited35 L&T Uttaranchal Hydropower Limited 36 L&T Power Projects Limited37 International Seaport Dredging Limited 38 Bhilai Power Supply Company Limited39 L&T Bangalore Airport Hotel Limited 40 L&T Phoenix Info Parks Private Limited41 Spectrum Infotech Private Limited 42 Larsen & Toubro Electromech LLC43 Larsen & Toubro Qatar LLC 44 L&T Infocity Lanka Private Limited45 Larsen & Toubro LLC 46 Hyderabad International Trade Expositions Limited

Associate Companies:

1 Audco India Limited 2 Ewac Alloys Limited

3 L&T-Chiyoda Limited 4 L&T-Komatsu Limited

5 L&T-Ramboll Consulting Engineers Limited 6 L&T-Case Equipment Private Limited

7 Voith Paper Technology (India) Limited 8 Kakinada Seaports Limited

9 International Seaport (Haldia) Private Limited 10 Second Vivekananda Bridge Tollway Company Private Limited

11 Vishakhapatnam Industrial Water Supply Company Limited 12 GVK Jaipur Kishengarh Expressway Private Limited

13 L&T-Ascendas Private Limited

Joint Ventures (Other than Associates):

1 International Metro Civil Contractors Joint Venture 2 Bauer-L&T Diaphragm Wall Joint Venture

3 The Dhamra Port Company Limited 4 L&T-Demag Plastics Machinery Limited (formerly L&T-DemagPlastics Machinery Private Limited)

5 L&T-Valdel Engineering Limited 6 L&T-Hochtief Seabird Joint Venture(Formerly, L&T-Valdel Engineering Private Limited)

7 Desbuild-L&T Joint Venture 8 HCC-L&T Purulia Joint Venture

9 Larsen & Toubro Limited-Shapoorji Pallonji & Company Limited 10 Larsen & Toubro Limited-Shapoorji Pallonji & Company LimitedJoint Venture (Les Palles Exhibition Centre) Joint Venture (Eben Cybercity)

11 L&T-AM Tapovan Joint Venture 12 Metro Tunnelling Group Joint Venture(Tapovan Vishnugarh Hydro Project)

Key Management Personnel & their relatives:

1 Mr. A.M. Naik (Chairman & Managing Director) 2 Mr. J.P. Nayak (Whole-time Director)Mrs. Neeta J. Nayak (Wife)

3 Mr. Y. M. Deosthalee (Whole-time Director) 4 Mr. K. Venkataramanan (Whole-time Director)Mrs. Leena Y. Deosthalee (Wife) Mrs. Jyothi Venkataramanan (Wife)

5 Mr. R. N. Mukhija (Whole-time Director) 6 Mr. K. V. Rangaswami (Whole-time Director)Mrs. Sushma Mukhija (Wife)

7 Mr. V. K. Magapu (Whole-time Director) 8 Mr. M. V. Kotwal (Whole-time Director)

141

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)iii. Disclosure of related party transactions:

Rs.croreSr. Nature of transaction/relationship/major partiesNo. 2006-2007 2005-2006

Amount Amounts Amount Amountsfor major for major

parties parties1 Purchase of goods & services (including Commission paid)

Subsidiaries 173.69 118.49Associates & Joint Ventures, including: 783.96 674.78

Audco India Limited 598.11 507.50Ewac Alloys Limited 108.94 84.10

Total 957.65 793.27

2 Sale of goods/power/contract revenue & servicesSubsidiaries, including: 524.39 230.58

Larsen & Toubro Infotech Limited 121.96 55.48L&T Infocity Limited 113.74 125.65L&T Panipat Elevated Corridor Private Limited 119.67 9.10

Associates & Joint Ventures, including: 215.37 294.95L&T Komatsu Limited 44.22 0.67Second Vivekananda Bridge Tollway Company Private Limited 143.44 184.21Visakhapatnam Industrial Water Supply Company Limited 2.71 32.15

Total 739.76 525.53

3 Purchase/Lease of Fixed AssetsSubsidiaries, including: 8.57 1.94

Tractor Engineers Limited 7.76 -L&T Finance Limited 0.76 0.34Larsen & Toubro Infotech Limited - 1.60

Associates & Joint Ventures: 4.83 1.64Ewac Alloys Limited 4.83 1.64

Total 13.40 3.58

4 Sale of Fixed AssetsAssociates & Joint Ventures: - -

L&T-Case Equipment Limited - -(During 2006-2007: Rs.3745; During 2005-2006: Rs.Nil)

Total - -

5 Subscription to equity and preference shares(incl. application money paid)

Subsidiaries, including: 806.25 141.49L&T Finance Limited 100.00 50.00L&T Infrastructure Development Projects Limited 233.06 66.99L&T Infrastructure Finance Company Limited 243.00 -Larsen & Toubro International FZE 136.21 7.50

Total 806.25 141.49

6 Purchase of InvestmentsSubsidiary: 52.69 -

L&T Finance Limited 52.69 -

Total 52.69 -

142

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Rs.crore

Sr. Nature of transaction/relationship/major partiesNo. 2006-2007 2005-2006


parties parties

7 Sale of Investments/Buyback of Shares

Subsidiaries, including: 14.20 39.75

L&T Infrastructure Development Projects Limited 9.00 39.75

Larsen & Toubro International FZE 5.20 -

Total 14.20 39.75

8 Receiving of services/overheads charged by related parties


L&T Finance Limited 0.15 3.52

Larsen & Toubro Infotech Limited 5.83 3.19

L&T Infrastructure Development Projects Limited - 6.64

Associates & Joint Ventures, including: 0.23 0.84

L&T-Ramboll Consulting Engineers Limited - 0.71

Total 6.21 14.57

9 Rent paid, including lease rentals under leasing/hire purchasearrangements including loss sharing on equipment finance


L&T Finance Limited 13.97 10.59

Associates & Joint Ventures 0.86 0.60

Key Management Personnel 0.14 0.14

Relatives of Key Management Personnel 0.10 0.10

Total 15.66 12.32

10 Charges for deputation of employees to related parties



Larsen & Toubro (Oman) LLC 2.54 -


L&T-Case Equipment Private Limited 0.69 0.01

HCC-L&T Purulia Joint Venture 0.54 0.93

Total 11.18 5.67

11 Dividend Received


HPL Cogeneration Limited 25.72 47.58


Associates & Joint Ventures: 35.22 12.30

L&T-Komatsu Limited 18.00 -

Ewac Alloys Limited 9.12 5.10

Audco India Limited 8.10 7.20

Total 76.93 79.52

143




parties parties

12 Commission received, including those under agency arrangementsSubsidiaries 0.61 0.12Associates & Joint Ventures, including: 140.20 76.50

L&T-Komatsu Limited 125.20 64.36

Total 140.81 76.62

13 Rent received, Overheads recovered and Miscellaneous income



Larsen & Toubro (Oman) LLC - 7.24

Narmada Infrastructure Construction Enterprise Limited - 6.22


L&T-Case Equipment Private Limited 1.90 1.93

International Metro Civil Contractors - 4.79

Total 49.81 50.79

14 Interest ReceivedSubsidiaries, including: 3.61 2.91

HPL Cogeneration Limited - 2.87L&T Infrastructure Development Projects Limited 0.63 -L&T Finance Limited 1.93 -Bhilai Power Supply Company Limited 0.77 -

Associates & Joint Ventures, including: 1.17 -L&T-Case Equipment Private Limited 0.80 -

Key Management Personnel 0.02 0.04

Total 4.80 2.95

15 Interest PaidSubsidiaries, including: 5.01 3.28

L&T Finance Limited 3.50 0.26L&T Power Investments Private Limited - 0.85India Infrastructure Developers Limited 0.59 2.08

Associates & Joint Ventures: 1.56 2.31Audco India Limited 1.56 2.31

Key Management Personnel(During 2006-2007: Rs.Nil; During 2005-2006: Rs.361) - -

Total 6.57 5.59

16 Amounts written offAssociates & Joint Ventures: - 0.06

L&T-Demag Plastics Machinery Limited - 0.06

Total - 0.06

144




parties parties

17 Payment of Salaries/PerquisitesKey Management Personnel: 27.20 17.18

A.M. Naik 5.85 3.99J. P. Nayak 3.04 2.07Y.M. Deosthalee 3.53 2.23K. Venkataramanan 3.48 2.20R.N. Mukhija 3.44 2.16K.V. Rangaswami 2.51 1.76V.K. Magapu 2.52 1.76M.V. Kotwal 2.83 1.01

Total 27.20 17.18

18 Shares allotted to Whole time Directors underEmployee Stock Option Schemes

Key Management Personnel: 2.71 1.48A.M. Naik 0.77 0.42J. P. Nayak 0.46 0.25Y.M. Deosthalee 0.46 0.25K. Venkataramanan 0.46 0.25R.N. Mukhija 0.33 0.18K.V. Rangaswami 0.07 0.04V.K. Magapu 0.09 0.05M.V. Kotwal 0.07 0.04

Total 2.71 1.48

19 Amount provided for:Associates & Joint Ventures: 0.14 -

Larsen & Toubro Limited-Shapoorji Pallonji & CompanyLimited Joint Venture (Ebene Cybercity) 0.14 -

Total 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 partiesNo. As at 31-3-2007 As at 31-3-2006


parties parties1 Accounts Receivable

Subsidiaries, including: 361.08 148.35Larsen & Toubro Infotech Limited 65.34 53.02L&T Finance Limited 69.29 0.24L&T Saudi Arabia LLC 1.34 38.55

Associates & Joint Ventures, including: 48.31 192.99Visakhapatnam Industrial Water Supply Company Limited - 24.96International Metro Civil Contractors Joint Venture - 16.73Second Vivekanand Bridge Tollway Company Private Limited 17.90 67.04GVK Jaipur Kishengarh Expressway Private Limited 0.92 26.77

Total 409.39 341.34

145


Sr. Nature of transaction/relationship/major partiesNo. As at 31-3-2007 As at 31-3-2006


parties parties2 Accounts Payable

Subsidiaries, including: 226.03 172.08Larsen & Toubro Infotech Limited 23.93 7.70L&T Finance Limited 91.70 143.74

Associates & Joint Ventures, including: 247.65 177.41Audco India Limited 209.74 146.27

Total 473.68 349.49

3 Loans & Advances recoverableSubsidiaries, including: 142.64 131.01

Bhilai Power Supply Company Limited 4.81 85.49India Infrastructure Developers Limited 37.64 36.33L&T Finance Limited 86.48 0.72

Associates & Joint Ventures, including: 26.62 2.56L&T-Case Equipment Private Limited 11.27 1.67L&T-Demag Plastics Machinery Limited 15.10 -L&T-Valdel Engineering Limited 0.19 0.88

Key Management Personnel 0.83 1.20Relatives of Key Management Personnel 0.06 0.05

Total 170.15 134.82

4 Advances against equity contributionSubsidiaries: 2.16 108.28

L&T Infrastructure Finance Company Limited 2.00 -L&T Infrastructure Development Projects Limited 0.16 108.28

Total 2.16 108.28

5 Unsecured loansSubsidiaries, including: 6.34 1.67

Tractor Engineers Limited 5.00 -L&T Finance Limited 0.85 1.67

Total 6.34 1.67

6 Advances received in the capacity of supplier of goods/servicesclassified as “Advances from Customers” in the Balance Sheet

Subsidiaries, including: 180.53 23.20L&T Infocity Limited 2.33 8.44L&T Krishnagiri Thopur Toll Road Limited 38.63 -L&T Western Andhra Tollways Limited 26.87 -L&T Vadodara Bharuch Tollway Limited 73.32 -L&T Panipat Elevated Corridor Private Limited 20.40 14.66

Associates & Joint Ventures, including: 56.33 13.92Second Vivekananda Bridge Tollway Company Private Limited 2.62 13.61The Dhamra Port Company Limited 52.45 -

Total 236.86 37.12

7 Due to Whole time DirectorsKey Management Personnel: 13.80 9.78

A.M. Naik 3.28 2.42J. P. Nayak 1.64 1.21Y.M. Deosthalee 1.64 1.21K. Venkataramanan 1.64 1.21R.N. Mukhija 1.64 1.21K.V. Rangaswami 1.32 0.97V.K. Magapu 1.32 0.97M.V. Kotwal 1.32 0.58

Total 13.80 9.78

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

146

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)v. 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 PacificPte. Ltd., Singapore (which is a subsidiary of Komatsu Ltd., Japan) remains in force. As per the terms of the agreement, the Companyis the exclusive agent of L&T-Komatsu Limited to market LTK machines and provide product support. Pursuant to the aforesaidagreement, LTK is required to pay commission to the Company at specified rates on the sales effected by the Company. As perprovisions of the Companies Act, 1956, a sole-selling agency agreement requires approval from Government of India (GOI) every fiveyears. LTK has sought revision in some of the conditions granted vide the last GOI approval dated January 7, 2005. Pending receiptof the revised approval from GOI, LTK has entered into a non-exclusive agreement with the Company for sale of its products witheffect 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 associatecompany. Pursuant to the aforesaid agreement, AIL is required to pay commission to the Company at specified rates on the saleseffected by the Company. Further, as per the terms of the agreement, the Company is the non-exclusive distributor of AIL productsand 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 associatecompany. The agreement shall remain valid until either party gives 12 months’ prior written notice to the other for termination. As perthe terms of the agreement, the Company is the selling agent authorised to purchase and resell EWAC products in accordance withthe 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 companyeffective January 1, 2001. As per the terms of the agreement, the Company is a selling and servicing agent of LTDPML. Pursuant tothe aforesaid agreement, LTDPML is required to pay commission to the Company at specified rates on sales effected by theCompany.

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 isfixed and non-cancellable. In the case of cars, the Company has an option to renew the lease for a secondary period. Theagreements provide for revision of lease rentals in the event of changes in (a) taxes, if any, leviable on the lease rentals (b) ratesof depreciation under the Income-tax Act, 1961, and (c) change in the lessor’s 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 financeleases are as follows:

Rs.crore

Minimum Lease Present Value of MinimumParticulars Payments Lease Payments

As at As at As at As at31-3-2007 31-3-2006 31-3-2007 31-3-2006

i) Payable not later than 1 year 1.50 3.64 1.32 3.25ii) Payable later than 1 year and not later than 5 years 0.71 1.49 0.69 1.33iii) Payable later than 5 years - - - -

Total (i + ii + iii) 2.21 5.13 2.01 4.58

Less: Future finance charges 0.20 0.55

Present Value of Minimum Lease Payments 2.01 4.58

ii. Contingent rent recognised/(adjusted) in the Profit and Loss Account in respect of finance leases: Rs.Nil [previous year: Rs.(0.01)crore]

b) Operating leases:

i. The Company has taken various residential/commercial premises and plant and machinery under cancellable operating leases.These lease agreements are normally renewed on expiry.

ii. a) The Company has taken certain assets like cars, technology assets, etc. on non-cancellable operating leases, the futureminimum lease payments in respect of which, as at March 31, 2007 are as follows:Minimum Lease Payments Rs.crorei Payable not later than 1 year 23.31ii Payable later than 1 year and not later than 5 years 38.65

iii. Payable later than 5 years 0.10

Total 62.06

b) 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.

iii. Lease rental expense in respect of operating leases: Rs.29.08 crore (previous year: Rs.28.57 crore)iv. Contingent rent recognised in the Profit and Loss Account: Rs.Nil (previous year: Rs.Nil)

147

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)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 As at 31-3-2006

Particulars Deferred Deferred Deferred DeferredTax Tax Tax Tax

Assets Liabilities Assets Liabilities

Difference between book depreciation and tax depreciation 184.36 189.57Provision for doubtful debts and advances debited to Profit and Loss Account 82.68 86.82Disputed statutory liabilities paid and claimed as deduction for tax purposes

but not debited to Profit and Loss Account 20.52 19.81Unpaid statutory liabilities/provision for Leave Encashment debited to

Profit and Loss Account 49.09 35.39Other items giving rise to timing differences 32.92 10.30 0.41

Total 164.69 204.88 132.51132.51132.51132.51132.51 209.79209.79209.79209.79209.79

Net Deferred Tax Liability 40.19 77.28Net incremental liability charged/(credited) to Profit and Loss Account (25.63) (15.35)(15.35)(15.35)(15.35)(15.35)Net Deferred Tax Liability assumed on amalgamation 1.01 -Charged/(credited) to General Reserve (12.88) -Charged/(credited) to Securities Premium Account 0.41 (1.90)

24. Basic and Diluted Earnings per share [“EPS”] computed in accordance with Accounting Standard (AS) 20 “‘Earnings per Share”

Including ExcludingParticulars extra-ordinary items extra-ordinary items

2006-2007 2005-2006 2006-2007 2005-2006Basic

Profit after tax as per Accounts (Rs.crore) A 1403.02 1012.14 1403.02 942.39Weighted average number of shares outstanding B 27,93,66,027 26,61,49,962 27,93,66,027 26,61,49,962

Basic EPS (Rupees) A / B 50.22 38.0338.0338.0338.0338.03 50.22 35.4135.4135.4135.4135.41

DilutedProfit after tax as per Accounts (Rs.crore) A 1403.02 1012.14 1403.02 942.39Add: Interest/Exchange difference (gain)/loss on bonds

convertible into equity shares (net of tax) B (7.62) 15.50 (7.62) 15.50

Adjusted profit for diluted earnings per share C=A+B 1395.40 1027.64 1395.40 957.89

Weighted average number of shares outstanding D 27,93,66,027 26,61,49,962 27,93,66,027 26,61,49,962Add: Weighted average number of potential equity shares

that could arise on conversion of FCCBs E 40,11,908 98,58,972 40,11,908 98,58,972Add: Weighted average number of potential equity shares on

account of employee stock options F 51,94,370 76,51,318 51,94,370 76,51,318Weighted average number of shares outstanding G=D+E+F 28,85,72,305 28,36,60,252 28,85,72,305 28,36,60,252

Diluted EPS (Rupees) C / G 48.36 36.2336.2336.2336.2336.23 48.36 33.7733.7733.7733.7733.77

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

Class of ProvisionsSr. Particulars of disclosure Product Excise Sales Litigation Others TotalNo. Warranties Duty Tax related

obligation

1 Balance as at 1-4-2006 22.77 0.10 8.56 30.42 1.56 63.412 Additional provision during the year 18.31 - 9.94 0.11 11.46 39.823 Provision used during the year 0.45 - 0.16 - - 0.614 Provision reversed during the year 3.77 - 0.91 0.56 - 5.245 Balance as at 31-3-2007 (5=1+2-3-4) 36.86 0.10 17.43 29.97 13.02 97.38

148


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 ofmeeting 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.

c) Disclosure in respect of Contingent Liabilities is given as part of Schedule J to the Balance Sheet.

26. The expenditure on Research and Development activities, as certified by the Management, is Rs.55.47 crore (including capital expenditure ofRs.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 respectiverevenue heads.

28. As a part of Company’s risk management policy, the various financial risks mainly relating to changes in the exchange rates, interest rates andcommodity 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.crore1) For hedging foreign currency and interest rate risks

Forward contracts:Receivables 1630.47Payables 2642.30

Interest rate Swaps 25.002) For hedging commodity price related risks

Futures 35.18b) Un-hedged foreign currency exposures as at March 31, 2007 are as under:

Receivables 6796.35Payables 5460.39

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 Remunerationa) Managing and Whole-time Directors’ remuneration:

Rs.crore

Particulars 2006-2007 2005-2006

Salary 5.40 2.40Perquisites 2.82 1.71Commission 13.80 9.78Contribution to Provident / Superannuation Fund 5.18 3.29

Total 27.20 17.18

Note: The above figures do not include contribution to gratuity fund, pension scheme and provision for leave encashment benefit asseparate figures are not available for the managing/whole time directors.

b) Computation of Managerial Remuneration:Rs.crore

Profit before tax before extra-ordinary items as per Profit and Loss Account 2004.89Add: Managing and Whole-time Directors’ remuneration and commission 27.20

Commission paid to non-executive directors (net) 0.90Directors’ fees 0.26Depreciation, obsolescence and amortisation charged to the Accounts 171.45

Less: Transfer from Revaluation Reserve 1.44170.01

Loss on sale of current investments 7.26Provision for diminution in value of investments 11.95Provision for doubtful debts and advances (Net) 82.50Provision for foreseeable losses on construction contracts 8.27Profit (net) on sale of fixed assets as per Section 349 of the Companies Act, 1956

(net of capital profits) (3.35)305.00

Carried forward 2309.89

149

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Computation of Managerial Remuneration (Contd.)

Rs.crore

Brought forward 2309.89Less: Profit on sale of fixed assets as per Profit and Loss Account (Net) 6.90

Profit on sale of long-term investments as per Profit and Loss Account (net) 23.43

Share issue expenses charged to Securities Premium Account 0.38

Premium on redemption of debentures charged to Securities Premium Account (0.80)

Employee benefits debited to General Reserve 35.45

Depreciation and obsolescence as per Section 350 of the Companies Act, 1956 (net) 139.65

Depreciation on leased assets 1.19

206.20

Net Profit as per Section 198 of the Companies Act, 1956 2103.69

Maximum permissible remuneration to whole-time directors under Section 198 of theCompanies Act, 1956 @ 10 % of the profits computed as above 210.37

Restricted as per service agreements to 27.20

Maximum permissible managerial remuneration to non-executive directorsunder Section 198 of the Companies Act, 1956 @ 1 % 21.04

Restricted as per shareholders’ approval to 0.90

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

2006-2007 2005-2006

Rs.crore Rs.crore31. Auditors’ remuneration (excluding service tax) and expenses charged to the accounts:

Audit fees 0.50 0.38Certification work 0.55 0.36Tax audit fees 0.11 0.12Other services - 0.06Expenses reimbursed* 0.11 0.09*Excludes fees paid for FCCB issue of Rs.Nil (Previous Year Rs.0.03 crore), charged toSecurities Premium Account.

32. Value of Imports (on C.I.F. basis):Raw materials 531.29 502.72Components and spare parts 1148.51 796.95Spare parts for sale 174.19 129.34Capital goods 161.48 30.75

33. Expenditure in foreign currency:On overseas contracts 898.87 1075.54Royalty and technical know-how fees 4.29 8.31Interest 32.31 28.04Professional/Consultation fees 78.19 10.90Other matters 455.39 344.10

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)# 0.01 0.01ii. Custodian of Global Depositary Receipts: 68,88,179 shares (previous year: 59,79,728 shares) # 7.58 10.46

# 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)] 1115.83 790.40Construction and project related activities 2420.85 2229.59Export of services 174.28 100.45Commission 3.77 3.48Interest and dividend received 5.78 16.44Other receipts 50.08 37.63

150

36. List of Small Scale Industrial Undertakings to whom the Company owes monies for more than 30 days as at March 31, 2007:

1 A Bond Strands Private Limited 2 A K Enterprises 3 A S Enterprises4 A G Mechanical Enterprises Private 5 A R Industries 6 Aakansha Arts

Limited7 Aarsha Chemicals Private Limited 8 Aarson’s Industries 9 Accurate Forge Private Limited10 Acetech Machinery Components 11 Acura Engineering Company 12 Adhar Equipments Private Limited13 Adino Telecom Limited 14 Advance Cooling Systems Private Limited 15 Alfa Enterprises16 Aluminium Rolling & Spinning Mills 17 Alu-Fin 18 Aman Engineering19 Ambico Inter-Allied Marketing Private 20 Amit Engineering Works 21 Amita Enterprise

Limited22 Ampson Engineering Private Limited 23 Anandji Cables 24 Aniruddha Wire Cut Tools25 Ansons Electro Mechanical Works 26 Apollo Seals Company 27 Apollo-Soyuz Electricals Private Limited28 APS Technocrats 29 APT Controls & Appliances Private Limited 30 APT Pneumatics Private Limited31 Apurva Industries 32 Arc Light Trading Corporation 33 Armatech Associates34 Arun Engineering 35 Ashok Leather Works 36 Ashwin Plastic Industries37 Asian Ancillary Corporation 38 Asmira Paint Manufacturing Private Limited 39 Atlanta Forms Private Limited40 Atlas Adco Engineers 41 Atlas Engineering Company 42 Autoalarm Industries43 B R Industries 44 B T Solders Private Limited 45 Baid Engineering Private Limited46 Baj Enterprises 47 Baka Liftec (India) Private Limited 48 Balkrishna Pattern Shop49 Bharat Metal Process 50 Bharath Trailers 51 Bharati Engineering Works52 Billets Electro Werke Limited 53 Bombay Brazing Company 54 Bonus Stationers55 Britto Energy Engineers 56 C.Gopal Naicker & Son 57 Cadd Centre India Private Limited58 Careprint 59 Chandra Engg. And Mech.Private Limited 60 Chandra Udyog61 Chauhan Engineering 62 Chennai Hydro-Maatics Private Limited 63 Chirag Engineering64 Classic Canteen Systems 65 Classic Engineering Corporation 66 Classic Enterprises67 Classic Packaging 68 Comet Brass Products 69 Computerised Numercial Control70 Connectwell Industries Private Limited 71 Consolidated Dynamics Private Limited 72 Continental Coatings Private Limited73 Corrosion Controls 74 Crystal Industrial Syndicate 75 Cue Chem Industries76 D C Metal Corporation 77 D P Polymer Products 78 D S M Soft Private Limited79 Dalal Plastic Corporation 80 Damodar Engineers 81 Daniel Measurement and Control

(Industries) Private Limited82 Deepak Hardware Mart 83 Delta Control Engineering Corporation 84 Divya Electro Technica Private Limited85 Duralloy India 86 Dynamics Engineering Works 87 Dynetic Products Private Limited88 Eagle Rubber Industries 89 Eastern Enterprises 90 Eastwell Asbestos Industries91 Efficient Engineering Works 92 Electromech Engineers 93 Electronic Relays (India) Private Limited94 Eleven Lever Engineering 95 Elm Components 96 Elmex Controls Private Limited97 Emaco Engineering Private Limited 98 Emco Lenze Private Limited 99 Emcolite Electroplaters100 Emcolite Industries 101 Engi Chem 102 English Tools & Castings Private Limited103 Enpro Engineering 104 Eonour Technologies Limited 105 Epsilon Automotive Private Limited106 Essen Deinki 107 Esteem Gases Private Limited 108 Evans Industrial Works Private Limited109 Excel Electric Industries 110 Excel Graphics Private Limited 111 Excel Process Private Limited112 Extrudex Plastics Corporation 113 Fabtech Projects & Engineers 114 Famous Ladders Manufacturing Company115 Ferrocare Machines Private Limited 116 Fitwel Gasket Company 117 Flexpro Electricals Private Limited118 Flowlines Engineering Private Limited 119 Flowtech 120 Fluoro Plast121 Fluorokraft Private Limited 122 Fork Lift India 123 Forward Alloys & Castings124 Friends Industrial Works 125 G S Alloy Castings Limited 126 Gajanan Industries127 Ganesh Engineering 128 Ganesh Industries 129 Garg Associates Private Limited130 Gaurav Engineering 131 Gayatri Engineers 132 Geldhof Limited133 General Engineering 134 General Industries 135 General Instruments Corporation136 Geo Chem Laboratories Private Limited 137 German Plastics Industries 138 Giridhari Explosives Private Limited139 Goa Sintered Products Private Limited 140 Graphic Creation 141 Grover Forging142 Haji Iron and Steel Works 143 Hariram Steels Private Limited 144 Heatreaters & Engineers145 Heavy Fab Industries 146 Hemant Tools Private Limited 147 Hempronics Systems Private Limited148 Henkel Chembond Surface Technologies 149 Heramb Industries 150 Hinode Technologies Private Limited

Limited151 Hi-Tech Forgings (Bangalore) Private 152 Hitech NDT Services 153 HRC Engineers

Limited154 Hyd-Air Engineering Works Goa 155 IEC Air Tools Private Limited 156 IGP Engineers Private Limited157 IMI Machine Tools Private Limited 158 Inca Radiant Engg. (I) Private Limited 159 Indcoil Transformers Private Limited160 Inder Engineering Works 161 India Die Services 162 Indian Cancer Society163 Indo German Tool Room 164 Indus Forms Private Limited 165 Industrial Insulators166 Industrial Springs Manufacturing Company 167 Innovative Equipments 168 International Chemical Industries


151

169 Ion Electricals Private Limited 170 Iresco Electricals Private Limited 171 ITW Signode India Limited172 J C Engineering Works 173 J K Enterprises 174 J Mangsun & Company175 J K Forgings 176 Jagannathan Engineering Works 177 Jai Bhawani Mata Industries178 Janaki Enterprises 179 Jay Industries 180 Jayalakshmi Engineering Works181 Jayaram Engineering Works 182 Jayco Industries 183 Jaywant Engineering Works184 Jethwa Tailors 185 Jobin Engineering Works 186 Joy Engineering Company187 Jude Engineering Works 188 Jupiter Enterprises 189 Jyoti Plastic Works Private Limited190 K C Metal Industries 191 K Dhandapani & Company Limited 192 K D Chemicals193 Kala Gear Engineering Private Limited 194 Kalantri Chemical Industries 195 Kalinga Industrial Fasteners196 Kalpana Gears Private Limited 197 Kalyani Mould Base Private Limited 198 Kamal Saw Mill199 Kantilal Chhotalal & Company 200 Kaveri Engineering 201 Kay Bee Engineering Enterprises202 Keepsake Engg. Consultancy Private Limited 203 Khandekar Engineering Works 204 Kheraj Electrical Industries Private Limited205 Khullar Technical Services 206 Kitana Industries 207 Kiyosh Electronics208 Kooverji Devshi & Company Private Limited 209 Kramp Products 210 Kritisheela Engineering211 Kromo Prints 212 Kubo Chemicals Private Limited 213 Kun-Chem Pretreatments Private Limited214 Lakshmi Enterprises 215 Lakshmi Industries 216 Libraflex217 Line Pro 218 Lonestar Industries 219 Lucky Forms Private Limited220 M M Enterprises 221 M R International 222 Macro Engineering223 Macrotherm Industries 224 Madhubabu Industries Private Limited 225 Madras Hardtools Private Limited226 Madura Steel Industries Private Limited 227 Magdalene Industries 228 Magna Cranes Private Limited229 Mahamumbai Chhatri Utpadak Sahakari 230 Mahant Tool Room 231 Maharashtra Automatic Works232 Mahavir Industries 233 Mahavir Lock Mart 234 Mahesh Industries235 Mahisa Electronics 236 Maini Materials Movement Private Limited 237 Malnad Alloy Castings Private Limited238 Mardia Non-Ferrous Foundry 239 Mardia Tubes Limited 240 Master Base and Moulds Private Limited241 Master Engineers 242 Maya Plastics 243 Mazda Industries244 Mec Fab Engineering Works 245 Megawin Switchgear 246 Meghna Fabrics247 Metal Craft Engineering & Spring 248 Metal Craft Industries 249 Metal Products250 Metalix Equipment 251 Metallurgical Services 252 Metro Eyelet Industries253 Micro Fits 254 Micro Screw Manufacturing Company 255 Micron Cut (Mumbai) Private Limited

Private Limited256 Mihir Industries 257 Mini Industries 258 Mipak Polymers Limited259 Mister-Mesh Wire Products 260 Modern Engineering 261 Modern Industries262 Monalisa Electronic Design Centre 263 Monochem Industries 264 N D Industries

Private Limited265 Nagindas Kalidas Chapadia 266 Nana Udyog 267 Narandas Engineering Works Private

Limited268 Narayan Powertech Private Limited 269 National Industries 270 National Refinery Private Limited271 Navbharat Engineers 272 Nazareth Metals 273 New Delta Gear Manufacturers Private

Limited274 New India Cable Corporation 275 New Stanpack Industries 276 New Tech Industries277 Nfotec (Division of Sika Interplant) 278 Nilesh Enterprise 279 Nordson India Private Limited280 NR Hytech Engineers Private Limited 281 Okay Industries 282 Om Powder Coaters & Painters283 Omega Engineering Works 284 Omkar Puf Insulation Private Limited 285 Orbital Systems (Bombay) Private Limited286 Oriental Engineering Specialities 287 Orissa Engineers Private Limited 288 P M Electro-Auto Private Limited289 Packing Consultants & Services 290 Packshield Industries 291 Panchal Electro Controls Private Limited292 Pankaj Engineering Company 293 Paramount Seals and Packings 294 Parool Industries295 Pasuma Industries 296 Patlon Industries 297 Peacefort Chem Ind. Engg. Private

Limited.298 Perfect & Precision Plastics 299 Pipe Fit Engineers Private Limited 300 PLA TEC Industries301 Plastic Products Engineering Company 302 Pluto Plastic Private Limited 303 Polymetallurgical Corporation304 Polyrub Extrusions (India) 305 Polytech India 306 Pony Motors307 Popular Switchgears Private Limited 308 Powerflex Industries 309 Pragati Industries310 Prageet Engineers 311 Prakash Industries 312 Prashant Engineering Works313 Prathamesh Industries 314 Pratik Corporation 315 Pratimesh Industries316 Pravin Rubber Company 317 Precihole Machine Tools Private Limited 318 Precision Engineers319 Precision Machine & Auto Components 320 Precision Metal Work 321 Precision Press Tools Private Limited

Private Limited322 Precision Spring Works 323 Precision Tools & Fasteners 324 Premauni Tools325 Premier Brass Industries 326 Premier CNC Press Shop Private Limited 327 Premier Industries328 President Engineering Works 329 Press Metal Industries 330 Pressform Industries331 Process Technique Electronics Private 332 Progress Industries 333 Proins Technologies Private Limited

Limited334 Prospect Electrical & Engg Company 335 Protochem Industries 336 Protosys Technologies Private Limited


152

337 Quality Product Finishers 338 R J Industrial Corporation 339 R C Industries340 R K Industries 341 Raju Converters Private Limited 342 Rama Engineering343 Ramakant Metal Industries 344 Ramesh Silicate & Chemical Industries 345 Reliable Electronic Components Private

Limited346 Reliable Engineering Industries 347 Reliable Rainwear 348 Rocks Fabricators349 Rohini Engineering Works 350 Rotomag Motors & Controls Private Limited 351 Rukmani Engineering352 Runa Enterprise 353 Rush Art Printers 354 S and S Enterprises355 SKM Industries 356 S S Wandler Private Limited 357 Sachet Homewell358 Sai Industries 359 Sai Rubber Industries 360 Sainath Enterprises361 Sainath Fabrication 362 Sajin Industries 363 Sakthi Electroplaters364 Samarth Engineering Industries 365 San Industries 366 Sang Fasteners Private Limited367 Saras Industries 368 Saras Plastics 369 Sargam Metals Private Limited370 Satish Industries 371 Sawarmal Engineering 372 Scaanray Metallurgical Services373 SCR Elektroniks 374 Seco Industries 375 Selectron Process Controls Private

Limited376 Selwin Industries 377 Senzo Engineering & Plastic Company 378 Seth Engineering Works379 Setwel Industries 380 Shakti Wire Products 381 Sharad Metacom Private Limited382 Sharada Industrial and Engg. Works 383 Sheetal Metal Products 384 Sheetart385 Shekam Fasteners 386 Shepherd Transformer Industries 387 Sheth Impression388 Shinograph 389 Shiv Shakti Industries 390 Shivalik Bimetal Controls Limited391 Shivalik Engineering 392 Shraddha Engineering Works 393 Shree Electricals394 Shree Ganesh Engineering Works 395 Shree Ganesh Rivets & Fasteners 396 Shree Industry397 Shree Manjunath Industrial & 398 Shree Rasayani 399 Shree Stampings

Commercial Corporation400 Shreyas Enterprises Private Limited 401 Shri Jayaveeraa Enterprises 402 Shri Santoshi Pipe Fitting Centre403 Sicco Engineering Works 404 Siddhalaxmi Industries 405 Sigma Engineers406 Sivram & Company 407 Size Control Gauges and Tools 408 Skill Tech Engineers409 Smart Engineering Works 410 Soham Industries 411 Sound Auto & Engineering Company412 Southern Gasket Products 413 Southern Pressings 414 Span Chem Technologies415 Sparklet Engineers 416 Spiraseal Gaskets Private Limited 417 Sri Balamurugan Engineering Enterprises418 Sri Ganeshraman Industries 419 Sri Saravanaa Fabs 420 Sri Akhandalmani Saw Mill421 Sri Viji Steel Engineering 422 Standard Spring & Metal Pressing Works 423 Star Drive Busducts Private Limited424 Star Testing Systems 425 Starflex Sealing India Private Limited 426 Stellar Paints427 Sterling Motors 428 Subhash Enterprises 429 Sudha Ventilating Systems Private

Limited430 Super Automats 431 Super Label Manufacturing Company 432 Super Platers433 Super Sales Agencies 434 Superlite Industries 435 Supra Heater Industries436 Suraj Pressings Private Limited 437 Suresh Art Printers 438 Surya Springs Private Limited439 Suryadipta Projects Private Limited 440 Suyog Engineers Private Limited 441 Swaamy Industries442 Swasthik Machine Works 443 Swastik Enterprises 444 Swift Electroniks445 System Support Services 446 Tachometric Controls 447 Tee Vee Tools & Engineering448 Teekay Tubes Private Limited 449 Teknic Controls 450 Teknovation Engineers Private Limited451 Telser Electronics Private Limited 452 Tender Care International 453 Tespa Tools Private Limited454 The Bharat Tanks 455 The Megha Engg. Enterprises Industries 456 Thermcon Engineers457 Thermoflex Cable Industries 458 Theta Controls 459 Thriarr Polymers Private Limited460 Todi & Company 461 Transmeasurements Company 462 Trimurti Enterprises463 Trionex 464 Tristar Industrial Tools Private Limited 465 Tri-Vision Engineering466 Truegraph Charts Private Limited 467 Tulip Corporation 468 Ujwal Electrical Stampings Private Limited469 Ujwal Plastic Industries Private Limited 470 Unique Industrial Handlers Private Limited 471 United Electric Co. (Delhi) Private Limited472 United Industrial Corporation 473 Unity Printing Press 474 Universal Engineering Works475 Universal Industries 476 V H Engineers 477 Vaiman Industries478 Vaishnav Fastners 479 Vako Seals Private Limited 480 Vanjax Sales Private Limited481 Vardhman Sales Corporation 482 Vasantha Tool Crafts Private Limited 483 Vedvyas Engineering Works484 Vee Yes Engineering Works 485 Veejay Engineering 486 Velmurugan Heavy Engg. Industries

Private Limited487 Vidhi Vidhan 488 Vijay Engineering 489 Vikas Engineering Enterprises490 Viksan Spring 491 Vileco Electrical Industries 492 Vimal Textiles Waste Company493 Vitech Fabricators Private Limited 494 Vitronics 495 Vivek Printers496 Vivid Electromech Private Limited 497 VR Associates 498 Welset Moulders499 Wiperdrive Engineering 500 Wood Kraft 501 Xylus Flow Tech Engineering Private

Limited502 Yuflow Engineering Private Limited 503 Zaveri Bros. Silver Platers Private Limited 504 Zebra Weblift Private Limited505 Zoom-D Consultancy Services Private Limited


153

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. Thedisclosure pursuant to the said Act is as under:

Particulars Rs.crore

Principal amount due to suppliers under MSMED Act, 2006 0.93

Interest accrued and due to suppliers under MSMED Act, on the above amount 0.01

Payment made to suppliers (other than interest) beyond the appointed day, during the year 1.02

Interest paid to suppliers under MSMED Act, (other than Section 16) -

Interest paid to suppliers under MSMED Act, (Section 16) 0.02

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. 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 ofinformation 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 acaptive power plant to a third party:

i. not to reduce its shareholding in IIDL below 100% and/or relinquish management control and/or majority representation on the Board ofDirectors, without the specific approval of the Trustees, and

ii. to compensate the subsidiary for any shortfall in receivables on account of variations in rates of interest, depreciation, corporate taxes, otherstatutory levies etc., during the currency of the lease.

b) Jointly with L&T Infrastructure Development Projects Limited (a subsidiary of the Company), to the term lenders of its subsidiary companies L&TTransportation Infrastructure Limited (LTTIL) and Narmada Infrastructure Construction Enterprise Limited (NICE):

i. not to reduce their joint shareholding in LTTIL & NICE below 51% until the financial assistance received from the term lenders is repaid in fullby LTTIL & NICE, and

ii. to jointly meet the shortfall in the Working Capital requirements of LTTIL & NICE until the financial assistance received from the term lenders isrepaid in full by LTTIL & NICE.

c) 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 inexchange rates.

d) In terms of Company’s Concession Agreement with Government of India and Government of Gujarat, not to change the control over L&T WesternIndia Tollbridge Limited (a subsidiary of L&T Infrastructure Development Projects Limited) during the period of the Agreement.

e) To the debenture holders of L&T Infrastructure Development Projects Limited (a subsidiary of the Company) and to the lenders of its subsidiaries L&TPanipat Elevated Corridor Private Limited & L&T Krishnagiri Thopur Toll Road Limited, not to dilute Company’s shareholding below 51%.

39. a) The Company’s investment in HPL Cogeneration Limited (a subsidiary of the Company) has been pledged as security in favour of the consortium oflenders in respect of the term loans provided to HPL Cogeneration Limited.

b) The Company’s 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 ofallotment i.e. March 29, 2007.

40. 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. Name of the Company No. of Equity Face Value Amount invested Sold toNo. shares (Rs.crore)

1 Larsen & Toubro (Wuxi) Electric NA NA 21.80 Larsen & ToubroCompany Limited International FZE

2 L&T-Crossroads Private Limited 90,00,000 Rs 10 each 9.00 L&T InfrastructureDevelopment 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 ofJudicature at Bombay on May 26, 2006. In terms of the Scheme, the assets and liabilities of the Transferor Company have been transferred at book valueto the Transferee Company with effect from April 1, 2005. Consequent upon the Scheme becoming effective on June 5, 2006, the shares held by theCompany in the Transferor Ccompany have been extinguished and in lieu thereof, the Transferee Company has allotted to the Company 2,10,60,000 fullypaid 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.

42. 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 FinancialReconstruction (“the BIFR Scheme”).

b) The amalgamation was given effect on October 3, 2006 (“the Effective Date”) consequent upon compliance with requirements under the BIFRScheme.


154

c) 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 againstthe opening balance of Profit and Loss account.

d) The financial transactions arising out of operations of the Transferor Company during the current financial year have been incorporated in the booksof the Company under respective heads of account.

e) The amalgamation has been accounted for under the ‘Purchase’ method as prescribed under the Accounting Standard (AS) 14 “Accounting forAmalgamations” issued by the Institute of Chartered Accountants of India as follows:

i. The assets (except deferred tax assets) and liabilities of the Transferor Company, have been incorporated in the financial statements of theCompany as on the Effective Date at their respective carrying value.

ii. The deferred tax assets have been recognised as on March 31, 2007 to the extent there is a virtual certainty of realisation.

iii. Two fully paid equity shares of face value of Rs.2 each have been issued as consideration for the amalgamation.

iv. As at March 31, 2007, the capital reserve arising out of the amalgamation stood as follows:

Particulars Rs.crore

(A) Net assets acquired on amalgamation:

1 Fixed Assets (net) 13.08

2 Current Assets 0.10

Less: Current liabilities 29.94

(29.84)

3 Deferred tax liabilities (1.22)

4 Deferred tax assets recognised [as per point (ii) above] 28.38

Net assets acquired 10.40

(B) Excess of value of net assets acquired on amalgamationover the amount of consideration [as per point (iii) above],transferred to Capital Reserve 10.40

43. There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2007.

44. 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 theCompanies Act, 1956.

45. Details of sales, raw materials and components consumed, capacities & production, inventories and purchase of trading goods:

a) SALES:

2006-2007 2005-2006

Class of Goods Unit Quantity Value Quantity Value

Rs.crore Rs.crore

Earthmoving and agricultural machinery and spares 207.45 170.82

Welding alloys & accessories 166.89 137.18

Industrial Machinery Tonnes 11,841 250.72 10,730 185.76

Nuclear purpose equipment, deaerators, ultra highpressure vessels including multiwall vessels,high pressure heat exchangers and high pressureheaters in aggregate Tonnes 22 59.43 110 55.00

Plant & equipment and modules for nuclear powerprojects, heavy water projects, nuclear and spaceresearch and allied projects including items forChemical, Oil & Gas, etc. industries Tonnes 21,457 2663.95 10,877 2703.21

Powder metallurgy and industrial products 95.55 73.02

Industrial electronic control panels 113.07 70.26

Valves and accessories 647.29 539.54

Chemical plant & machinery, including pharmaceutical,dyestuff, distillery, brewery and solvent extractionplants, evaporator and crystallizer plants andpollution control equipment in aggregate Tonnes 5,705 790.99 5,052 1147.06


155

Switchgear, all types 872.66 638.00

Electro surgical unit and accessories 5.39 5.40

Petrol dispensing and metering pumps Nos 7,987 64.44 6,902 91.10

Ship auxiliaries and components of mechanised sailingvessels Tonnes 95 98.08 - -

Complete cement making machinery, including rotary kilns Nos Parts for 93.52 Parts for 176.74and fluxo packers in aggregate 2 Plants 2 Plants

Transmission line tower Tonnes 27,119 50.30 35,708 57.60

Steel structural fabrication Tonnes 16,320 130.40 24,703 171.80

Nos 10,45,472 36.40 12,09,841 31.20

Rubber processing machinery and accessories Nos 314 236.46 216 183.70

Ultrasound equipment and accessories 24.70 25.90

Patient monitoring system and accessories 58.50 45.40

Electricity meters 183.80 121.30

Ready mix concrete Cu.m. 25,61,553 754.90 16,43,698 346.30

Others 980.46 1132.76

Total 8585.35@ 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 2005-2006


Rs.crore Rs.crore

(i) Items

Steel Tonnes 1,24,490 304.17 57,012 116.14

Metres 8,80,438 95.76 7,26,512 48.93

Sq. mtrs 2,49,849 254.01 4,06,957 115.75

Nos / Pcs 8,75,616 187.83 4,41,944 120.03

Non-ferrous metals Tonnes 3,768 118.09 1,915 42.73

Metres 8,72,607 0.91 7,98,247 0.61

Sq. mtrs 1,247 8.84 831 0.39

Bakelite Tonnes 256 2.73 240 2.53

Cement machinery components 83.56 379.61

Nuclear equipment components, including items for Oil &Gas industries, etc. in aggregate 1034.69 818.30

Chemical Plant components 268.86 493.18

Switchgear components 509.43 365.35

Electronic devices, test & measuring instruments andindustrial electronic control panel components 77.03 61.00

Metering & Protection system and Medical Equipmentcomponents 177.78 118.00

Industrial Machinery Components 35.21 25.70

Power plant & machinery components 35.93 26.48

Others 422.36 190.64

TOTAL 3617.19 2925.37

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)2006-2007 2005-2006


Rs.crore Rs.crore

156

(ii) Raw materials and components consumed :

2006-2007 2005-2006

Particulars % to total Amount % to total Amountconsumption consumption

Rs.crore Rs.crore

Imported (including through canalising agencies) 49 1782.58 43 1244.92

Indigenous 51 1834.61 57 1680.45

TOTAL 100 3617.19 100 2925.37

c) CAPACITIES & PRODUCTION:

Licensed Installed ActualClass of Goods Unit Capacity Capacity Production

Scrapper, bulldozer, ripper and loader attachments Nos 250 250 -(250) (250) (-)

Road rollers, hot mix plants and other road construction and bridgeconstruction machinery Nos 150 150 -

(150) (150) (-)

Dairy machinery and equipment – various items in aggregate Nos 35,584 35,584 -(35,584) (35,584) (-)

Chemical plant and machinery, including pharmaceutical, dyestuff, distillery,brewery and solvent extraction plants, evaporator and crystalliser plantsand pollution control equipment in aggregate Tonnes 6,067 6,567 5,705

(6,067) (6,567) (5,052)

Equipment for food processing industry Tonnes 65 65 -(65) (65) (-)

Complete cement making machinery, including rotary kilns andfluxo packers in aggregate Nos 2 2 Parts for 2

plants

(2) (2) (Parts for 2plants)

Sugarcane and beet diffusion, beet preparation and beet pulp dehydrationplants Nos 2 2 -

(2) (2) (-)

Nuclear purpose equipment, deaerators, ultra high pressure vessels,including multiwall vessels, high pressure heat exchangers andhigh pressure heaters in aggregate Tonnes 5,000 3,950 22

(5,000) (3,950) (110)

Plant and equipment and modules for nuclear power projects, heavy waterprojects, nuclear and space research and allied projects, including itemsfor chemical, oil and gas, etc. industries Tonnes 10,000 10,000 21,457#

(10,000) (10,000) (10,877)

Complete high speed bottling plants Nos 6 6 -(6) (6) (-)

Pulp and paper making plants Tonnes 2,000 800 -(2,000) (800) (-)

Suspended particles drying plants Nos 6 6 -(6) (6) (-)

Containers for liquefied gases and chemicals Nos Not applicable* 1,000 tonnes -carrying capacity

(Not applicable)* (1,000 tonnes (-)carrying capacity)

Steel plant valves Nos 40 40 -(40) (40) (-)

Ship auxiliaries and components of mechanised sailing vessels Tonnes 1,000 1,000 95(1,000) (1,000) (-)

Rubber processing machinery Nos 109 109 316(109) (109) (211)


157

Switchgear, all types Nos 26,78,500 31,74,750 44,03,446(26,78,500)$ (31,74,750) (36,66,597)

Miscellaneous electrical items Nos 10,49,100 10,39,100 -(10,49,100) (10,39,100) (-)

Petrol dispensing and metering pumps Nos 4,800 4,800 7,898(4,800) (4,800) (6,466)

Press tools, jigs, fixtures, dies for pressure castings, moulds for plasticinjection and bakelite Rs.L /Nos Rs. 220 lakhs Rs. 295 lakhs 226 nos

(Rs.220 lakh)@ (Rs.295 lakh) (471 nos)

Glass bottles and jars Nos. in millions - - -(Not applicable)** (400) (107.9)

Industrial machinery Tonnes 12,000 12,000 11,953(12,000) (12,000) (10,565)

Industrial electronic control panels Nos 2,500 2,500 559(2,500) (2,500) (459)

Electronic devices Nos 30,000 30,000 6,930(30,000) (30,000) (936)

Electro surgical unit and accessories Nos Not applicable* 1,250 492(Not applicable)* (1,250) (556)

Ultrasound equipment and accessories Nos Not applicable* 1,000 658(Not applicable)* (1,000) (715)

Patient monitoring system and accessories Nos Not applicable* 7,000 6,872(Not applicable)* (5,500) (4,704)

Relays Nos Not applicable* 60,000 58,341(Not applicable)* (55,000) (48,583)

Control & relay panels Nos Not applicable* 100 -(Not applicable)* (100) (-)

Electricity meters Nos Not applicable* 7,00,000 6,60,383(Not applicable)* (4,80,000) (4,12,741)

Transmission line tower Tonnes 51,000 51,000 54,615(54,000) (54,000) (65,333)

Steel structural fabrication Metric Tonnes 12,000 12,000 36,223(18,000) (18,000) (32,277)

Steel re-rolling Tonnes 40,000 40,000 14,101(40,000) (40,000) (25,584)

Ready mix concrete Cu.m. 41,66,600 41,66,600 27,37,523(6,60,400) (31,28,000) (20,17,662)

Figures in brackets pertain to previous year.

*Licensing not applicable. Installed capacity is based on one of the following :

1. Entrepreneur’s Memoranda filed with Govt. of India, Ministry of Industry, New Delhi;

2. Registration with the Directorate General of Technical Development

3. Approval obtained from the Govt. of India, Ministry of Industry, New Delhi;

4. Agreement with Govt. of India, Ministry of Petroleum & Natural Gas.

** As per Entrepreneur’s 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 beeninstalled.

$ 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 of4,96,250 Nos. has been installed.

# Includes production from external sources.

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Licensed Installed Actual

Class of Goods Unit Capacity Capacity Production

158

Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)Notes forming part of Accounts (contd.)d) INVENTORIES:

Class of Goods Unit As at 31-3-2007 As at 31-3-2006 As at 31-3-2005Quantity Value Quantity Value Quantity Value

Rs.crore Rs.crore Rs.croreElectronic, medical and other instruments,

accessories and spares 0.17 0.18 0.51

Industrial machinery Tonnes 221 4.49 109 1.92 274 4.10

Switchgear, all types 120.03 90.83 87.85

Complete cement making machinery, includingrotary kilns and fluxo packers in aggregate Nos Parts for 38.40 Parts for 145.20 Parts for 52.89

2 Plants 2 Plants 2 Plants

Patient monitoring systems and accessories 7.07 2.47 5.28

Chemical plant & machinery, includingpharmaceutical, dyestuff, distillery, breweryand solvent extraction plants, evaporatorand crystalliser plants and pollution controlequipment in aggregate Tonnes 152 568.94 152 302.12 152 114.40

Industrial electronic control panels 0.04 0.04 0.45

Spares for earthmoving and agriculturalmachinery 38.49 28.41 25.96

Nuclear purpose equipment, deaerators, ultrahigh pressure vessels including multiwallvessels, high pressure heat exchangersand high pressure heaters in aggregate 96.48 51.36 24.69

Ultrasound equipment and accessories 6.13 4.95 10.22

Powder metallurgy and industrial products 8.18 6.81 6.01

Petrol dispensing and metering pumps Nos 173 4.74 262 4.43 816 7.71

Valves and accessories 2.56 1.70 2.33

Earthmoving and agricultural machinery and spares 6.22 0.99 0.50

Welding alloys and accessories 16.56 11.18 11.94

Electronic test & measuring instruments 0.49 0.15 1.00

Plant and equipment and modules for nuclearpower projects, heavy water projects,nuclear and space research and alliedprojects including items for Chemical, Oil &Gas, etc. industries 1386.27 555.87 326.73

Others 530.82 379.92 311.58

Total 2836.08@ 1588.53@@@@@ 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 2006-2007 2005-2006

Rs.crore Rs.crore

Earthmoving and agricultural machinery and spares 161.53 125.75

Welding alloys and accessories 113.40 105.90

Valves and accessories 559.28 470.54

Electronic, medical & other instruments, accessories and spares 23.85 192.91

Powder metallurgy and industrial products 64.90 48.28

Others 258.04 202.42

Total 1181.00 1145.80

Notes:

(a) The installed capacities are as certified by Managing/Whole-time Directors on which certificates the auditors have placed reliance.

(b) 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.

(c) Quantitative figures for sales are after exclusion of inter-divisional transfers, capitalisation/captive consumption, samples, etc.

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

159

47 Balance Sheet Abstract and Company’s General Business ProfileI Registration Details

Registration No. 1 1 - 0 4 7 6 8 State Code 1 1Balance 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 LBonus Issue Private Placement#

2 8 0 0 3 9 2 3 2 8# Conversion of Foreign Currency Convertible Bonds@ The Company also raised capital during the year by way of allotment of shares under Employee Stock OwnershipSchemes 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 5Sources of Funds Paid-Up Capital Reserves & Surplus *

5 6 6 5 4 1 5 7 1 1 7 7 9 3*Including employee stock options Rs.514974 Thousand.

Secured Loans Unsecured Loans2 4 5 4 0 2 1 1 8 3 2 3 4 8 6

Deferred Tax Liabilities2 0 4 8 8 3 4

Application of Funds Net Fixed Assets and net Intangible Assets Investments2 2 2 4 6 9 5 4 3 1 0 4 4 4 6 4

Net Current Assets Deferred Tax Assets2 5 4 7 3 9 2 2 1 6 4 6 9 3 5

Misc. Expenditure Accumulated Losses9 8 4 0 0 N I L

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 1

+ - Profit/Loss Before Tax + - Profit/Loss After Tax+ 2 0 0 4 8 8 6 1 + 1 4 0 3 0 2 5 8

Please tick Appropriate box + for Profit, - for LossBasic Earnings Per Share in Rs. Dividend Rate %

5 0 . 2 2 6 5 0V 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. 8 4 7 9 8 9 . 0 2(ITC Code)Product Description 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

Item Code No. 8 5 3 6 . 0 0(ITC Code)Product Description Switchgear, all types


Signatures to Schedules A to Q and NotesA.M. NAIK

As per our report attached Chairman & Managing Director


160

Name of the subsidiary company Narmada L&T L&T-Sargent L&T-ECC L&T L&T Cyber ParkInfrastructure Transportation & Lundy Construction Western Infrastructure DevelopmentConstruction Infrastructure Limited (M) India Development and

Enterprise Limited SDN.BHD. Tollbridge Projects ConstructionLimited Limited Limited Limited

Financial year of the subsidiary company ended on 31-3-2007 31-3-2007 31-3-2007 31-12-2006 31-3-2007 31-3-2007 31-3-2007Number of Shares in the subsidiary company held

by Larsen & Toubro Limited at theabove date - Equity shares 1,26,48,507 1,08,64,000 27,52,129 Nil 1,39,50,007 19,30,31,352 Nil

- Preference shares Nil Nil Nil Nil Nil Nil NilThe net aggregate of profits, less losses, of the subsidiary

company so far as it concerns the members ofLarsen & Toubro Limited:

Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore(i) Dealt with in the accounts of Larsen & Toubro

Limited amounted to:(a) for the subsidiary’s financial year ended

March 31, 2007 and December 31, 2006 Nil 0.98 Nil Nil Nil Nil Nil(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited Nil Nil 0.03 1.08 1.95 Nil Nil

(ii) Not dealt with in the accounts ofLarsen & Toubro Limited amounted to:(a) for the subsidiary’s financial year ended

March 31, 2007 and December 31, 2006 8.59 5.49 0.62 (0.02) 1.93 128.40 3.47(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited (7.30) (1.43) (1.99) (0.26) 3.13 (13.13) (1.93)

Changes in the interest of Larsen & Toubro Limitedbetween the end of the subsidiary’s financial yearand March 31, 2007

Number of shares acquired Nil Nil Nil Nil Nil Nil NilMaterial changes between the end of the

subsidiary’s financial year and March 31, 2007(i) Fixed assets (net additions) Nil Nil Nil Nil Nil Nil Nil(ii) Investments Nil Nil Nil Nil Nil Nil Nil(iii) Moneys lent by the subsidiary Nil Nil Nil Nil Nil Nil Nil(iv) Moneys borrowed by the subsidiary company

other than for meeting current liabilities Nil Nil Nil Nil Nil Nil Nil

Statement pursuant to Section 212 of the Companies Act, 1956, relating toStatement pursuant to Section 212 of the Companies Act, 1956, relating toStatement pursuant to Section 212 of the Companies Act, 1956, relating toStatement pursuant to Section 212 of the Companies Act, 1956, relating toStatement pursuant to Section 212 of the Companies Act, 1956, relating toSubsidiary Companies:Subsidiary Companies:Subsidiary Companies:Subsidiary Companies:Subsidiary Companies:

Name of the subsidiary company L&T Finance Larsen & HPL Larsen & India L&T Larsen &Limited Toubro Cogeneration Toubro Infrastructure Infocity Toubro

Infotech Limited (Oman) Developers Limited InternationalLimited LLC Limited FZE

Financial year of the subsidiary company ended on 31-3-2007 31-3-2007 31-3-2007 31-12-2006 31-3-2007 31-3-2007 31-12-2006

Number of Shares in the subsidiary company heldby Larsen & Toubro Limited at theabove date - Equity shares 12,41,91,500 3,00,00,000 3,12,12,000 Nil 5,60,60,000 Nil 266

- Preference shares Nil Nil 3,12,12,000 Nil Nil Nil NilThe net aggregate of profits, less losses, of the subsidiary


Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs crore(i) Dealt with in the accounts of Larsen & Toubro


March 31, 2007 and December 31, 2006 Nil 15.01 25.72 Nil Nil Nil Nil(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited 30.55 113.25 123.05 2.30 Nil 5.28 Nil

(ii) Not dealt with in the accounts of Larsen & ToubroLimited amounted to:(a) for the subsidiary’s financial year ended

March 31, 2007 and December 31, 2006 62.61 134.02 16.85 16.50 (12.20) 22.24 132.91(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited 78.41 176.34 41.85 18.49 16.92 41.82 53.36


Number of shares acquired Nil Nil Nil Nil Nil Nil 40Material changes between the end of the



161

Statement pursuant to Section 212 of the Companies Act, 1956, relating toStatement pursuant to Section 212 of the Companies Act, 1956, relating toStatement pursuant to Section 212 of the Companies Act, 1956, relating toStatement pursuant to Section 212 of the Companies Act, 1956, relating toStatement pursuant to Section 212 of the Companies Act, 1956, relating toSubsidiary Companies (contd.)Subsidiary Companies (contd.)Subsidiary Companies (contd.)Subsidiary Companies (contd.)Subsidiary Companies (contd.)

Name of the subsidiary company L&T Larsen & Hyderabad Tractor Larsen & Larsen & Larsen &Capital Toubro International Engineers Toubro Toubro Toubro

Company Infotech Trade Limited LLC Qatar (Wuxi)Limited GmbH Expositions LLC Electric

Limited CompanyLimited


by Larsen & Toubro Limited at theabove date - Equity shares 50,00,000 Nil Nil 68,000 50,000 Nil Nil



Rs crore Rs.crore Rs.crore Rs.crore Rs crore Rs crore Rs.crore(i) Dealt with in the accounts of Larsen & Toubro


March 31, 2007 and December 31, 2006 Nil Nil Nil Nil Nil Nil Nil(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited 0.55 Nil Nil 2.38 Nil Nil Nil


March 31, 2007 and December 31, 2006 2.51 0.39 0.22 13.26 0.24 (5.24) (1.12)(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited 2.59 3.16 (1.88) 11.49 (0.16) (1.09) Nil

Changes in the interest of Larsen & Toubro Limitedbetween the end of thesubsidiary’s financial year and March 31, 2007


subsidiary’s financial year and March 31, 2007(i) Fixed assets (net additions) Nil Nil Nil Nil Nil Nil 8.83(ii) Investments Nil Nil Nil Nil Nil Nil Nil(iii) Moneys lent by the subsidiary Nil Nil Nil Nil Nil Nil 0.10(iv) Moneys borrowed by the subsidiary company


Name of the subsidiary company International International L&T L&T L&T L & T L&TSeaports Seaports Pte. Panipat Tech Krishnagiri Western Vadodara

(India) Limited Elevated Park Thopur Andhra BharuchPrivate Corridor Limited Toll Road Tollways TollwayLimited Limited Limited Limited Limited


by Larsen & Toubro Limited at theabove date - Equity shares Nil 18,15,000 Nil Nil Nil Nil Nil



Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs crore Rs.crore(i) Dealt with in the accounts of Larsen & Toubro



since it became subsidiary ofLarsen & Toubro Limited Nil Nil Nil Nil Nil Nil Nil


March 31, 2007 and December 31, 2006 (0.28) (2.66) Nil Nil Nil Nil Nil(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited (0.59) 0.11 Nil Nil Nil Nil Nil





162


Name of the subsidiary company L&T Spectrum L & T Larsen & L&T L&T L&TInterstate Infotech Urban Toubro Infocity Infocity Overseas

Road Private Infrastructure Information Infrastructure Lanka ProjectsCorridor Limited Limited Technology Limited Private NigeriaLimited Canada Limited Limited

LimtedFinancial year of the subsidiary company ended on 31-3-2007 31-3-2007 31-3-2007 31-3-2007 31-3-2007 31-3-2007 31-12-2006Number of Shares in the subsidiary company held

by Larsen & Toubro Limited at theabove date - Equity shares Nil 4,40,000 Nil Nil Nil Nil Nil



Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore(i) Dealt with in the accounts of Larsen & Toubro





March 31, 2007 and December 31, 2006 Nil (0.70) 0.18 0.37 0.39 0.40 Nil(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited Nil Nil Nil (0.34) 0.06 0.52 Nil


Number of shares acquired Nil Nil Nil Nil Nil Nil NilMaterial changes between the end of the subsidiary’s

financial year and March 31, 2007(i) Fixed assets (net additions) Nil Nil Nil Nil Nil Nil Nil(ii) Investments Nil Nil Nil Nil Nil Nil Nil(iii) Moneys lent by the subsidiary Nil Nil Nil Nil Nil Nil Nil(iv) Moneys borrowed by the subsidiary company


Name of the subsidiary company L&T L&T International L&T Larsen & Larsen & L&TInfrastructure Power Seaport Modular Toubro Toubro Infrastructure

Finance Projects Dredging Fabrication Saudi Readymix DevelopmentCompany Limited Limited Yard LLC Arabia Concrete Projects

Limited LLC Industries (Lanka)LLC Private

LimitedFinancial year of the subsidiary company ended on 31-3-2007 31-3-2007 31-3-2007 31-12-2006 31-12-2006 31-12-2006 31-3-2007Number of Shares in the subsidiary company held

by Larsen & Toubro Limited at theabove date - Equity shares 24,30,00,000 50,000 8,600 Nil Nil Nil Nil

- Preference shares Nil Nil 11,267 Nil Nil Nil NilThe net aggregate of profits, less losses, of the subsidiary


Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore Rs.crore(i) Dealt with in the accounts of

Larsen & Toubro Limited amounted to:(a) for the subsidiary’s financial year ended




March 31, 2007 and December 31, 2006 (2.77) Nil 2.86 (1.25) (5.75) Nil Nil(b) for previous financial years of the subsidiary



Number of shares acquired Nil Nil Nil Nil Nil Nil NilMaterial changes between the end of thesubsidiary’s financial year and March 31, 2007

(i) Fixed assets (net additions) Nil Nil Nil Nil Nil Nil Nil(ii) Investments Nil Nil Nil Nil Nil Nil Nil(iii) Moneys lent by the subsidiary Nil Nil Nil Nil Nil Nil Nil(iv) Moneys borrowed by the subsidiary company


163

Name of the subsidiary company L&T L&T L&T Larsen & GDA GDA GDATurbo Vision Phoenix Toubro Technologies Systems Technologies

Generator Ventures Infoparks Electromech Inc. Private LimitedPrivate Limited Private LLC LimitedLimited Limited


by Larsen & Toubro Limited at theabove date - Equity shares Nil Nil Nil Nil Nil Nil Nil




Larsen & Toubro Limited amounted to :(a) for the subsidiary’s financial year ended




March 31, 2007 and December 31, 2006 Nil Nil Nil 4.83 (0.03) Nil 0.50(b) for previous financial years of the subsidiary







Name of the subsidiary company L&T Larsen & Larsen & Larsen & L&T L&T L&TElectricals Toubro Toubro Toubro Boilers Uttaranchal Bangalore

Saudi Kuwait (Qingdao) (Jiangsu) Private Hydropower AirportArabia Construction Rubber Valve Limited Limited Hotel

LLC General Machinery Company LimitedContracting Company Limited

Co. WLL LimitedFinancial year of the subsidiary company ended on 31-3-2007 31-12-2006 31-12-2006 31-12-2006 31-3-2007 31-3-2007 31-3-2007

Number of Shares in the subsidiary company heldby Larsen & Toubro Limited at theabove date - Equity shares Nil Nil Nil Nil Nil Nil Nil




Larsen & Toubro Limited amounted to:(a) for the subsidiary’s financial year ended




March 31, 2007 and December 31, 2006 Nil Nil (0.06) Nil Nil Nil Nil(b) for previous financial years of the subsidiary



Number of shares acquired Nil Nil Nil Nil Nil Nil NilMaterial changes between the end of thesubsidiary’s financial year and March 31, 2007

(i) Fixed assets (net additions) Nil Nil Nil Nil Nil Nil Nil(ii) Investments Nil Nil Nil Nil Nil Nil Nil(iii) Moneys lent by the subsidiary Nil Nil Nil Nil Nil Nil Nil(iv) Moneys borrowed by the subsidiary company


164

Name of the subsidiary company CSJ Bhilai Power Andhra Pradesh Raykal Aluminium L&TInfrastructure Supply Expositions Company South City

Private Limited Company Limited Private Limited Private Limited Projects LimitedFinancial year of the subsidiary company ended on 31-3-2007 31-3-2007 31-3-2007 31-3-2007 31-3-2007

Number of Shares in the subsidiary company heldby Larsen & Toubro Limited at theabove date - Equity shares Nil 49,950 Nil Nil Nil

- Preference shares Nil Nil Nil Nil NilThe net aggregate of profits, less losses, of the subsidiary


Rs crore Rs crore Rs.crore Rs crore Rs.crore(i) Dealt with in the accounts of

Larsen & Toubro Limited amounted to :(a) for the subsidiary’s financial year ended

March 31, 2007 and December 31, 2006 Nil Nil Nil Nil Nil(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited Nil Nil Nil Nil Nil


March 31, 2007 and December 31, 2006 Nil Nil Nil Nil Nil(b) for previous financial years of the subsidiary

since it became subsidiary ofLarsen & Toubro Limited Nil Nil Nil Nil Nil


Number of shares acquired Nil Nil Nil Nil NilMaterial changes between the end of the

subsidiary’s financial year and March 31, 2007(i) Fixed assets (net additions) Nil Nil Nil Nil Nil(ii) Investments Nil Nil Nil Nil Nil(iii) Moneys lent by the subsidiary Nil Nil Nil Nil Nil(iv) Moneys borrowed by the subsidiary company

other than for meeting current liabilities 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&TInterstate Road Corridor Limited, L&T Overseas Projects Nigeria Limited, L&T Power Projects Limited, Larsen & Toubro Readymix Concrete Industries LLC, L&T Infrastructure Development ProjectsLanka (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 PrivateLimited, 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, CSJInfrastructure 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 yetto commence business.

A.M. NAIKChairman & Managing Director

J.P. NAYAK K.V. RANGASWAMI SURINDER NATHY.M. DEOSTHALEE V.K. MAGAPU U. SUNDARARAJAN

N. HARIHARAN K. VENKATARAMANAN S.N. TALWAR THOMAS MATHEW T.Company Secretary R.N. MUKHIJA M.M. CHITALE

Mumbai, May 29, 2007 Directors Mumbai, May 29, 2007


38

INDEPENDENT FINANCIALS-10 YEAR HIGHLIGHTSRs. croreRs. croreRs. croreRs. croreRs. 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 AccountGross Sales & Service 17901 14966 13255 9807 9870 8167 7825 7424 7292 5677

Other Income 462 464 698 398 254 218 207 175 110 91

Gross Revenues 18363 15430 13953 10205 10124 8385 8032 7599 7402 5768

Net Sales & Service 17579 14735 13050 9561 9360 7726 7390 6956 6883 5305

PBDIT 2209 1503 1434 890 999 1042 1013 994 870 766

Profit before Tax andextraordinary items 2005 1314 1286 769 510 401 339 369 441 482

Extraordinary Items - 70 - - - - - 13 81 108

Profit after Tax 1403 1012 984 533 433 347 315 342 471 531

Dividend including dividenddistribution tax 428 349 407 225 211 174 178 180 180 178

Balance SheetShare Capital 57 27 26 25 249 249 249 248 248 248

Reserves 5712 4613 3343 2750 3314 3095 3751 3616 3458 3174

Net Worth 5769 4640 3369 2775 3563 3344 4000 3864 3706 3422

Deferred Tax Liability (Net) 84 77 95 114 841 853 - - - -

Loan Funds 2078 1454 1859 1324 3176 3463 4263 3974 3359 2819

Capital Employed 7931 6171 5323 4213 7580 7660 8263 7838 7065 6241

Net Fixed and Intangible Assets 2225 1605 1083 1015 4056 4264 4671 4589 4555 4297

Investments 3104 1920 961 966 1160 885 813 774 489 348

Net Working Capital (NWC) 2547 2625 3238 2185 2300 2484 2735 2439 2004 1580

Ratios and StatisticsPBDIT as % of Total Income 12.24 9.89 10.43 8.95 10.39 13.12 13.33 13.94 12.44 14.20

PAT before extra-ordinary itemsas % of Total Income 7.78 6.20 7.16 5.35 4.50 4.37 4.15 4.61 5.58 7.84

ROCE % * 20.41 17.45 21.69 13.52 7.27 6.84 6.74 7.38 7.51 8.30

RONW % ** 27.19 23.90 32.83 20.66 12.91 9.69 8.18 8.85 11.13 13.22

Gross Debt:Equity Ratio 0.36:1 0.32:1 0.56:1 0.49:1 0.92:1 1.07:1 1.09:1 1.05:1 0.92:1 0.84:1

NWC as % of Gross Sales &Service 14.23 17.54 24.43 22.28 23.30 30.42 34.95 32.85 27.48 27.83

Current Ratio 1.27 1.38 1.58 1.47 1.58 1.81 2.11 2.07 1.84 1.74

Basic Earnings perEquity Share (Rs.)@ 50.22 38.03# 38.81 21.41 17.42 13.95 12.67 13.74# 18.94# 21.39#

Book Value perEquity Share (Rs.) 202.28## 334.01 253.91 216.74 139.15 130.25 157.31 152.13 146.48 134.99

No. of Equity Shareholders 4,28,504 3,27,778 3,23,908 3,65,824 4,90,628 5,09,922 5,13,562 6,05,031 7,56,852 7,98,947

No.of Employees 27,191 23,148 19,848 18,996 21,873 22,922 23,988 24,448 25,596 25,362

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

39

CONSOLIDATED FINANCIALS - HIGHLIGHTSRs. croreRs. croreRs. croreRs. croreRs. crore

Description 2006-2007 2005-2006 2004-2005 2003-2004 2002-2003 2001-2002

Profit and Loss Account

Gross Sales & Service 20700 16747 14599 11107 10857 9195

Other Income 994 519 659 431 226 185

Gross Revenues 21694 17266 15258 11538 11083 9380

Net Sales & Service 20348 16500 14379 10849 10327 8714

PBDIT 3404 2042 1720 1215 1200 1287

Profit before tax and extraordinary Items 3005 1668 1405 921 469 414

Extraordinary Items - 70 - 147 - -

Profit attributable to Group Shareholders 2240 1317 1050 747 380 290

Dividend including dividend distribution tax 428 349 407 225 211 174

Balance Sheet

Share Capital 57 27 26 25 249 249

Reserves 6865 4937 3290 2622 2968 2889

Net Worth 6922 4964 3316 2647 3217 3138

Minority Interest 646 107 105 54 50 44

Loan Funds 6432 3499 3454 2769 4701 4978

Deferred Tax Liability (Net) 107 127 137 214 913 928

Capital Employed 14107 8697 7012 5684 8881 9088

Net Fixed & Intangible Assets 5454 2973 2215 2140 5539 5824

Investments 2479 1676 615 624 528 358

Net Working Capital (NWC) 6157 4023 4141 2872 2715 2831

Ratios and Statistics

PBDIT as % of Total Income 15.95 12.00 11.44 10.77 11.37 14.46

PAT before extra-ordinary items as % of Total Income 10.50 7.33 6.98 5.32 3.60 3.26

ROCE % * 19.96 16.98 17.56 11.54 6.25 5.88

RONW % ** 37.69 30.13 35.20 20.47 11.97 9.24

Gross Debt:Equity Ratio 0.94:1 0.71:1 1.06:1 1.08:1 1.52:1 1.65:1

NWC as % to Gross sales 29.74 24.02 28.37 25.86 25.00 30.78

Current Ratio 1.58 1.53 1.71 1.58 1.63 1.86

Basic Earnings per Equity Share (Rs.)@ 80.19 49.49 # 41.40 30.02 # 15.29 11.66

Book Value per Equity Share (Rs.) 242.77 ## 357.43 249.75 206.33 123.98 121.64

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

40

PBDIT AS % OF TOTAL INCOME

Rs.crore

670

1434 1503

0

500

1000

1500

2000

2500

PBDIT

2006-20072005-20062004-20052003-20042002-20035

10

15

PBDIT as %of Total Income

8.9% 8.9%

10.4%9.9%

2209

890

12.2%

Rs.crore

1078413062

14942

22370

ORDER INFLOW

2002-2003 2003-2004 2004-2005 2005-2006 2006-20078000

16000

24000

3200030602

5000

10000

15000

20000

Rs.crore

7443

9807

13255

14966

SALES

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

17901

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

Operating Cash Flow as % of Gross Revenue

Per

cent

age

OPERATING CASH FLOW AS % OF GROSS REVENUE

0

5

10

15

20

10.6

4.52.8

11.0

14.9

Interest & Brokerage 0.2%

Depreciation & Amortisation 0.9%

Taxes 3.3%

Dividend 2.4%

Retained Earnings 5.4%

Sales, Admn. & Other Expenses 8.3%

Mfg. Constn. & Operating Expenses 72.5%

DISTRIBUTION OF REVENUE

2006-20072005-2006

Staff Expenses 7.0%

Interest & Brokerage 0.5%

Depreciation & Amortisation 0.7%

Taxes 2.4%

Dividend 2.3%

Retained Earnings 4.4%

Sales, Admn. & Other Expenses 8.1%

Mfg. Constn. & Operating Expenses 75.7%

Staff Expenses 5.9%

41

SEGMENT-WISE CUSTOMER SALES 2006-2007

Engineering &Construction

78%Total customer sales Rs.17,901 crore

Electrical &Electronics

11%

Others1%

Machinery & Industrial Products10%

Engineering &Construction

83%

Total order inflow Rs.30,602 crore

Electrical &Electronics

7%

Others3%

Machinery & Industrial Products7%

SEGMENT-WISE ORDER INFLOW 2006-2007

SECTOR-WISE ORDER BOOK AS AT MARCH 31, 2007

Infrastructure39%

Others14%

Power16%

Process12%

Total order Book Rs.36,882 crore

Hydrocarbon19%

Rs.crore

8430

11107

14599

16747

L & T GROUP - SALES

2002-2003 2003-2004 2004-2005 2005-2006 2006-20075000

10000

15000

20000

25000

20700

L & T GROUP - PAT & EPS

Rs.crore

PA

T

EP

SRupees

380

600

1050

1247

2240

100

700

1300

1900

2500

PAT

2006-20072005-20062004-20052003-20042002-2003*10

40

70

100

EPS

* Including demerged Cement business

80.19

46.8741.40

24.1215.29

2005-2006 2006-2007

Engineering & Construction

Revenue 2005-2006 2006-2007

Result

Rs.crore

SEGMENT-WISE REVENUE & RESULT

0

4000

8000

12000

16000

20000

0

500

1000

1500

2000

2500

3000

Electrical & ElectronicsMachinery & Industrial Products

Others

1157013425

861

1408

308

313

73

22719954

2067

184394115266

18276

1341

2102

15501474672

Rev

enue

Res

ult

2007

Documents

shanghai banking

kobla partner

dsp merryl

sundararajan

chitale surinder

heavy water

jointly controlled

jointly controlled