Fy 14 Annual Report

8/10/2019 Fy 14 Annual Report

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L&T Finance Limited | Annual Report 2013-14 | 1

Dear Members,

Your Directors have pleasure in presenting the Nineteenth Annual Report of the Company with the AuditedAccounts for the Financial Year ended March 31, 2014.

FINANCIAL HIGHLIGHTS

The summarized nancial results of the Company for the Financial Year ended March 31, 2014 are as under:

( ` In Lakh)

Particulars For the year endedMarch 31, 2014

For the year endedMarch 31, 2013

Gross Income 224, 550.91 206,806.51

Prot before Tax 30,478.06 31,340.86Provision for Tax 14,756.00 10,522.50Deferred tax (4,400.60) (284.50)

Prot after Tax 20,122.66 21,102.86

Add: Balance brought forward from previous years 51,559.47 17,525.18Prot available for appropriation 71,682.13 38,628.04

Appropriations:Interim Dividend 9,894.52 10,013.74Proposed nal dividend - 1,025.22Dividend Distribution Tax 1,681.58 1,798.71

Transfer to General Reserve 2,012.27 2,110.30Transfer to Special Reserve U/S 45-IC of RBI Act, 1934 4,024.56 4,220.60Transfer to / (from) Debenture Redemption Reserve 3,434.00 (32,100.00)

Net surplus in the statement of Prot and Loss 50,635.20 51,559.47

APPROPRIATIONSYour Company proposes to transfer ` 2,012.27 Lakhs(Previous year: ` 2,110.30 Lakhs) to General Reserve.Your Company also proposes to transfer ` 4,024.56Lakhs (Previous Year: ` 4,220.60 Lakhs) to SpecialReserve Created U/S 45- IC of the Reserve Bank ofIndia Act, 1934. ` 3,434.00 Lakhs has been transferredto Debenture Redemption Reserve from surplus in thestatement of Prot and Loss as against the previous yearappropriation of ` 32,100.00 Lakhs from DebentureRedemption Reserve.

It is proposed to retain ` 50,635.20 Lakhs (Previous Year ` 51,559.47 Lakhs) in the statement of Prot and Lossof the Company.DIVIDENDDuring the year, your Company had declared an interimdividend of ` 4.15 per equity share of ` 10/- each. The

total outgo on account of payment of interim dividendwas ` 11,576.10 Lakhs (inclusive of dividend distributiontax amounting to ` 1,681.58 Lakhs).

The Directors have considered it nancially prudent inthe long-term interests of the Company to reinvest theprots into the business of the Company to build a strongreserve base and grow the business of the Company. Nonal dividend has therefore been recommended for theFinancial Year ended March 31, 2014.

PERFORMANCE OF THE COMPANY

Financial Performance of the CompanyThe Company has, during the year, decided tostrategically exit the car nancing business (nowcarried out through a fellow subsidiary) to focus onthe B2B segment. Consequently, the nancial datafor the 2 years is not fully comparable.

Directors’ Report



2 | L&T Finance Limited | Annual Report 2013-14

The Company has achieved enhanced businessperformance during the year under review, incomparison to the year ended March 31, 2013, inspite of the challenging economic environment andslowdown in several sectors. Gross portfolio assetsrecorded 9.29% growth from ` 1,434,942.23Lakhs as at March 2013, to ` 1,568,317.66 Lakhsas at March 2014.

Income from operations has grown from ` 204,719.66 Lakhs in the year ended March 31,2013 to ` 219,981.73 Lakhs in the year underreview, an increase of 7.46%. Total income hasalso grown 8.58% from ` 206,806.51 Lakhs to

` 224, 550.91 Lakhs in the same period.

Protability was lower, due to higher provisioningin construction equipment, commercial vehiclesand corporate lending businesses.

Initiatives undertaken during the year

During the Financial Year 2014, your Company hadundertaken several initiatives with an objective toenhance customer reach & centricity, multi channelreach, build scalability, manage risks effectively,attain process excellence & business continuity andaid cost exibility.

Some of the initiatives that the Company hadundertaken were:

Tablet Project: The project is aimed at makingthe loan application process paperless. This wouldhelp the Company to reduce reliance on physicalinfrastructure and assist in deepening the presenceof the Company. For the customer, it will meansubstantially better turnaround time for theprocessing of their loan.

Call Centre: Implementation of Call Centre wasstarted from May 18, 2013. It supports 100% callrecording, campaign and volume based dial outand is also available in 7 languages.

Web channel: Implementation of Web Channelas Alternate Delivery Channels was started fromJune 30, 2013. The website is customer friendlyand service oriented and includes service offeringsto customers for various purposes like request forproduct details etc.

Corporate/ Strategic initiatives

Business Unit (“BU”) based structure: L&T FinancialServices has some more entities engaged in Retailnancing. Hence, it was felt prudent by the Management

to have synergies within the Group.

Accordingly, the integration process for the functionalteams within the Retail Platform were completedduring the year which would enable improve operatingefciencies, reduce operating cost and build up aleadership pool at various levels.

In the area of Technology, it is proposed to migrateto 100% usage of Tablet, integration with 3 rd partycollection centres and collection score card for propensityprediction.

Performance of businesses:

Consumer and Auto Loans

This includes products such as car/ used car, farmequipment, light and small commercial vehicles.

The farm equipment business showed anappreciable gain in market share. During the year,the Company, in order to focus on asset nancing,has strategically exited the car nancing business,which is now carried out by a fellow subsidiary.

Micro and Small Enterprises

This includes products such as constructionequipment, medium and small commercial vehiclesand working capital.

The growth of the Company in this business wasstrategically moderated due to deterioration of riskprole of the industry caused by overall economicslowdown, leading to lower asset quality andcertain external factors. We focused on businessgiving good yield at an acceptable risk prole.

Mid and Large Corporations

This includes products such as lease, term loans,channel nance and loan against securities.

Deal origination and self sourcing capabilities haveimproved; risk monitoring of portfolio has beenincreased in frequency and made more intensive.However, this sector has delivered sub-par returnsdue to increased credit costs.




Micronance Business has returned toprotability, though the Company is following apolicy of cautious growth.

RESOURCES

The growth in Loans and Advances towards nancingactivities has led to increased funding requirement.

The Company has raised funds through a mix ofborrowings. During the year, the net borrowings haveincreased from ` 11,80,517.54 Lakhs as at March 2013,to ` 13,29,046.21 Lakhs as at March 2014.

FUND RAISING

During the year under review, the Company met itsfunding requirements through issue of Non-ConvertibleDebentures ( “NCDs”), Commercial Paper ( “CPs”) andBank borrowings.

The aggregate debt (NCDs, CPs and Bank borrowings)outstanding as on March 31, 2014 was ` 13,24,101.21Lakhs.

CREDIT RATING

During the year under review, the Company had its issueof debentures rated and re-afrmed at CARE AA+ and[ICRA] AA+/Stable by CARE & ICRA respectively.

FIXED DEPOSITS

The Company had stopped accepting fresh deposits aswell as renewal of existing deposits several years earlier,and as such, during the year, the Company has notaccepted any public deposits.

The Company has outstanding unclaimed xed depositsof ` 0.15 Lakhs pertaining to 2 deposit holders. TheCompany had received claims from the respective FixedDeposit Holder / Legal heirs for the 2 matured depositsand awaits completion of the necessary formalities forrepayment of the redeemed amounts.

MANAGING DIRECTOR

The Board at its Meeting held on July 22, 2013,appointed Mr. Dinanath Dubhashi as Managing Director& Chief Executive of the Company for a period of veyears with effect from July 22, 2013. He earlier held theposition of Chief Executive & Manager of the Company.Pursuant to his appointment as Managing Director &Chief Executive, he has stepped down from the positionof Manager on the same date.

COMPANY SECRETARY

During the year, Mr. Manoj Harlalka (ACS No. 12938)had resigned from the post of Company Secretary witheffect from September 30, 2013. Your Directors placeon record their appreciation of the valuable contributionmade by him to the function.

The Board at its Meeting held on January 20, 2014,appointed Mr. Kailash Purohit (ACS No. 28740) asCompany Secretary of the Company with effect fromJanuary 20, 2014.

DIRECTORS

Mr. Subramaniam N., who had expressed his desirenot to seek re-election at the previous Annual GeneralMeeting, subsequently reinstated his candidature at therequest of a member and was re-elected as Director atthe said Annual General Meeting.

Prior to the coming into force of Section 149 of theCompanies Act, 2013 (the “Act” ), three of the Company’sDirectors, Mr. P. V. Bhide, Mr. Subramaniam N. andMr. M. Venugopalan were categorized as IndependentDirectors in terms of the denition contained in theEquity Listing Agreement, though the Company did nothave its equity shares listed.

The provisions of Section 149(4) of the Act, pertainingto the appointment of Independent Directors havebeen notied by the Ministry of Corporate Affairs witheffect from April 1, 2014. Pursuant to the coming intoforce of Section 149 of the Act, from April 1, 2014, theCompany has re-assessed the status of its directors witha view to determining their qualifying for classicationas Independent Directors in terms of Section 149(6) ofthe Act. Accordingly, Mr. P. V. Bhide, Mr. SubramaniamN. and Mr. M. Venugopalan fulll the criteria laid out inSection 149(6) of the Act in this regard.

Section 149(10) of the Act, restricts the tenure ofIndependent Director to two terms of ten years, witha single term not exceeding ve years, which shallbe effective from April 1, 2014. Mr. P. V. Bhide andMr. Subramaniam N. retire by rotation at the forthcomingAnnual General Meeting ( “AGM” ) and, they, beingeligible, have offered themselves for appointment asIndependent Directors of your Company pursuant to theprovisions of the Act, to hold ofce for a period uptoMarch 31, 2019.






4. The Directors have prepared the Annual Accountson a going concern basis; and

5. Proper systems are in place to ensure compliance ofall laws applicable to the Company.

AUDITORS’ REPORT

The Auditors’ Report is unqualied. The notes to theAccounts referred to in the Auditors’ Report are selfexplanatory and therefore do not call for any furtherclarications under Section 217(3) of the CompaniesAct, 1956.

RESERVE BANK OF INDIA GUIDELINES

The Company continues to comply with all therequirements prescribed by the Reserve Bank of India,from time to time, as applicable to it.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciationof the dedication and commitment of the Company’semployees to the growth of the Company. Theirunstinted support has been and continues to be integralto the Company’s ongoing success. The Directors wish

to thank the Company’s clients and business associatesfor their support to the growth of the Company. TheDirectors also wish to thank the Central and StateGovernments, Reserve Bank of India and other Regulatory

/ Government Authorities, Financial Institutions, Banks,Mutual Funds and Rating Agencies for their support.

For and on behalf of the Board of Directors

Y. M. Deosthalee Dinanath DubhashiChairman Managing Director &

Chief Executive

Mumbai

April 21, 2014

Registered Ofce:L&T House,Ballard Estate,Mumbai - 400001




BOARD OF DIRECTORS

The Board of Directors along with its Committeesprovides leadership and guidance to the Company’smanagement and directs, supervises and controlsthe activities of the Company. At present, the Boardcomprises Eight Directors viz. Mr. Y. M. Deosthalee, Mr.P. V. Bhide, Mr. Mannil Venugopalan, Mr. SubramaniamN., Mr. S. Raghavan, Mr. N. Sivaraman, Mr. R. ShankarRaman and Mr. Dinanath Dubhashi.

Currently, the Board comprises Mr. Dinanath Dubhashi,Managing Director & Chief Executive and 7 Non-Executive Directors. Mr. Deosthalee is the Non-ExecutiveChairman. Mr. Deosthalee, is the Chairman andManaging Director of L&T Finance Holdings Limited, theHolding Company, while Mr. Sivaraman is the President& Whole-time Director of the same. Mr. R. Shankar

Raman is the Chief Financial Ofcer of Larsen & ToubroLimited, the ultimate Holding Company while Mr. S.Raghavan was associated during the year with Larsen& Toubro Limited. Mr. Bhide is an Independent Directoron the Board of L&T Finance Holdings Limited. Mr. P.V.Bhide, Mr. Subramaniam N. and Mr. M. Venugopalanare Independent Directors on the Company’s Board.

During the period under review, six meetings of theBoard of Directors were held on April 23, 2013, July 22,2013, September 27, 2013, October 21, 2013, January20, 2014 and March 20, 2014.

The Board functions either as a full Board or throughvarious Committees constituted to oversee specicareas. The Committees have oversight of operationalissues assigned to them by the Board. The eight coreCommittees constituted by the Board in this connectionare:

The Details of various Committees of the Company areas under:

1) Audit Committee:

The Audit Committee has been set up pursuant toSection 292A of the Companies Act, 1956, as wellas the RBI directions for NBFCs. During the year, theCommittee was re-constituted.

During the year, the Committee, was re-constitutedThe Committee comprises 3 Directors as per detailsgiven below:

Composition of Audit Committee

Mr. P.V. Bhide – Chairman

Mr. Mannil Venugopalan

Mr. S. Raghavan

Role of the Committee

The role, terms of reference, authority and powersof the Audit Committee are in conformity withSection 292A of the Companies Act, 1956. Duringthe scal year 2013-14, the Committee met 5times.

2) Committee of Directors:

During the year, the Committes was re-constituted.The Committee currently comprises 3 Directors asper details given below.

Composition of Committee of Directors (COD)

Mr. Y. M. DeosthaleeMr. N. Sivaraman

Mr. Dinanath DubhashiRole of the Committee

The COD is entrusted with the powers of generalmanagement of the affairs of the Company.

During the scal year 2013-14, the Committee met30 times.

3) Asset–Liability Management Committee(ALCO):

During the year, the Committee was re-constituted.The Committee is chaired by Mr. N. Sivaraman,and comprises Mr. Dinanath Dubhashi and othermembers holding senior executive positions inthe Company, group companies and the ultimateparent company.

Annexure ‘A’ to Directors‘ ReportCorporate Governance Report





1. Monitoring market risk management systems,compliance with the asset-liability managementpolicy and prudent gaps and tolerance limits

and reporting systems set out by the Board ofDirectors and ensuring adherence to the RBIGuidelines issued in this behalf from time totime;

2. Reviewing the business strategy of theCompany (on the assets and liabilities sides) inline with the Company’s budget and decidedrisk management objectives;

3. Reviewing the effects of various possiblechanges in the market conditions related tothe Balance Sheet and recommend the actionneeded to adhere to the Company’s internallimits;

4. Balance Sheet planning from risk-returnperspective including the strategicmanagement of interest rate and liquidity risks;

5. Product pricing for nancial assistance, desiredmaturity prole and mix of the incrementalassets and liabilities, based on marketconditions;

6. Articulating the current interest rate view ofthe Company and deciding the future businessstrategy on this view; and

7. Deciding on the source and mix of liabilitiesand recommending the desired asset mix.


4) Credit Committee:

The Credit Committee was re-constituted duringthe year. The Credit Committee of the Companyis broad-based, consisting of Mr. N. Sivaraman,Mr. Dinanath Dubhashi, Mr. Subramaniam N.and senior executives from the Company, Group

Company and the ultimate parent Company.Role of the Committee

The Credit Committee reviews and approves variouscredit proposals as per the credit and lendingauthorisations approved by the Board.

Credit decisions are supported by risk managementguidelines and norms approved by the Board ofDirectors of the Company.


5) Nomination and Remuneration Committee:

The nomenclature of the Committee was changedfrom “Nomination & Compensation Committee”to “Nomination and Remuneration Committee”during the year.

Further, the Committee was also re-constitutedduring the year. The Committee currently comprisesthe following members:

Mr. P. V. Bhide - Chairman

Mr. M. Venugopalan

Mr. Y. M. Deosthalee

Mr. Sunil Prabhune - Secretary


proposed Directors by obtaining necessaryinformation and declaration from themand undertake a process of due diligence todetermine the suitability of the person(s) forappointment / continuing to hold appointmentas a Director on the Board, based uponqualication, expertise, track record, integrityand other relevant factors.

their remuneration, promotions, etc.

6) Risk Management Committee:

During the year, the Risk Management Committeewas re-constituted. The Committee currentlycomprises Mr. Sivaraman, Mr. Dinanath Dubhashiand other members.


The Risk Management Committee is responsiblefor managing, inter alia the integrated risk whichincludes liquidity risk, interest rate risk and currencyrisk.




7) Investment Committee

During the year, the Investment Committee wasre-constituted. The Investment Committeecomprises Mr. N. Sivaraman, Mr. Dinanath Dubhashi

and other members.Role of the Committee

To evaluate proposals for buyback ofinstruments issued by the Company andapprove the same and decide on extinguishingof the instrument or holding as investment.

The Committee decides on investments in/divestments of:

companies). The Investment Committeesets up limits for investments in individualcompanies subject to regulatory norms.

8) Corporate Social Responsibility Committee

The Corporate Social Responsibility ( “CSR”)Committee was constituted in March 2014. TheCommittee currently comprises the followingmembers:

Mr. Y. M. Deosthalee

Mr. M. Venugopalan

Mr. N. Sivaraman


a) Formulation of CSR Policy indicating theactivities to be undertaken by the Companyas specied in Schedule VII of the CompaniesAct, 2013 and recommendation of the sameto the Board;

b) Determine the amount to be spent on CSRfrom time to time and recommend the sameto the Board;

c) Monitoring the CSR Policy of the Companyfrom time to time.

Separation of Ofces of Chairman and ChiefExecutive Ofcer

The roles and ofces of Chairman and ChiefExecutive are separated. Mr. Y. M. Deosthalee isthe Non-Executive Chairman of the Board whereasMr. Dinanath Dubhashi is the Managing Director &Chief Executive of the Company.

Remuneration of Directors

The Managing Director receives salary & allowancesfrom the Company in terms of his contract ofemployment with the Company. The Directors onthe Board who are / were in the services of theparent holding companies, Larsen and Toubro

Limited and L&T Finance Holdings Limited, drewremuneration from their respective companies.Other Directors on the Board are paid sitting feesfor attending the meetings of the Board and / orany Committee thereof and commission on netprots.

Independent Directors

Mr. Y. M. Deosthalee and Mr. N. Sivaramanare associated with the Holding Company, L&TFinance Holdings Limited and play a strategic andsupervisory role over the Company. Mr. R. ShankarRaman is the CFO of the ultimate parent, Larsen& Toubro Limited while Mr. S. Raghavan wasearlier associated with Larsen & Toubro Limited.Mr. P. V. Bhide, Mr. Subramaniam N. and Mr. M.Venugopalan were Independent Directors duringthe year ended March 31, 2014.

Pursuant to the provisions of Section 149 of theCompanies Act, 2013, which came into force onApril 1, 2014, Mr. P. V. Bhide, Mr. SubramaniamN. and Mr. M. Venugopalan meet the criteriafor independence laid out in Section 149(6) ofthe Companies Act, 2013, and are IndependentDirectors.

Number of Companies in which an Individualmay become a Director

The Company has apprised its Board members aboutthe restriction on number of other directorshipsand expects them to comply with the same.




Responsibilities of the Board

Presentations to the Board in areas such as nancialresults, budgets, business prospects, etc. give theDirectors, an opportunity to interact with senior

managers and other functional heads. Directors arealso updated about their role, responsibilities andliabilities.

The Company ensures necessary training to theDirectors relating to its business through formal/informal interactions. Systems, procedures andresources are available to ensure that every Directoris supplied, in a timely manner, with precise andconcise information in a form and of a qualityappropriate to effectively enable/ discharge hisduties. The Directors are given time to study the dataand contribute effectively to the Board discussions.

The Non-Executive Directors through theirinteractions and deliberations give suggestions forimproving overall effectiveness of the Board andits Committees. Their inputs are also utilized todetermine the critical skills required for prospectivecandidates for election to the Board. The systemof risk assessment and compliance with statutoryrequirements are in place.

Disclosures

During the Financial Year ended March 31, 2014:

There was no materially signicant related

party transaction with the Directors that havea potential conict with the interests of theCompany.

The related party transactions have beendisclosed in the Notes to Accounts formingpart of the Annual Financial Statements.

Though not applicable, the Company hasadhered to a few mandatory and nonmandatory requirements of CorporateGovernance norms as prescribed by Clause 49of the Equity Listing Agreement.

During the year, the Companies Act, 2013had received President’s assent on August 29,

2013. Thereafter, the Ministry of CorporateAffairs, Government of India ( “MCA”) hasprogressively notied various sections startingfrom the date, September 12, 2013, someof sections having effect during the year. Tilldate, MCA has notied many sections, andthe Company is geared up to implement all ofthem.

Means of Communication

Half Yearly Results are published in one dailyEnglish newspaper of national prominence.

The investors (debenture holders) are alsocommunicated the “Half Year Communication”as per the Debt Listing Agreement.

Annual Reports, ofcial news releases and

presentations are also displayed on the websiteof the Company http://www.ltnance.com.

Internal Auditors

The Company has an internal audit departmentwhich provides services to the Company.

Internal Control

The Board ensures the effectiveness of theCompany’s system of internal controls includingnancial, operational and compliance controls andrisk management systems.

Secretarial Audit

The Secretarial Audit, at regular intervals, isconducted by the Corporate Secretarial departmentof Larsen & Toubro Limited, which has competentprofessionals to carry out the said audit.

For and on behalf of the Board of Directors

Y. M. Deosthalee Dinanath DubhashiChairman Managing Director &

Chief Executive

Place: MumbaiDate: April 21, 2014




Independent Auditors’ Report

To the Members of L&T Finance LimitedReport on the nancial statementsWe have audited the accompanying nancial statementsof L&T Finance Limited (“the Company”), which comprisethe balance sheet as at 31st March 2014, and thestatement of prot and loss and the cash ow statementfor the year then ended, and a summary of signicantaccounting policies and other explanatory information.Management’s responsibility for the nancialstatementsManagement is responsible for the preparation of thesenancial statements that give a true and fair view of thenancial position, nancial performance and cash owsof the Company in accordance with the AccountingStandards notied under the Companies Act, 1956 (“theAct”) read with the General Circular 15/2013 dated 13thSeptember 2013 of the Ministry of Corporate Affairsin respect of section 133 of the Companies Act, 2013.This responsibility includes the design, implementation

and maintenance of internal control relevant to thepreparation and presentation of the nancial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.Auditor’s responsibilityOur responsibility is to express an opinion on thesenancial statements based on our audit. We conductedour audit in accordance with the Standards on Auditingissued by the Institute of Chartered Accountants ofIndia. Those Standards require that we comply withethical requirements and plan and perform the audit toobtain reasonable assurance about whether the nancialstatements are free from material misstatement.An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in thenancial statements. The procedures selected depend onthe auditor’s judgment, including the assessment of therisks of material misstatement of the nancial statements,whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevantto the Company’s preparation and fair presentation of thenancial statements in order to design audit proceduresthat are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness ofthe Company’s internal control. An audit also includesevaluating the appropriateness of accounting policiesused and the reasonableness of the accounting estimatesmade by management, as well as evaluating the overallpresentation of the nancial statements.We believe that the audit evidence we have obtained issufcient and appropriate to provide a basis for our auditopinion.OpinionIn our opinion and to the best of our information andaccording to the explanations given to us, the nancialstatements give the information required by the Act in

the manner so required and give a true and fair viewin conformity with the accounting principles generallyaccepted in India:a) in the case of the balance sheet, of the state of

affairs of the Company as at 31st March 2014;

b) in the case of the statement of prot and loss, ofthe prot for the year ended on that date; and

c) in the case of the cash ow statement, of the cashows for the year ended on that date.

Report on other legal and regulatory requirements1. As required by the Companies (Auditor’s Report

Order, 2003 (“the Order”) issued by the centralgovernment of India in terms of sub-section (4A) osection 227 of the Act, we give in the Annexure astatement on the matters specied in paragraphs 4and 5 of the Order.

2. As required by section 227(3) of the Act, we reportthat:

a) we have obtained all the information andexplanations which to the best of ourknowledge and belief were necessary for thepurpose of our audit;

b) in our opinion proper books of accountas required by law have been kept by theCompany so far as it appears from ourexamination of those books;

c) the balance sheet, statement of prot and lossand cash ow statement dealt with by thisReport are in agreement with the books ofaccount;

d) in our opinion, the balance sheet, statementof prot and loss, and cash ow statementcomply with the Accounting Standardsnotied under the Act read with the GeneralCircular 15/2013 dated 13 September 2013,of the Ministry of Corporate Affairs in respecof section 133 of the Companies Act, 2013;and

e) on the basis of written representationsreceived from the directors as on 31 March2014, and taken on record by the board ofdirectors, none of the directors is disqualiedas on 31 March 2014 from being appointedas a director in terms of clause (g) of sub-section (1) of section 274 of the CompaniesAct, 1956.

SHARP & TANNAChartered AccountantsFirm’s registration no.109982W

by the hand of

Firdosh D. BuchiaPartner

Mumbai, 21st April 2014 Membership no.38332




Annexure to Independent Auditors’ Report

(Referred to in paragraph 1 of our report of even date)

1. (a) The Company is maintaining proper recordsshowing full particulars, including quantitativedetails and situation of xed assets;

(b) In respect of owned assets as explained to us,all xed assets have been physically veried bythe management, in accordance with a phasedprogram of verication, which in our opinion,is reasonable, considering the size of theCompany and nature of its assets. In respectof leased assets the Company has formulatedthe program of physical verication for all thexed assets over the period of three yearswhich in our opinion is reasonable havingregard to size of the company and the natureof its assets. No material discrepancies werenoticed on such verication.

(c) The Company has not disposed off anysubstantial part of its xed assets during theyear, so as to affect its going concern status.

2. The Company is a non- banking nance companyand does not hold any inventories. Accordingly,paragraph 4 (ii) (a), (b) and (c) of the Order is notapplicable.

3. (a) According to the information and explanationsgiven to us, the Company has not granted any

loans, secured or unsecured, to companies,rms or other parties covered in the registermaintained under section 301 of theCompanies Act, 1956. Accordingly, paragraph4 (iii) (b), (c) and (d) of the Order are notapplicable to the Company.

(b) According to the information and explanationsgiven to us, the Company has not taken anyloans, secured or unsecured, from companies,rms or other parties covered in the registermaintained under section 301 of theCompanies Act, 1956. Accordingly, paragraph4 (iii) (f) and (g) of the Order are not applicableto the Company.

4. In our opinion and according to the informationand explanations given to us, there is an adequateinternal control system commensurate with the size

of the Company and the nature of its business,for the purchase of xed assets and for servicesrendered. During the course of audit, we haveneither come across nor have we been informed of

any continuing failure to correct major weaknessesin internal control system.

5. According to the information and explanationsgiven to us, there are no contracts or arrangementsthat need to be entered in to the register maintainedunder section 301 of Companies Act, 1956.Accordingly, paragraph 4 (v) (b) of the Order is noapplicable to the Company

6. According to the information and explanations givento us, the Company has not accepted any depositsfrom the public to which the directives issued by theReserve Bank of India and the provisions of section58A, 58AA of the Companies Act, 1956 and anyother relevant provisions and the rules framedthereunder apply.

7. In our opinion, the Company has an internal auditsystem commensurate with its size and nature of itsbusiness.

8. The Company is a non-banking nance company.Accordingly, paragraph 4 (viii) of the Order is noapplicable to the Company.

9. (a) According to the information and explanations

given to us, in our opinion, the Company isregular in depositing undisputed statutorydues including provident fund, investoreducation and protection fund, employeesstate insurance, income-tax, sales tax, wealthtax, service tax, cess and other statutory duesas applicable with the appropriate authorities.According to the information and explanationsgiven to us, there are no arrears of outstandingstatutory dues as at the last day of the nancialyear for a period exceeding six months fromthe date they became payable.

(b) According to the information and explanationsgiven to us and the records of the Companyexamined by us, the particulars of income-taxsales tax as at 31st March 2014 which havenot been deposited on account of disputepending, are as under:




10. The Company has no accumulated losses as at 31stMarch 2014 and it has not incurred any cash lossesin the nancial year ended on that date or in theimmediately preceding nancial year.

11. According to the information and explanationsgiven to us and the records examined by us, theCompany has not defaulted in repayment of duesto any nancial institution or bank or debentureholders as at the balance sheet date.

12. According to the information and explanationsgiven to us and the records examined by us, theCompany has maintained adequate records wherethe loans and advances are granted on the basis ofsecurity by way of pledge of shares, debentures andother securities.

13. The provisions of any special statute applicable tochit fund/nidhi/mutual benet fund/societies are notapplicable to the Company. Accordingly, paragraph4 (xiii) of the Order is not applicable to the Company

14. In our opinion and according to the informationand explanations given to us, the Company is notdealing or trading in shares, securities, debenturesand other investments. The Company has investedsurplus fund in the schemes of mutual funds.According to the information and explanations givento us, proper records have been maintained of thetransactions and contracts and timely entries havebeen made therein. The investment in marketablesecurities and mutual funds has been held by theCompany in its own name.

Name of theStatute

Nature of the disputed dues Amount (Rs.Lakh)

Period to which theamount relates

Forum wheredisputes are

pendingIncome Tax

Act, 1961

Tax, interest and penalty 59.57

2006-07CIT

12.17 2009-10 CIT1,880.70 2010-11 CIT

320.72 2011-12 CIT(A)Fringe benets 101.44 2009-10 Assessing

OfcerThe Central SalesTax Act, 1956 andLocal Sales Tax Acts

Disallowance of exemption claimedfor deemed sale in the course ofinter state and import transactions

301.97 1995-96 to 1996-97,2000-01, 2004-05,2009-10

JointCommissioner(Appeal)

96.73 1995-96 to1998-99, 2000-01 Deputy.Commissioner(Appeal)

32.95 1995-96 to 1999-00 High Court223.44 2007-08, 2010-11 Appellate

Board14.04 1996-97, 2003-04 Tribunal

Refusal of input tax credit (ITC) 5.51 2013-14 JointCommissioner(Appeal)

Local hire purchase turnover madetaxable

7.04 1999-00 High Court

Service Tax underFinance Act, 1994

Service tax levied on receipt ofinterest on delayed payment

90.14 2005-06 to 2011-12 AppellateAuthority




15. According to the information and explanationsgiven to us and the records examined by us, theCompany has not given any guarantee for loanstaken by others from bank or nancial institutions.

Accordingly, paragraph 4 (xv) of the Order is notapplicable to the Company.

16. In our opinion and according to the informationand explanations given to us, the term loans havebeen applied for the purposes for which they wereobtained.

17. According to the information and explanationsgiven to us and on an overall examination of thebalance sheet of the Company, we report that nofunds raised on short-term basis have been used forlong-term investments.

18. According to the information and explanationsgiven to us and the records examined by us, theCompany has not made preferential allotmentof shares to parties and companies covered inthe register maintained under section 301 of theCompanies Act, 1956 during the year. Accordingly,paragraph 4 (xviii) of the Order is not applicable tothe Company.

19. According to information and explanations given tous and records examined by us, securities have beencreated in respect of debentures issued.

20. According to information and explanations given

to us and records examined by us, the Companyhas not raised any money by public issue during theyear. Accordingly, paragraph 4 (xx) of the Order isnot applicable to the Company.

21. We were informed by management there werefourteen cases of frauds against the Companydetected during the year aggregating to Rs. 84.43lakhs. The amounts recovered during the year wereRs. 0.60 lakhs and the provision during the year wasRs. 57.16 lakhs (including Rs. 23.38 lakhs for theearlier year).

SHARP & TANNAChartered Accountants

Firm’s registration no.109982Wby the hand of

Firdosh D. BuchiaPartner

Mumbai, 21st April 2014 Membership no.38332




Balance Sheet as at March 31, 2014

As per our report attached For and on behalf of Board

SHARP & TANNAN Y.M. Deosthalee N. SivaramanChartered Accountants Chairman Director

Firm’s registration no. 109982Wby the hand of

Firdosh D. Buchia Dinanath Dubhashi Kailash PurohitPartner Managing Director & Chief Executive Company SecretaryMembership no. 38332

Mumbai, April 21, 2014 Mumbai, April 21, 2014

(` in Lakh)Note No As at March 31, 2014 As at March 31, 2013

EQUITY AND LIABILITIES:Shareholders’ FundsShare capital 2 23,842.23 23,842.23

Reserves and surplus 3 195,461.21 187,046.86219,303.44 210,889.09Non-current liabilitiesLong-term borrowings 4 696,351.63 618,192.78Other long term liabilities 5 15,935.75 14,558.94Long-term provisions 6 2,205.10 1,886.00

714,492.48 634,637.72Current liabilitiesShort-term borrowings 7 274,075.08 201,088.40Current maturities of long term borrowings 4 358,619.50 361,236.36Trade payables 8 12.06 12.95Other current liabilities 9 80,217.68 81,788.47Short-term provisions 10 2,009.02 5,063.33

714,933.34 649,189.51TOTAL 1,648,729.26 1,494,716.32

ASSETS:Non-current assetsFixed assets 11

Tangible assets 31,481.10 27,512.64Intangible assets 1,094.94 549.31

Capital work-in-progress 95.93 565.17Non-current investments 12 10,632.23 7,613.81Deferred tax assets (net) 13 8,474.40 4,073.80Long-term loans and advances 14 3,526.87 6,085.35Long-term loans and advances towards

nancing activities 15 911,896.94 769,137.52Other non-current assets 16 1,402.54 3,644.53

968,604.95 819,182.13Current assetsTrade receivables 17 944.45 757.70Cash and bank balances 18 22,063.46 10,578.73Current maturities of long-term loans andadvances towards nancing activities 15 489,954.94 456,173.09Short-term Loans and advances towardsnancing activities 19 124,903.67 176,909.65Other current assets 20 42,257.79 31,115.02

680,124.31 675,534.19TOTAL 1,648,729.26 1,494,716.32

Signicant accounting policies 1The accompanying notes are an integralpart of nancial statements.

27




Statement of Prot and Loss for the year ended March 31, 2014

As per our report attached For and on behalf of the Board





(` in Lakh)

Note No 2013-14 2012-13

INCOME:

Income from operations 21 219,981.73 204,719.66Other income 22 4,569.18 2,086.85

Total Income 224,550.91 206,806.51

EXPENSES:

Finance costs 23 127,292.06 120,242.46

Employee benets expense 24 9,825.73 10,199.03

Administration and Other expenses 25 27,120.92 20,217.37

Allowances and write offs 26 22,838.22 18,763.87

Depreciation and amortisation expense 6,995.92 6,042.92

Total Expenses 194,072.85 175,465.65

Prot before tax 30,478.06 31,340.86

Tax expense:

Current tax 14,756.00 10,522.50

Deferred tax (4,400.60) (284.50)

Prot after tax 20,122.66 21,102.86

Earnings per equity share before and after extraordinary items: 27.7

Basic earnings per equity share ( ` ) (*not annualised) 8.44 8.85

Diluted earnings per equity share ( ` ) (*not annualised) 8.44 8.85

Face value per equity share ( ` ) 10.00 10.00

Signicant accounting policies 1

The accompanying notes are an integral part of nancial statements. 27




Cash Flow Statement for the year ended March 31, 2014

(` in Lakh)

2013-14 2012-13

A. Cash ow from operating activities

Prot before taxes as per Statement of Prot & Loss 30,478.06 31,340.86Adjustment for:

Depreciation and amortisation 6,995.92 6,042.92

(Prot)/ Loss on sale of investments (net) (2,396.77) (429.63)

(Prot)/ Loss on sale of xed assets (net) 2,086.19 2,090.03

Cumulative interest on long term NCDs, payable at maturity 2,515.18 6,446.17

Provision for diminution in value of investments 7.52 (1.92)

Provision for non-performing assets 5,613.52 (2,628.07)

Provision for standard assets 281.10 185.00

Operating prot before working capital changes 45,580.72 43,045.36 Adjustment for :

(Increase)/ Decrease in trade and other receivables and advances (9,315.30) (5,871.17)

Increase/ (Decrease) in trade and other payables (2,902.43) 11,231.57

Cash (used in) / generated from operations 33,362.99 48,405.76

Direct taxes paid (12,262.69) (8,702.11)

Cash Generated from Operations 21,100.30 39,703.65

Loans disbursed (net of repayment) (130,148.82) (148,707.34)

Net cash ow from operating activities (A) (109,048.52) (109,003.69)

B. Cash ows from investing activities

Add : Inows from investing activities

Proceeds/Adjustments from sale of xed assets 1,794.59 19,989.35

Sale of investments 811.43 11,228.30

Sale of shares of subsidiary/associate companies - 16,688.92

2,606.02 47,906.57

Less : Outow from investing activities

Purchase of xed assets 14,786.17 6,144.37

Interest Capitalised - 390.89

investment in the shares of subsidiary companies - 4,500.00

Purchase of investments (net) 1,440.60 -

16,226.77 11,035.26

Net cash from investing activities (B) (13,620.75) 36,871.31




Cash Flow Statement for the year ended March 31, 2014

(` in Lakh)

2013-14 2012-13

C. Cash ows from nancing activities

Add : Inows from nancing activitiesProceeds from long term borrowings 2,242,900.00 2,542,500.00Proceeds / repayment of short term borrowings (net) 84,653.35 69,046.66

2,327,553.35 2,611,546.66Less : Outows from nancing activitiesRepayment of long term borrowings 2,179,024.68 2,527,635.25Debenture Issue Expenses 200.29 288.27Interim dividend tax paid 3,480.28 425.47

Interim dividend paid 10,919.73 10,013.742,193,624.98 2,538,362.73

Net cash ow from nancing activities (C) 133,928.37 73,183.93Net cash increase / (decrease) in cash and cash equivalents

(A+B+C) 11,259.10 1,051.55

Cash and cash equivalents as at beginning of the year 10,494.25 9,442.70

Cash and cash equivalents as at end of the year 21,753.35 10,494.25

Reconciliation of Cash and Cash EquivalentsClosing Balance as per Balance Sheet 22,063.46 10,578.73

Less : Deposits with original maturity for more than 3 months 310.11 84.48

Cash and Cash Equivalents as at end of the year 21,753.35 10,494.25Notes:1. Cash ow statement has been prepared under the indirect method as set out in the Accounting Standard (AS)

3 Cash Flow Statements.2. Purchase of xed assets includes movements of capital work in progress during the year.

3. Cash and cash equivalents represent cash, bank balances and deposits with maturity period of less than 3months.

4. Purchase of investments (net) includes net of Mutual fund purchase and sale during the year.5. Previous year end gures have been regrouped/reclassied wherever applicable.

As per our report attached For and on behalf of the Board








A. Basis of Accounting The nancial statements have been prepared in

accordance with the generally accepted accountingprinciples in India (‘Indian GAAP’), Accounting

Standards notied under the Companies (AccountingStandards) Rules, 2006 (as amended), the relevantprovision of the Companies Act, 1956 along with theapplicable guidelines issued by Reserve Bank of India(“RBI”) as applicable to a Non Banking FinancialCompany (AFC - NBFC). The nancial statementshave been prepared on accrual basis under thehistorical cost convention. The accounting policiesadopted in the preparation of nancial statementsare consistent with those followed in the previousyear.

B. Use of Estimate The preparation of nancial statements requires the

Management to make estimates and assumptionsconsidered in the reported amounts of assets andliabilities (including contingent liabilities) as of thedate of the nancial statements and the reportedincome and expenses during the reporting period.Management believes that the estimates used inpreparation of the nancial statements are prudentand reasonable. Future results could differ from theseestimates and differences between the actual resultsand the estimates are recognised in the periods inwhich the results are known / materialised.

C. Cash and Cash Equivalents Cash and Bank Balances that have insignicant risk

of change in value including term deposits, whichhave original durations up to three months, areincluded in cash and cash equivalents in the CashFlow Statement.

D. Cash ow Statement Cash ows are reported using the indirect method

whereby cash ows from operating, investing andnancing activities of the Company are segregatedand prot before tax is adjusted for the effects oftransactions of non-cash nature and any deferrals oraccruals of past or future cash receipts or payments.

E. Investments

The Company being regulated as a Non-BankingFinancial Company (AFC - NBFC) by the RBI,investments are classied under two categories i.e.Current and Long Term and are valued in accordancewith the RBI guidelines and Accounting Standard(AS) 13 on ‘Accounting for Investments’ as notied

under the Companies (Accounting Standard) Rules2006.

All investments are initially recorded at cost. The costof an investment includes purchase price and directly

attributable acquisition charges reduced by recoveryof costs, if any. On disposal of an investment, thedifference between its carrying amount and thenet disposal proceeds is charged or credited to theStatement of Prot and Loss.

Current investments are individually carried at thelower of cost and fair value / market value. Long-term investments are carried at acquisition cost.A provision is made for diminution other thantemporary on an individual basis against long-terminvestments. Premium paid over the face value oflong-term investment is amortised over the life of theinvestment.

F. Loans In accordance with the RBI guidelines, all loans are

classied under any of the four categories i.e. (i)standard assets (ii) sub-standard assets (iii) doubtfulassets and (iv) loss assets.

G. Tangible Fixed Assets Tangible Fixed assets are stated at cost of acquisition

including any cost attributable for bringing theasset to its working condition, less accumulateddepreciation and impairment losses, if any. Prot orloss arising from derecognition of xed assets aremeasured as difference between the net disposalproceeds and the cost of the assets less accumulateddepreciation up to the month of disposal and arerecognised in the Statement of Prot and Loss.

H. Intangible Assets Intangible Fixed assets comprising of software

licenses are stated at cost of acquisition includingany cost attributable for bringing the asset to itsworking condition, less accumulated amortisationand impairment losses, if any. Any expenses onsuch software licenses for support and maintenancepayable annually are charged to the Statement ofProt and Loss.

I. Depreciation and Amortisation

Depreciation/ Amortisation on xed assets iscalculated on a straight-line basis which reectsthe Management’s estimate of the useful life ofrespective xed assets and are greater than or equalto the corresponding rate prescribed in Schedule XIV

Notes forming part of Financial Statements - March 31, 2014




of the Companies Act 1956, The assets for whichhigher rates are used are as follows.

Particulars Nature Rates

(SLM)ScheduleXIV Rates

(SLM)OfceEquipment

Owned use /Operating Lease

10% 4.75%

Computer Owned use /Operating Lease

20% 16.21%

Plant &Equipment

OperatingLease

11.31% 4.75%

Motor car OperatingLease

15% 9.5%

Vehicles OperatingLease

16.21% 9.5%

- Leasehold improvements are amortized over theperiod of lease term. - Specialized software amortized over period of 3

years. - Fixed assets costing ` 5,000/- or less are fully

depreciated in the year of installation. - Depreciation is charged for the full month in the

month of purchase/sale even used for part of themonth.

J. Impairment of assets Tangible and intangible assets are reviewed

for impairment whenever events or changes incircumstances indicate that the carrying amount maynot be recoverable. An impairment loss is recognised

for the amount by which the asset’s carrying amountexceeds its recoverable amount, which is the higherof the asset’s net selling price or its value in use.

K. Revenue Recognition Revenue is recognised to the extent that it is

probable that the economic benets will ow to theCompany and the revenue can be reliably measuredand there exists reasonable certainty of its recovery.In addition, the following criteria must also be metbefore revenue is recognised:

(a) Interest from interest-bearing assets isrecognised on an accrual basis except in caseof non- performing loans where it is recognisedupon realization, as per the income and assetsclassication norms prescribed by RBI.

(b) Additional nance charges / overdue interestare treated to accrue only on realisation, dueto uncertainty of realisation and are accountedaccordingly.

(c) Income on discounted instruments is recognisedover the tenure of the instrument on a straight-line method.

(d) Front end fees on processing of loans arerecognised upfront as income.

(e) Revenues from the various services that theCompany renders are recognised when thefollowing criteria are met: persuasive evidence

of an arrangement exists, the services havebeen rendered, the fee or commission is xedor determinable, and collectability is reasonablyassured.

(f) Prot / loss on sale of investments is recognisedon trade date basis.

(g) Gains arising on direct assignment of assets/ receivable are recognized over the residual life ofthe loans in terms of the RBI guidelines. Loss, ifany is recognised upfront.

(h) Dividend is accounted when the right to its receiptis established.

L. Employee Benets Short Term Employee Benets:

All employee benets payable wholly within twelvemonths of rendering the services are classied asshort-term employee benets. Benets such assalaries, wages, short term compensated absencesetc. and expected cost of bonus, ex-gratia arerecognized in the period in which the employeerenders the related services.

Post Employment Benets - Dened–Contribution Plans The Companys superannuation scheme and

pension scheme are dened contribution plans.The Contribution paid/payable under the schemeis recognized during the period in which theemployee renders the related services.

- Dened–Benets Plans The employee’s gratuity fund scheme and

provident fund scheme managed by trust are theCompany’s dened benet plans. The presentvalue of the obligation under such dened benetplans is determined based on actuarial valuationusing the Projected Unit Credit Method, whichrecognizes each period of service as giving rise toadditional unit of employee benet entitlementand measures each unit separately to build up thenal obligation.

The obligation is measured at the present valueof the estimated future cash ows. The discountrates used for determining the present valueof the obligation under dened benet plans,is based on the market yields on Government

securities of a maturity period equivalent to theweighted average maturity prole of the relatedobligation at the balance sheet date.

Actuarial gains and losses are recognizedimmediately in the prot and loss account.

The fair value of the plan assets is reduced fromthe gross obligation under the dened benet





plans, to recognize the obligation on net basis. Past service cost is recognized as expense on a

straight-line basis over the average period untilthe benets become vested.

- Long Term Employee Benets: Accumulated leave, which is expected to be

utilized within the next twelve months, is treatedas short-term employee benet. The Companymeasures the expected cost of such absencesas the additional amount that it expects to payas a result of the unused entitlement that hasaccumulated at the reporting date.

The Company treats accumulated leave expectedto be carried forward beyond twelve months, aslong-term employee benet for measurementpurposes. Such long-term compensated absencesare provided for based on the actuarial valuationusing the Projected Unit Credit Method atthe reporting date. Actuarial gains/losses areimmediately taken to the Statement of Prot andLoss and are not deferred.

The Company presents the entire leave as acurrent liability in the balance sheet, since itdoes not have an unconditional right to defer itssettlement for twelve months after the reportingdate.

M. Borrowing Costs Borrowing cost includes interest and exchange

differences arising from foreign currency borrowingsto the extent they are regarded as an adjustment tothe interest cost. Ancillary and other borrowing costsare charged to Statement of Prot & Loss in the yearin which they are incurred.

N. Segment Reporting Policies Identication of segments: The Company’s operating businesses are organised

and managed separately according to the nature ofproducts and services provided, with each segmentrepresenting a strategic business unit that offersdifferent products and serves different markets.The analysis of geographical segments is based onthe areas in which major operating divisions of theCompany operate.

Unallocated items: Unallocated items include income and expenses

which are not allocated to any reportable businesssegment.

Segment Policies: The Company prepares its segment information in

conformity with the accounting policies adopted forpreparing and presenting the nancial statements ofthe Company as a whole.

O. Leases

Where the Company is lessee Operating lease: Operating leases, where the lessor effectively retains

substantially all the risks and benets of ownershipof the leased item, are classied as operating leases.Operating lease payments are recognized as anexpense in the Statement of Prot and Loss on astraight-line basis over the lease term in accordancewith Accounting Standard 19 on ‘Leases’ as notiedunder the Companies (Accounting Standards) Rules,2006.Initial direct costs incurred specically foroperating leases are recognised as expenses in theyear in which they are incurred.

Where the Company is lessor Finance Lease: Leases in which the Company transfers substantially

all the risks and benets of ownership of the assetare classied as nance leases. Assets given undernance lease are recognized as a receivable at anamount equal to the net investment in the lease.After initial recognition, the Company apportionslease rentals between the principal repayment andinterest income so as to achieve a constant periodicrate of return on the net investment outstanding inrespect of the nance lease. The interest income isrecognized in the Statement of prot and Loss. Initialdirect costs such as legal costs, brokerage costs,etc. are recognized immediately in the Statement ofProt and Loss.

Operating Lease: Leases in which the Company does not transfer

substantially all the risks and benets of ownershipof the asset are classied as operating leases.Assets subject to operating leases are included inxed assets. Lease income on an operating lease isrecognized in the Statement of Prot and Loss on astraight-line basis over the lease term. Costs, includingdepreciation, are recognized as an expense in theStatement of Prot and Loss. Initial direct costs suchas legal costs, brokerage costs, etc. are recognizedimmediately in the statement of Prot and Loss.

P. Earnings per share Basic and diluted earnings per share are computed in

accordance with Accounting Standard-20 – Earningsper share. Basic earnings per share is calculated bydividing the net prot or loss after tax for the yearattributable to equity shareholders by the weightedaverage number of equity shares outstanding

during the year. Diluted earnings per equity shareare computed using the weighted average numberof equity shares and dilutive potential equity sharesoutstanding during the year, except where the resultsare anti-dilutive.

Q. Taxes on Income Current tax is determined as the amount of tax





payable in respect of taxable income for the yearas determined in accordance with the provision, ofIncome Tax Act, 1961.

Deferred tax is recognised on timing differences,between taxable income and accounting income that

originated in one period and is capable of reversalin one or more subsequent periods. Deferred taxassets are recognised with regard to all deductibletiming differences to the extent it is probablethat taxable prot will be available against whichdeductible timing differences can be utilised. Whenthe Company carries forward unused tax losses andunabsorbed depreciation, deferred tax assets arerecognised only to the extent there is virtual certaintybacked by convincing evidence that sufcient futuretaxable income will be available against whichdeferred tax assets can be realised. The carryingamounts of deferred tax assets are reviewed at eachbalance sheet date and reduced by the extent thatit is no longer probable that sufcient taxable protwill be available to allow all or a part of the deferredtax asset to be utilised.

R. Foreign Currency Transactions, ForwardContracts and Derivatives

Foreign currency transactions are accounted atthe exchange rates prevailing on the date of eachtransaction. Foreign currency monetary itemsoutstanding as at the Balance Sheet date arereported using the closing rate. Gains and lossesresulting from the settlement of such transactionsand translations of monetary assets and liabilitiesdenominated in foreign currencies are recognised inthe Statement of Prot and Loss.

Premium in respect of forward contracts is chargedto Statement of Prot and Loss over the period of

the contract. Forward contracts outstanding as atthe Balance Sheet date are revalued at the closingrate.

S. Provisions, Contingent liabilities and Contingentassets

Provision against Loans and advances: The policy of provisioning against non performing

loans and advances has been decided by theManagement considering norms prescribed by the RBIunder Non Banking Financial Companies PrudentialNorms (Reserve Bank) Directions, 2007. As per thepolicy adopted, the provision against sub standardassets are created on a conservative basis, takinginto account Management’s perception of the higherrisk associated with the business of the Company.Certain non performing loans and advances areconsidered as loss assets and full provision has beenmade against such assets.

Provision against restructured loans is computed inaccordance with the RBI guidelines.

Contingent provision against standard assets ismade at 0.25% of the outstanding standard assetsin accordance with the RBI guidelines.

Other Provisions:

has a present legal or constructive obligation asa result of past events and it is probable that anoutow of resources will be required to settle theobligation, in respect of which reliable estimatecan be made. Provisions are not discounted totheir present value and are determined based onbest estimate required to settle the obligation atthe Balance Sheet date. These are reviewed ateach Balance Sheet date and adjusted to reectthe current best estimates.

Contingent Liabilities and Assets:

arises from past events whose existence will beconrmed by the occurrence or non-occurrence of

one or more uncertain future events beyond thecontrol of the Company or a present obligationthat is not recognized because it is not probablethat an outow of resources will be requiredto settle the obligation. A contingent liabilityalso arises in extremely rare cases where thereis a liability that cannot be recognized becauseit cannot be measured reliably. The Companydoes not recognize a contingent liability butdiscloses its existence in the nancial statements.Contingent Assets are not recognised.

T. Employee Stock Option Plan The Employees Stock Option Scheme (the Scheme)

provides for grant of equity shares of L&T FinanceHoldings Limited (the holding company) and Larsen& Toubro Limited (the ultimate holding company) toemployees of the company. The Scheme providesthat employees are granted an option to subscribeto equity share of the holding company that vest ina graded manner. The options may be exercised withspecied period. The holding company follows theintrinsic value method to account for its stock basedemployee compensation plans. The expense or creditrecognized in the Statement of Prot and Loss fora period represents the movement in cumulativeexpense recognized as at the beginning and end ofthat period.

U. Securities Issue Expenses Securities issue expenses are adjusted against the

Securities Premium Account as permissible undersection 78 (2) of the Companies Act, 1956, to theextent balance is available for utilization in theSecurities Premium Account.






2 Share capital

The Company has issued Equity Share Capital, the details in respect of which are given below

2. I. Number, face value and amount of shares authorised, issued, subscribed and paid-upAs at March 31, 2014 As at March 31, 2013

Authorised No. of Shares ` Lakh No. of Shares ` Lakh

Equity shares of ` 10 each 2,000,000,000 200,000.00 2,000,000,000 200,000.00

Issued, Subscribed & Paid up

Equity shares of ` 10 each 238,422,269 23,842.23 238,422,269 23,842.23

2. II. Reconciliation of the number of shares outstanding at the beginning and at the end of thereporting period

Equity Shares As at March 31, 2014 As at March 31, 2013

No. of Shares ` Lakh No. of Shares ` Lakh

Balance at the beginning of the year 238,422,269 23,842.23 238,422,269 23,842.23

Issued during the year - - - -

Balance at the end of the year 238,422,269 23,842.23 238,422,269 23,842.23

2. III. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equityshares is entitled to one vote per share.

2. IV.Shares held by holding company

As at March 31, 2014 As at March 31, 2013

No. of Shares ` Lakh No. of Shares ` Lakh

L&T Finance Holdings Limited and it’snominees 238,422,269 23,842.23 238,422,269.0 23,842.23

(Equity Shares of ` 10 each fully paid)

2. V. Details of shareholders holding more than 5% shares in the Company


No. ofShares*

% holding No. ofShares*

% holding

Equity Shares of ` 10 each fully paid 238,422,269 100% 238,422,269 100%

*Held by L&T Finance Holdings Limited (Holding company) and it’s nominee.





3 Reserves & surplus (` in Lakh)As at March 31, 2014 As at March 31, 2013

3. I. Capital redemption reserveBalance as per last nancial statements 82.25 82.25

3. II. Securities premium accountBalance as per last nancial statements 89,860.14 90,088.05Less: Debenture issue expenses adjusted during theyear / period 132.21 227.91{Net of tax ` 68.07 Lakh (Previous year ` 60.36 Lakh)}Closing Balance 89,727.93 89,860.14

3. III. Debenture redemption reserveBalance as per last nancial statements 12,600.00 44,700.00Add: Transferred from/ (to) surplus in the statementof Prot and Loss 3,434.00 (32,100.00)Closing Balance 16,034.00 12,600.00Debenture redemption reserve has been maintainedin accordance with Section 117C of the CompaniesAct, 1956 read with Circular no, 11/02/2012-CL-V(A)dated 11th February 2013 in respect of public issue ofdebentures.

3. IV. Reserve u/s 45-IC of Reserve Bank ofIndia Act, 1934Balance as per last nancial statements 23,852.79 19,632.19Add: Transferred from surplus in the Statement ofProt and Loss 4,024.56 4,220.60Closing Balance 27,877.35 23,852.79

3. V. General reserve

Balance as per last nancial statements 9,092.21 6,981.91Add: Transferred from surplus in the Statement ofProt and Loss 2,012.27 2,110.30Closing Balance 11,104.48 9,092.21

3. VI. Surplus in the statement of Prot and LossBalance as per last nancial statements 51,559.47 17,525.18Add: Net Prot for the year / period 20,122.66 21,102.86Less : AppropriationsInterim equity dividend (amount per share ` 4.15(March 31, 2013 : ` 4.20) 9,894.52 10,013.74Proposed nal dividend (amount per share ` Nil(March 31, 2013 : ` 0.43) - 1,025.22Tax on equity dividend 1,681.58 1,798.71Transferred to/ (from) debenture redemption reserve 3,434.00 (32,100.00)Transferred to reserve u/s 45-IC of Reserve Bank ofIndia Act, 1934 4,024.56 4,220.60Transferred to General Reserve 2,012.27 2,110.30Net surplus in the statement of Prot and Loss 50,635.20 51,559.47Total reserves and surplus 195,461.21 187,046.86




(` in Lakh)


Non currentportion Currentmaturities Non currentportion Currentmaturities

4 Long-term borrowings

I. Secured

Redeemable non convertible debentures 199,533.44 152,366.56 240,615.28 108,434.72

Less : Buy Back (1,263.81) (831.73) (922.50) (584.72)

198,269.63 151,534.83 239,692.78 107,850.00

Term loans

- From banks 238,082.00 207,084.67 113,500.00 253,386.36

Total I 436,351.63 358,619.50 353,192.78 361,236.36

II. Unsecured

Redeemable non convertible debentures 40,000.00 - 35,000.00 -

From banks 200,000.00 - 210,000.00 -

Perpetual debt 20,000.00 - 20,000.00 -

Total II 260,000.00 - 265,000.00 -Total (I + II) 696,351.63 358,619.50 618,192.78 361,236.36

Note No.

4 4.(I) (a) Security: The Debentures are secured by way of rst/second charge, having pari passu rights, as thecase may be, on the Company’s specied immovable properties and specied Lease/Term Loan receivables.

4. (I) (b) During the year, the Company has bought back and extinguished NIL (Previous Year 45,195) nos.of debentures of ` 1,000 each aggregating to ` NIL (Previous Year ` 451.95 Lakh). Apart from this, theCompany has bought back and is holding 58,832 nos. (Previous Year 150,722 nos.) debentures of ` 1000 eachaggregating to ` 588.32 Lakh (Previous Year ` 1,507.22 Lakh) as on March 31, 2014, pending extinguishment

/ re-issue of the same.

4.(I) (c) Utilisation of Proceeds: The funds raised through the above issues have been utilized for the Company’snancing activities, repayment of existing loans and for its business operations including capital expenditureand working capital requirements.

4.(I) (d) Term loan from bank is secured by hypothecation of specied lease/term loan receivables.










4 . ( I ) . ( i i ) S e c u r e d R e d e e m a b l e

N o n - c o n v e r t i b l e

D e b e n t u r e s : P u b l i c

I s s u e

S e r i e s

F a c e v a l u e p e r

D e b e n

t u r e s

D a t e o

f

a l l o t m e n

t

A m o u n t

N o n

C u r r e n

t

P o r t i o n

( ` )

C u r r e n

t

M a t u r i t i e s

( ` )

I n t e r e s t

r a t e %

P . a .

D a t e o

f

r e d e m p

t i o n

R e d e e m a b l e

t e r m

N C D 2 0 0 9 S e r i e s

4

1 0 0 0

e a c h

1 7 S e p t e m b e r

2 0 0 9

4 6 , 4 8 5 . 5 1

4 6 , 4 8 5 . 5 1

-

1 0 . 2 4 % 1 7

S e p t e m b e r

2 0 1 9

R e d e e m a b l e a t p a r a t

t h e e n d o f

1 2 0

m o n t h s

f r o m t h e d a t e o f a l l o t m e n t

N C D 2 0 0 9 S e r i e s

3

1 0 0 0

e a c h


2 0 0 9

1 2 , 3 8 4 . 1 2

1 2 , 3 8 4 . 1 2

-

9 . 9 5 % 1 7

J a n u a r y

2 0 1 7


t h e e n d o f

8 8

m o n t h s


N C D 2 0 0 9 S e r i e s

2

1 0 0 0

e a c h


2 0 0 9

2 8 , 8 1 7 . 9 2

-

2 8 , 8 1 7 . 9 2

9 . 6 2 % 1 7

S e p t e m b e r

2 0 1 4


t h e e n d o f

6 0

m o n t h s


N C D 2 0 0 9 S e r i e s

1

1 0 0 0

e a c h


2 0 0 9

1 0 , 2 1 6 . 9 1

-

1 0 , 2 1 6 . 9 1

9 . 5 1 % 1 7

S e p t e m b e r

2 0 1 4


t h e e n d o f

6 0

m o n t h s


9 7 , 9 0 4 . 4 6

5 8 , 8 6 9 . 6 3

3 9 , 0 3 4 . 8 3

G r a n

d T o t a l

3 4 9 , 8 0 4 . 4 6

1 9 8 , 2 6 9 . 6 3

1 5 1 , 5 3 4 . 8 3

4 . ( I ) . ( i i i ) T e r m l o a n s

f r o m B a n k :

R e p a y m e n t

t e r m

s

T e n u r e

N o n

C u r r e n t

P o r t i o n ( ` )

C u r r e n t M a t u r i t i e s

( ` )

B u l l e t

u p t o 5 y e a r s

9 2 , 5 0 0 . 0 0

1 0 0 , 0 0 0 . 0 0

Q u a r t e r l y

u p t o 5 y e a r s

1 4 5 , 5 8 2 . 0 0

1 0 7 , 0 8 4 . 6 7

-

-

G r a n d

T o t a l

2 3 8 , 0 8 2 . 0 0

2 0 7 , 0 8 4 . 6 7

U n s e c u r e d :

N o n

C u r r e n t :

4 . ( I I ) . ( i ) U n s e c u r e

d R e d e e m a b l e

N o n - c o n v e r t i b l e

S u b o r d i n a t e D e b t :

S e r i e s


D e b e n t u r e s

D a t e o

f

a l l o t m e n t

A m o u n t

N o n

C u r r e n t

P o r t i o n ( ` )

C u r r e n t

M a t u r i t i e s

( ` )

I n t e r e s t r a t e

% P .

a .

D a t e o f

r e d e m p t i o n

I o f F Y 2 0 1 3 - 1 4

1 0

l a k h s e a c h

2 7 M a r c h

2 0 1 4

5 , 0 0 0 . 0 0

5 , 0 0 0 . 0 0

-

1 0 . 3 5 %

2 7 M a r c h

2 0 2 4

J o f

F Y 2 0 1 2 - 1 3

1 0

l a k h s e a c h

2 1 D e c e m

b e r

2 0 1 2

2 7 , 5 0 0 . 0 0

2 7 , 5 0 0 . 0 0

-

9 . 8 0 %

2 1 D e c e m

b e r 2 0 2 2

H o f

F Y 2 0 0 7 - 0 8

1 0

l a k h s e a c h

2 0 F e b r u a r y 2 0 0 8

7 , 5 0 0 . 0 0

7 , 5 0 0 . 0 0

-

1 0 . 5 0 %

2 0 F e b r u a r y

2 0 1 8

4 0 , 0 0 0 . 0 0

4 0 , 0 0 0 . 0 0

-

4 . ( I I ) . ( i i ) T e r m l o a n s

f r o m B a n k :

R e p a y m e n t

t e r m

s

T e n u r e

A v e r a g e

R a t e o f

I n t e r e s t

N o n

C u r r e n t

P o r t i o n ( ` )

B u l l e t

u p t o 5 y e a r s

F i x e d

2 0 0 , 0 0 0

G r a n d

T o t a l

2 0 0 , 0 0 0

4 . ( I I ) . ( i i i ) P e r p e t u a l d e b t

S e r i e s


D e b e n t u r e s

D a t e o f a l l o t m e n t

A m o u n t

N o n

C u r r e n t

P o r t i o n

( ` )

C u r r e n t M a t u r i t i e s

( ` )

I n t e r e s t r a t e

%

p . a .

F o f

F Y 2 0 1 1 - 1 2

1 0

l a k h s e a c h

3 0 D e c e m

b e r 2 0 1 1

2 0 , 0 0 0

2 0 , 0 0 0

-

1 1 . 5 0 %

N o t e :

O u t s t a n d i n g

b a l a n c e o f p e r p e t u a l d e b t

i s 8 . 8 4 %

o f T i e r I C a p i t a l o f `

2 2 6 , 2 6 5 . 9 8 l a k h s a s a t

M a r c h 3

1 , 2 0 1 4 .




(` in Lakh)As at March 31, 2014 As at March 31, 2013

5 Other long term liabilitiesInterest accrued but not due on non convertibledebentures

7,504.19 11,153.01

Long term obligations 4,210.77 -Security deposits and margin money received 2,486.25 2,287.07Deferred income on assignment 819.55 718.86Other long term liabilities 914.99 400.00

15,935.75 14,558.94


6 Long term provisions

Contingent provision against standard assets 2,205.10 1,886.002,205.10 1,886.00


7 Short-term borrowingsI. SecuredTerm loans

- from banks 45,000.00 15,000.00Loans repayable on demand

- Cash Credit - 5,000.00- Working Capital demand Loans 5,400.00 -

Total I 50,400.00 20,000.00

II. UnsecuredTerm loans

- from banks - 10,000.00Bank Overdraft - 3,971.16Working Capital Demand Loan 22,000.00 -Commercial papers 200,500.00 150,995.00Less : Unexpired discounting charge 3,769.92 196,730.08 2,627.03 148,367.97Loans and advances from related parties

- Inter corporate borrowings 4,945.00 18,749.27Total II 223,675.08 181,088.40

Total (I + II) 274,075.08 201,088.40





Short Term borrowings

Secured

7.(I) (i) Term loans from Bank

(` in Lakh)Repayment terms Tenure Average Rate of Interest

Bullet 7 to 12 month Base Rate + predetermined margin 45,000.00

Grand Total 45,000.00

Short Term borrowings -

Unsecured

7.(II) (i) Term loans from Bank

Repayment terms Tenure Average Rate of Interest

Bullet 7 to 12 month Base Rate + predetermined margin 22,000.00


7.(II) (ii) Inter corporate borrowings(` in Lakh)

Name of Lender Relation Date ofFinancing

` Lakh Date ofredemption

RedemptionTerms

L&T Finance Holdings Limited Holding Company 31 March 2014 252.00 31 March 2015 Bullet

L&T Finance Holdings Limited Holding Company 28 March 2014 500.00 28 March 2015 BulletL&T Finance Holdings Limited Holding Company 14 March 2014 1,000.00 14 March 2015 BulletL&T Capital Company Limited Fellow subsidiary 28 February 2014 115.00 28 February

2015Bullet

Metro Tunnelling Group Fellow Associate 11 January 2014 3,000.00 11 January 2015 BulletL&T Capital Company Limited Fellow subsidiary 2 January 2014 78.00 2 January 2015 Bullet


8 Trade payablesAs at March

31, 2014As at March

31, 2013 - Dues to Micro Enterprises and Small Enterprises - -

- Others 12.06 12.95

Total 12.06 12.95





9 Other current liabilities (` in Lakh)

As atMarch 31, 2014

As atMarch 31, 2013

Interest accrued but not due on borrowings 18,467.87 15,297.81Security deposits and margin money received 602.90 813.44

Short term obligations 26,576.53 33,640.57

Deferred income on assignment 620.12 613.17

Bank book credit balance 9,173.67 12,087.72

Other liabilities

Advance from customers 7,593.33 6,257.45

Trade payable for capital goods 89.42 36.12

Provision for Expenses 4,771.15 3,413.87

Statutory liabilities 3,118.23 2,893.53

Other liabilities 9,204.46 6,734.79

80,217.68 81,788.47

10 Short-term provisions (` in Lakh)

As atMarch 31, 2014

As atMarch 31, 2013

Contingent provision against standard assets 1,540.00 1,578.00

For Employee benets - Gratuity 3.90 126.16

- Leave Encashment 465.12 535.24

Proposed nal dividend - 1,025.22

For Tax on equity dividend - 1,798.71

2,009.02 5,063.33





N O T E N O

. 1 1 - F I X E D A S S E T S

( `

i n L a k h )

P a r t i c u l a r s

G r o s s

B l o c k ( a t c o s t )

D e p r e c i a t i o n

/ A m o r t i s a t i o n

N e t B l o c k

A s a t

A d d i t i o n s

S a l e s

A s a t

U p t o

F o r t h e

D e d u c

U p t o

A s a

t

A s a t

A p r i l 1 ,

2 0 1 3

M a r c h

3 1 ,

2 0 1 4 M a r c h

3 1 ,

2 0 1 3

Y e a r

t i o n s M a r c h

3 1 ,

2 0 1 4 M a r c h

3 1 ,

2 0 1 4

M a r c h

3 1 ,

2 0 1 3

T a n g i b l e A s s e t s

O w n e d

A s s e t s

B u i l d i n g s

3 , 1 1 7 . 7 1

-

- 3 ,

1 1 7 . 7 1

5 3 3 . 5 0

5 0 . 8 2

-

5 8 4 . 3 2

2 , 5 3 3 . 3 9

2 , 5 8 4 . 2 1

O f c e e q u i p m e n

t

8 7 2 . 4 4

1 5 7 . 6 0

1 . 3 1

1 , 0 2 8 . 7 3

4 1 1 . 2 3

1 1 6 . 1 1

0 . 7 6

5 2 6 . 5 8

5 0 2 . 1 5

4 6 1 . 2 1

F u r n i t u r e a n d

x t u r e s

1 , 1 8 2 . 9 1

1 4 0 . 4 3

9 8 . 8 1

1 , 2 2 4 . 5 3

3 6 6 . 4 5

1 0 3 . 9 2

2 8 . 7 2

4 4 1 . 6 5

7 8 2 . 8 8

8 1 6 . 4 6

L e a s e h o l d r e n o v a

t i o n

2 8 0 . 3 4

5 9 1 . 2 5

1 . 9 7

8 6 9 . 6 2

4 5 . 4 9

3 0 2 . 0 2

1 . 6 6

3 4 5 . 8 5

5 2 3 . 7 7

2 3 4 . 8 5

C o m p u t e r s

3 , 0 3 9 . 1 9

1 , 0 7 1 . 1 3

0 . 2 5

4 , 1 1 0 . 0 7

1 , 7 5 0 . 9 9

5 7 4 . 6 2

0 . 1 2

2 , 3 2 5 . 4 9

1 , 7 8 4 . 5 8

1 , 2 8 8 . 2 0

O w n e d

A s s e t s

L e a s e d

o u t P l a n t a n d m a c h i n e r y

6 , 9 1 1 . 2 7

4 , 9 1 4 . 1 7

2 , 1 7 8 . 2 8

9 , 6 4 7 . 1 6

2 , 7 7 7 . 4 0 1 , 0 8 7

. 2 1

7 6 2 . 9 7

3 , 1 0 1 . 6 4

6 , 5 4 5 . 5 2

4 , 1 3 3 . 8 7

O f c e e q u i p m e n

t

6 5 . 9 7

1 5 0 . 3 8

1 3 . 0 8

2 0 3 . 2 7

1 6 . 1 2

1 8 . 9 2

6 . 5 8

2 8 . 4 6

1 7 4 . 8 1

4 9 . 8 5

F u r n i t u r e a n d

x t u r e s

1 , 5 5 0 . 8 5

-

1 2 0 . 0 0

1 , 4 3 0 . 8 5

3 3 0 . 5 7

9 4 . 3 7

2 3 . 4 2

4 0 1 . 5 2

1 , 0 2 9 . 3 3

1 , 2 2 0 . 2 8

M o t o r c a r s

1 9 , 7 6 2 . 5 1

5 , 6 5 8 . 0 6

3 , 6 9 9 . 6 6 2 1 , 7 2 0 . 9 1

5 , 1 7 2 . 1 9 3 , 1 4 3

. 6 3 1 , 6 8 5 . 9 4

6 , 6 2 9 . 8 8 1 5 , 0 9 1 . 0 3

1 4 , 5 9 0 . 3 2

V e h i c l e s

9 0 4 . 8 0

-

-

9 0 4 . 8 0

3 6 3 . 2 2

1 4 4 . 5 8

-

5 0 7 . 8 0

3 9 7 . 0 0

5 4 1 . 5 8

C o m p u t e r s

4 , 6 7 7 . 5 7

1 , 6 2 9 . 6 0

1 , 0 4 8 . 1 3

5 , 2 5 9 . 0 4

3 , 0 8 5 . 7 6

8 2 7 . 1 8

7 7 0 . 5 4

3 , 1 4 2 . 4 0

2 , 1 1 6 . 6 4

1 , 5 9 1 . 8 1

( A )

4 2 , 3 6 5 . 5 6 1 4 , 3 1 2 . 6 2

7 , 1 6 1 . 4 9 4 9 , 5 1 6 . 6 9 1 4 , 8 5 2 . 9 2 6 , 4 6 3

. 3 8 3 , 2 8 0 . 7 1 1 8 , 0 3 5 . 5 9 3 1 , 4 8 1 . 1 0 2 7 , 5 1 2 . 6 4

I n t a n g i b l e A s s e

t s

O w n e d

A s s e t s

S p e c i a l i s e d s o f t w a r e

2 , 3 7 8 . 3 7

1 , 0 7 8 . 1 7

- 3 ,

4 5 6 . 5 4

1 , 8 2 9 . 0 6

5 3 2 . 5 4

- 2 ,

3 6 1 . 6 0

1 , 0 9 4 . 9 4

5 4 9 . 3 1

( B )

2 , 3 7 8 . 3 7

1 , 0 7 8 . 1 7

- 3 , 4 5 6 . 5 4

1 , 8 2 9 . 0 6

5 3 2 . 5 4

- 2 , 3 6 1 . 6 0

1 , 0 9 4 . 9 4

5 4 9 . 3 1

( A ) + ( B )

4 4 , 7 4 3 . 9 3 1 5 , 3 9 0 . 7 9

7 , 1 6 1 . 4 9 5 2 , 9 7 3 . 2 3 1 6 , 6 8 1 . 9 8 6 , 9 9 5

. 9 2 3 , 2 8 0 . 7 1 2 0 , 3 9 7 . 1 9 3 2 , 5 7 6 . 0 4 2 8 , 0 6 1 . 9 5

P r e v i o u s Y e a r

6 3 , 2 3 0 . 9 4

9 , 1 4 9 . 3 3 2 7 , 6 3 6 . 3 4 4 4 , 7 4 3 . 9 3 1 6 , 1 9 5 . 9 9 6 , 0 4 2

. 9 2 5 , 5 5 6 . 9 3 1 6 , 6 8 1 . 9 8

A d d : C a p i t a l W o r k - i n - P r o g r e s s

9 5 . 9 3

5 6 5 . 1 7

3 2 , 6 7 1 . 9 7 2 8 , 6 2 7 . 1 2





Face value(fully paid

up)


` pershare /

unit

No. ofshares/

units

` in Lakh No. ofshares /

units

` in Lakh

12 Non-current investments

12. I. Other Investments (valued at cost unless stated otherwise)

Quoted instruments

Investment in Debentures

Infrastructure Development FinanceCompany Limited

IDFC Ltd (M+150bps) 16 May 2017 1,000,000 400 4,683.98 400 4,683.98

Investment in equity

Integrated Digital Info Services Limited 10 383,334 11.73 383,334 11.73Monnet Industries Limited 10 5,640 2.26 5,640 2.26

Monnet Ispat and Energy Limited 10 3,008 0.75 3,008 0.75

Monnet Project Developers Limited 10 11,280 4.51 11,280 4.51

Elque Polyesters Limited 10 194,300 19.43 194,300 19.43

Glodyne Technoserve Limited 6 319,262 22.67 - -

Less : Provision for diminution in thevalue of investments

- (38.68)

- (31.16)

Unquoted instruments

Investment in equity shares

Invent Assets Securitisation & Recon-struction Private Limited 10 7,100,000 1,597.51 7,100,000 1,597.51

Alpha Micro Finance Consultants PrivateLimited 10 200,000 20.00 200,000 20.00

Metropoli Overseas Limited 10 99,400 14.91 99,400 14.91

Anil Chemicals and Industries Limited 10 40,000 8.00 40,000 8.00

L&T Infra Debt Fund Limited 10 20,000,000 2,000.00 - -

Less : Provision for diminution in thevalue of investments - (22.91) - (22.91)

Investment in Government/ Trustsecurities

LTFL Securitisation Trust 2002 0.01 0.0112% National Saving Certicate 2002 0.04 0.04

(Deposited as security with sales taxauthorities)





Face value(fully paid

up)


` pershare /

unit

No. ofshares/

units

` in Lakh No. ofshares /

units

` in Lakh

Other investments

Phoenix ARC Private Limited

Security receipt

Phoenix ARF Scheme 5 - - - 8,501 76.93

Phoenix ARF Scheme 6 1,000 9,843 98.43 9,843 98.43

Phoenix ARF Scheme 7 257 23,238 59.71 23,238 228.89

Phoenix ARF Scheme 8 - - - 38,195 208.16

Phoenix ARF Scheme 9 970.00 6,612 64.14 6,612 66.12Phoenix ARF Scheme 10 1,000 18,889 188.89 18,889 188.89

Phoenix ARF Scheme 11 1,000 44,208 442.08 - -




Security application money paid pend-ing allotment - - - - 437.33

Investment in Units

KKR India debt Opportunities Fund III 1,000 72,500 725.00 - -

Total 10,632.23 7,613.81

Note:

Aggregate amount of quotedinvestments

Book value 4,745.33 4,722.66

Market value 4,700.42 4,691.50

Aggregate amount of unquotedinvestments

Book value 5,948.49 2,945.22

Aggregate provision for diminu-tion in the value of Investments 61.59 54.07





13 Deferred tax assets (net)

In compliance with the Accounting Standard (AS) 22 on ‘Accounting for Taxes on Income’ issued by theInstitute of Chartered Accountants of India, the Company has provided for deferred tax assets (net) in theStatement of Prot & Loss on account of timing differences. The major components of deferred tax assetsand liabilities arising on account of timing differences are:

(` in Lakh)

Component As at March 31,2014

As at March 31,2013

Deferred tax liability

Difference between book depreciation andtax depreciation - 161.80

Other item giving rise to timing difference 543.84 721.60

543.84 883.40

Deferred tax assets

Difference between book depreciation andtax depreciation 661.29 -

Provision for NPA / Advances 6,782.00 3,597.90

Unpaid statutory liabilities /provision for leaveencashment 158.09 181.90

Other item giving rise to timing difference 1,416.86 1,177.40

9,018.24 4,957.20

Net deferred tax assets / (liability) 8,474.40 4,073.80

-

14 Long-term loans and advances

Unsecured (Considered goods)

Capital Advances 193.63 329.01

Advances recoverable in cash or in kind orfor value to be received

528.29 535.67

Advance taxes (net) 2,804.95 5,220.67

3,526.87 6,085.35






Non currentportion#

Currentmaturities

Non currentportion#

Currentmaturities

15 Long-term loans and advances towardsnancing activitiesI. Secured Term loans 819,735.23 442,253.34 686,322.64 416,802.29

Finance Lease 8,372.33 5,459.25 9,167.49 5,576.03Debentures 12,922.51 5,400.00 14,333.33 5,666.67

841,030.07 453,112.59 709,823.46 428,044.99Less : Allowance for non performing assets 13,799.41 - 7,286.88 -

Total I 827,230.66 453,112.59 702,536.58 428,044.99II. Unsecured Term loans 87,074.65 36,842.35 65,908.32 28,128.10

Debentures - - 4,000.00 -87,074.65 36,842.35 69,908.32 28,128.10

Less : Allowance for non performing assets 2,408.37 - 3,307.38 -Total II 84,666.28 36,842.35 66,600.94 28,128.10

Total (I + II) 911,896.94 489,954.94 769,137.52 456,173.09#Borrower wise loans and advances towards nancing activity under the NPA category has been treatedas non-current.


16 Other non-current assets

Income accrued but not due on NCD andloans 1,402.54 3,644.53

1,402.54 3,644.53

(` in Lakh)As at March 31, 2014 As at March 31, 201317 Trade receivables

SecuredConsidered good Debts outstanding for a period exceedingsix months - -

Others 563.78 563.78 418.60 418.60Considered doubtful Debts outstanding for a period exceedingsix months 1,021.07 358.78Less : Provision for doubtful debts (1,021.07) - (358.78) -

UnsecuredConsidered good Debts outstanding for a period exceedingsix months 154.04 139.83

Others 226.63 199.27380.67 339.10944.45 757.70





(` in Lakh) As at March 31, 2014 As at March 31, 2013

18 Cash and bank balancesCash and cash equivalentsBalances with BanksCurrent account 7,104.25 10,438.83Cheques on hand 14,375.18 -Deposit account (with original maturity ofless than three months) 44.32 41.59Cash on hand 229.60 13.83Other bank balancesDeposits with original maturity for morethan 12 months 2.38 2.38Deposits with original maturity for morethan 3 months but less than 12 months 307.73 82.10

22,063.46 10,578.73


19 Short-term loans and advances towardsnancing activitiesI. Secured Term loans 236.34 65,733.52

Total I 236.34 65,733.52

II. Unsecured Term loans 124,667.33 111,176.13

Total II 124,667.33 111,176.13Total (I + II) 124,903.67 176,909.65


20 Other current assetsAdvances recoverable in cash or in kind orfor value to be received 4,244.94 9,088.88Less : Provision for Advances 4,053.00 191.94 - 9,088.88

Billed interest and other receivable 14,055.26 7,346.73Less : Allowances for income reversal 3,953.82 10,101.44 1,596.24 5,750.49Interest accrued on loan 31,964.41 16,275.65

42,257.79 31,115.02





(` in Lakh)

2013-2014 2012-2013

21 Income from operations

Term Loans and other nancing activity 207,308.09 189,843.28

Lease 10,891.44 9,954.28

Bill Discounting 1,713.13 4,447.65

Networking activity 7.80 28.11

Other operational income 61.27 446.34

219,981.73 204,719.66

(` in Lakh)

2013-2014 2012-2013

22 Other Income

Income from investments

- Interest and dividend on securities 493.53 1,089.90

- Prot on sale / redemption of investments(net) 2,396.77 429.63

2,890.30 1,519.53

Others 1,678.88 567.32

4,569.18 2,086.85

(` in Lakh)2013-2014 2012-2013

23 Finance costs

Interest on debentures 42,946.74 40,366.48

Interest on term loans 49,361.03 54,623.13

Interest on inter corporate borrowings 634.65 964.53

Commercial paper discounting charges 32,760.63 23,322.85

82,756.31 78,910.51

Interest on bank overdraft / Cash Credit 450.59 126.30

Exchange difference on foreign currencyborrowings/ derivatives (to the extentregarded as borrowing cost)

250.95 305.40

Others 887.47 533.77

127,292.06 120,242.46





(` in Lakh)

2013-2014 2012-2013

24 Employee benets expenses

Salaries 10,224.52 10,038.00

Contribution to and provision for:

Provident fund and Pension fund 407.88 392.87

Gratuity fund 19.28 126.16

Superannuation fund 47.57 54.36

Compensated absences/ leave encashment 77.04 231.48

551.77 804.87

Expenses on ESOP 87.64 213.06

Welfare and other expenses 318.53 252.96

Shared service cost recovered (1,356.73) (1,109.86)

9,825.73 10,199.03

(` in Lakh)

2013-2014 2012-2013

25 Administration and Other expenses

Travelling and conveyance 1,739.22 1,569.32

Printing and stationery 354.08 290.50Telephone and Communication 1,196.48 1,045.60

Directors’ Sitting fees 32.07 3.96

Brokerage 4,346.37 1,329.23

Collection agency payout 116.77 -

Stamping charges 167.66 166.12

Advertising and publicity 68.97 449.96

Repairs and maintenance 1,700.52 1,593.46

Rent 2,184.84 2,306.45

Rates and taxes 166.32 235.22

Electricity charges 390.87 340.08

Insurance charges 277.46 293.33





(` in Lakh)

2013-2014 2012-2013

25 Administration and Other expenses

(Contd.)Auditors remuneration

Audit fees 10.00 10.00

Tax audit fees 2.50 2.50

Limited review fees 6.00 6.00

Certication 1.30 6.79

Expenses reimbursed 2.11 1.72

21.91 27.01

Professional fees 9,577.80 6,599.12Bank Charges 9.16 0.69

Corporate support charges 700.79 671.08

Loss on sale of xed assets 2,086.19 2,090.03

Brand license fees 1,148.82 649.60

Corporate social responsibilities expenses 319.08 109.07

Miscellaneous expenses 712.92 614.02

Shared service cost recovered (197.38) (166.48)

27,120.92 20,217.37

(` in Lakh)

2013-2014 2012-2013

26 Allowances and write offs

Allowance for standard assets 281.10 185.00

Allowance for non-performing assets 5,613.52 (2,628.07)

Provision for advances and receivables 4,053.00 -

Allowance for diminution in value of

investments 7.52 (1.92)Loss on foreclosure of loans (net) 6,998.11 3,030.40

Bad debts write off 5,884.97 18,178.46

22,838.22 18,763.87






NOTE NO. – 27: NOTES ON FINANCIAL STATEMENTS

27.1 Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee Benets”

i) Dened Contribution Plans :

Amount of ` 147.42 lakh (previous year ` 156.55 lakh) towards contribution to superannuation andpension fund is recognized as an expense and included in Employee benets Expenses in the Statementof Prot and Loss.

ii) Dened Benet Gratuity Plans :

a) The amounts recognised in Balance Sheet are as follows:(` in Lakh)

Particulars Gratuity Plan

As at March31, 2014

As at March31, 2013

A. Amount to be recognized in Balance Sheet

Present Value of Dened Benet Obligation

- Wholly Funded 417.66 415.03

- Wholly Unfunded - -

Less: Fair value of Plan Assets (413.76) (288.87)

Unrecognised Past Service Costs - -

Amount to be recognised as liability or (asset) 3.90 126.16

B. Amounts reected in the Balance Sheet

Liability 3.90 126.16

Assets - - Net Liability/(asset) 3.90 126.16

b) The amount recognised in the Statement of Prot and Loss are as follows:

(` in Lakh)

Particulars Gratuity Plan

2013-14 2012-13

1 Current Service Cost 108.19 91.45

2 Interest on Dened Benet Obligation 41.29 33.18

3 Expected Return on Plan Assets (25.34) (18.12)

4 Actuarial Losses/(Gains) (104.86) 19.65

5 Past Service Cost - -

Total included in Employee Benet Expenses 19.28 126.16

Actual Return on Plan Assets 17.64 19.87




c) The changes in the present value of dened benet obligation representing reconciliation ofopening and closing balance thereof are as follows:

(` in Lakh)Particulars Gratuity Plan

As at March31, 2014

As at March31, 2013

Opening balance of the present value ofDened Benet Obligation 415.03 297.11Add: Current Service Cost 108.19 91.45Add: Interest Cost 41.29 33.18Add/(less): Actuarial Losses/(Gain) (112.56) 21.40Liability Assumed on acquisition / (Settled on Divestitures) (15.38) --Less: Benets paid (18.91) (28.11)Closing balance of the present value ofDened Benet Obligation 417.66 415.03

d) Changes in the fair value of plan assets representing reconciliation of the opening and closingbalances thereof are as follows:(` in lakh)

Particulars Gratuity PlanAs at March

31, 2014As at March

31, 2013Opening balance of the fair value of the plan assets 288.87 196.43Add: Expected Return on plan assets 25.34 18.13Add/(less): Actuarial gains/(losses) (7.70) 1.75Add: Contributions by Employer 126.16 100.67Less: Benets Paid (18.91) (28.11)Closing balance of the plan assets 413.76 288.87

Expected Employers Contribution Next Year 70.00 70.00e) The broad categories of plan assets as a percentage of total plan assets, are as follows: Particulars Gratuity Plan

As at March 31, 2014 As at March 31, 2013% (` in Lakh) % (` in Lakh)

1 Government of India Securities 66% 274.37 52% 150.52 Corporate Bonds 18% 73.50 30% 87.293 Special Deposit Scheme 6% 24.11 8% 21.284 Equity Shares of Listed Companies 7% 28.80 10% 29.675 Property 0% -- -- --6 Insurer Managed Funds 0% -- -- --

7 Others 3% 12.99 -- 0.14Basis used to determine the overall expected return:

The Trust formed by the Company manages the Investments of Gratuity Fund. Expected rate of return on investment is determined based on the assessment made at the beginning of the year on the return expected on itsexisting portfolio, along with the estimated increment to the plan assets and expected yield on the respective assetsin the portfolio during the year.






f) Principal actuarial assumptions at the balance sheet date : (` in Lakh)

Particulars As at March 31, 2014 As at March 31, 2013

1. Discount rate 9.35% 8.00%

2. Expected return on plan assets 8.00% 8.00%

3. Salary growth rate : 6.00% 6.00% g) The amounts pertaining to experience adjustments are as follows:

(` in Lakh)

Particulars As at March 31,

2014 2013 2012 2011 2010

Gratuity Plan

Dened Benet Obligation 417.66 415.03 297.12 200.69 125.26

Plan Assets 413.76 288.87 196.43 119.32 97.35

Surplus/(Decit) (3.90) (126.16) (100.69) (81.37) (27.91)

Exp. Adj. on Plan Liabilities (34.29) (28.11) 27.20 33.84 (11.17)

Exp. Adj. on Plan Assets (7.70) 1.75 0.76 (2.36) (1.25)

iii) Dened Benet Provident Fund Plan:a) The amounts recognised in Balance Sheet are as follows:

(` in Lakh)

Particulars Provident Fund Plan

As at March 31,2014

As at March 31,2013

A. Net (Liability) / Asset recognized in the Balance Sheet

Present Value of Funded Obligation (3,417.87) (2,653.31)

Present Value of Unfunded obligation (63.15) (19.37)

Less: Fair value of Plan Assets 3,399.45 2,632.27

Amount to be recognised in the Balance Sheet as (liability) or asset (81.57) (40.41)

B. Amounts to be recognised in the Balance Sheet

Liability (81.57) 40.41

Assets -- --




b) Expenses recognised in the Statement of Prot & Loss:

(` in Lakh)


2013-14 2012-13

1 Current Service Cost 349.54 295.76

2 PF Transfer In -- 20.42

3 Interest on Dened Benet Obligation 224.18 156.64

4 Expected Return on Plan Assets (224.18) (156.64)

5 Net Actuarial Losses/(Gains) (11.83) 3.57

6 (Shortfall) in actual return on plan assets over interest payable notto be recognised as expenses to the extent of excess of asset overliabilities 11.83 (3.57)

7 Expenses recognized in the Statement of Prot & Loss 349.54 316.18

8 Actual Return on Plan Asset 231.72 163.73

c) The changes in value of dened benet Obligation representing reconciliation of opening andclosing balance thereof are as follows:

(` in Lakh)


As at March 31,2014

As at March 31,2013

Opening balance of the present value of

Dened Benet Obligation 2,672.68 2,011.73

Add: Current Service Cost 349.54 316.18

Add: Interest Cost 224.18 156.64

Add: Contribution by Plan Participants 512.84 428.52

Add: Actuarial Losses / (Gain) (19.37) (3.52)

Less: Benets paid (322.00) (236.87)

Closing balance of the present value of

Dened Benet Obligation 3,417.87 2,672.68





d) Changes in the fair value of plan assets representing reconciliation of the opening and closingbalances thereof are as follows:

(` in Lakh)


As at March 31,2014

As at March 31,2013

Opening balance of the fair value of the plan assets 2,632.27 1,962.86

Add: Expected Return on plan assets 224.18 156.64

Add/(less): Actuarial gains/(losses) 7.54 7.09

Add: Contributions by Employer 347.49 314.05

Add: Contribution by Plant participants 509.97 428.50

Less: Benets Paid (322.00) (236.87)

Closing balance of the plan assets 3,399.45 2,632.27

e) The major categories of plan assets as a percentage of total plan assets, are as follows:


As at March 31,2014

As at March 31,2013

1 Government of India Securities 24% 24%

2 State Government Scheme 15% 13%

3 Special Deposit Scheme 12% 14%

4 Public Sector Unit Bond 41% 42%

5 Corporate Bonds 8% 7%

100% 100%

Note: The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by

the interest income on long term investments of the fund. Any shortfall in the interest income over the interest ob-ligation is recognised immediately in the Statement of Prot and Loss as actuarial losses. Pursuant to the guidancenote issued by the Institute of Actuaries, ` 40.79 lakh has been recognised in Statement of Prot & Loss on accountof interest rate guarantee on Exempt Provident fund.





iv) General description of dened benet plans:

1. Gratuity Plan:

The Company operates gratuity plan through a trust wherein every employee is entitled to the benetequivalent to fteen days salary last drawn for each completed year of service. The same is payableon termination of service, or retirement, whichever is earlier. i.e. The benet vests after ve years ofcontinuous service. The Company’s scheme is more favorable compared to the obligation under thePayment of Gratuity Act, 1972.

2. Provident Fund Plan:

The Company manages Provident Fund Plan through a Provident Fund Trust for its employees which ispermitted under the Provident Fund and Miscellaneous Provisions Act, 1952. The Plan envisages contri-butions by employer and employees and guarantees interest at the rate notied by the Provident FundAuthority. The contribution by employer and employee together with interest are payable at the time ofseparation from service or retirement whichever is earlier. The benet under this plan vests immediately

on rendering of service.3. Leave Encashment:

The company provides leave encashment benet on all types of separation from the company. It is cal-culated on the last basic salary drawn at the time of separation. Maximum leave encashment allowableat the time of separation is 180 days.

27.2 Borrowing Cost : Accounting Standard (AS) 16

Borrowing costs capitalised during the year are ` NIL (previous year ` 390.89 lakh)

27.3 Segment Reporting : Accounting Standard (AS) 17

Primary Segment (Business Segment)

The Company operates mainly in the business segment of fund based nancing activity. All other activitiesrevolve around the main business. Further, all activities are carried out within India. As such, there are noseparate reportable segments as per the provisions of AS 17 on ‘Segment Reporting’ issued by the Instituteof Chartered Accountants of India.

Secondary Segment (Geographical Segment)

The company operates only in the domestic market. As a result separate segment information for differentgeographical segments is also not disclosed.

27.4 Related Party Disclosures: Accounting Standard (AS) - 18

(a) List of Related Parties (with whom transactions were carried out during current or previous year)

A. Ultimate Holding Company

1. Larsen & Toubro Limited





B. Holding Company

2. L&T Finance Holdings Limited

C. Fellow Subsidiary Companies

3. L&T Infrastructure Finance Company Limited

4. L&T FinCorp Limited

5. Larsen & Toubro Infotech Limited

6. L&T Capital Company Limited

7. L&T Capital Markets Limited

8. L&T General Insurance Company Limited

9. L&T Housing Finance Limited

10. L&T Access Distribution Services Limited (Formerly L&T Access Financial Advisory Services Limited)

11. L&T Investment Management Limited

12 L&T Vrindavan Properties Limited (Formerly L&T Unnati Finance Limited)

13. L&T Infra Debt Fund Limited

14. Family Credit Limited

15. Ewac Alloys Limited

D. Fellow Associates

16. Feedback Infrastructure Services Private Limited

17. Metro Tunneling Group

18. Salzer Electronics Limited

E. Key Management Personnel

19. Mr. Dinanath M. Dubhashi – Managing Director & Chief Executive





(b) Disclosure of related party transactions :-(` in Lakh)

Sr.No.

Nature of Transaction 2013-2014 2012-2013

Assets:1 Account Receivable

Family Credit Limited 3.39 - L&T General Insurance Company Limited - 203.76 L&T Vrindavan Properties Limited 400.55 725.15 Larsen & Toubro Limited 0.14 - L&T FinCorp Limited - 123.98 L&T Capital Markets Limited 0.64 -

2 Interest / redemption premium accrued but not due on NCD Feedback Infrastructure Services Private Limited 814.95 52.40

3 Interest accrued on Inter Corporate Deposit Given L&T FinCorp Limited - 0.55

4 Investment made in Equity shares L&T Infra Debt Fund Limited 2,000.00 4,500.00

5 Loan Outstanding balance Ewac Alloys Limited 2,400.00 2,480.00 Feedback Infrastructure Services Private Limited 4,000.00 4,000.00 Salzer Electronics Limited 398.85 -

6 Outstanding Balance of Inter Corporate Deposit Given L&T FinCorp Limited - 242.62

7 Recovery of Capital WIP Cost L&T Vrindavan Properties Limited - 963.81

8 Sale of Immovable property to

L&T Vrindavan Properties Limited - 25,635.519 Sale of Investment to L&T Finance Holdings Limited - 16,688.92

10 Interest accrued but not due on Term Loan given Ewac Alloys Limited 71.02 71.01 Salzer Electronics Limited 3.50 -

Liabilities:11 Account Payables

Family Credit Limited 3,063.13 222.82 L&T Access Distribution Services Limited 2.42 - L&T Finance Holdings Limited 60.82 39.35 L&T General Insurance Company Limited 162.64 -

L&T Infrastructure Finance Company Limited 3.81 - L&T Investment Management Limited 6.06 - Larsen & Toubro Limited 1,543.74 1,822.65 L&T FinCorp Limited 3,179.04 5,934.82 L&T Capital Markets Limited 1.79 - Larsen & Toubro Infotech Limited 23.66 38.59





(` in Lakh)Sr.No.


12 Interest accrued but not due on Inter corporate deposit taken

Family Credit Limited - 1.56 L&T Finance Holdings Limited - 6.50 L&T FinCorp Limited - 3.88

13 Interest accrued but not due on NCD L&T Finance Holdings Limited 1.98 227.79 Larsen & Toubro Limited 189.74 189.84

14 Outstanding balance of Inter corporate deposit taken Family Credit Limited - 1,524.27 L&T Finance Holdings Limited 1,752.00 7,825.00 L&T Housing Finance Limited - 2,000.00

L&T Capital Company Limited 193.00 - Metro Tunneling Group 3,000.00 - L&T FinCorp Limited - 4,400.00

15 Outstanding balance of NCD Issued L&T Finance Holdings Limited 1,390.00 8,400.00 Larsen & Toubro Limited 3,695.70 3,697.70

Income:16 Corporate support charges recovered from

Family Credit Limited 209.20 146.29 L&T Finance Holdings Limited 3.61 2.79

L&T General Insurance Company Limited 215.59 242.67 L&T Housing Finance Limited 221.36 224.72 L&T Infrastructure Finance Company Limited 538.84 681.83 L&T Investment Management Limited - 138.81 L&T FinCorp Limited 58.56 137.08 L&T Capital Markets Limited 88.73 26.89

17 Employee Deputation cost recovered from L&T General Insurance Company Limited 3.40 - L&T Housing Finance Limited 197.25 - L&T Infrastructure Finance Company Limited 6.00 -

L&T Investment Management Limited 7.15 - Larsen & Toubro Limited - 4.65 L&T FinCorp Limited 17.02 - L&T Capital Markets Limited 8.49 -





(` in Lakh)Sr.No.


18 Interest income on Inter corporate deposits

Family Credit Limited 69.92 0.25 L&T Housing Finance Limited 7.93 - L&T Infrastructure Finance Company Limited 45.50 79.37 L&T Vrindavan Properties Limited 508.85 - L&T FinCorp Limited 234.06 72.70 L&T Capital Markets Limited 0.04 -

19 Interest income on NCD Feedback Infrastructure Services Private Limited 538.52 404.69 Family Credit Limited 9.93 -

20 Interest income on Term loan given Ewac Alloys Limited 368.62 298.26 Salzer Electronics Limited 39.27 -

21 Networking charges recovered from Larsen & Toubro Limited 8.62 31.14

22 Other Income Family Credit Limited 24.32 - L&T FinCorp Limited 31.85 -

23 Rent income on operating lease L&T General Insurance Company Limited 375.47 - Larsen & Toubro Limited 3.82 - Larsen & Toubro Infotech Limited 14.15 5.81

24 Rent recovered from Family Credit Limited 57.25 -

L&T General Insurance Company Limited - 33.51 L&T Housing Finance Limited 108.50 5.66 L&T Infrastructure Finance Company Limited 295.68 352.13 L&T Investment Management Limited 36.01 81.20 Larsen & Toubro Limited 0.13 14.73

Expenses:25 Brand license fees paid to

Larsen & Toubro Limited 1,042.53 649.6026 Corporate Support charges paid to

L&T Access Distribution Services Limited 30.93 - L&T Finance Holdings Limited 2.60 0.32 L&T Investment Management Limited - 0.96 Larsen & Toubro Limited 273.64 275.44

27 Data Centre charges Paid to Larsen & Toubro Limited 242.29 94.35

28 Data processing charges paid to Larsen & Toubro Limited 58.70 60.09





(` in Lakh)Sr.No.


29 Dividend Paid

L&T Finance Holdings Limited 9,894.53 10,013.74

30 Employee deputation cost Paid to

L&T Investment Management Limited 6.85 -

Larsen & Toubro Limited 6.25 84.17

31 ESOP cost Debited by

L&T Finance Holdings Limited 87.64 212.22

Larsen & Toubro Limited - 0.84

32 Interest paid to

Family Credit Limited 20.06 2.04

L&T Finance Holdings Limited 902.84 2,473.43 L&T Housing Finance Limited 5.04 2.03


L&T Capital Company Limited 2.62 36.83

Metro Tunneling Group 270.79 -

L&T FinCorp Limited 26.22 103.48

33 Management fees paid to

L&T Finance Holdings Limited 660.00 710.12

34 Professional fees paid to

Larsen & Toubro Infotech Limited 92.34 186.98

35 Rent paid to

Family Credit Limited 29.04 -

L&T Finance Holdings Limited - 62.02

L&T Housing Finance Limited 16.36 0.70

L&T Investment Management Limited - 24.25

L&T Vrindavan Properties Limited 92.00 -


L&T FinCorp Limited 539.57 578.48

36 Managerial Remuneration

D.M. Dubhashi 147.51 110.56

37 Brokerage Paid to

L&T Access Distribution Services Limited 6.92 -

L&T Capital Markets Limited 1.60 -





(` in Lakh)Sr.No.


Transaction:

38 Inter corporate borrowings taken Family Credit Limited 11,368.87 2,124.27 L&T Finance Holdings Limited 155,527.00 278,651.36 L&T Housing Finance Limited 7,620.00 2,000.00 L&T Capital Company Limited 193.00 48.30 L&T FinCorp Limited 27,957.43 39,525.00 Metro Tunneling Group 3,000.00 -

39 Inter corporate deposit given Family Credit Limited 43,000.00 500.00 L&T Housing Finance Limited 4,700.00 - L&T Infrastructure Finance Company Limited 42,600.00 68,850.00

L&T Vrindavan Properties Limited 13,623.63 - L&T FinCorp Limited 81,400.00 43,461.62 L&T Capital Markets Limited 7.25 -

40 NCD Issued to L&T Finance Holdings Limited 1,390.00 8,400.00

41 Operating lease given Larsen & Toubro Infotech Limited - 18.84 L&T General Insurance Company Limited 1,605.00 -

42 Purchase of Operating lease Assets L&T General Insurance Company Limited 1,605.00 -

43 Sale of Loan Portfolio to

Family Credit Limited 46,192.16 42,440.14 L&T Infrastructure Finance Company Limited 12,021.79 27,369.38 L&T FinCorp Limited 26,700.04 82,979.46

44 Term Loan Given Ewac Alloys Limited - 3,200.00 Salzer Electronics Limited 1,403.85 -

45 Security Deposit Given L&T Vrindavan Properties Limited 399.27 -

46 Receivable Discounting Larsen & Toubro Limited 9,896.27 -

47 Investment in NCD

Family Credit Limited 5,900.00 -48 Sale of NCD

L&T Investment Management Limited 5,900.00 -Note: Transactions shown above are excluding of Service Tax, if any.





27.5 Finance Lease:In accordance with Accounting Standard 19 on ‘Leases’ as notied under the Companies (AccountingStandards) Rules, 2006, the following disclosures in respect of Finance Leases are made:

Assets given on lease:The Company has given assets on nance lease to its customers with respective underlying assets as security.The details of gross investments, unearned nance income and present value of rentals as at March 31,2014 in respect of these assets are as under:

(` in Lakh)

Particulars 2013-14 2012-13Gross Investments :- Within one year 6,896.14 6,405.54- Later than one year and not later than ve years 9,311.36 11,259.79

- Later than ve years 256.17 23.68

Total 16,463.67 17,689.01

Unearned Finance Income :- Within one year 1,437.06 1,505.18- Later than one year and not later than ve years 1,193.61 1,654.93- Later than ve years 1.42 1.20

Total 2,632.09 3,161.31Present Value of Rentals :- Within one year 5,459.08 4,900.36

- Later than one year and not later than ve years 8,117.75 9,604.86- Later than ve years 254.75 22.48

Total 13,831.58 14,527.70

27.6 Operating Lease :

In accordance with Accounting Standard 19 on ‘Leases’ as notied under the Companies (AccountingStandards) Rules, 2006, the following disclosures in respect of operating Leases are made:

(i) The Company has taken vehicles for certain employees under Operating Leases, which expire betweenSeptember 2014 to November 2018 (Previous year September 2014 to February 2018). Salaries includegross rental expenses of ` 40.80 lakh (previous year ` 53.44 lakh). The total of future minimum leasepayments under non-cancellable operating leases are :

(` in Lakh)

Particulars 2013-14 2012-13Minimum Lease Payments

- Within one year 0.45 50.76- Later than one year and not later than ve years 105.53 139.24

- Later than ve years - -Total 105.98 190.00





(ii) The Company has taken premises on non-cancellable operating lease. Lease Payments includes ` 2,144.03 lakh (previous year ` 2,253.01 lakh) recognised in the Statement of Prot and Loss. Thetotal of future minimum lease payments under non-cancellable operating leases are :

(` in Lakh)

Particulars 2013-14 2012-13Minimum Lease Payments

- Within one year 225.34 487.19- Later than one year and not later than ve years 131.93 218.99- Later than ve years 10.75 --

Total 368.02 706.18

Assets given on lease:The total of future minimum lease payments under non-cancellable operating leases are:

(` in Lakh)

Particulars 2013-14 2012-13Minimum Lease

- Within one year 14,879.85 7,336.35

- Later than one year and not later than ve years 22,010.42 10,909.39- Later than ve years 1,779.91 12.42

Total 38,670.18 18,258.16

27.7 Basic and Diluted Earnings Per Share (EPS) computed in accordance with Accounting Standard (AS)20 “Earnings Per Share”:

2013-14 2012-13Basic

Prot after tax as per Statement of Prot and Loss ( (` in Lakh)) A 20,122.66 21,102.86Weighted average number of equity shares outstanding duringthe year (Nos.) B 238,422,269 238,422,269Basic EPS ( ` ) A/B 8.44 8.85

DilutedProt after tax as per Statement of Prot and Loss ( ` lakh) A 20,122.66 21,102.86

Add: Weighted average number of equity shares outstanding(Nos.)

B238,422,269 238,422,269

Add: Weighted average no. of equity shares on account of

share application money (Nos.) C -- --Weighted average number of shares outstanding during theyear

D=B+C238,422,269 238,422,269

Diluted EPS ( ` ) A/D 8.44 8.85Face value of shares ( ` ) 10.00 10.00





27.8 Contingent Liabilities and commitments: Accounting Standard (AS) - 29

( ` In Lakh)

Contingent Liabilities: As at March

31, 2014

As at March

31, 2013a) Claim against the Company not acknowledged as debt:

- Income Tax matter in dispute 9,684.66 9,083.47

- Sales tax/ VAT / Service Tax matter in dispute 869.04 896.34

- Legal matter in dispute 67.60 121.06

b) Bank Guarantees; 200.00 237.69

c) Other money for which the Company is contingently liable:

Liability towards Letter of Credit 31,050.14 24,604.62

Commitmentsa) Estimated amount of contracts remaining to be executed on

capital account and not provided for 2,844.58 206.96

b) Undisbursed Commitment* 22,182.00 69,298.00

*This disclosure is given pursuant to the notication no. DNBS.CC.PD.No.252/03.10.01/2011-12 dated26th December, 2011 issued by Reserve Bank of India.

27.9 Assignment of Receivables :

The Company has assigned/sold receivables amounting to ` 83,560.70 lakh (previous year ` 153,001.67lakh). This assignment/ sale are without recourse to the Company.

( ` In Lakh)

Particulars 2013-14 2012-13

Loans & receivables Assigned / Sold

Total Number of Loan 11,767 12,656

Book Value of Loan 83,560.70 153,001.67

Sale Consideration Received 84,384.20 152,787.45

Gain / (Loss) on Sale 745.35 876.01

Gain / (Loss) Amortised to P&L 672.57 795.54

Form and Quantum (outstanding value) of services provided byway of

Credit Enhancement NIL NIL

Liquidity Support NIL NIL

Post-Securitisation Asset Servicing NIL NIL





27.10 Pursuant to the Employees Stock Options Scheme established by the ultimate holding company (i.e. Larsen& Toubro Limited) and by the holding company (i.e. L&T Finance Holdings Limited), the details of the stockoptions granted to the employees of the Company are as under:

( ` In Lakh)

Company Status Incurred during the year

Larsen & Toubro Limited Ultimate Holding Company NIL

(0.84)

L&T Finance Holdings Limited Holding Company 87.64

(212.22)

(previous year gures in bracket)

27.11 Expenditure in foreign currency:

Interest payment ` NIL (previous year ` 71.54 lakh)

On other matters ` 32.00 lakh (previous year ` 23.77 lakh)

27.12 During the year, the Company has sold xed assets including capital work in progress aggregating to ` NILto L&T Vrindavan Properties Limited (formerly known as L&T Unnati Finance Limited), a fellow subsidiarycompany (previous year ` 25,635.50 lakh).

27.13 Disclosure relating to frauds committed againstthe Company:

No of fraud occurred during the year: : 14

Amount involved : ` 84.44 lakh

Amount recovered : ` 0.60 lakh

Amount provided : ` 57.16 lakh

27.14 On the basis of replies received by the Company in response to enquiries made, there are no dues payableas at the year end to Micro, Small and Medium Enterprises nor are there other particulars that are requiredto be disclosed under the Companies Act, 1956 or the Micro, Small and Medium Enterprises DevelopmentAct, 2006.

27.15 Schedule to the Balance Sheet of a non-deposit taking Non-Banking Financial Company (as required interms of paragraph 13 of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies PrudentialNorms (Reserve Bank) Direction, 2007.





LIABILITY SIDE:

1. Loans and advances availed by the NBFCs inclusive of interest accrued thereon but not paid

(` in Lakh)

Particular AmountOutstanding

AmountOverdue

(a) Debentures :

- Secured 349,804.46 -

- Unsecured 40,000.00 -

(b) Deferred Credits - -

(c) Term Loans 717,566.67 -

(d) Inter-Corporate Loans and borrowings 4,945.00 -

(e) Commercial Paper 200,500.00 -

(f) Other Loans (Perpetual debt, Bank overdraft and Cash Credit) 20,000.00 -

(g) Lease Finance - -

(h) Accrued Interest on above borrowings (a) to (g) 25,972.06 -

ASSET SIDE:1. Break-up of Leased Assets and Stock on Hire and hypothecation loans counting towards AFC

activities(` in Lakh)

Amount Outstanding

(i) Lease assets including lease rentals under sundry debtors :(a) Financial Lease 364.66

(b) Operating Lease -(ii) Stock on hire including hire charges under sundry debtors

(a) Assets on Hire -

(b) Repossessed Assets -(iii) Other loans counting towards AFC activities

(a) Loans where assets have been repossessed 8,149.86

(b) Loans other than (a) above 1,024,933.66

2. Break-up of Loans and Advances including bills receivables [Other than those included in (3)

below](` in Lakh)

Amount Outstanding(a) Secured 1,280,579.59(b) Unsecured 246,175.96





3. Break-up of Investments(` in Lakh)

Amount Outstanding

CURRENT INVESTMENTS1. Quoted

(i) Shares :(a) Equity -

(b) Preference -

(ii) Debentures and Bonds -

(iii) Units of Mutual Funds -(iv) Government Securities -(v) Others (please specify) -

2. Unquoted(i) Shares :

(a) Equity -

(b) Preference -(ii) Debentures and Bonds -(iii) Units of Mutual Funds -

(iv) Government Securities -(v) Others (please specify) -

LONG TERM INVESTMENTS1. Quoted

(i) Shares : (a) Equity 22.67 (b) Preference -

(ii) Debentures and Bonds 4,683.98(iii) Units of Mutual Funds -(iv) Government Securities -(v) Others (please specify) -

2. Unquoted(i) Shares :

(a) Equity 3,617.51

(b) Preference -

(ii) Debentures and Bonds -(iii) Units of Mutual Funds -

(iv) Government Securities 0.05(v) Others (please specify) Security receipts 2,308.02






4. Investor group-wise classication of all investments (current and long term) in shares and securi-ties (both quoted and unquoted):

(` in Lakh)

Category Market Value /Break up or fair

value or NAV

Book Value(Net of Provisions)

1. Related Parties

(a) Subsidiaries - -

(b) Companies in the same group - -

(c) Other related parties 2,000.00 2,000.00

2. Other than related parties 8,626.00 8,632.23

Total 10,626.00 10,632.235. Borrower group-wise classication of assets nanced:

(` in Lakh)

Secured Unsecured

1. Related Parties

(a) Subsidiaries - -

(b) Companies in the same group - -

(c) Other related parties 6,400.00 -

2. Other than related parties 1,274,179.59 246,175.96Total 1,280,579.59 246,175.96

6. Other Information

(` in Lakh)

Particulars Amount

(i) Gross Non-Performing Assets

(a) Related parties -

(b) Other than related parties 44,953.24

(ii) Net Non-Performing Assets

(a) Related parties -

(b) Other than related parties 28,745.46

(iii) Assets acquired in satisfaction of debt 22.67





27.16 Schedule to the Balance Sheet of a Non-Banking Financial Company as required by RBI as per their CircularRBI/ 2008-09/ 116 DNBS(PD).CC.No.125/ 03.05.002/ 2008-2009, Guidelines for NBFC-ND-SI as regardscapital adequacy, liquidity and disclosure norms:

1) Capital Risk Adequacy Ratio (CRAR) :

Items 2013-14 2012-13i) CRAR (%) 16.28% 17.36%ii) CRAR – Tier I Capital (%) 13.83% 14.92%iii) CRAR – Tier II Capital (%) 2.45% 2.44%

2) Exposures :

Exposure to Real Estate Sector

Category 2013-14 2012-13

A) DIRECT EXPOSURE

(i) Residential Mortgages – Nil Nil

Lending secured by mortgages on residential propertythat is or will be occupied by the borrower or that isrented; (Individual housing loans up to ` 15 lakh may beshown separately)

(ii) Commercial Real Estate - 25,679.63 35,975.00

Lending secured by mortgages on commercial realestates (ofce buildings, retail space, multipurposecommercial premises, multi-family residential buildings,multi-tenanted commercial premises, industrial orwarehouse space, hotels, land acquisition, developmentand construction, etc.). Exposure would also includenon-fund based (NFB) limits;

(iii) Investments in Mortgage Backed Securities (MBS)and other securitized exposures -

Nil Nil

a. Residential

b. Commercial Real Estate

B) INDIRECT EXPOSURE Nil Nil

Fund based and non-fund based exposures on National

Housing Bank (NHB) and Housing Finance Companies

(HFCs).




3) Asset Liability Management:Maturity pattern of certain items of assets and liabilities

(` in Lakh)1 day to

30/31 days(1 month)

Over 1month to2 months

Over 2monthsup to 3months

Over 3months up

to 6 months

Over 6months to 1

year

Over 1 yearto 3 years

Over 3years to 5

years

Over 5years

Total

Liabilities

Borrowings fromBanks

80,500.00 68,000.00 62,000.00 85,535.00 45,944.50 101,784.00 57,500.00 98,985.63 600,249.13

Market Borrowings 11,875.00 28,333.00 15,625.00 142,084.00 96,568.00 438,082.00 - - 732,567.00

Assets

Advances 69,153.56 62,847.19 83,570.13 144,150.08 259,631.04 610,763.18 226,421.47 95,573.23 1,552,109.88

Investments - - - - - 1,583.00 4,707.00 4,342.23 10,632.23

27.17 Previous year gures have been regrouped/ reclassied wherever necessary.

As per our report attached For and on behalf of Board



Firdosh D. Buchia Dinanath Dubhashi Kailash PurohitPartner Managing Director & Chief Executive Company Secretary

Membership no. 38332Mumbai, April 21, 2014 Mumbai, April 21, 2014

Fy 14 Annual Report

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