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S-33

L&T FINANCE LIMITED

Directors’ Report

The Directors have pleasure in presenting their Annual Report and Accounts for the year ended March 31, 2005.

FINANCIAL RESULTS

Year ended Year ended

31.03.2005 31.03.2004

Rs. Crore Rs. Crore

Gross Income 110.05 78.18

Profit before Tax 26.11 14.30

Provision for Tax 2.08 0.86

Profit after Tax 24.03 13.44

Add : Balance brought forward from previous years 2.04 6.41

Balance available for appropriations 26.07 19.85

Appropriations:

Reserve u/s 45 IC of RBI Act, 1934 4.81 2.70

Transfer from Debenture Redemption Reserve (1.50) 0.25General Reserve – 1 - 6.00

General Reserve – 2 10.00 3.00

Interim Dividend 4.33 -

Tax on dividend 0.57 -

Final Dividend 4.33 5.20

Tax on Dividend 0.57 0.67

Surplus c/f to Balance Sheet 2.96 2.03

DIVIDEND

The Directors recommend a final Dividend of Rs.0.50 per equity share aggregating to a total dividend of Rs. 1.00 per equity share on 8,66,91,500 equity

shares of Rs.10 each (Previous year Rs.0.60 per equity share on 8,66,91,500 equity shares).

PERFORMANCE OF THE COMPANY

This year has seen significant growth of assets in retail Tractor Financing, Construction Equipment and in Corporate Finance. The year also saw the

Company making a start in retail Commercial Vehicle Financing. Going forward this segment would require expansion of our network to cover important

centres and would contribute significantly to business.

There has been considerable growth in earnings in all segments of the Company’s business. Interest costs have been contained by sound treasury

management.

The Company is confident of continuing to show profitable performance during the coming years.

RESOURCES

During the year under review the Company has borrowed on different instruments from various sources for varying tenors aggregating Rs.2722.23

crores. During the year, loans aggregating Rs.2496.92 crore were repaid on respective due dates. The quantum of long-term loans raised during the

year is Rs.298.27 crore.

DEPOSITS

Fixed deposits held by the Company stands at Rs.0.48 cr. as against Rs.1.14 cr. during the previous year. 247 deposits totaling

Rs.30,03,000/- due for repayment on or before March 31, 2005 were unclaimed by depositors. The Company has sent reminders / intimations to

depositors for the balance unclaimed deposits.

SUBSIDIARY COMPANIES

As required u/s 212 of the Companies Act, 1956, the Audited Statement of Accounts, the reports of the Board of Directors and Auditors of the subsidiary

companies are annexed.

ASSOCIATE COMPANY

NAC Infrastructure Equipment Ltd., has completed its first full year of operations. Gross revenues for the period was Rs.3.96 cr., with a Profit before Tax

of Rs.0.08 cr. and Profit after Tax of Rs.0.03 cr. The market for equipment hire is expected to show considerable growth in the years to come.





S-35

L&T FINANCE LIMITED

Auditors’ Report

Auditors’ Report to the Members of L&T Finance Limited

1. We have audited the attached balance sheet of L&T Finance Limited as at March 31, 2005, and also the Profit and Loss Account and the Cash

Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the

audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a

test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles

used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit

provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the

Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(a) We have obtained all information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of the

audit;

(b) In our opinion, proper books of accounts as required by law have been kept by the Company, so far as it appears from our examination ofthese books;

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

(d) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting

standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) On the basis of the written representations received from directors of the Company as at March 31, 2005, and taken on record by the Board

of Directors, we report that none of the director is disqualified as on March 31, 2005 from being appointed as a director in terms of clause (g)

of sub-section (1) of Section 274 of the Companies Act, 1956; and

(f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information

required by the Companies Act, 1956, in the manner so required and give a true and fair view in confirmity with the accounting principles

generally accepted in India:

i) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2005;

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

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

For SHARP & TANNAN

Chartered Accountants

By the hand of

MILIND P. PHADKE

Partner

(Membership No. 33013)

Place : Mumbai

Date : Apri l 30, 2005



S-36

L&T FINANCE LIMITED

Annexure to the Auditors’ Report

With reference to the Annexure referred to in paragraph 3 of the report of the Auditors’ to the Members of L&T Finance Limited on the accounts for the

year ended March 31, 2005, we report that:

1) a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) In respect of owned assets as explained to us, all the fixed assets have been physically verified by the management during the year. In

respect of leased assets the company has formulated a program of physical verification of all the fixed assets over a period of three years

which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were

noticed on such verification.

c) Fixed Assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

2) The Company is an NBFC (Non banking Finance Company) and does not hold any inventory.

3) According to the information and explanations given to us, there are no companies, firms or other parties of the nature required to be covered in

the register maintained under Section 301 of the Companies Act, 1956.

4) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size

of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the

course of our audit, no major weakness has been noticed in the internal control system.

5) In our opinion, and according to the information and explanations given to us, there are no transactions that need to be entered into a register in

pursuance of Section 301 of the Companies Act, 1956.

6) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Sections 58A, 58AA

or any other provision of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted

from the public. No order has been passed by the Company Law Board.

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

8) The Central Government has not prescribed for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956.

9) a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory

dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service

tax, custom duty, excise-duty, cess and other statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax,

sales tax, customs duty and excise duty were outstanding, as at March 31, 2005 for a period of more than six months from the date they

became payable.

c) According to the records of the Company, there are no dues of customs duty, wealth-tax, service tax, excise duty, cess, which have not been

deposited on account of any dispute. In respect of Income tax and Sales Tax, demands amounting to Rs.15,74,67,294/- and Rs.3,47,00,096/

- respectively are in appeal with various authorities.

10) The Company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses during the financial

year covered by our audit and the immediately preceding financial year.

11) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has

not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12) Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the

Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not a Chit Fund/ Nidhi/ Mutual benefit Fund/ Society.

14) Based on our examination of the records and evaluation of the related internal controls, we are of the opinion that proper records have been

maintained of the transaction and contracts and timely entries have been made in those records. We also report that the Company has held the

shares, securities, debentures and other securities in its own name.



S-37

L&T FINANCE LIMITED

15) The Company has not given any guarantee for loans taken by others from bank or financial institutions.

16) The term loans have been applied for the purpose for which they were raised.

17) According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds

raised on short-term basis have been used for long term investment. No long-term funds have been used to finance short-term assets except

permanent working capital.

18) The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the

Act.

19) As at the year end 113 debentures of Rs.1,00,00,000 each were outstanding, out of which the Company has not created any security in respect

of 78 debentures of Rs.1,00,00,000 each.

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

21) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the

Company has been noticed or reported during the course of our audit.

For SHARP & TANNAN

Chartered Accountants

By the hand of

MILIND P. PHADKE

Partner

(Membership No. 33013)

Place : Mumbai

Date : Apr il 30, 2005



S-38

L&T FINANCE LIMITED

Balance Sheet as at March 31, 2005

Schedules As at 31.03.2005 As at 31.03.2004Rs. Lakh Rs. Lakh Rs. Lakh Rs. Lakh

SOURCES OF FUNDS:

Shareholders’ Funds

Share Capital 1 8,669.15 8,669.15

Reserves & Surplus 2 4,727.45 3,304.43

Loan Funds

Secured Loans 3 27,721.53 31,682.90

Unsecured Loans 4 44,207.01 17,639.30

Total 85,325.14 61,295.78

APPLICATION OF FUNDS:

Fixed Assets

Gross Block 5 14,746.53 11,014.26

Less : Depreciation 2,342.19 1,364.01

Net Block 12,404.34 9,650.25

Capital Work-in-Progress 2,697.11 1,221.16

15,101.45 10,871.41

Investments 6 6,234.93 4,064.62

Current Assets, Loans & Advances 7

Stock-on-Hire 2,618.08 7,295.75

Sundry Debtors 973.83 627.86

Cash & Bank Balances 1,683.65 1,849.54

Other Current Assets 25.68 1,449.06

Loans & Advances 65,689.67 41,030.37

70,990.91 52,252.58

Less:Current Liabilities & Provisions 8

Liabilities 6,275.46 5,182.34

Provisions 726.69 710.49

7,002.15 5,892.83

Net Current Assets 63,988.76 46,359.75

Total 85,325.14 61,295.78

Significant Accounting Policies 13

Notes Forming Part of Accounts 14

Balance Sheet Abstract & Company’s General

Business Profile 15

J.P. NAYAK

Y.M. DEOSTHALEE Directors

R. SHANKAR RAMAN

Place : Mumbai

Date : April 30, 2005

As per our Report attached

SHARP & TANNAN A. N. MANI

Chartered Accountants Manager

By the hand of

MILIND P. PHADKE V. C. RAJE

Partner Vice President - Accounts &

Membership No.33013 Company Secretary

Place : Mumbai


}



S-39

L&T FINANCE LIMITED

Profit & Loss Account for the year ended March 31, 2005

Schedules Year Ended Year Ended31.03.2005 31.03.2004

Rs. Lakh Rs. Lakh

INCOME :

Income From Operations 9 11,004.79 7,817.87

Total 11,004.79 7,817.87

EXPENDITURE :

Personnel Expenses 10 355.86 304.43

Administration & Other Expenses 11 1,982.34 1,484.42

Interest & Other Finance Charges 12 4,710.50 3,720.24

Depreciation 1,344.90 878.33

Total 8,393.60 6,387.42

Profit before taxes 2,611.19 1,430.45Provision for taxes 208.00 86.19

Profit after taxes 2,403.19 1,344.26

Add:Balance brought forward from last Accounts 203.91 641.40

Profit available for appropriation 2,607.10 1,985.66

Transfer to Reserve u/s. 45 IC of RBI Act, 1934 481.00 270.00

Transfer from Debenture Redemption Reserve (150.00) 25.00

Transfer to General Reserve - I - 600.00

Transfer to General Reserve - II 1,000.00 300.00

Proposed Final Equity Dividend 433.46 520.15

Interim Equity Dividend 433.46 -

Additional Tax on Dividend 113.29 66.64

Balance carried to Balance Sheet 295.89 203.87

Basic and Diluted earning per Equity Share See Note No. L(iii) Rs.2.77 Rs.1.60

Face value per Equity Share Rs.10.00 Rs.10.00

Significant Accounting Policies 13

Notes Forming Part of Accounts 14

Balance Sheet Abstract & Company’s General Business Profile 15

}

J.P. NAYAK


R. SHANKAR RAMAN

Place : Mumbai



SHARP & TANNAN A. N. MANI

Chartered Accountants Manager

By the hand of

MILIND P. PHADKE V. C. RAJE

Partner Vice President - Accounts &

Membership No.33013 Company Secretary

Place : Mumbai




S-40

L&T FINANCE LIMITED

Cash Flow Statement for the year ended on March 31, 2005

Year Ended Year Ended

31.03.2005 31.03.2004A. Cash Flow from Operating Activities Rs. lakh Rs. lakh

Net Profit before tax 2611.19 1430.46Adjustment for:Depreciation 1344.90 878.32(Profit)/ Loss on Sale of Investments (net) (162.98) (2.90)(Profit)/Loss on Sale of Fixed Assets (36.44) (74.96)Interest and Dividend received on Investments (202.09) (119.74)Provision for Leave Encashment 2.28 5.21Miscellaneous Expenditure written off - 1.90Provision for Diminution in value of Investments 240.33 0.52Provision for Non Performing Assets (net) 163.24 522.75Operating Profit before Working Capital Changes 3960.43 2641.56Adjustment for :(Increase)/ Decrease in net Stock on hire 4677.67 5305.82(Increase)/ Decrease in Trade and Other Receivables (23745.14) (7414.48)Increase/ (Decrease) in Trade and other payables 616.93 684.27Increase/ (Decrease) in Trade and other payables - 390.97

Cash Generated from Operations (14490.11) 1608.15Direct Taxes paid (208.00) (61.98)

Net Cash Flow from Operating Activities (A) (14698.11) 1546.17

Net Cash Flow from Operating Activities on Account of Merger (B)(Increase)/Decrease in Trade and Other Receivables - (78.76)Increase / (Decrease) in Reserves - 1254.87

- 1176.11

B. Cash Flows from Investing ActivitiesPurchase of fixed assets (including capital work in progress) (7045.91) (4262.58)Proceeds/Adjustments from sale of fixed assets 1507.40 828.43Purchase of Investments (36336.03) (49684.19)Sale of investments 34088.42 49591.64Interest or Dividend received on Investments 202.09 119.74

Net Cash from Investing Activities (C) (7584.02) (3406.97)

Net Cash from Investing Activities on Account of Merger (D) - -Increase in Fixed Assets - (2106.06)Increase in Investments - (1964.98)

- (4071.04)

C. Cash Flows from Financing ActivitiesIncrease / (Decrease) in Secured Loans (3961.36) 15184.95Increase / (Decrease) in Unsecured Loans (net) 26567.71 (13892.44)Dividends paid during the year (490.11) 0.00

Increase / (Decrease) in Share Capital - 902.84

Net Cash Generated (Used in) / from Financing Activities (E) 22116.24 2195.35

Net Cash Generated (Used in) / from Financing Activities on Account of Merger (F)Increase / (Decrease) in Secured Loans - 1277.19Increase / (Decrease) in Unsecured Loans - 4.18Equity Shares issued - 1766.31

- 3047.68

Net Cash Increase/(Decrease) in Cash And Cash Equivalents (A+C+E) (165.89) 334.55Net Cash Increase/(Decrease) in Cash And Cash Equivalents On Account of Merger (B+D+F) - 152.75Cash And Cash Equivalent As At Beginning of The Year 1849.54 1362.23Cash And Cash Equivalent As At End of The Year 1683.65 1849.54

Notes:1) Cash Flow Statement has been prepared under indirect method as set out in the Accounting Standards (AS-3) - issued by the Institute of

Chartered Accountants of India.2) Purchase of fixed assets includes movements of capital work-in-progress between the beginning and end of the year.3) Cash & cash equivalents represent cash and bank balances.

J.P. NAYAK


R. SHANKAR RAMAN

Place : MumbaiDate : April 30, 2005


SHARP & TANNAN A. N. MANIChartered Accountants Manager By the hand of

MILIND P. PHADKE V. C. RAJEPartner Vice President - Accounts &Membership No.33013 Company Secretary


}



S-41

L&T FINANCE LIMITED

Schedules forming part of accounts

As at 31.03.2005 As at 31.03.2004Rs. Lakh Rs. Lakh Rs. Lakh Rs. Lakh

SCHEDULE - 1

SHARE CAPITAL

Authorised

10,00,00,000 (Previous Year 10,00,00,000) Equity 10,000.00 10,000.00

Shares of Rs.10 each. 10,000.00 10,000.00

Issued,Subscribed & Paid up

8,66,91,500 Equity Shares of 8,669.15 8,669.15

Rs.10 each, fully paid up.

i) 2,66,91,500 Equity Shares of Rs.10 each fully

paid-up issued for a consideration other than

cash consequent on amalgamation

ii) 8,66,91,494 shares are held by the Holding

Company, Larsen & Toubro Limited 8,669.15 8,669.15

SCHEDULE - 2

RESERVES & SURPLUS

Reserve u/s. 45 IC of RBI Act, 1934

As per last Balance Sheet 1,173.89 903.89

Add : Transferred from Profit & Loss A/c 481.00 270.00

1,654.89 1,173.89

Debenture Redemption Reserve

As per last Balance Sheet 150.00 125.00

Less : Transferred to Profit & Loss A/c (150.00) 25.00

- 150.00

General Reserve - I

As per last Balance Sheet 700.00 300.00Add : Transferred from Profit & Loss A/c - 600.00

Less : Utilised during the year - 200.00

700.00 700.00

General Reserve - II

As per last Balance Sheet 994.41 694.42

Add : Transferred from Profit & Loss A/c 1,000.00 300.00

1,994.41 994.41

Capital Redemption Reserve 82.25 82.25

Profit & Loss Account 295.90 203.87

4,727.45 3,304.43

SCHEDULE - 3

SECURED LOANS

Secured Redeemable Non Convertible Debentures 3,500.00 14,000.00From Banks:

Cash Credit / Working Capital Demand Loans 1,500.00 1,800.00

Term Loan 16,651.45 10,209.55

Foreign Currency Loan 6,070.08 5,673.35

27,721.53 31,682.90



S-42

L&T FINANCE LIMITED

As at 31.03.2005 As at 31.03.2004

Rs. Lakh Rs. Lakh Rs. Lakh Rs. Lakh

SCHEDULE - 4

UNSECURED LOANS

Fixed Deposits 48.16 113.97

(Repayable within one year-Rs.48,16,000/-)

Loans and Advances from subsidiary 299.00 171.00

Short Term Loans & Advances :

From Banks 32,000.00 4,499.78

From Others

i) Non Convertible Debentures 7,800.00 12,500.00

ii) Others 4,000.00 300.00

Other Loans & Advances:

Lease Finance 59.85 54.55

44,207.01 17,639.30


SCHEDULE - 5

FIXED ASSETS Rs. Lakh

Fixed Assets Gross Block Depreciation Net Block Net Block

Particulars Opening Additions Sale / As On Opening For the Deduction / As On As On As OnBalance Adjustment 31/3/2005 Balance Per iod Adjustment 31/3/2005 31/3/2005 31/3/2004

As on As on1/4/2004 1/4/2004

OWNED ASSETS

Building 3,419.04 - - 3,419.04 151.48 55.73 - 207.21 3,211.83 3,267.58

Plant & Machinery 4,221.72 2,499.07 10.30 6,710.48 689.96 530.01 9.54 1,210.43 5,500.05 3,531.76

Furniture & Fixtures 35.29 0.71 3.80 32.21 7.81 4.02 3.80 8.04 24.17 27.48

Motor Car 2,690.02 2,674.69 1,802.65 3,562.06 291.61 599.79 348.38 543.01 3,019.05 2,398.41Vehicles 424.60 174.48 - 599.08 122.91 92.65 - 2 15.56 383.52 301.68

Specialised Software 18.37 51.70 - 70.07 6.71 9.48 - 16.20 53.87 -

Computers 128.88 164.01 20.94 271.95 66.98 39.37 5.00 1 01.35 170.60 73.55

10,937.92 5,564.66 1,837.69 14,664.89 1,337.46 1 ,331.05 366.72 2,301.80 12,363.09 9,600.46

ASSETS TAKEN ON LEASE

Plant & Machinery 5.85 - - 5.85 2.77 0.95 - 3.71 2.14 3.08

Vehicles 70.49 5.30 - 75.79 23.78 12.90 - 36.68 39.11 46.71

76.34 5.30 - 81.64 26.55 13.85 - 40.39 41.25 49.79

TOTAL 11,014.26 5,569.96 1,837.69 14,746.53 1364.01 1 ,344.90 366.72 2,342.19 12,404.34 9,650.25

Previous Year 7,959.17 3 ,992.61 937.53 11,014.25 669.74 878.32 184.05 1,364.01

Add:Capital Work-in-Progress 2,697.11 1,221.16

15,101.45 10,871.41



S-43

L&T FINANCE LIMITED


As at 31.03.2005 As at 31.03.2004Rs. Lakh Rs. Lakh Rs. Lakh Rs. LakhSCHEDULE - 6

INVESTMENTS(At cost or market value whichever is lower)Long Term Investments:Government Securities 0.03 13.55Bonds - 200.00Shares 4,043.07 3,744.57

4,043.10 3,958.12Current Investments:Shares 2,482.01 73.79Mutual Funds - 107.01Others 0.01 0.01

2,482.02 180.81

6,525.12 4,138.93Less: Diminution in Value of Investments 290.19 74.31

TOTAL 6,234.93 4,064.62

Note:Quoted Investments (Market Value-Rs.2191.82 Lakh) 2,191.82 213.00(Previous Year Rs.213.00 Lakh)Unquoted Investments 4,043.11 3,851.62

6,234.93 4,064.62

Particulars of Investments :LONG TERM INVESTMENTSGovernment Securities :12.50% Maharashtra State Development Loan 2004 - 13.52(Face Value Rs.13,00,000/-)12% National Saving Certificate 2002 0.03 0.03(Face Value Rs.3,000)(Pledged as security deposit with Sales Tax Authorities)

TOTAL (A) 0.03 13.55

Bonds:13.85% Pradeshiya Industrial and Investment Corporation - 200.00of U.P Ltd. 2006200 State Government Guaranteed, Non-Convertible,Non-Cummulative, Redeemable, Taxable Bonds of Rs.1,00,000/- each

TOTAL (B) - 200.00

Shares (fully paid up of Rs.10/- each):Subsidiary Companies :L&T Capital Company Limited 550.00 550.00(54,99,997 equity shares)

550.00 550.00

Other Companies:Narmada Infrastructure Construction Enterprise Limited 1,656.92 1,656.92(86,77,250 Equity Shares)L&T Transportation Infrastructure Limited 1,236.15 1,236.15(1,02,50,000 Equity Shares)L&T-Demag Plastics Machinery Private Limited 300.00 300.00

(30,00,000 Equity Shares)NAC Infrastructure Equipment Limited 300.00 1.50(30,00,000 Equity Shares)

(29,85,000 shares purchased during the year)

3,493.07 3,194.57

TOTAL (C) 4,043.07 3,744.57



S-44

L&T FINANCE LIMITED

CURRENT INVESTMENTS

Shares:

Shares (Fully paid up) :

JJ Spectrum Ltd. 10 - 8.95

(89,500 equity shares)

Metropoli Overseas Ltd. 10 14.91 14.91


Anil Chemicals Ltd. 10 8.00 8.00


Pashupati Fabrics Ltd. 10 - 14.98

(1,49,800 equity shares)

Elque Polyesters Ltd. 10 19.43 19.43

(1,94,300 equity shares)

Monnet Industries Ltd. 10 7.52 7.52(18,800 equity shares)

Ahmedabad Electricity Company Ltd. 10 14.65 -

(10000 equity shares)

Andhra Sugars Ltd. 10 36.01 -


Apollo Hospitals Enterprise Ltd. 10 82.66 -


Arvind Mills Ltd. 10 66.90 -


Associated Cement Company Ltd. 10 91.07 -


Atul Products Ltd. 10 16.84 -


Bank Of Baroda 10 22.18 -


Bank of Rajasthan 10 17.65 -(24000 equity shares)

Bharat Petroleum Corporation Ltd. 10 113.31 -


Bharati Tele Systems Ltd. 10 90.22 -


BOC Ltd. 10 24.71 -


Canara Bank 10 43.96 -


Century Textiles & Industries Ltd. 10 61.78 -


CESC Ltd. 10 22.37 -


Chennai Petroleum Ltd. 10 0.22 -

(100 equity shares)

Crompton Greaves Ltd. 10 89.78 -

(20000 equity shares)Cummins India Ltd. 2 34.34 -


Eveready Industries Ltd. 10 0.80 -


Exide Industries Ltd. 10 4.89 -



As at 31.03.2005 As at 31.03.2004

Rs. Lakh Rs. Lakh

Face Valueper Unit



S-45

L&T FINANCE LIMITED

Gujarat Ambuja Cement Ltd. 10 205.89 -


Gujarat NRE Coke Ltd. 10 24.28 -


HDFC Bank Ltd. 10 122.32 -


HEG Ltd. 10 13.99 -


India Glycol Ltd. 10 29.74 -


India Tobacco Company Ltd. 10 105.76 -


Indian Petrochemicals Corporation Ltd. 10 36.98 -(20000 equity shares)

Jaiprakash Associates Ltd. 10 28.39 -


Jayshree Tea Ltd. 10 21.97 -


Jet Airways Ltd. 10 64.82 -


Kesoram Industries Ltd. 10 4.40 -


Mahanagar Telephone Nigam Ltd. 10 6.57 -


National Thermal Power Corporation Ltd. 10 30.80 -


New Delhi Television Ltd. 4 48.02 -


Neyveli Lignite Corporation Ltd. 10 37.13 -


Nicholas Piramal India Ltd. 2 48.00 -


Opto Circuits (India) Ltd. 10 43.84 -


Orient Paper & Industries Ltd. 10 32.09 -


Rashtriya Chemicals and Fertilizers Ltd. 10 20.54 -


Reliance Industries Ltd. 10 148.99 -


Shree Cements Ltd. 10 32.20 -


State Bank of India 10 72.88 -


Steel Authority of India Ltd. 10 17.40 -

(25000 equity shares)Strides Arcolab Ltd. 10 22.21 -


Tata Motors Ltd. 10 74.89 -


Tata Tea Ltd. 10 55.27 -



As at 31.03.2005 As at 31.03.2004

Rs. Lakh Rs. Lakh

Face Valueper Unit



S-46

L&T FINANCE LIMITED

Tata Tele Services (Maharashtra) Ltd. 10 15.77 -


Thermax Ltd. 10 62.17 -


Tinplate Company Ltd. 10 14.42 -


Titan Industries Ltd. 10 52.67 -


Trent Ltd. 10 61.33 -


Videocon International Ltd. 10 32.29 -

(50000 equity shares)Zensar Technology Ltd. 10 9.79 -


TOTAL D 2,482.01 73.79

Mutual Funds:

Kotak Liquid Institiutional Premium Plan -Daily Dividend - 107.01

(8,75,135 units of Rs. 10/- each)

TOTAL E - 107.01

Others

LTFL Securitisation Trust 2002 0.01 0.01

TOTAL F 0.01 0.01

Total (A+B+C+D+E+F) 6,525.12 4,138.93

Less: Diminution in Value of Investments 290.19 74.31

TOTAL 6,234.93 4,064.62

Details of Investments purchased and sold during the year

Face Value Nos. Cost

Rs. Per Unit Rs. Lakh

Money Market Mutual Fund:

Kotak Liquid Institiutional Premium Plan-Daily Dividend 10 23,75,43,041 29,047.00

Grindlays Floating Rate ST Super Institutional Plan C 10 101,21,57,604 1,01,217.48

-Daily Dividend

Grindlays Cash Fund-Super Institutional Plan C 10 14,23,42,590 14,234.26

HSBC Cash Fund-Institutional Plus - Daily Dividend 10 37,42,73,968 37,443.20

HDFC Cash Management Fund-Savings Plan 10 34,20,42,046 36,380.96

- Daily Dividend Reinvestment

Magnum Institutional Income - Savings - Dividend 10 1,99,39,602 2,000.44

Birla Cash Plus-Institutional Premium -Daily Dividend 10 1,99,67,242 2,000.00

Principal Cash Management Fund

- Liquid Option Institutional Plan -Dividend Reinvestment-Daily 10 2,75,09,657 2,751.36- Liquid Option Institutional Premium Plan 10 5,75,28,962 5,753.04

Dividend Reinvestment-Daily

Prudential ICICI Liquid Plan Institutional Plus Plan 10 15,47,76,081 18,335.00

-Daily Dividend Option

Prudential ICICI Floating Rate Fund-Plan C-Dividend Option 10 8,91,90,703 8,920.23

ABN AMRO Cash Fund-Daily Dividend 10 7,50,38,371 7,504.26


As at 31.03.2005 As at 31.03.2004

Rs. Lakh Rs. Lakh

Face Valueper Unit



S-47

L&T FINANCE LIMITED

Equity Shares:

Andhra Sugars Ltd. 10 1,000 1.50

Associated Cement Company Ltd. 10 15,000 54.20

Atul Products Ltd. 10 5,522 4.65

Bajaj Auto Ltd. 10 20,000 229.93

Ballarpur Industries Ltd. 10 18,000 18.36

Balrampur Chini Ltd. 1 16,453 93.30

Bank of Rajasthan 10 26,000 18.83

Bharat Forge Ltd. 10 12,500 167.52

Bharat Heavy Electricals Ltd. 10 40,000 313.24

Bharat Petroleum Corporation Ltd. 10 1,000 4.72

Bharati Tele Systems Ltd. 10 10,000 22.55

Bhushan Steel Ltd. 10 10,000 22.65

BOC Ltd. 10 60,000 57.49Century Textiles & Industries Ltd. 10 76,800 172.23

Chennai Petroleum Ltd. 10 9,900 21.50

Cipla Ltd. 2 20,000 62.66

Crompton Greaves Ltd. 10 10,000 41.14

Dabur India Ltd. 1 20,000 21.46

Dhampur Sugar Mills Ltd. 10 45,000 47.84

Escorts Ltd. 10 39,000 36.42

Essar Steel Ltd. 10 25,000 16.25

Eveready Industries Ltd. 10 19,000 15.28

Exide Industries Ltd 10 9,145 14.39

Gas Authority of India Ltd. 10 20,000 47.45

Grasim Industries Ltd. 10 28,345 372.95

Gujarat Ambuja Cement Ltd. 10 40,000 177.72

Gujarat Narmada Ltd. 10 25,000 18.61

Gujarat NRE Coke Ltd. 10 24,880 24.05

Hero Honda Motors Ltd. 2 20,000 120.55

Hindalco Industries Ltd. 10 5,000 68.46

Hindustan Oil Exploration Co. Ltd. 10 50,000 51.75

Hotel Leela Venture Ltd. 10 15,988 25.32

ICICI Bank Ltd. 10 49,802 192.95

I-Flex Solutions Ltd. 5 10,000 62.71

India Glycol Ltd. 10 4,814 7.24

India Tobacco Company Ltd. 10 14,500 195.81

Infosys Technologies Ltd. 5 5,000 100.85

Infotech Enterprise Ltd. 10 43,132 107.78

Jaiprakash Associates Ltd. 10 25,000 51.14

KEC International Ltd. 10 25,000 42.37

Kesoram Industries Ltd. 10 16,552 21.14

Mahanagar Telephone Nigam Ltd. 10 20,398 29.11

Mahindra & Mahindra Ltd. 10 25,000 133.80

Max India Ltd. 10 35,471 148.30


Moser Baer Ltd. 10 10,000 23.60National Aluminium Company Ltd. 10 10,000 18.69

New Delhi Television Ltd. 4 25,000 43.47

Nicholas Piramal India Ltd. 2 4,107 12.40

Oil And Natural Gas Corporation Ltd. 10 5,000 41.01

Radico Khaitan Ltd. 10 21,309 65.98

Reliance Industries Ltd. 10 1,71,587 930.52


Details of Investments purchased and sold during the year

Face Value Nos. Cost

Rs. Per Unit Rs. Lakh






S-49

L&T FINANCE LIMITED

Loans & Advances:

Secured, Considered Good :

Loans against pledge of shares 450.00 -

Other Loans - 928.65

Unsecured, Considered Good :

Bills Discounted 6,450.49 6,171.86

Other Loans 33,495.96 29,025.85

(Including Intercorporate Deposits Rs.Nil, P.Y. Rs.220.41 lakh)

Unsecured, Considered Doubtful

Bills Discounted - 33.81

Other Loans 44.59 1,366.07

44.59 1,399.88

Less: Provision for Non Performing Assets 16.84 616.39

27.75 783.49Advances towards capital assets 66.56 54.84

Advances recoverable in cash or in kind 25,198.91 4065.68

65,689.67 41,030.37

SCHEDULE - 8

CURRENT LIABILITIES AND PROVISIONS

Liabilities :

Sundry Creditors 4,990.52 3,610.23

Security Deposits 822.49 772.45

Advances Received - Hire Purchase/Lease 41.72 49.41

Income /Charges accounted in Advance - 189.30

Interest accrued but not due 420.73 560.95

6,275.46 5,182.34

Provisions for:

Taxes 208.00 94.55

Proposed Equity Dividend 433.45 520.15Additional Tax on Dividend 56.65 66.64

Gratuity 1.45 4.29

Leave Encashment 27.14 24.86

726.69 710.49

Year Ended 31.03.2005 Year Ended 31.03.2004


SCHEDULE - 9

INCOME FROM OPERATIONS

Lease & Hire Purchase 3,473.36 3,839.69

Bills Discounting 737.00 893.93

Other Financing Activities 5,989.04 2,143.50

Networking Activity 394.86 431.72

Income from Investments

- Dividend from Subsidiary Company - 55.00

- Others 365.08 67.64

365.08 122.64

Other Income 45.45 386.39

11,004.79 7,817.87

As at 31.03.2005 As at 31.03.2004





S-50

L&T FINANCE LIMITED

Year Ended 31.03.2005 Year Ended 31.03.2004



SCHEDULE - 10

PERSONNEL EXPENSES

Salaries 306.50 240.91

Contribution to and provision for :

Provident fund and Pension fund 12.81 12.20

Gratuity fund 1.45 4.29

Superannuation Fund 3.92 7.99

Leave encashment 5.37 8.73

Welfare & Other Expenses 25.81 30.31

355.86 304.43

SCHEDULE - 11

ADMINISTRATIVE & OTHER EXPENSESTravelling & Conveyance 163.34 142.40

Printing & Stationery 14.10 12.13

Telephone, Postage & Telegrams 298.57 252.62

Directors’ Sitting Fees 0.48 0.42

Brokerage & Service Charges 222.20 71.43

Advertising & Publicity 8.25 2.00

Repairs & Maintenance - Building 0.50 0.30

Repairs & Maintenance - Plant & Machinery 3.98 2.49

Repairs & Maintenance - Others 95.49 12.48

Rent 54.73 128.11

Rates & Taxes 70.46 112.34

Electricity Charges 13.00 11.75

Insurance 41.80 35.95

Auditors Remuneration :

Audit Fees 3.32 2.70

Tax Audit Fees 0.78 0.78

Certification 1.10 0.68Expenses Reimbursed 0.59 0.42

5.79 4.58

Provision for Non-Performing Assets / Write offs 163.24 722.75

Less : Transfer from General Reserve - I 0.00 200.00

163.24 522.75

Provision for Diminution in value of Investments 240.33 0.52

Miscellaneous Expenses 586.08 172.15

1982.34 1484.42

SCHEDULE - 12

INTEREST & OTHER FINANCE CHARGES

Fixed Loans 4,503.39 3,624.56

Others 207.11 95.68

4,710.50 3,720.24



S-51

L&T FINANCE LIMITED

SCHEDULE - 13

SIGNIFICANT ACCOUNTING POLICIES.

A. Method of Accounting :

The Company maintains its accounts on accrual basis following the historical cost convention, in compliance with the Accounting Standards

specified to be mandatory by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

B. Revenue Recognition :

(i) Income from Hire purchase and Lease transactions are accounted on accrual basis, pro-rata for the period, at the rates implicit in the

transactions. Processing fees/Management Fees, Income from Bill Discounting, other financing activities, other compensation and Investments

are accounted on accrual basis.

(ii) Income from Operating lease is recognized on straight line basis over the lease term and accounted on the dates as per the Contractual

terms.

C. Brokerage on Fixed Deposits is charged over the period of Deposits.

D. The Company complies with the guidelines issued by the Reserve Bank of India in respect of Prudential Norms for Income Recognition and

Provisioning for Non-Performing Assets.

E. Retirement Benefits :

Contributions to Provident Fund, Family Pension Fund and Superannuation are accounted on actual liability basis. Contributions to Gratuity fund

and Provision for Leave encashment benefit on retirement are made on the basis of actuarial valuation.

F . Fixed Assets :

i ) Owned Assets :

Assets held for own use are stated at original cost less accumulated depreciation.

ii) Leased Assets :

Assets leased under finance lease are stated as “Loans & Advances” as required by Accounting Standards (AS -19) – Leases, issued by the

Institute of Chartered Accountants of India.

Assets under operating lease are stated at original cost less accumulated depreciation.

iii) Assets Taken on Lease :

Assets taken on lease on or after 1.4.2001 are stated at original cost less accumulated depreciation as required by Accounting Standards (AS

-19) – Leases issued by the Institute of Chartered Accountants of India.

G. Depreciation on Fixed Assets :

i) Owned Assets :

Depreciation on assets held for own use has been provided on Straight Line Basis as per Schedule XIV to the Companies Act, 1956, except

for Computer Software. Computer Software is depreciated at 33.33% per annum. These rates are fixed in consonance with the expected

useful life of the assets.

Depreciation on assets acquired and given to employees under the Hard Furnishing Scheme has been provided at 18% per annum on

Straight Line Basis.

ii) Assets given on Lease:

(a) In respect of the assets given on finance lease, Accounting Standards (AS – 19) – Leases has been applied. Investment in leased

assets is shown under Loans & Advances duly adjusted for recoveries during the lease period as required under the said Standard.

(b) In respect of assets given on operating lease, depreciation is provided on straight line basis pro-rata from the month of acquisition/

capitalization at the rates which have been determined on the basis of type of the asset, lease tenor, economic life of the asset etc.

These rates vary from 7% to 20% per annum.






S-53

L&T FINANCE LIMITED

C. (i) Cash Credit/Working Capital Demand Loan of Rs.1500.00 lakh is secured by hypothecation of specified Hire Purchases/Lease Assets

and book debts relating to Lease, Hire Purchase and other Activities.

( ii ) Term Loan of Rs.14583.33 lakh is secured by hypothecation of specified Hire Purchase/Lease/Loan receivables.

(iii) Foreign Currency loan of Rs. 6070.09 lakh is secured by hypothecation of specified Hire Purchases/Lease Assets and Term Loan

receivables and book debts relating to Lease, Hire Purchase and other Activities.

(iv) Term Loan of Rs.2068.12 lakh is secured by hypothecation of specified fixed assets of the Company and exclusive first charge on

specified receivables.

D. The Company has taken certain assets on lease costing Rs. 75.79 lakh (P.Y. Rs.332.97 lakh) the future lease obligation against which is

Rs. 65.46 lakh (P.Y. Rs.116.07 lakh)

E. i) Finance Lease Obligations taken on lease on or after 1.4.2001 :

The Company normally acquires assets/equipments under finance lease with the respective underlying assets/equipments as security.

Minimum lease payments outstanding as of March 31, 2005 in respect of these assets are as under:

Rs. Lakh

Due Total Minimum Lease Interest Not Due Present Value of

Payments Outstanding Minimum Lease

as on March 31, 2005 Payments

Within One Year 34.35 3.63 30.72

Later than one year and not later than five years 31.11 1.98 29.13

Later than five years Nil Nil Nil

65.46 5.61 59.85

ii) Finance Lease Obligations given on lease on or after 1.4.2001 :

The Company has given assets on finance lease to its customers with respective underlying assets/equipments as security. Minimum

lease payments outstanding as of March 31, 2005 in respect of these assets are as under:

Rs. Lakh

Due Total Minimum Lease Interest Not Due Present Value of

Payments Outstanding Minimum Lease

as on March 31, 2005 Payments

Within One Year 247.65 23.53 224.12

Later than one year and not later than five years 659.93 59.99 599.94

Later than five years Nil Nil Nil

907.58 83.52 824.06

F. Income from other financing activities include interest on Loans & Advances of Rs.5075.30 lakh (P.Y. Rs.2207.69 lakh)

{Tax deducted at source Rs.183.17 lakh (P.Y. Rs.110.80 lakh ) }

G. Advances recoverable in cash or in kind include

i) Lo an to Offic ers Rs.5.59 lakh (P.Y. Rs.5.44 lakh), maximum amount outstanding during the year Rs.5.80 lakh(P.Y. Rs.5.94 lakh)

ii) Rs.28.18 lakh being sales tax paid upto 31/12/97 in various states on inter-state lease/Hire Purchase Transactions. Due to ambiguity in

certain provisions of Sales Tax Act in respective states with respect to such transactions, recovery of the same from the customers is

kept in abeyance. The Company has since then been paying sales tax on such transactions under protest in various states to the extent

it is collected from the customers.




S-54

L&T FINANCE LIMITED

H. Stock-on-hire includes receivables of Rs.452.60 lakh (P.Y. Rs.1265.36 lakh) detailed hereunder.

As at 31.03.2005 As at 31.03.2004

Secured Rs. lakh Rs. lakh

Outstanding for more than six months

Considered Good 286.05 1012.95

Others: Considered Good 275.60 726.01

561.65 1738.96

Less : Provision for non-performing assets 109.05 473.60

452.60 1265.36

I. Assignment of Receivables:

The Company has assigned/sold some of the Lease, Hire Purchase Assets/receivables and Term Loan receivables amounting to

Rs.34,836.69 lakh. This assignment/sale is without recourse to the Company. The Company does not expect any contingent or other liability

in future in respect of these assigned/sold assets/receivables.

J. Managers salary and perquisites amounting to Rs.17.25 lakh (P.Y. Rs.16.66 lakh) have been charged to the Accounts.

K. Value of imports (on CIF basis) :

Capital Goods Rs.2694.60 lakh (P.Y. Rs.1200.37 lakh)

L. ( i) Segment Reporting: AS-17

The Company operates mainly in the business segment of fund based financing activity. The other business segment does not have

income and/or assets more than 10% of the total income and/or assets of the Company.

(ii) Related Party Disclosure: AS-18

The following related party transaction were carried out during the year ended 31.03.2005 Rs. Lakh

No. Controlling Relationship Nature of Amount Amount Amount

Company Transaction due to due from

Transaction

1 Larsen & Toubro Holding Company ICD Borrowed 38325.00Limited

Lease finance given 87.00

Assignment/Sale of Lease/HP

Receivables/Assets and Term

Loan Receivables 22419.00 21419.00

Expenditure

Interest on ICD borrowed 103.50

Service Charges 128.19 6.75

Income

Lease Finance Charges 11.44

Operating Lease Rental 2089.50 280.50


Transaction

2 India Infrastructure Fellow Subsidiary Assignment of Hire Purchase/

Developers Limited Company Term Loan Receivables 1539.60

Sundry Creditors 0.04

Income

Service Charges 14.40

Interest 0.24




S-55

L&T FINANCE LIMITED

Transaction

3 HPL Cogeneration Fellow Subsidiary ICD Borrowed 4000.00 4000.00

Limited Company Expenditure

Interest 263.28

Transaction

4 L&T Capital Subsidiary Company ICD Borrowed 271.00 299.00

Company Limited Expenditure

Interest 18.01 18.01

Professional Fees 5.00

Transaction

5 Larsen & Toubro Fellow Subsidiary Lease Finance Given 13.73

Infotech Limited Company Expenditure


Income


Operating Lease Rentals 265.13

Service Charges 22.15

Transaction

6 L&T – Sargent & Fellow Subsidiary Lease Finance Given 9.48

Lundy Limted Company Income


Income

7 Tractors Engineers Fellow Subsidiary Operating Lease Rentals 2.65

Limited Company Service Charges 2.00

Transaction

8 NAC Infrastructure Associate Company Investment Purchase 300.00Equipment Limited

(iii) Earning per share (“EPS”) computed in accordance with Accounting Standard 20 : “Earnings Per Share” :

Particulars 2004-05 2003-04

(a) Profit after tax for the year — Rs. Lakh 2403.19 1344.26

(b) Weighted average number of equity shares 8,66,91,500 8,66,91,500

(c) i) Nominal value of shares (Rs.) 10.00 10.00

ii) Earnings per share Basic and Diluted (Rs.) 2.77 1.60

M Disclosure in respect of Operating Leases as required under Accounting Standards (AS 19) – Leases :

a) Gross Value of assets and accumulated depreciation as on balance sheet date :

2004-05 2003-04

Rs. Lakh Rs. Lakh

- Gross Value of assets

Plant & Machinery 6493.40 4000.22

Vehicles 4613.22 3114.62

Computers 138.61 20.50

- Accumulated Depreciation

Plant & Machinery 1091.27 596.18

Vehicles 952.29 414.52

Computers 9.62 4.04

Rs. Lakh

No. Controlling Relationship Nature of Amount Amount Amount

Company Transaction due to due from




S-56

L&T FINANCE LIMITED

b) The total lease depreciation recognised in the Profit and Loss Account for the year is Rs.1198.01 lakh (P. Y. Rs 759.93 lakh). No

contingent rent has been recognised in the Profit and Loss Account during the year (P. Y. Rs.Nil )

c) The Company provides vehicles, computers, construction equipment and other plant & machinery on operating lease for varying periods

and the lease can be renewed as per mutual agreement. Contractually, the lessee has the option to reduce the lease period and hence

the agreements are treated as cancellable in nature.

N. Expenditure in Foreign currency:

On Interest Rs.418.38 lakh (P.Y. Rs.167.62 lakh)

On other matters Rs.1.12 lakh (P.Y. Rs.42.80 lakh)

O. PROVISION FOR TAXES :

(a) i) Income Tax Rs.200.00 lakh (P.Y. Rs.88.00 lakh)

ii) Wealth Tax Rs.8.00 lakh (P.Y. Rs.6.55 lakh)

iii) Excess provision for Wealth Tax of Rs Nil ( P. Y. Rs.8.36 lakh) written back during the year.

(b) The Company is entitled to a future Tax Credit of Rs Nil Lakh (P. Y. 73.80 lakh ) under Section 115JAA of the Income Tax Act, 1961.

(c) Deferred Tax Liability : In terms of the interim injunction dated December 6, 2001 restraining the Institute of Chartered Accountants of

India from implementing the Accounting Standards (AS-22) -Accounting for Taxes on Income, with reference to Non-banking Finance

Companies, issued by the High Court of Judicature at Madras in response to the Miscellaneous Petition no.27682 of 2001 in Writ

Petition No. 18827 of 2001 filed by the Association of Leasing & Financial Services Companies of which the company is a member,

pending final disposal of this Petition no provision has been made in the accounts towards deferred tax liability, if any

P. The Company has entered into certain derivative transactions including transactions involving foreign currencies. These derivative transactions,

being considered as off-Balance Sheet transactions, the cash flows arising therefrom are recognised in the books of account as and when the

settlements take place in accordance with the terms of the respective contracts over the tenor thereof.

Q. Miscellaneous Expenditure includes Rs.48.10 lakh (P.Y. Rs.74.38 lakh) on account of loss on foreclosure of certain Hire Purchase agreements,

and provision of Rs.370.00 lakh (P.Y. Rs.Nil ) on account of losses on future expected foreclosures and servicing costs.

R. Pursuant to the Employees Stock Options (ESOP) Scheme established by the Holding Company (i.e. Larsen & Toubro Limited), stock options

have been granted to the employees of the Company in respect of which, cost of Rs.22.75 lakh has been incurred by the Holding Company

during the Year.

S. Schedule to the Balance Sheet of a Non-Banking Financial Company as required in terms of Paragraph 9BB of Non-Banking

Financial Companies Prudential Norms (Reserve Bank) Directions, 1998

Rs. Lakh

Liabilities Side:

Particulars Amount Amount

Outstanding Overdue

1 Loans and advances availed by the NBFCs inclusive of

interest accrued thereon but not paid

(a) Debentures : Secured 3500.00 -

: Unsecured (Other than fall ing

within the meaning of Public Deposits) 7800.00 -

(b) Deferred Credits - -

(c) Term Loans 50151.45 -

(d) Inter-Corporate Loans and Borrowings 4299.00 -

(e) Commercial Paper - -

(f) Public Deposits 48.16 -

(g) Other Loans (Foreign Currency Loan) 6070.08 -

(h) Lease Finance 59.85 -




S-57

L&T FINANCE LIMITED

2 Break-up of (1)(f) above (Outstanding public deposits

inclusive of interest accrued thereon but not paid) : - -

(a) In the form of Unsecured debentures - -

(b) In the form of partly secured debentures i.e. debentures

where there is a shortfall in the value of security - -

(c) Other Public deposits 48.16 -

Assets Side:

3 Break-up of Loans and Advances including bills receivables

[Other than those included in (4) below]:

(a) Secured 33142.00 -

(b) Unsecured 29687.00 -

4 Break-up of Leased Assets and Stock on Hire and

hypothecation loans counting towards EL/HP activities:

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

(a) Financial Lease 824.06 -

(b) Operating Lease 7839.18 -

(ii) Stock on hire including hire charges under sundry debtors:

(a) Assets on Hire 2584.23 -

(b) Repossessed Assets 33.84

(iii) Hypothecation loans counting towards EL/HP activities:

(a) Loans where assets have been repossessed - -

(b) Loans other than (a) above - -

5 Break-up of Investments:

Current Investments

1. 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 - -





Rs. Lakh

Liabilities Side:


Outstanding Overdue




S-58

L&T FINANCE LIMITED

Long Term Investments:

1. Quoted

(i) Shares :

(a) Equity 2191.82 -

(b) Preference - -





2. Unquoted : - -(i) Shares :

(a) Equity - -

(b) Preference 4043.07 -



(iv) Government Securities 0.03 -

(v) Others (please specify) 0.01 -

6 Borrower group-wise classification of all leased assets,

stock-on-hire and loans and advances

(Rs. Lakh)

Category Amount net of provisions Secured Unsecured Total

1 . Related Part ies

(a) Subsidiaries - - -

(b) Companies in the same group - - -

(c) Other related parties - 8022.86 8022.86

2. Other than related parties 33142.00 32945.45 66087.45

Total 33142.00 40968.31 74110.31

7 Investor group-wise classification of all investments

(current and long term in shares and securities)

(both quoted and unquoted):

Rs. Lakh

Category Market Value/ Book Value

Break up or (Net of Provisions)

fair value or NAV

1. Related Part ies

a) Subsidiaries 550.00 550.00

b) Companies in the same group 3493.07 3493.07

c) Other related parties - -

2. Other than related parties 2191.86 2191.86

Total 6234.93 6234.93

Rs. Lakh

Assets Side:


Outstanding Overdue




S-59

L&T FINANCE LIMITED

8 Other i nformation

(i) Gross Non-Performing Assets

(a) Related parties -

(b) Other than related parties 192.83

(ii) Net Non-Performing Assets

(a) Related parties -

(b) Other than related parties 66.95

(iii) Assets acquired in satisfaction of debt 2502.79

T. Previous year figures have been regrouped/reclassified wherever necessary.

Amount

Rs. Lakh




S-60

L&T FINANCE LIMITED

U. Balance Sheet Abstract and Company’s General Business Profile

I . Registration DetailsRegistration No. 1 1 - 8 3 1 4 7 State Code 1 1

Balance Sheet Date 3 1 0 3 0 5

Date Month Year

II. Capital raised during the year (Amount in Rs. Thousands)

Note:

2,66,91,500 equity shares of Rs.10/- each fully paid up aggregating to Rs. 2,66,915.00 (Rs. in Thousands) issued for consideration otherwisethan in cash pursuant to the Scheme of Amalgamation approved by the High Court of Judicature at Bombay and the High Court of Judicatureat Madras.

Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)Total Liabilities Total Assets

8 5 3 2 5 1 4 8 5 3 2 5 1 4

Sources of Fund

Paid-up Capital Reserves & Surplus

8 6 6 9 1 5 4 7 2 7 4 5

Secured Loans Unsecured Loans

2 7 7 2 1 5 3 4 4 2 0 7 0 1

Application of Funds

Net Fixed Assets Investments

1 5 1 0 1 4 5 6 2 3 4 9 3

Net Current Assets Miscellaneous Expenditure

6 3 9 8 8 7 6 N I L

Accumulated Losses

N I L

IV. Performance of Company (Amount in Rs. Thousands)

Turnover Total Expenditure

1 1 0 0 4 7 9 8 3 9 3 6 0

Profit before tax Profit after tax

2 6 1 1 1 9 2 4 0 3 1 9

** Earning per Share in Rs. Dividend rate %

2 . 7 7 1 0 . 0 0

** Annualised

Item Code. N A(ITC Code)

Prodct Description L o a n s

L e a s i n g / H i r e P u r c h a s e

B i l l s D i s c o u n t i n g


}J.P. NAYAK


R. SHANKAR RAMAN


As per our report attached

SHARP & TANNAN A. N. MANIChartered Accountants Manager By the hand of

MILIND P. PHADKE V. C. RAJEPartner Vice President - Accounts &Membership No.33013 Company Secretary




L&TFinance05

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