1

Analysts Meet -May 2001

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Difficult Business Environment• Slowing Economy

• High fiscal deficits & limited government spending

• Investment Scenario not encouraging– Fewer opportunities

– Slower pace of investments in Power and infrastructure sectors

– Many core sector industries still afflicted by excess capacity

• Poor growth in capital goods and manufacturing sectors

• Many states affected by drought and sparse rains

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Highlights of FY 2001

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Good performance in a challenging environment

• Order Booking increases by 24%– Order backlog higher by 38%

• Sales increase at 5% subdued due to low opening order backlog

• Exports grow two-fold to Rs. 7.24 billion– Export of critical equipment Rs. 0.92 billion– Project Exports Rs. 3.7 billion– Cement/Clinker exports Rs. 2.09 billion

• Substantial improvement in Q4 performance– Cement division returns good performance on the back of

improved prices and operating efficiencies– E&C jobs cross threshold completion levels

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Engineering &Construction

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Major Orders Booked -Domestic

Various Road Jobs in Orissa, Tamil Nadu & Gujarat 10440

Delhi Metro 4300

445 MW Combined Cycle Power Plant at Konaseema, AP 4070

Modernisation Work at Delhi Vidyut Board from BHEL 2035

2nd Compressor Module, HRC Platform-ONGC 1736

Flyover at Calcutta 1760

Water Supply/Drainage jobs for Delhi Jal Board, Govt. of TN and Karnataka

2560

Rs.Millions

8

200 MW Gas based power plant at Salalah, Oman 6000

Hospital for Ministry of Health Services, Saudi Arabia - Thinet International

2410

168.1 MW Combined Cycle Power Project for AES Kelanitissa Pvt. Ltd., Sri Lanka

2400

Stadium Building for Govt. of Qatar 523

Major Orders Booked -OverseasRs.Millions

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FY 2001 FY 2000 % Change

Order Booking 72.01 53.83 34%

Sales 45.92 43.53 5%

Order Backlog 96.82 70.29 38%

PBDIT/Sales 11.7% 13.1%

Rs. Billions

E&C - Financial Performance FY 2001

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Cement

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Industry review

• 2% negative growth in consumption– Low infrastructural / development expenditure

– Severe drought conditions in certain states

– Gujarat earthquake

• Prices remained depressed till Nov’00

• Improvement in prices since Dec’00

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Divisional Performance - FY2001• Volume growth of 8%• Margins improved due to price improvement in the last

4 months and cost reduction measures during the year• Margins could have been better but for increase in

– Power & Fuel cost– Limestone royalty– Freight cost

• Continued efforts on operating efficiencies• Arakkonam Grinding Unit commissioned in Dec’00 • Grinding unit at Durgapur under construction, expected

to be commissioned by Dec’01

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Improving Power consumption

FY 99 FY 00 FY 01

ACW 110 105 105

HCW 103 99 92

GCW 83 81 81

APCW 110 88 85Av. for L&T 99 92 90NCCL 107 103 97

kwh/MT of OPC

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CementFinancial Performance FY 2001

FY2001 FY2000 % Change

Sales - Mio. Tons

Domestic 8.95 9.02 (0.8%)

Exports 2.36 1.49 58.4%

Total 11.31 10.51 7.6%

Sales - Rs. Billions. 21.94 19.35 13.4%

Net Realisation - Rs/Ton 1251 1110 12.7%

PBDIT/Sales 17.1% 12.5%

PBDIT/Sales(incl.Fis.benefits) 19.0% 15.9%

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Other Segments

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EBG Financial Performance FY 2001

FY2001 FY2000 % Change

Sales 7.01 6.29 11%

PBDIT/Sales 17.8% 21.1%

(Rs. Billions)

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Diversified Businesses Financial Performance FY 2001

(Rs. Billions)

FY 2001 FY 2000 % Change

Sales 3.39 5.07 (49.6%)

PBDIT/Sales 5.3% 12.7%

•Drop in Sales due to closure of Glass unit till July 2000, transfer of valves business to E&C and transfer of Pithampur unit to JV with Case

•Drop in margin due to closure of Glass unit - impact Rs. 9 crores

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L&T Infotech

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LTITL back on growth trajectory

• Year of consolidation and growth– Management team strengthened by drawing talents

from L&T• CMM SEI Level 4 obtained• 60 new customers added• Several new alliances established with

technology providers• Focus on domain offering

– Telecom, financial services, power and related utilities, health care, manufacturing

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LTITL

Rs. Billions

FY 2001 FY2000 % Change

Revenue 2.51 1.67 50%

PBT 0.42 0.16 163%

PAT 0.36 0.15 140%

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Summary Results FY 2001

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New Orders Booked

53.05

64.4276.88

81.46

104.27

0

20

40

60

80

100

120

Rs.Billions

1996-97 1997-98 1998-99 1999-00 2000-01

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Gross Revenues

53.8857.68

72.92 74.2478.25

0

10

20

30

40

50

60

70

80

Rs.Billions

1996-97 1997-98 1998-99 1999-00 2000-01

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Order Backlog

43.14

52.52 58.7

68.19

97.6

0

1020

3040

50

6070

8090

100

Rs.Billions

1996-97 1997-98 1998-99 1999-00 2000-01

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Segmentwise RevenueSegmentwise Revenue

Others7%Elect.

8%

Cement26% E&C

59%

FY 2001 FY 2000

Others4%Elect.

9%

Cement28% E&C

59%

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Performance Indicators – FY 2001

FY01 FY00 % ChangeOrder Booking 104.27 81.46 28%Sales 78.25 74.24 5%Other Income 2.09 1.75 19%Total Revenue 80.34 75.99 6%Cost of sales 70.21 66.03 6%Operating Margin 10.13 9.96 2%% to sales 12.9% 13.4%Interest 3.61 3.32 9%Depreciation 3.13 2.93 7%PBT 3.39 3.71Extra ord. 0 0.12Tax 0.24 0.41 (41%)PAT 3.15 3.42 (8%)

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Balance Sheet31-Mar-01 31-Mar-00

SHAREHOLDERS' FUNDSShare Capital 2.48 2.48Reserves 37.52 36.16Net Worth 40.00 38.64LOAN FUNDSSecured Loans 30.02 29.05Unsecured Loans 12.62 10.69TOTAL SOURCES 82.64 78.38Net Block incl. CWIP 46.71 45.89Investments 8.13 7.74Current Assets 53.36 47.26Less: Current Liab. 26.00 22.87NCA 27.36 24.39Misc. Expenditure 0.44 0.36TOTAL APPLICATION 82.64 78.38

Rs. Billion

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Prospects FY 2002

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Vivekananda Bridge, Calcutta 4250Jaipur-Kishangarh Road Project 3000Road packages-NHAI, State highways 4000Stadium Projects - Yemen, AbuDhabi, Kuwait 2700Rupsa Bridge, Bangladesh 1000Race Track at Calcutta 1000Water Supply Project, Oman 700

E&C Order Prospects

Rs.Million

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Indian Oil Corporation, Panipat/Mathura/Baroda 14000Power Plant in Gujarat 2500ONGC Platform Jobs 8000BPCL Hydrocracker unit / SRU 9000

ROSA Power 12260

E&C Order Prospects contd..

Rs.Million

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Outlook for Fiscal 2002 - E&C

• Environment continues to be tough with limited opportunities

• Current Order Backlog in excess of Rs. 95 bn

• Good order booking prospects in power, infrastructure and refinery segments

– Timing uncertain

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Outlook for Fiscal 2002 - Cement

• Volume growth of 8% expected. • Key demand drivers being

– Reconstruction work in Gujarat– Major concretising projects to be undertaken by

NHAI – Further fiscal benefits extended to the housing

sector

• Demand may get a further boost with– Good monsoon – Improved spending on infrastructure

• Price stability to continue in the medium term

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HR Thrust

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HR Challenges

• Challenge of attracting talent

• Attrition among the professionals, specially engineers

• Need to nurture and retain talent/special skills

• Need to identify and develop future Leaders

• Improve productivity

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Compensation Increases for young

talent

Compensation Increases for young

talent

MLPMLP

CompetenceBuilding

CompetenceBuilding

AssessmentCentres

AssessmentCentres

ExceptionalProfessionals

Very Good Performers &

Hot Skilled Employees

Very Good Performers &

Hot Skilled Employees

Career AvenuesMovement to

LTITL

Career AvenuesMovement to

LTITL

Multi-pronged strategy to Attract & Retain Talent

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40 MTs250 MLs

MANAGEMENT LEADERSHIP MANAGEMENT LEADERSHIP PROGRAMME (MLP)PROGRAMME (MLP)

Management Leaders

(Nurturing talent from within L&T)

Management Trainees

(Taking talent from outside & nurturing within L&T)

MTS & MLP

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Efforts Towards Globalisation

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Globalisation Strategy

• Pre–Qualification

• Quality Accreditation

• Country / Region Focus

• Exploit JV relationships

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Prequalification

• HED prequalified with– Refineries and oil & gas companies in Middle

East, Far East, South Africa, Venezuala, Brazil and USA

– International EPC contractors – Bechtel, Fluor Daniel, Chiyoda

• E&C prequalified with Petronas, Mobil, Amoco

• Construction group is well recognised in Middle East

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Quality Accreditation

• Quality certification obtained for export to China, UK and Europe

• Cement is manufactured to satisfy British and European standards

• ECC’s international operations are ISO 9001 certified

• Trained manpower conversant with quality standards of Australia, UK, Denmark, Germany and Canada

• LTITL operations are SEI CMM Level 4 certified

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Regional Focus

• Middle East• South East Asia covering ASEAN and SAARC

countries

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Cement Restructuring Update

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Cement Restructuring -Current Status

• Due diligence by potential candidates completed

• JV Agreements and other documents are under discussion with potential candidates

• Binding bids to be received after finalising the documents

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Thank You