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Contents Pages
Larsen & Toubro Infotech Limited S 2 - 7
Larsen & Toubro Infotech GmbH S 7 - 9
L&T Netcom Limited S 9 - 12
L&T Trade.com Limited S 12 - 15
L&T Transportation Infrastructure Limited S 15 - 18
L&T Western India Tollbridge Limited S 18 - 21
Narmada Infrastructure Construction Enterprise Limited S 21 - 25
Cyberpark Development & Construction Limited S 25 - 27
L&T Infocity Limited S 27 - 31
Andhra Pradesh Expositions Private Limited S 32 - 33
Hyderabad International Trade Expositions Limited S 34 - 37
L&T ECC Construction (M) SDN. BHD. S 38 - 40
Larsen & Toubro (Oman) LLC S 41 - 43
Larsen & Toubro International FZE S 43 - 43
L&T Cement Limited S 44 - 45
Dakshin Cements Limited S 45 - 46
Larsen & Toubro Ceylinco (Private) Limited S 47 - 49
L&T Finance Limited S 50 - 56
L&T Capital Company Limited S 57 - 60
L&T Holdings Limited S 61 - 64
L&T Equipment Leasing Company Limited S 65 - 68
India Infrastructure Developers Limited S 68 - 72
HPL Cogeneration Limited S 73 - 78
Tractor Engineers Limited S 79 - 84
Larsen & Toubro LLC S 85 - 86
LTM Limited S 86 - 88
Bhilai Power Supply Company Limited S 89 - 90
L&T Power Investments Private Limited S 91 - 92
Raykal Aluminium Company Private Limited S 93 - 94
LARSEN & TOUBRO LIMITEDANNEXURE TO DIRECTORS� REPORT 2002-2003
REPORTS AND ACCOUNTS - SUBSIDIARY COMPANIES
In service lies success
LARSEN & TOUBRO INFOTECH LIMITED
S-2
LARSEN & TOUBRO INFOTECH LIMITEDThe Directors have pleasure in submitting the Sixth Annual Report and Accounts of Larsen &Toubro Infotech Limited for the year ended 31st March, 2003.
FINANCIAL RESULTSRs. Million
2002-03 2001-02
Total Income 2577.19 2666.87Operating Profit (PBIDT) before provision for doubtfuldebts and amortisation of deferred revenue expenditure 395.03 607.62Less : Provision for doubtful debts (Net) 24.79 37.87Less : Amortisation of deferred revenue expenditure 29.46 -Operating Profit (PBIDT) 340.78 569.75Less : Interest 39.81 39.60Less : Depreciation and amortisation 161.76 126.27
Profit Before Taxes (PBT) 139.21 403.88Less : Provision for Current Tax 10.45 40.37Add/ Less: (Writeback) / further provision for earlier years (5.10) 5.07Less : Provision for Deferred Tax 1.31 1.39
Profit After Taxes (PAT) 132.55 357.05Add : Balance brought forward from previous year 133.72 95.80Add : Debenture Redemption Reserve written back - 75.00Balance available for disposal which Directors appropriateas follows : 266.27 527.85Dividends 75.00 225.00Tax on Dividend - 19.13Transfer to General Reserve 21.55 150.00Balance to be carried forward 169.72 133.72
DIVIDEND
The Directors have paid Interim dividend of Rs.2.50 per shareon 30,000,000 Equity Shares of Rs.5/- each 75.00 187.50The Directors do not recommend any final dividend. - 37.50
FINANCIAL PERFORMANCE
Total income from all sources was Rs. 2577.19 million (decrease of 3.4% over previous year).Software exports amounted to Rs. 2297.58 million (decrease of 6.4% over previous year).Operating profit (PBIDT) before provision for doubtful debts and amortisation of deferred revenueexenditure was Rs. 395.03 million (decrease of 35% over previous year). Profit before tax wasRs. 139.21 million (decrease of 65% over previous year) and Profit after tax was Rs. 132.55million (decrease of 63% over previous year). Earnings per share were Rs.4.42 per equityshare of Rs.5 each.
YEAR IN RETROSPECT
The year 2002-03 has witnessed the fallout of continuing slowdown in US and similar countrieswhich, coupled with increased competition, has driven the rate realisation by over 10% vis-à-vis last year’s rates.New opportunities have begun to surface as several US companies embark on large scaleoffshore outsourcing. In the initial phase of this new wave, companies with large base andmanpower bandwidth (upward of 5000 people) have been shown preference by the customers.Thus, while the export value figures from the country have increased, most of this additionalbusiness has gone to the few large outsourcing companies from India.
QUALITY INITIATIVES
During the year the Company achieved the SEI CMM Level 5 for all verticals and developmentcenters. With ISO 9001:2000 and SEI CMM Level 5 certifications, the Company has joined anelite band of high maturity software services organisations in the world. The processes andperformance metrics involved in the SEI Capability-Maturity Model are also under minute scrutinyfor continuous improvement using six sigma methodologies. In the first phase the processesinvolving services areas – with network services being the prime – are being addressed in thesix sigma methodology.
ORGANISATION
The Company has built several frameworks and proof of concepts to back up market forays inthe four declared verticals viz. Manufacturing, Utilities, Financial services and Telecom servicesas per the interim strategic plan vide McKinsey recommendations.The market for Indian IT companies, however, seems to be dominated by requirements fromERP and ERP extension implementations, upgrades and global rollouts on the one hand andcost cutting, offshore outsourcing on the other.In view of the above, the Company has not been able to deploy and earn from the verticaldefined businesses and has concentrated on the available market.
Substantial efforts have been made during the year on the focused skill building through thecreation of “pipelines” for meeting the demands of account managers, solution architects andglobal project leaders.The Company has been successful in positioning itself for certain large outsourcing dealsnotwithstanding the size handicap, primarily by leveraging its parentage of the L&T Group. Alsothe thrust on the ERP segments has been vastly increased to gear up for the anticipatedavailability of business during the next year. In view of this, the Company is confident ofsignificantly improving its performance in the next year.
CAPITAL EXPENDITURE
As at 31st March, 2003 the gross fixed assets stood at Rs 1224.07 million and the net fixedassets at Rs 711.87 million. Additions during the year amounted to Rs 344.63 million.
DEPOSITS
During the period under review, the Company has not accepted any deposits from the public.
SUBSIDIARY COMPANIES
As required by Section 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.
AUDITORS' REPORTThe Auditors’ Report to the Shareholders does not contain any qualifications. The notes to theaccounts referred to in the Auditors’ Report are self-explanatory and therefore do not call forany further comments of Directors.
DISCLOSURE OF PARTICULARS
Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earningsand outgo are given in Annexure ‘A’ forming part of this report.
PERSONNEL
The information required under Section 217(2A) of the Companies Act, 1956 & the rules madethereunder are given in a separate annexure to this Report and forms part of the Report. TheReport and the Accounts are being sent to the shareholders excluding the aforesaid annexure.Any shareholder interested in obtaining a copy of the said annexure may write to the CompanySecretary at the Registered office of the Company.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirm:(i) that in the preparation of the annual accounts, the applicable accounting standards have
been followed and there has been no material departure;(ii) that the selected accounting policies were applied consistently and the Directors made
judgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31,2003 and of the profit of theCompany for the year ended on that date;
(iii) that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) that the annual accounts have been prepared on a going concern basis.
DIRECTORS
Mr. J. P. Nayak retires from the Board of Directors by rotation and is eligible for re-appointment.
AUDIT COMMITTEE
The Audit Committee consists of three non executive directors. The present members of theCommittee are Mr. A.M. Naik, Mr. Y.M.Deosthalee and Mr. J.P.Nayak. Mr. Y.M.Deosthalee isthe Chairman of the Audit Committee.The role, terms of reference, the authority and power of Chairman are in conformity with therequirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors on theinternal control systems and internal audit report.
AUDITORS
The Auditors, M/s. Sharp & Tannan, hold office until the conclusion of the ensuring AnnualGeneral Meeting and are recommended for re-appointment. Certificate from the auditors hasbeen received to the effect that their re-appointment, if made, would be within the limits prescribedunder section 224 (1B) of the Companies Act, 1956.
ACKNOWLEDGEMENTS
The Directors acknowledge the invaluable support extended to the Company by the FinancialInstitutions, Bankers, Vendors, Suppliers and Customers. The Directors are pleased to placeon record their appreciation for the valuable contribution by the employees of the Company.
For and on behalf of the BoardA.M. NAIK Y.M. DEOSTHALEE
Mumbai Director Director20
th May, 2003
DIRECTORS' REPORT
A. Conservation of energy
(a) Since the Company is engaged in software development, it is not a major consumer of energy.
B. Technology absorption
(b) Efforts made in technology absorption as per Details furnished in Form B.Form B of the Annexure
C. Foreign exchange earnings and outgo
(c) Activities relating to exports; initiatives taken to The Company exports customised software and professional services mainly to North America, Western Europe, Japan,increase exports, development of new export Korea and Singapore. The Company plans to conduct road shows in USA to promote offshore execution of softwaremarkets for products and services; and export plans services from India. It also maintains constant contact with prospective customers for its offerings by way of participation in
International Trade Fairs.
(d) Total foreign exchange used and earned 2002-03 (Rs. Million)
Used 1240.01Earned 2310.38
ANNEXURE - AINFORMATION AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988
AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2003.
LARSEN & TOUBRO INFOTECH LIMITED
S-3
FORM B(Disclosure of particulars with respect to Technology Absorption)
Research and Development (R & D)
1. Specific areas in which R & D carried out by the Company
2. Benefits derived as a result of the above R & D
3. Future plan of action
4. Expenditure on R & Da) Capitalb) Recurringc) Totald) Total R&D expenditure as a percentage of total Turnover
Technology absorption, adaptation and innovation
1. Efforts in brief made towards technology absorption, adaptation : The Company operates Centres of Excellence in respect of emerging and existing technologies which collate,and innovation disseminate and spread knowledge to all employees in the Company. Employees are trained using state of the
art methodologies, which results in better productivity. The Company has created a software component libraryto ensure reusability of software and consistency in implementation. These find particular use in B2B marketplaceimplementations where adherence to standards and compatibility with different platforms is very important.
2. Benefits derived as a result of the above efforts : Repeat business, expansion into various new technology domains and productivity improvements through use oflatest software tools.
} Not Applicable
We have audited the attached Balance Sheet of Larsen & Toubro Infotech Limited as at 31st
March 2003 and also the Profit and Loss Account and the Cash Flow Statement for the yearended on that date, annexed thereto. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financial statementsbased on our audit.We conducted our audit in accordance with auditing standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatements. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.In accordance with the provisions of Section 227 of the Companies Act, 1956 we report that:i. we have obtained all the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;ii. in our opinion, proper books of account as required by law have been kept by the Company
so far as appears from our examination of those books;iii. the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this
report are in agreement with the books of account;iv. 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;
v. on the basis of written representations received from the Directors as on 31st March 2003,and taken on record by the Board of Directors, we report that none of the Directors isdisqualified as on 31st March 2003 from being appointed as a Director in terms of clause(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. in our opinion and to the best of our information and according to the explanations givento us, the said accounts give the information required by the Companies Act, 1956, in themanner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India;(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st
March 2003;(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date;
and(c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 dated7th September 1988, issued by the Central Government under Section 227(4A) of the CompaniesAct, 1956, we report as under:(1) The Company is maintaining proper records to show full particulars including quantitative
details and situation of fixed assets. The Company has formulated a programme of physicalverification of all the fixed assets, at reasonable intervals, which in our opinion is reasonable.Accordingly, the physical verification of the fixed assets has been carried out by themanagement during the year and no material discrepancies were noticed on suchverification.
(2) The fixed assets have not been revalued during the year.(3) The Company has not taken any loans, secured or unsecured, from companies, firms or
other parties listed in the register maintained under Section 301 and from companies
under the same management, as defined under sub-section (1B) of Section 370 of theCompanies Act, 1956.
(4) The Company has granted an unsecured loan to a company under the same management,as defined under sub-section (1B) of Section 370 of the Companies Act, 1956, the termsof which are not prima facie prejudicial to the interests of the Company.
(5) The parties to whom loans or advances in the nature of loans have been given arerepaying the principal amounts as stipulated and are also regular in payment of interest,where applicable.
(6) In our opinion and according to the information and explanations given to us, there is anadequate internal control procedure commensurate with the size of the Company and thenature of its business for the purchase of software, plant and machinery, furniture andother assets and for the sale of software packages.
(7) According to the information and explanations given to us, there are no transactions ofpurchase or sale of goods and services in pursuance of contracts or arrangementsentered in the register maintained under Section 301 of the Companies Act, 1956aggregating to Rs.50,000 or more in respect of each party.
(8) The Company has not accepted fixed deposits during the year from the public.(9) We are of the opinion that the Company has an internal audit system commensurate with
its size and the nature of its business.(10) Maintenance of cost records has not been prescribed under Section 209(1)(d) of the
Companies Act, 1956.(11) The Company has regularly deposited during the year Provident Fund dues with the
authorities.(12) According to the information and explanations given to us, there were no undisputed
amounts payable in respect of income tax, wealth tax, sales tax, customs duty whichwere outstanding as at 31st March 2003 for a period of more than six months from the datethey became payable.
(13) According to the information and explanations given to us and the records of the Companyexamined by us, no personal expenses have been charged to revenue account otherthan those payable under contractual obligations or in accordance with the generallyaccepted business practices.
(14) The Company is not a sick industrial company within the meaning of clause (o) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.
(15) In respect of its service activities, the Company has a reasonable system which providesfor a reasonable allocation of man-hours consumed to the relative jobs commensuratewith its size and nature of its business. In our opinion, there is a reasonable system ofauthorisation at proper levels and adequate system of internal control commensurate withthe size of the Company and the nature of its business on the allocation of man-hours tothe jobs.
(16) Clauses (iii), (iv), (v), (vi), (xii) and (xiv) of paragraph 4A and clause (ii) of paragraph 4Bof the aforesaid Order are not applicable during the year.
SHARP & TANNANChartered Accountants
by the hand of
R.D. KAREMumbai, 20th May, 2003 Partner
Auditors' report to the members of Larsen & Toubro Infotech Limited
Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary company:Name of the subsidiary company : Larsen & Toubro Infotech GmbHFinancial year of the subsidiary company ended on : 31/03/2003
Number of Shares in the subsidiary company held by Larsen & Toubro Infotech Limited at the above date 1The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Infotech Limited :(i) Dealt with in the accounts of Larsen & Toubro Infotech Limited amounted to:
(a) for the subsidiary’s financial year ended 31st March, 2003 Nil(b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Infotech Limited Euro 250,000
(ii) Not dealt with in the accounts of Larsen & Toubro Infotech Limited amounted to:(a) for the subsidiary’s financial year ended 31st March, 2003 Euro 78,727(b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Infotech Limited. Euro 143,605
Changes in the interest of Larsen & Toubro Infotech Limited between the end of the subsidiary’s financial year and 31st March 2003Number of shares acquired NilMaterial changes between the end of the subsidiary’s financial year and 31st March, 2003 Not applicable
V.K. MAGAPU A.M. NAIKMumbai Manager Y.M. DEOSTHALEEDate : 20
th May, 2003 S.S. PRABHUDESAI
Secretary
Directors}
LARSEN & TOUBRO INFOTECH LIMITED
S-4
Balance Sheet at 31 st March, 2003Schedules As at 31.03.2003 As at 31.03.2002
Rs. lacs Rs. lacsSOURCES OF FUNDSSHAREHOLDERS’ FUNDSShare capital A 1,500.00 1,500.00Reserves and surplus B 6,897.18 6,321.73
8,397.18 7,821.73LOAN FUNDSSecured loans C 7,056.50 4,175.60Unsecured loans D 1,760.77 -
8,817.27 4,175.60
TOTAL 17,214.45 11,997.33APPLICATION OF FUNDSFIXED ASSETS EGross block 12,240.75 8,794.39Less : Depreciation 5,122.09 3,511.81
Net block 7,118.66 5,282.58Capital work-in-progress 1,623.74 436.47
8,742.40 5,719.05INVESTMENTS F 46.41 11.41CURRENT ASSETS,LOANS ANDADVANCESSundry debtors G 7,191.24 5,703.78Cash and bank balances H 179.08 629.26Loans and advances I 3,565.20 2,812.38
10,935.52 9,145.42LESS : CURRENT LIABILITIES AND J
PROVISIONSCurrent liabilities 2,732.83 1,808.31Provisions 251.70 1,040.83
2,984.53 2,849.14Net current assets 7,950.99 6,296.28DEFERRED REVENUE EXPENDITURE K 517.18 -(To the extent not written off or adjusted)Deferred tax (see schedule P, note 12)Deferred tax asset 22.76 16.04Deferred tax liability (65.29) (45.45)
TOTAL 17,214.45 11,997.33SIGNIFICANT ACCOUNTING POLICIES PAND NOTES ON ACCOUNTS
Profit & Loss Account for the year ended 31 st March, 2003
Schedules 2002 - 03 2001-02Rs. lacs Rs. lacs
INCOMESoftware development services and productsOverseas 22,975.85 24,544.57Domestic 2,649.62 1,939.04Other income L 146.47 185.05
25,771.94 26,668.66EXPENDITURESoftware development expenses M 13,920.51 13,205.65Sales, administration and other expenses N 7,901.10 7,386.78
21,821.61 20,592.43
Operating profit before 3,950.33 6,076.23provision for doubtful debts and amortisationof deferred revenueProvision for doubtful debts (net) 247.93 378.72Amortisation of deferred revenue Expenditure 294.61 -
Operating profit (PBIDT) 3,407.79 5,697.51Interest O 398.10 395.95Depreciation and amortisation 1,617.65 1,262.73
Profit before tax (PBT) 1,392.04 4,038.83Provision for taxes(including Rs . 400,000 for wealth tax; 104.48 403.68previous year Rs.500,000)(Writeback)/further provision for tax earlier years (net) (51.00) 50.79Deferred tax 13.11 13.90
Profit after tax (PAT) 1,325.45 3,570.46Add : Balance brought forward from
previous year 1,337.25 958.04Add : Debenture redemption reserve written back - 750.00
Profit available for appropriation 2,662.70 5,278.50Less: Transfer to general reserve 215.52 1,500.00
Profit available for distribution 2,447.18 3,778.50Interim dividend 750.00 1,875.00Proposed dividend - 375.00Tax on dividend - 191.25
Balance to be carried forward 1,697.18 1,337.25
Basic and diluted earnings per equity share (EPS) 4.42 11.90Equivalent number of shares of Rs. 5 each 30,000,000 30,000,000SIGNIFICANT ACCOUNTING POLICIES PAND NOTES ON ACCOUNTS
Schedules forming part of AccountsAs at 31.03.2003 As at 31.03.2002
Rs. lacs Rs. lacs
SCHEDULE AShare capitalAuthorised : 3,00,00,000 Equity shares of Rs.5 each
(Previous year 3,00,00,000 of Rs. 5 each) 1,500.00 1,500.00Issued and Subscribed3,00,00,000 Equity Shares for Rs. 5 each 1,500.00 1,500.00(Previous year 3,00,00,000 of Rs. 5 each)
Paid up3,00,00,000 Equity Shares for Rs. 5 each 1,500.00 1,500.00(Previous year 3,00,00,000 of Rs. 5 each)
All the above Equity shares (Same as previous year)are held by Larsen and Toubro Limited, the holding
Company 1,500.00 1,500.00
SCHEDULE BReserves and surplusDebenture redemption reserve
As per last Balance Sheet 750.00Less : Transferred to profit and loss account - 750.00
As at 31.03.2003 As at 31.03.2002Rs. Lacs Rs. Lacs
General reserve
As per last Balance Sheet 4,984.48 3,500.00Less : Accumulated net deferred tax liability
as on 1 April’ 2001 - (15.52)Add : Transferred from profit and loss account 215.52 1,500.00
5,200.00 4,984.48Profit and loss account 1,697.18 1,337.25
6,897.18 6,321.73SCHEDULE CSecured loansLoans from banks 7,056.50 4,175.60
7,056.50 4,175.60SCHEDULE DUnsecured loansInter corporate borrowings (from holding company) 1,700.00 -Lease finance (due with in one year Rs. 2,183,038) 60.77 -
1,760.77 -
As per our report attachedSHARP & TANNAN V.K. MAGAPU A.M. NAIKChartered Accountants Manager Y.M. DEOSTHALEEBy the hand ofR.D. KARE S.S. PRABHUDESAIPartner Secretary
Mumbai,Date : 20th May, 2003
Directors}As per our report attachedSHARP & TANNAN V.K. MAGAPU A.M. NAIKChartered Accountants Manager Y.M. DEOSTHALEEBy the hand ofR.D. KARE S.S. PRABHUDESAIPartner Secretary
Mumbai,Date : 20th May, 2003
Directors}
LARSEN & TOUBRO INFOTECH LIMITED
S-5
SCHEDULE - EFixed Assets
Gross Block Depreciation/Amortisation Net Block (Rs.)
Fixed and Intangible Assets As at Additions Deductions As at As at For the Deductions Up to As at As at1-Apr-2002 31-Mar-2003 1-Apr-2002 Year 31-Mar-2003 31-Mar-2003 31-Mar-2002
Owned AssetsIntangible Assets- Business rights - 980.50 - 980.50 - 49.03 - 49.03 931.47 -Leasehold land 122.69 - - 122.69 9.57 1.29 - 10.86 111.83 113.12Buildings 1,604.14 122.09 - 1,726.22 196.15 66.97 - 263.13 1,463.09 1,407.99Plant and machinery 534.78 62.34 - 597.12 493.35 22.78 - 516.12 81.00 41.44Computers 2,587.33 507.64 4.94 3,090.03 1,484.79 542.78 1.70 2,025.87 1,064.16 1,102.54Software 1,325.07 855.83 0.20 2,180.69 420.74 495.99 0.02 916.71 1,263.98 904.33Furniture and fixtures 2,219.63 626.25 0.07 2,845.81 847.10 351.15 0.01 1,198.24 1,647.57 1,372.53Vehicles 400.76 255.31 33.02 623.04 60.13 73.28 5.66 127.75 495.29 340.63
Sub Total (A) 8,794.39 3,409.96 38.23 12,166.10 3,511.83 1,603.27 7.39 5,107.71 7,058.39 5,282.58
Leased AssetsComputers - 74.65 - 74.65 14.38 - 14.38 60.27 -
Sub Total (B) - 74.65 - 74.65 - 14.38 - 14.38 60.27 -
Grand Total (A+B) 8,794.39 3,484.61 38.23 12,240.75 3,511.83 1,617.65 7.39 5,122.09 7,118.66 5,282.58
Previous Year 6,521.88 2,627.27 354.76 8,794.39 2,571.32 1,262.73 322.23 3,511.83
Add: Capital work-in-progress 1,566.52 363.37
Add: Advances pending capitalisation 57.22 73.11
8,742.40 5,719.05
SCHEDULES FORMING PART OF ACCOUNTS
As at 31.03.2003 As at 31.03.2002Rs. Lacs Rs. Lacs
SCHEDULE FInvestments (at cost,unquoted)Long term investment1, fully paid equity share of Euro 25,000/- in 11.41 11.41L&T Infotech GmbH, wholly owned subsidiaryCurrent investmentsIDBI Principal Cash Management Fund - Money at call option 35.00 -Details of investments purchased and sold during the year :(46,090,471.95 units of Rs. 10 each subscribed;Cost Rs. 460,904,720)(46,574,471.95 units of Rs. 10 each sold;Sale value Rs. 465,744,720)
46.41 11.41SCHEDULE GSundry debtorsUnsecuredDebts outstanding for a period exceeding six monthsConsidered good 756.49 741.20Considered doubtful 789.55 541.62
1,546.04 1,282.82Other DebtsConsidered good
- Due from subsidiary 145.92 -- Others 6,288.83 4,962.58
Considered doubtfulLess : Provision for doubtful debts 789.55 541.62
7,191.24 5,703.78SCHEDULE HCash and bank balancesCash on hand 3.15 7.00Balances with scheduled banksin current accounts (including remittances in transit) 175.93 622.26
179.08 629.26SCHEDULE ILoans and advancesSecured :
Loans against mortgage of house property 82.22 50.16Unsecured :
Unbilled revenues 117.25 46.00Due from subsidiary company 48.80 48.80Dividend due from subsidiary company - 149.17Advances recoverable in cash or in kind 3,316.93 2,518.25
3,565.20 2,812.38SCHEDULE JCurrent Liabilities and provisionsSundry creditors 1,476.91 1,364.00Due to subsidiary company - 21.35Due to holding company 1,255.42 420.69Due to directors 0.50 1.05Interest accrued but not due on loans - 1.22
(Rs. lacs)
Note : Additions during the year include:Rs. 2,700,000 being borrowing costs capitalised in accordance with Accounting Standard -16 “Borrowing Costs” issued by the Institute of Chartered Accountants of IndiaRs. 34,813 (net) being exchange difference
As at 31.03.2003 As at 31.03.2002SCHEDULE J (contd.) Rs. Lacs Rs. LacsProvisionsTaxes 104.48 403.68Proposed dividend - 375.00Tax on dividend - 99.45Leave encashment 147.22 162.70
2,984.53 2,849.14SCHEDULE KDeferred Revenue Expenditure(To the extent not written off or adjusted)Restructuring expenses 257.52 -Expenses for SEI CMM Level 5 259.66 -
517.18 -
2002-03 2001-02Rs. Lacs Rs. Lacs
SCHEDULE LOther incomeDividend from subsidiary company 119.67 149.17Income from other investments 4.38 0.78Profit/(loss) on sale of fixed assets (1.23) 26.64Provision no longer required 15.48 5.17Other receipts 8.17 3.29
146.47 185.05SCHEDULE MSoftware development expensesSalaries including overseas staff expenses 11,182.87 11,120.09Staff welfare 754.73 757.13Contribution to provident and other funds 238.69 229.11Contribution to superannuation fund 97.88 36.61Contribution to gratuity fund 24.63 2.01Communication expenses 305.13 351.04Consultancy charges 734.00 139.54Cost of software packages
for own use 240.63 164.61for resale 341.95 405.51
13,920.51 13,205.65SCHEDULE NSales, Administration and other expensesSalaries including overseas staff expenses 2,265.31 2,028.60Travelling and conveyance 1,298.50 1,095.00Rent 683.72 538.81Telephone charges and postage 472.01 468.59Legal and professional charges 978.57 898.76Printing and stationery 182.12 124.59Advertisement 140.66 208.28Repairs to building 25.92 21.99Repairs to computers 85.34 123.67General repairs and maintenance 267.70 248.21Power and fuel 240.69 226.22Establishment expenses 288.44 398.42Insurance charges 65.21 117.02Rates and taxes 554.78 441.75
LARSEN & TOUBRO INFOTECH LIMITED
S-6
10. Income taxProvision for income tax for the current year is based on the taxable profits for the year afterconsidering tax exemptions / allowances.Deferred tax is recognised subject to the consideration of prudence in respect of deferred taxasset, on timing differences being the differences between taxable income and accountingincome that originate in one period and are capable of reversal in one or more subsequentperiods.
Notes forming part of Accounts1. Contingent liabilities:
Bank guarantees outstanding as at 31st March, 2003 amounted to Rs. 598.43 lacs (previousyear Rs. 205.01 lacs)
2. The net exchange loss arising on foreign currency transactions amounting to Rs. 10.95 lacs(previous year gain of Rs. 209.33 lacs) has been accounted under respective revenue heads.
3. The Company is mainly engaged in the business of software development. This is not capableof being expressed in the form of generic units. Hence it is not possible to give quantitativedetails and information required under Paragraphs 3, 4c of part II of Schedule VI of theCompanies Act, 1956.
4. The secured loans from banks are secured against hypothecation of the Company’s movableassets and export receivables.
5. Expenditure in foreign currency : Rs. Lacs2002-03 2001-02
Overseas staff costs 8,260.63 8,156.27Foreign travel 340.55 285.72Agency commission 82.39 135.64Interest 28.73 34.74Others (includes overseas office expenses ) 2,928.13 1875.82Total 11,640.43 10488.19
6. Earnings in foreign currency :Software exports 22975.85 24544.56Interest income 8.25 16.99Dividend income 119.67 149.17Total 23,103.77 24710.72
7. Manager’s remuneration includes :Salary 27.54 17.31Perquisites 4.98 3.45Retirement benefits 1.62 1.68Total 34.14 22.44The above figures do not include contribution to gratuity fund, pension scheme and leaveencashment benefit.
8. Auditors’ remuneration (excluding service tax) and expenses charged to the accounts include :Audit fees 4.00 3.00Tax audit fees 1.50 1.00Certification fees 1.02 0.21Reimbursement of expenses - 0.03Total 6.52 4.24
9. Value of imports on C.I.F. basis :Capital goods 740.24 613.71Others 19.50 -Total 759.74 613.71
10. Estimated amount of contracts remaining to be executed on capital account (net of advances)and not provided for: Rs. 190.86 lacs (previous year: Rs. 246.85 lacs)
11. During the year the rate of depreciation for plant and machinery and servers was changed from30% to 20% and 25% respectively, to bring them in line with the expected useful life of theassets. As a result, the depreciation for the year is lower by Rs. 39.25 lacs and the profit forthe year is higher by the same amount.
12. The break-up of net deferred tax liability as at March 31, 2003 is as under :Rs. Lacs
Deferred tax Current year Deferred tax asset/asset/(liability) as (charge) / (liability) as at
at March 31st, 2002 credit March 31st, 2003Deferred tax liabilities● Depreciation / amortisation (45.45) (2.88) (48.34)● Amortisation of tangible assets - (2.11) (2.11)● Miscellaneous expenditure
(to the extent not written off oradjusted) - (14.84) (14.84)
● Total (45.45) (19.83) (65.29)Deferred tax asset● Provision for doubtful debts 15.92 6.74 22.66● Others 0.11 (0.02) 0.10● Total 16.04 6.72 22.76Net deferred tax liability (29.41) (13.11) (42.53)
13. Related party disclosure:The related parties with whom the Company had transactions during the year are :Name RelationshipLarsen & Toubro Limited Holding companyLarsen & Toubro Infotech GmbH 100% subsidiaryTractor Engineers Limited Fellow subsidiaryL&T Finance Limited Fellow subsidiaryL&T Trade.Com Limited Fellow subsidiaryL&T Netcom Limited Fellow subsidiaryA summary of transactions with related parties is given below: Rs. lacsTransaction Holding Co. Subsidiary Fellow Subsidiary● Sale of services 1469.20 1015.71 14.00
(984.44) (1343.29) (61.33)● Purchase / lease of assets - - 1055.15
(-) (-) (227.70)● Overheads charged by 1481.83 - -
(714.77) (-) (40.11)● Overheads charged to 50.75 - 27.44
(-) (-) (-)● Deputation charges paid - - -
(165.97) (-) (7.46)● Deputation charges received - - -
(10.58) (-) (3.09)● Lease rent paid - - 82.52
(-) (-) (132.20)● Interest / Dividend received 0.12 119.67 -
(1.97) (149.17) (-)● Interest / Dividend paid 831.55 - 4.68
(2269.62) (-) (-)● Loans received 1700.00 - -
(-) (-) (-)● Trade receivable 834.09 194.72 30.54
● Trade payable 2089.51 - 164.24
Outstanding balance as on 31.3.02 (-) 420.68 176.62 (-) 10.00Figures in brackets pertain to the previous yearNo amounts were written off / provided or written back in respect of related party transactionsduring the year.
2002-03 2001-02SCHEDULE N (contd..) Rs. Lacs Rs. Lacs
Auditors’ remuneration 6.79 4.45Bad debts - 18.26Commission charges 66.80 151.94Books and periodicals 65.34 79.43Entertainment 59.40 55.10Directors fees 0.50 1.05Miscellaneous expenses 153.30 136.64
7,901.10 7,386.78SCHEDULE OInterest paid on
Fixed loans 65.04 162.78On others 292.73 148.36
Lease finance charges 133.66 140.07Less : Interest received (Tax deducted at source Rs . 28,089 93.33 55.26previous year Rs 657,032)
398.10 395.95SCHEDULE PSignificant Accounting Policies1. Basis of accounting
The Company maintains its accounts on accrual basis following the historical cost conventionin accordance with generally accepted accounting principles (“GAAP”) and in compliance withthe Accounting Standards referred to in Section 211(3C) and other requirements of theCompanies Act, 1956.The preparation of financial statements in confirmity with GAAP requires the management ofthe Company to make estimates and assumptions that affect the income and expense reportedfor the period and assets and liabilities reported as of the date of the financial statements.Examples of such estimates include the useful lives of the fixed assets, provision for doubtfuldebts, future obligations in respect of retirement benefit plans, etc. Actual results could varyfrom these estimates.
2. Revenue recognitionRevenue earned from services provided on “time and material” basis is recognised based onsoftware developed or time spent in person hours or person weeks and billed to customers asper the terms of specific contracts.Revenue from services performed on “fixed-price” basis is recognised using the percentageof completion method. Unbilled revenue represents value of services performed in accordancewith the contract terms but not billed.Revenue on sale of software packages is accounted on despatch to customers.Overseas sales includes indirect taxes (wherever applicable).
3. Retirement benefitsContribution to Provident and Super-annuation Funds are accounted on actual liability basis.Provision for Leave Encashment benefit on retirement is made on the basis of actuarialvaluation. Gratuity contribution is made to the group gratuity scheme of the Life InsuranceCorporation of India.
4. Fixed AssetsFixed Assets are stated at cost less depreciation.Computer software developed in-house is capitalised at cost.
5. Leases(a) Lease transactions entered into prior to April 1, 2001:
The lease rentals in respect of such assets are charged to the profit and loss account.(b) Lease transactions entered into on or after April 1, 2001:
Assets acquired under leases where the Company has substantially all the risks andrewards of ownership are classified as finance leases. Such assets are capitalised at theinception of the lease at the lower of the fair value and the present value of minimum leasepayments and a liability is created for an equivalent amount. Each lease rental is allocatedbetween the liability and the interest cost, so as to obtain a constant periodic rate ofinterest on the outstanding liability for each period.
6. Depreciation(a) Owned assets
Depreciation on all assets is calculated using straight line method at rates prescribed byschedule XIV to the Companies Act, 1956, except for the following:● Intangible assets
Intangible assets are amortised on straight line basis over a period of five years.● Leasehold land amortised over the residual
period of the lease● Plant and machinery 20%● Computers 30%● Servers 25%● Furniture and fixtures 10%● Office equipments 20%● Computer software 33.33%● Motor cars (see note 11) 14.14%
(b) Leased assetsAssets acquired under finance leases are depreciated at the rates applicable to similarassets owned by the Company as there is reasonable certainty that the Company shallobtain ownership of the assets at the end of the lease term.
Depreciation on additions / deductions is calculated pro-rata from / to the month of additions/ deductions.
7. Borrowing costBorrowing cost that are attributable to the acquisition and construction of qualifying assets arecapitalised as part of cost of such assets till such time as the asset is ready for its use. Aqualifying asset is one that requires a substantial period of time to get ready for its intended use.All other borrowing costs are recognised as an expense in the period in which they areincurred.
8. Deferred revenue expenditureThe expenses disclosed under Miscellaneous Expenditure are amortised as follows:(a) Restructuring expenses over a period of two years(b) Expenses incurred for obtaining SEI CMM Level 5 certification are amortised over a
period of two years from completion of the exercise.9. Foreign currency transactions
Foreign currency transactions are recorded at the rates prevailing on the date of thetransaction.Translation of foreign currency transaction of overseas branches is as under:● revenue items at the average rate for the period;● fixed assets and investments at the rates prevailing on the date of the transaction; and● other assets and liabilities at year end rates.Exchange difference on settlement / year end conversion is adjusted to:● cost of fixed assets, if foreign currency liability pertains to fixed assets; and● profit and loss account in other cases.Profit or loss on forward contracts is accounted over the period of the contract.
LARSEN & TOUBRO INFOTECH LIMITED
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14. LeaseIn accordance with Accounting Standard 19 “Leases” issued by the Institute of CharteredAccountants of India, the assets acquired under finance leases on or after April 1, 2001 arecapitalised and a loan liability is recognised for an equivalent amount. Consequently depreciationis provided on such leases. Lease rentals paid are allocated to the liability and the interestcharged to profit and loss account.Consequently, the gross block of fixed assets is higher by Rs. 74,64,767, depreciation for theyear is higher by Rs. 14,38,128 and charge to profit and loss account in respect of lease rentalsis lower by Rs. 18,56,044, interest expense is higher by Rs. 4,68,012 and the profit is lower byRs. 50,096.Assets acquired on finance lease comprise of servers. The minimum lease rentals and theirpresent value as at March 31, 2003 in respect of assets acquired under finance lease are asfollows : Rs. lacsMinimum lease payments
- Payable not later than 1 year 27.54- Payable after 1 year but not later than 5 years 43.63- Total 71.17
Less : future finance charges 10.4060.77
Present value of minimum lease payments- Payable not later than 1 year 21.83- Payable after 1 year but not later than 5 years 38.94- Total 60.77
15. Segmental reportingSegmental reporting of revenues for the company is on the basis of the geographical locationof the customers and is as under:
Rs. lacsUSA Europe Asia Pacific India Rest of the World Total
Revenue 13203.23 5287.94 4448.44 2649.62 36.24 25625.47(14509.27) (5006.15) (5006.87) (1939.04) (22.26) (26483.59)
Fixed assets used and liabilities contracted for performing the Company’s business have notbeen identified to any of the above reported segments as the fixed assets and services areused interchangeably among segments.
16. Based on the information and records available with the Company, there are no amountspayable to small scale undertakings due for more than 30 days as at March 31, 2003.
17. Salaries (including overseas staff expenses) is net of Rs. 85.31 Lac on account of write backof excess charge of prior years.
18. Previous year’s figures have been regrouped wherever necessary to conform to classificationsof the current year.
Cash Flow Statement for the year ended 31 st March, 20032002-03 2001-02Rs. lacs Rs. lacs
A Cash flow from operating activities :Net profit before tax 1,392.06 4,038.83Adjustments for :Depreciation 1,617.65 1,262.73Interest paid 398.09 395.96Unrealised foreign exchange difference 55.71 (121.32)Dividend received from subsidiary company (119.67) (149.17)Income from other investments (4.38) (0.78)Deferred revenue expenditure amortised 294.61 -Deferred revenue expenditure (811.79) -(Profit)/loss on sale of fixed assets 1.23 (26.64)Operating profit before working capital changes 2,823.51 5,399.61Changes in working capital(Increase)/decrease in trade receivables (1,543.18) 65.53(Increase)/decrease in other receivables (1,228.52) (300.17)(Increase)/decrease in inventories - 1.98Increase/(decrease) in trade payables 900.18 (331.81)(Increase)/decrease in working capital (1,871.51) (564.47)Cash generated from operations 952.00 4,835.14Direct taxes paid (3.00) (635.12)Net cash from operating activities 949.00 4,200.02
B Cash flow from investing activities :Purchase of fixed assets (4,671.86) (2,835.61)Sale of fixed assets 29.63 59.17Investments (35.00) -Interest received 70.54 55.26Dividend received from subsidiary 268.84 -Dividend received from other investments 4.04 0.78Net cash from investing activities (4,333.81) (2,720.40)
C Cash flow from financing activities :Proceeds from other borrowings (net) 2,941.66 609.40Inter corporate borrowings 1,700.00 -Financial expenses (482.56) (554.07)Dividend paid (1,125.00) (2,625.00)Dividend tax paid (99.45) (168.30)Net cash from financing activities 2,934.65 (2,737.97)Net (decrease)/increase in cash and cash equivalents (A+B+C)(450.16) (1,258.35)Cash and cash equivalents at the beginning of the year 629.25 1,887.63Cash and cash equivalents at the end of the year 179.09 629.25
As per our report attachedSHARP & TANNAN V.K. MAGAPU A.M. NAIKChartered Accountants Manager Y.M. DEOSTHALEEBy the hand ofR.D. KARE S.S. PRABHUDESAIPartner Secretary
Mumbai,Date : 20th May, 2003
Directors}
19. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details:
State Code
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Net Current Assets
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Miscellaneous Expenditure
1 1 1 0 4 6 9 3
3 1 0 3 2 0 0 3
1 1
N I L
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
Secured Loans
N I L
N I L
1 7 2 1 4 4 5
Net Fixed Assets
Registration No.
Balance Sheet Date
Accumulated Losses
Turnover (incl. other income) Total ExpenditureIV. Performance of Company (Amount in Rs. Thousands)
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Dividend Rate %Earnings per share of Rs. 5
1 3 2 5 4 6
1 7 2 1 4 4 5
1 5 0 0 0 0 6 8 9 7 1 9
1 7 6 0 7 77 0 5 6 4 9
8 7 4 2 4 0
7 9 5 0 9 9
2 5 7 7 1 9 5 2 4 3 7 9 8 9+ -
ü
V. Generic Names of Three Principal Products/Services of the Company (As permonetary items)Item Code No.
N . A
Product Description
N I L
5 0
S O F T W A R E
Deferred Tax
4 2 5 3
4 6 4 1
5 1 7 1 8
+ -
ü
+ -ü
1 3 9 2 0 6
R S 4 P 4 2
D E V E L O P M E N T
As per our report attachedSHARP & TANNAN V.K. MAGAPU A.M. NAIKChartered Accountants Manager Y.M. DEOSTHALEEBy the hand ofR.D. KARE S.S. PRABHUDESAIPartner Secretary
Mumbai,Date : 20th May, 2003
Directors}
Notes:1. Cash flow has been prepared under the indirect method as set out in the Accounting
Standard - 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 year3. Previous year’s figures have been regrouped /reclassified wherever applicable
LARSEN & TOUBRO INFOTECH GmbHLARSEN & TOUBRO INFOTECH GmbHDIRECTORS' REPORT
The Directors have pleasure in presenting the Fourth Annual report and the audited accounts of theCompany for the year ended 31st March, 2003.Financial Results 2002-03 2001-02
Euros EurosTotal Income 4,761,055 6,712,565Profit before tax 130,838 550,305Profit after tax 78,727 332,064Review of OperationsThe Company registered total income of Euro 4.77 Million and profit after tax of Euro 0.08 Million.The global slowdown with its effect on IT spending and the pressure on billing rates has adverselyaffected the performance during the year. However, with a better thrust on focused offerings wehope to improve the performance in the coming year.DividendIn order to conserve the resources of the Company, the Directors do not recommend dividend forthe current year.
DirectorsDuring the year under review, Mr. Aloke Palsikar ceased to be the Director of the Company. TheBoard places on record its sincere appreciation of the valuable contribution made by him. Mr. VinayRajadhyaksha has been appointed as Director in place of Mr. Aloke Palsikar.AuditorsDuring the year under review, pursuant to the notice received from the Member of the Company,the auditor Mr.Viktor Finkler was replaced by M/s Grant Thornton ADVIDATA AG.M/s GrantThornton ADVIDATA AG have indicated their willingness for re-appointment.
For and on behalf of the Board,
RAJGOPALAN VENKATESH VINAY RAJADHYAKSHADirector Director
Leipzig16th May, 2003
LARSEN & TOUBRO INFOTECH GmbH
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AUDITORS' REPORTAuditor’s report to the ShareholdersWe have audited the financial statements including the accounting system for Larsen & ToubroInfotech GmbH for the fiscal year from 1st April, 2002 to 31st March, 2003. The legal representativesof the Company are responsible for the accounting system and preparation of the financial statementsin compliance with the German Commercial law and the supplementary regulations in the articlesof incorporation. Our responsibility is to express an opinion, based on our audit, on the financialstatements, including the accounting system.We conducted our audit of the financial statements in accordance with Sec.317 of the GermanCommercial Code and in compliance with the generally accepted auditing principles for the audit offinancial statements issued by the German Institute of Auditors (IDW). Those standards requirethat we plan and perform the audit to obtain reasonable assurance that inaccuracy and violationsare recognized which significantly affect the presentation of the net worth, financial position andresults of operations as conveyed by the financial statements, in compliance with generally acceptedaccounting principles. The scope of the audit was planned taking into account our understanding ofbusiness operations, the Company‘s economic and legal environment, and any potential errorsanticipated. In the course of the audit, the effectiveness of the system of internal accountingcontrols was assessed, and the disclosures made in the books and records, financial statements
and management report were verified, mainly on a test basis. The audit also includes assessingthe accounting principles used and significant estimates made by the legal representatives, as wellas evaluating the overall presentation of the financial statements. We believe that our audit providesa reasonable basis of our opinion.The financial statements present a true and fair view of the Company’s networth, financial positionand results of operations in accordance with the generally accepted accounting principles exceptfor the following:-The Company has invested an amount of Euro 113495 in Panhealth Inc., USA. We have beeninformed that this investment is in the nature of long term strategic investment. In the absence ofrecent financial information regarding Panhealth, we are unable to comment on the current value ofthis investment.The above audit report as of 31st March, 2003 is in compliance with the legal requirements and therelevant reporting principles (IDW PS 450 des Instituts der Wirtschaftsprafer).
Wiesbaden, Grant Thornton ADVIDATA AG16th May, 2003
Balance Sheet as at 31 st March, 2003As at 31-03-2003 As at 31-03-2002
Sche- EUR INR EUR INRdules (in'000) (in Lacs) (in'000) (in Lacs)
SOURCES OF FUNDSSHAREHOLDERS' FUNDSShare Capital A 25.00 11.41 25.00 10.66Capital contribution -Reserves and Surplus B 222.34 124.69 143.60 61.60
247.34 136.10 168.60 72.26LOAN FUNDSUnsecured loans C 110.00 48.79 110.00 46.89
110.00 48.79 110.00 46.89TOTAL 357.34 184.89 278.60 119.15APPLICATION OF FUNDSFixed Assets DGross Block 16.45 8.51 15.78 6.73Less: Depreciation 11.93 6.17 8.68 3.70Net Block 4.52 2.34 7.10 3.03InvestmentsPan Health, U.S.A. E 113.49 58.72 113.49 48.37
113.49 58.72 113.49 48.37Current assets, loans and advancesSundry debtors F 688.58 356.29 977.12 416.45Cash and bank balances G 316.46 163.74 545.09 232.32Loans and advances H 22.51 11.65 12.15 5.18
1,027.55 531.68 1,534.36 653.95Less: Current liabilities and provisionsLiabilities I 422.55 218.64 486.57 207.38Provisions J 365.67 189.21 889.78 378.82
788.22 407.85 1,376.35 586.20Net current assets 239.33 123.83 158.01 67.75TOTAL 357.34 184.89 278.60 119.15SIGNIFICANT ACCOUNTING POLICIES OAND NOTES ON ACCOUNTS
Profit & Loss Account for the year ended 31 st March, 20032002-03 2001-02
Sche- EUR INR EUR INRdules (in’000) (in Lacs) (in’000) (in Lacs)
INCOMESoftware development servicesand productsOverseas 331.09 160.45 716.66 304.29Domestic* 4,249.76 2,059.43 5,995.20 2,545.56Increase of Work-in-progress 171.76 83.24 — —Other income K 8.45 11.56 0.71 1.81
4,761.06 2,314.68 6,712.57 2,851.66EXPENDITURESoftware development expenses L 3,635.72 1,744.40 4,824.04 2,048.29Sales, administration and otherexpenses M 990.22 479.86 1,332.70 565.86
4,625.94 2,224.26 6,156.74 2,614.15Operating profit (PBIDT) 135.12 90.41 555.82 237.51Interest 1.03 0.50 1.67 0.71Depreciation 3.25 1.57 3.85 1.64Profit before tax 130.84 88.34 550.30 235.16Taxes on income N 52.11 25.25 218.24 92.67Profit after tax 78.73 63.09 332.06 142.49Add: Balance brought forward fromprevious year 143.60 61.60 61.54 25.26Profit available for appropriation 222.33 124.69 393.60 167.75Less: Transferred to General Reserve — — — —Profit available for distribution 222.33 124.69 393.60 167.75Dividend — — 250.00 106.15Interim — — — —Final (proposed) — — — —Additional Tax on dividend — — — —Balance carried to Balance Sheet 222.33 124.69 143.60 61.60SIGNIFICANT ACCOUNTING POLICIES OAND NOTES ON ACCOUNTS
Schedules forming part of accountsAs at 31-03-2003 As at 31-03-2002EUR INR EUR INR
(in'000) (in Lacs) (in'000) (in Lacs)SCHEDULE AShare CapitalAuthorised: 1 equity share of EUR 25.000 each 25.00 11.41 25.00 10.66Issued and Subscribed25.000 (Previous year -) Equity Shares 25.00 11.41 25.00 10.66Paid up25.000 (Previous year -) Equity Shares 25.00 11.41 25.00 10.66Called up25.000 (Previous year -) Equity SharesAll the above Equity shares are heldby Larsen & Toubro Infotech Ltd. 25.00 11.41 25.00 10.66
25.00 11.41 25.00 10.66
For Grant Thornton ADVIDATA AGA. GROB P. BRITZPartner Partner
Place : Wiesbaden Place : LeipzigDate : 16th May, 2003 Date : 16th May, 2003
Directors}RAJAGOPLAN VENKATESHVINAY RAJADHYAKSHA
For Grant Thornton ADVIDATA AGA. GROB P. BRITZPartner Partner
Place : Wiesbaden Place : LeipzigDate : 16th May, 2003 Date : 16th May, 2003
Directors}RAJAGOPLAN VENKATESHVINAY RAJADHYAKSHA
SCHEDULE BReserves and surplusGeneral Reserve as per last Balance Sheet - 0.00 0.00 0.00Add: Transferred from Profit and Loss Acccount - 0.00 0.00 0.00
- 0.00 0.00 0.00Profit & Loss Account 222.34 124.69 143.60 61.60
222.34 124.69 143.60 61.60SCHEDULE CUnsecured LoansLoan from Larsen & Toubro Infotech Limited,the holding company 110.00 48.79 110.00 46.89
110.00 48.79 110.00 46.89
As at 31-03-2003 As at 31-03-2002EUR INR EUR INR
(in'000) (in Lacs) (in'000) (in Lacs)
SCHEDULE DFixed Assets
Currency Gross Block Depreciation Net Block
Assets WDV as at Additions during Cost as at As at For the year As at As at1-Apr-2002 the year 31-Mar-2003 1-Apr-2002 31-Mar-2003 31-Mar-2003
Computer INR (in Lacs) 8.17 0.34 8.51 4.49 1.68 6.17 2.34
Equipment EUR (‘000) 15.78 0.67 16.45 8.68 3.25 11.93 4.51
As at 31-03-2003 As at 31-03-2002EUR INR EUR INR
(in'000) (in Lacs) (in'000) (in Lacs)SCHEDULE EInvestments (at cost, unquoted)100000 fully paid Equity Shares of USD1 each in Pan Health, U.S.A. 113.49 58.72 113.49 48.37
113.49 58.72 113.49 48.37
As at 31-03-2003 As at 31-03-2002EUR INR EUR INR
(in'000) (in Lacs) (in'000) (in Lacs)SCHEDULE FSundry Debtors (Unsecured)Debts outstanding for a period exceeding sixmonths — — — —Considered good — — — —Considered doubtful — — — —
— — — —
LARSEN & TOUBRO INFOTECH GmbH
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SCHEDULE GCash and Bank balancesCash on hand - 0.00 0.00 0.00Balances with Scheduled Banks on currentaccounts 316.46 163.74 544.40 232.03Cash in transit - 0.00 0.69 0.29Fixed Deposits (including interest theron) - 0.00 0.00 0.00
316.46 163.74 545.09 232.32SCHEDULE HLoans and AdvancesUnsecured, considered good - 0.00Deposits for premises 12.59 6.52 - -Work in progress 9.92 5.13 0.00 0.00Advances recoverable in cash or in kind - 0.00 12.15 5.18
22.51 11.65 12.15 5.18SCHEDULE ILiabilitiesLiabilites against Larsen & Toubro Infotech Ltd. 282.02 145.92 300.49 128.07Liabilities VAT - 0.00 148.47 63.28Liabilities social insurances 44.37 22.96 14.46 6.16Liabilities wage withholding tax 33.60 17.39 (19.64) (8.37)Liabilities employees 13.29 6.88 25.29 10.78Liabilities others 46.14 23.88 0.00 0.00
419.42 217.03 469.07 199.92Sundry creditors 3.13 1.61 17.50 7.46Interest accrued but not due on loans - 0.00 0.00 0.00
422.55 218.64 486.57 207.38SCHEDULE JProvisionsProvison for taxesProvision for municipal trade tax 256.62 132.78 238.30 101.56Provision for corporate income tax 23.56 12.19 324.58 138.34Provision for solidarity surcharge tax 1.39 0.72 17.39 7.41
281.57 145.69 580.27 247.31Provisions forSoftware consulting - 0.00 0.00 0.00Tax consulting 10.00 5.17 5.00 2.13Audit 11.60 6.00 4.00 1.70Performance incentives - 0.00 0.00 0.00Accidential insurance for employees(Berufsgenossenschaft) 42.00 21.74 30.00 12.79Office, business and other expenses 20.50 10.61 20.50 8.74Intercompany fees - 0.00 0.00 0.00General provision - 0.00 0.00 0.00Proposed dividends - 0.00 250.00 106.15Additional tax on dividend - 0.00 0.00 0.00Leave encashment - 0.00 0.00 0.00
84.10 43.52 309.50 131.51365.67 189.21 889.77 378.82
SCHEDULE KOther IncomeDecrease of debts considered doubtful - - 0.71 0.30Interest income 7.93 3.85 - -Insurance reimbursement 0.51 0.25 - -Exchange difference on consolidation 7.46 1.51
8.44 11.56 0.71 1.81SCHEDULE LSoftware development services and productsSalaries including overseas staff expenses 1,258.00 609.63 1,483.15 629.75Staff welfare 233.70 113.25 150.89 64.07Contribution to provident and other funds 12.00 5.82 16.00 6.79Software development services 2,132.01 1,015.70 3,174.00 1,347.68
3,635.71 1,744.40 4,824.04 2,048.29SCHEDULE MSales, administration and other expensesTravelling charges and conveyance 14.88 7.21 24.98 10.61Car expenditures - - 4.78 2.03Rent 26.08 12.64 38.68 16.42
Telephone charges 29.07 14.09 32.47 13.79Legal and professional charges 119.63 57.98 91.02 38.65Printing and stationery 3.13 1.52 2.62 1.11Advertisement - - 0.59 0.25Gifts 0.11 0.05 0.15 0.06Repairs to computer 0.56 0.27 - -General repairs and maintenance 0.29 0.14 0.87 0.37Power and fuel 2.47 1.19 0.44 0.19Establishment expenses 0.44 0.21 - -Insurance charges 9.68 4.69 18.49 7.85Rates and taxes 594.25 287.98 839.62 356.51Auditor’s remuneration 7.60 3.68 4.00 1.70Books and periodicals 0.38 0.18 0.40 0.17Entertainment 1.62 0.79 3.37 1.43Bad debts written off - - 0.61 0.26Directors fees 103.69 50.26 148.85 63.20Bank charges and currency exchange loss 9.99 4.84 14.68 6.23Currency exchange rate loss 5.29 2.56 7.66 3.25Employee administration and travel cost 51.83 25.11 79.73 33.85Stamps and courier 4.18 2.03 5.31 2.25Education and training 0.06 0.03 - -Miscellanous expenses 4.98 2.41 13.38 5.68
990.21 479.86 1,332.70 565.86SCHEDULE N (Taxes)Municipal trade tax 23.91 11.59 99.25 42.14Corporate income tax 26.73 12.95 112.79 47.90Solidarity surcharge tax 1.47 0.71 6.20 2.63
52.11 25.25 218.24 92.67SCHEDULE ONotes to Financial StatementsGenerallyThe Company is a small company in the sense of section 267 para 1 Commercial Code.For the profit & loss account the cost of sales method has been applied according to section 275Commercial Code.Significant Accounting PoliciesMethod of AccountingThe Company maintains its accounts on accrual basis following the historical cost convention. Thefinancial statements comply with the generally accepted accounting principles and German legalprovisions.Fixed AssetsFixed Assets are stated at original purchase or production cost of the Company. As far asamortiseable assets are concerned, the original purchase or production cost have been reducedby depreciations as scheduled.DepreciationDepreciation on all assets has been calculated using the straight line method.In accordance with the simplification rule under the tax regulations, it was applied the full depreciationamount for those assets, added in the first half year, and the half depreciation for assets added inthe second half year.Low item assets with original purchase cost of not more than EUR 285 (previous year 410) havebeen depreciated in the year of purchase at the full amount.Work-in-progressThe work-in-progress was evaluated with the original purchase or production cost. As far as therewere lower values at the day of the balance sheet, those were stated.Current assets, loans and advancesFrom the current assets, loans and advances, provision for doubtful debts is calculated speciallyfor each item.ProvisionsThe provisions are stated at the amount of the probable liabilities.LiabilitiesThe liabilities have a remaining term of less than one year and are stated at the amount repayable.RevenuesEUR 3,994,670. Revenue from software development is recognised based on software developedor time spent in person hours or person weeks and billed to the customer as per the terms ofspecific contracts.Labour cost : EUR 1,607,389.Foreign currency transactionsSales and expenses are recorded at rates prevailing on the date of the transaction. Expensesrelated to overseas offices are converted at average rates during the year. Current assets ¤t liabilities are accounted at rates prevailing on the date of balance sheet. Exchange differenceson settlement/conversion are adjusted to profit & loss account.Other Notes Directors:Shareholder and affiliated companies: Vinay Rajadhyaksha, MumbaiLarsen & Toubro Infotech Limited, Rajagopalan Venkatesh, FrankfurtMumbai, India Leipzig16th May, 2003
Other DebtsAccounts receivableother receivablesConsidered good 688.58 356.29 977.12 416.45Considered doubtful — — — —
688.58 356.29 977.12 416.45Less: Provision for doubtful debts — — — —
688.58 356.29 977.12 416.45
As at 31-03-2003 As at 31-03-2002EUR INR EUR INR
(in'000) (in Lacs) (in'000) (in Lacs)
As at 31-03-2003 As at 31-03-2002EUR INR EUR INR
SCHEDULE M (contd...) (in'000) (in Lacs) (in'000) (in Lacs)
L&T NETCOM LIMITEDDIRECTORS' REPORT
L&T NETCOM LIMITED
The Directors have pleasure in presenting the Annual Report and Audited Accounts for the yearended 31st March 2003.I. FINANCIAL RESULTS
2002-03 2001-02(Rs.) (Rs.)
Income from Operations 41,947,150 30,000,000Total Expenses 42,203,722 46,557,170Profit/ (Loss) Before Tax (256,572) (16,557,170)Adjustments(Deferred Tax Asset) 243,755 5,788,175Profit /(Loss) After tax (12,817) (10,768,995)Appropriations — —Equity Dividend — —Debit balance carried to Balance Sheet (10,781,812) (10,768,995)
II. PERFORMANCE OF THE COMPANYThe Company is a Category ‘A’ ISP Licence Holder and provides connectivity to its parentcompany Larsen & Toubro Limited ( L&T) and L&T group companies.The services currently provided by the Company include the following:- Internet Access- SAP- Web Hosting- E-mailDuring the year under review, the Company had obtained a licence to provide “Voice Services”which, on implementation, could result in significant savings to L&T Group.
III. CAPITAL EXPENDITUREAs at 31st March, 2003 the gross fixed assets stood at Rs. 17,080,523 and the net fixed assetsat Rs.12,454,846. Additions during the year amounted to Rs. 638,131.
IV. DEPOSITSDuring the period under review the Company has not accepted any deposits from the public.
V. AUDITORS’ REPORTThe notes to the accounts referred to in the Auditors’ Report are self explanatory and thereforedo not call for any further comments of Directors.
VI. DISCLOSURE OF PARTICULARSInformation as per the Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1988 relating to conservation of energy, technology absorption, foreign exchangeearnings and outgo are given in Annexure ‘A’, forming part of this report.
VII. PERSONNELThere are no employees covered by the provisions of Section 217 (2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) Rules, 1975.
VIII. DIRECTORS' RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirms:i. that in the preparation of the annual accounts, the applicable accounting standards have
been followed and there has been no material departure;ii. that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31
st March, 2003;
L&T NETCOM LIMITED
S-10
7. We are of the opinion that the Company has an internal audit system commensurate with its sizeand nature of its business.
8. As explained to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax,customs duty and excise duty were outstanding as at 31st March, 2003, for a period of more thansix months from the date they become payable.
9. According to the information and explanations given to us and the records of the Companyexamined by us, no personal expenses have been charged to revenue account other than thosepayable under contractual obligations or in accordance with the generally accepted businesspractices.
10. The Company is not a sick industrial company within the meaning of Section 3 (1) (o) of the SickIndustrial Companies (Special Provisions) Act, 1985, as amended.
11. Paragraph 4A (iii), (iv), (v), (vi), (ix), (xii), (xiv), (xvi), (xvii) and Paragraph 4B (ii), (iii), (iv) of theaforesaid Order are not applicable to the Company during the year.
SHARP & TANNANChartered Accountants
by the hand of
R.D. KAREPlace : Mumbai, PartnerDate : 6th
May, 2003
AUDITORS’ REPORT TO THE SHAREHOLDERS OF L&T NETCOM LIMITEDWe have audited the attached Balance sheet of L&T Netcom Limited as at 31st March 2003 and the Profitand Loss Account of the Company for the year ended on that date annexed thereto. These financialstatements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in India. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatements. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes 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 providesa reasonable basis for our opinion.In accordance with the provisions of Section 227 of the Companies Act, 1956, we report that:1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988, issued
by the Central Government of India under Section 227(4A) of the Companies Act, 1956, weenclose in the Annexure, our report on the matters specified in paragraphs 4 and 5 of the saidOrder.
2. Further to our comments in the annexure referred to in paragraph 1 above, we report as under :(a) we have obtained all the information and explanations which to the best of our knowledge and
belief, were necessary for the purpose of our audit;(b) in our opinion, proper books of account as required by law have been kept by the Company
so far as appears from our examination of those books;(c) the said Balance Sheet and the Profit and Loss Account dealt with by the report are in
agreement with the books of account;(d) in our opinion, the Profit and Loss Account and Balance sheet comply with the accounting
standards referred to in Section 211(3C) of the Companies Act, 1956, to the extentapplicable;
(e) on the basis of written representations received from the directors as on 31st March, 2003 andtaken on record by the Board of Directors, none of the directors is disqualified as on 31st
March, 2003 from being appointed as a director of the Company under Section 274 (1) (g)of the Companies Act, 1956; and
(f) we report that, in our opinion and to the best of our information and according to theexplanations given to us, the said Accounts read together with the Significant AccountingPolicies in Schedule ‘H’ and other Notes appearing in Schedule ‘I’ thereon, give theinformation required by the Companies Act, 1956 in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India:(i) in the case of the Balance sheet, of the state of the Company’s affairs as at 31
st March,
2003; and(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date.
SHARP & TANNANChartered Accountants
by the hand of
Place : Mumbai, R.D. KAREDate : 6th
May, 2003 Partner
iii. that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern basis.IX. DIRECTORS
Mr. S. V. Subramanian and Mr. V. K. Magapu who were appointed as Directors in the casualvacancy caused by the resignation of Mr. A. M. Naik and Mr. P. K. Venkatakrishnan respectively,will hold office upto the date of the ensuing Annual General Meeting, and are eligible for re-appointment.The Company has received a notice from a member under the provisions of Section 257 ofthe Companies Act, 1956 proposing the candidature of Mr. S. V. Subramanian and Mr. V. K.Magapu for the office of a Director.Mr. R. N. Mukhija retires by rotation and being eligible offers himself for re-appointment.
X. AUDIT COMMITTEEThe Audit Committee consists of three non executive directors. The present members of theCommittee are Mr. R. N. Mukhija, Mr. S. V. Subramanian and Mr. V. K. Magapu. Mr. R. N.Mukhija is the Chairman of the Audit Committee.The role, terms of reference, the authority and power of Chairman are in conformity with therequirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors oninternal control systems and internal audit report.
XI. AUDITORSThe Auditors, M/s. Sharp & Tannan, Chartered Accountants, hold office until the conclusion ofthe ensuing Annual General Meeting and are recommended for re-appointment. A Certificatefrom the Auditors has been received to the effect that if re-appointed, it would be within thelimits prescribed under Section 224(1B) of the Companies Act, 1956.
For and on behalf of the Board
R.N. MUKHIJA S.V. SUBRAMANIANPlace : Mumbai Director DirectorDate : 6
th May, 2003
Annexure ‘A’ to the Directors’ ReportA. Conservation of Energy:
a) Energy Conservation measures taken:b) Additional investments and proposals, if any, being implemented for reduction of
conservation of energy:c) Impact of measures at (a) and (b) above for reduction of energy consumption and
consequent impact on the cost of production of the goods:d) Total energy consumption and energy consumption per unit of production as per Form A
of the Annexure in respect of the industries specified in the schedule thereto:There are no particulars to be disclosed under this head from (a) to (d)
B. Technology absorption:e) Efforts made in technology absorption as per Form B:
I) Research & Development (R&D):There are no particulars to be disclosed under this head.
II) Technology absorption, adaptation and innovation:1. Efforts in brief made towards technology absorption, adaptation and innovation:
n Personnel trained in the areas of Internet Protocol (IP) Technology.n The latest technologies in IT security have been implemented including firewalls
and anti-virus software.n Technology assessment of VoIP (Voice over IP) suppliers is under way with a
view to deployment soon.2. Benefits derived as a result of the above efforts:
n Ensuring a high quality of service with very high reliability for the users.n Ensuring the security of the users of the Company’s services.n Preparing for rapid deployment of VoIP in the year 2003-04.
3. Information regarding technology imported:There are no particulars to be disclosed under this head.
C. Foreign exchange earning and outgo:The Company had no foreign exchange inflow during the period under review. A sum ofRs.1,20,481/- was incurred as expenditure in foreign currency towards renewal of AnnualMembership Fee to Asia Pacific Network Information Centre (APNIC), Australia.
BALANCE SHEET AS AT 31 ST MARCH, 2003Schedules As at As at
31.3.2003 31.3.2002Rupees Rupees Rupees
SOURCES OF FUNDS :Shareholders’ Funds
Share capital A 59,716,100 59,716,100Loan Funds
Unsecured loans B 417,628 512,504Total 60,133,728 60,228,604
APPLICATION OF FUNDS:Fixed assets C
Gross block 17,080,523 16,442,392Less : Depreciation 4,625,677 2,107,607Net block 12,454,846 14,334,785
Current assets, loans and advances DSundry debtors 13,066,461 -Cash and bank balances 1,728,392 35,780Loans and advances 5,257,850 11,778,256
20,052,703 11,814,036Less : Current liabilities and provisions
Liabilities - Sundry Creditors E 3,560,279 1,641,008Provisions - -
3,560,279 1,641,008Net current assets 16,492,424 10,173,028Deferred tax asset (net) 6,031,930 5,788,175Miscellaneous expenditure(to the extent not written-off or adjusted)Preliminary and pre-operative expenses 14,372,716 19,163,621Profit and loss account 10,781,812 10,768,995Total 60,133,728 60,228,604Significant accounting policies HNotes forming part of Accounts I
}As per our report attached
SHARP & TANNANChartered Accountants R.N. MUKHIJAby the hand of J.C.COLACO Directors
Manager S.V.SUBRAMANIANR.D. KAREPartner
Mumbai, 6th May, 2003 Mumbai, 6th May, 2003
ANNEXURE TO THE AUDITORS' REPORT(Referred to in paragraph 1 of our Report of even date)
1. The Company is maintaining records showing full particulars, including quantitative details andsituation of all fixed assets. We are informed by the management that they have physically verifiedthe same at the year-end and no discrepancies were noticed on such verification.
2. The fixed assets have not been revalued during the year.
3. The Company has not taken/granted any loans, secured or unsecured, from / to companies, firms,other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Asexplained to us, there are no companies under the same management as defined under Section370 (1B) of the Companies Act, 1956.
4. In our opinion and according to the information and explanations given to us, there are adequateinternal control procedures commensurate with the size of the Company and the nature of itsbusiness for the purchases of stores, materials including components, plant and machinery,equipment and other assets and rendering of services.
5. According to the information and explanations given to us, purchase of materials and servicesmade in pursuance of contracts or arrangements entered in register maintained under Section301 of the Companies Act, 1956, and aggregating during the period to Rs. 50,000 or more in valuein respect of each party, have been made at prices which are reasonable having regard to theprevailing market prices for such materials or services or the prices at which transactions forsimilar goods or services have been made with other parties.
6. The Company has not accepted any deposits from public to which the provisions of Section 58Aof the Companies Act, 1956, and the rules framed thereunder apply.
L&T NETCOM LIMITED
S-11
As at As atSCHEDULE ‘D’ 31-3-2003 31-3-2002
Rupees RupeesCurrent assets, loans and advancesSundry debtors,unsecured, considered goodDebts outstanding for a period exceeding six months - -Other debts 13,066,461 -
13,066,461 -Cash and bank balanceswith scheduled bank on current account 1,728,392 35,780Loans and advancesunsecured, considered goodAdvances recoverable in cash or in kindor for value to be received 18,102 -Deposits 6,500 6,500Prepaid expenses 5,233,248 11,771,756
5,257,850 11,778,25620,052,703 11,814,036
SCHEDULE ‘E’Current Liabilities and Provisions:LiabilitiesSundry creditors- Small scale industrial undertakings - -- Others 3,560,279 1,641,008
3,560,279 1,641,008Provisions - -
3,560,279 1,641,008SCHEDULE ‘F’Operating ExpensesLeased line and other expenses 18,522,712 30,811,831Lease rentals 10,499,658 7,697,137Others 1,696,493 81,361
30,718,863 38,590,329SCHEDULE ‘G’Administration and Other ExpensesService charges 3,458,502 1,643,998Insurance 107,909 10,125Rates and taxes 1,693 806Travelling and conveyance 92,477 145,744
SCHEDULES FORMING PART OF ACCOUNTS: 31 ST MARCH, 2003SCHEDULE ‘G’ (contd...)
As at As at31-3-2003 31-3-2002
Rupees Rupees
Telephone expenses 277,171 318,988Printing and stationery 4,365 14,650Subscriptions 92,031 290,025Bank charges 26,197 76,577Miscellaneous expenses 40,763 864,896
4,101,108 3,365,809SCHEDULE ‘H’Significant Accounting Policies1. Basis of Accounting:
The Company maintains its accounts on accrual basis following the historical cost conventionin accordance with generally accepted accounting principles and in compliance with AccountingStandard referred to in Section 211(3C) and other requirements of the Companies Act, 1956to the extent applicable.
2. Fixed AssetsFixed assets are stated at original cost, net of tax / duty credits availed, if any.
3. DepreciationDepreciation is provided on straight line method at the rates and in the manner specified inSchedule XIV to the Companies Act, 1956. Depreciation on additions / deductions is calculatedpro-rata from / to the month of additions / deductions.
4. Miscellaneous ExpenditurePreliminary and pre-operative expenses are amortized over a period of five years from theyear of commencement of operations.
5. LeasesAssets acquired under leases on or after 1st April, 2001 and which are in the nature of financelease are capitalized at the inception of the lease at the lower of the fair value or the presentvalue of minimum lease payments and a liability is created for an equivalent amount. Eachlease rental payment is allocated between the liability and the interest cost.
6. Deferred TaxDeferred tax is recognized on timing differences between book profits and the taxable incomefor the year and quantified using the tax rates and laws enacted or substantively enacted ason the Balance Sheet date.Deferred tax assets are recognized and carried forward to the extent that there is a reasonablecertainty that sufficient future taxable income will be available against which deferred taxassets can be realised.
SCHEDULE ‘C’
Gross Block Depreciation Net Block
Fixed Assets As at As at Up to For the Up to As at As at1-4-2002 Additions 31-3-2003 31-3-2002 Year 31-3-2003 31-3-2003 31-3-2002
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Plant and machinery 15,253,019 476,825 15,729,844 1,983,798 2,381,745 4,365,543 11,364,301 13,269,221Furniture and fixtures 604,373 161,306 765,679 36,883 41,499 78,382 687,297 567,490
Sub-Total 15,857,392 638,131 16,495,523 2,020,681 2,423,244 4,443,925 12,051,598 13,836,711
Leased Assets 585,000 — 585,000 86,926 94,826 181,752 403,248 498,074
Total 16,442,392 638,131 17,080,523 2,107,607 2,518,070 4,625,677 12,454,846 14,334,785
Previous Year — 16,442,392 16,442,392 — 2,107,607 2,107,607
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 ST MARCH, 2003Schedules 2002-03 2001-02
Rupees RupeesINCOMEIncome from operations 41,947,150 30,000,000EXPENDITUREOperating expenses F 30,718,863 38,590,329Administration and other expenses G 4,101,108 3,365,809Depreciation 2,518,070 2,043,396Interest 74,776 77,332Preliminary and pre-operative expenses written off 4,790,905 2,480,304
42,203,722 46,557,170Profit/(Loss) before tax (256,572) (16,557,170)Provision for taxation- Current year - -- Deferred tax 243,755 5,788,175Profit/(Loss) after tax (12,817) (10,768,995)Add : Balance brought forward from previous year (10,768,995)
Balance carried to Balance Sheet (10,781,812) (10,768,995)
Schedules 2002-03 2001-02Rupees Rupees
Basic / diluted earnings per share - (1.80)Significant accounting policies HNotes forming part of accounts I
}As per our report attached
SHARP & TANNANChartered Accountants J.C.COLACO R.N. MUKHIJAby the hand of Manager S.V.SUBRAMANIANR.D. KAREPartnerMumbai, 6th May, 2003 Mumbai, 6th May, 2003
Directors
SCHEDULES FORMING PART OF ACCOUNTS: 31 ST MARCH, 2003As at As at
SCHEDULE ‘A’ (Share Capital) 31-3-2003 31-3-2002Authorised: Rupees Rupees100,00,000 Equity shares of Rs.10 each 100,000,000 100,000,000Issued and subscribed:59,71,610 Equity Shares of Rs.10 fully paid 59,716,100 59,716,100(All the shares are held by Larsen & Toubro Limited,the holding Company) 59,716,100 59,716,100SCHEDULE ‘B’ (Loan Funds)Unsecured Loans - Lease Finance 417,628 512,504
417,628 512,504
SCHEDULE ‘I’
Notes forming part of accounts1. Auditors’ remuneration (excluding service tax) and expenses charged to the accounts:
2002-03 2001-02Rupees Rupees
Audit fees 5,000 5,000Tax Audit fees 5,000 -
2. The Company had no transactions during the year with any small scale industrial undertakings and hence reporting details of interest on overdue outstandings, does not arise.3. The Company is a service company and accordingly information required under paragraph 4 (c) of Part II of Schedule VI to the Companies Act 1956 has not been furnished.4. Expenditure in foreign currency: Rs.120,481; (Previous year Rs.120,075).
L&T NETCOM LIMITED
S-12
8. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
State Code
Date Month Year
Rights Issue Private PlacementPublic Issue Bonus Issue
1 1 - 8 6 1 4 7
3 1 0 3 2 0 0 3
1 1
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
N I L
Registration No.
Balance Sheet Date
I. Registration Details:
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE (contd....)(b) Deferred tax assets and liabilities are being offset as they relate to taxes on Incomelevied by the same governing taxation laws.
7. Finance Leasesa) In accordance with Accounting Standard 19 “Leases” issued by the Institute of Chartered
Accountants of India and made mandatorily applicable, the assets acquired on lease onor after 1st April, 2001 are capitalised and a loan liability recognized for an equivalentamount. Accordingly, depreciation has been provided on such assets. Lease rentals paidare allocated between the liability account and the interest cost.
b) The minimum lease payment liabilities in respect of finance leases are as follows:Minimum lease payments As at 31.3.2003 As at 31.3.2002
Rs. Rs.i. Payable not later than one year 169,652 169,652ii. Payable later than 1 year and not later
than 5 years 368,488 538,140iii. Payable later than 5 years - -
Total minimum lease payments 538,140 707,792Less: Future Finance charges 120,512 195,288Present value of minimum lease payments 417,628 512,504
Present value of Minimum lease paymentsi. Payable not later than 1 year 110,609 94,876ii. Payable later than 1 year and not later
than 5 years 307,019 417,628iii. Payable later than 5 years - -
Total present value of minimum lease payments 417,628 512,504
5. Related party disclosures:a) Larsen & Toubro Limited is the holding companyb) Transactions entered into with related parties are as under :
2002-03 2001-02Name of the Company Relationship Nature of transactions Amount Amount Amount Amount
Dr / (Cr) (due to)/ Dr / (Cr) (due to)/Rs. from Rs. Rs. from Rs.
Larsen & Toubro Limited Holding company Service income received (38,760,491) 12,787,753 (30,000,000) –Bank guarantee 20,000,000 – 20,000,000 –Services rendered(including pre-operative expenses) 714,000 – 1,398,305 –
L&T Finance Limited Fellow subsidiary Lease rentals (including pre-operative expenses) 10,499,658 – 9,251,142 –Interest on lease finance 74,776 – 77,332 –Unsecured loans – (417,628) – (512,504)Service income received (472,500) – – –
Tractor Engineers Limited Fellow subsidiary Service income received (147,002) – – –Larsen & Toubro InfotechLimited Fellow subsidiary Service charges (including pre-operative expenses) 2,744,502 (3,053,622) 309,120 (309,120)Note : No amounts pertaining to the related parties have been written off or written back during the year.
6. (a) Major Components of Deferred Tax Assets and Deferred Tax Liabilities: 31.03.2003 31.03.2002
Deferred Tax Deferred Tax Deferred Tax Deferred TaxAssets Rs. Liabilities Rs. Assets Rs. Liabilities Rs.
Difference between Book Value of Depreciable Assets as per books of accountand Written Down Value for tax purposes - 5,351,793 - 2,536,015Deferred Revenue Expenditure to the extent not debited to Profit & Loss Accountbut claimed as deduction for tax purposes - 1,993,141 - 2,422,664Unabsorbed losses carried forward 7,091,306 - 7,481,814 -Unabsorbed depreciation carried forward 6,105,564 - 3,259,737 -Other items giving rise to timing differences 179,994 - 5,303 -Total 13,376,864 7,344,934 10,746,854 4,958,679Net deferred tax assets / (liabilities) 6,031,930 5,788,175Net incremental liability charged to Profit & Loss Account 243,755 –
Total Liabilities
Paid-up Capital
Net Current Assets
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Miscellaneous Expenditure
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
Secured Loans
6 0 1 3 4
Net Fixed Assets
Accumulated Losses
6 0 1 3 4
5 9 7 1 6 N I L
4 1 8N I L
1 2 4 5 5 N I L
2 2 5 2 4 1 4 3 7 3
1 0 7 8 2
N I L N I L
Turnover Total ExpenditureIV. Performance of Company (Amount in Rs. Thousands)
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Dividend Rate %Earnings per share in Rs.2 5 7 1 3
-
4 1 9 4 7 4 2 2 0 4
N A
+ -
ü
+ -ü
S E R V I C I N G
V. Generic Names of Three Principal Products/Services of the Company (as permonetary terms)
9. Previous year figures have been regrouped wherever necessary.
}Signatures to Schedule 'A' to 'I'
SHARP & TANNANChartered Accountants R.N. MUKHIJAby the hand of J.C.COLACO Directors
Manager S.V.SUBRAMANIANR.D. KAREPartner
Mumbai, 6th May, 2003 Mumbai, 6th May, 2003
L&T TRADE.COM LIMITEDDIRECTORS’ REPORTThe Directors have pleasure in presenting their Report and Audited Accounts for the yearended 31st March, 2003.1. FINANCIAL RESULTS
Year ended Year ended31/03/2003 31/03/2002
Rs. Lacs Rs. LacsGross Income 989.94 52.58Profit before Tax / (Loss) 958.21 (305.97)Provision for Tax 73.07 -Profit after Tax / (Loss) 885.14 (305.97)
2. DIVIDENDThe Directors do not recommend payment of any dividend for the year.
3. PERFORMANCE OF THE COMPANYConsequent on calling off the joint venture with Bluestone Capital (Trade.com), U. S. A. andcontinued difficulties with respect to the Dot Com industry, the Company has suspendedit’s software development activity during the year. The Company has transferred some ofit’s business rights with respect to certain customer accounts at a consideration of Rs.980.50 Lacs.
4. FINANCEDuring the year under review, the Company has increased it’s paid-up equity share capitalby Rs. 4 Lacs by issue of 40000 equity shares of Rs. 10/- each , to comply with theprovisions of the Companies (Amendment) Act, 2000. The entire issue was subscribed bythe Holding Company – L&T Finance Limited.
5. CAPITAL EXPENDITUREThe company has not incurred any capital expenditure during the period under review.
6. DEPOSITSDuring the period under review the Company has not accepted any deposits from thepublic.
7. AUDITORS’ REPORTThe Auditors’ Report to the Shareholders does not contain any qualifications.The notes to the accounts referred to in the Auditors’ Report are self explanatory andtherefore do not call for any further comments of Directors.
8. DISCLOSURE OF PARTICULARSAs the Company is engaged in software development activity, there are no particulars tobe disclosed as per the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988.
9. PERSONNELThere are no employees covered by the provisions of the Section 217(2A) of the CompaniesAct, 1956 read with the Companies (Particulars of Employees) Rules,1975.
10. DIRECTORS' RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i) that in the preparation of the annual accounts, the applicable accounting standards
have been followed and there has been no material departure;ii) that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31
st March, 2003 and of the profit
of the Company for the year ended on that date;
L&T TRADE.COM LIMITED
S-13
iii) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) that the annual accounts have been prepared on a going concern basis.11. DIRECTORS
Mr. A. M. Naik and Mr. Y. M. Deosthalee resigned as Directors. Mr. A. G. Kelkar andMr. A. N. Mani were appointed as Directors in a casual vacancy caused by the saidresignations, respectively. Mr. A. G. Kelkar and Mr. A. N. Mani will hold the office upto thedate of the Annual General Meeting when Mr. A. M. Naik and Mr. Y. M. Deosthalee wouldhave retired by rotation, and are eligible for reappointment.The Company has received a notice from a member under the provisions of Section 257of the Companies Act, 1956 proposing the candidature of Mr. A. G. Kelkar andMr. A. N. Mani for the office of a Director.Mr. S. V. Subramanian retires by rotation and is eligible for reappointment.
12. AUDITORSThe Auditors, M/s. Sharp & Tannan, Chartered Accountants, hold office until the conclusionof the ensuing Annual General Meeting and are recommended for re-appointment. ACertificate from the auditors has been received to the effect that their re-appointment, ifmade, would be within the limits prescribed under Section 224(1B) of the Companies Act,1956.
13. ACKNOWLEDGEMENTSThe Directors acknowledge the invaluable support extended to the Company by the FinancialInstitutions, Bankers, vendors, suppliers and customers. The Directors are pleased to placeon record their appreciation for the valuable contribution made by the employees of theCompany.
8. According to the records of the Company and the information and explanations given to us,there was no amount payable in respect of income tax, outstanding as at 31st March, 2003for a period of more than six months from the date they became payable. As explained tous, the Company had no liability in the course of business in respect of excise duty, salestax and customs duty during the period.
9. According to the information and explanations given to us, no personal expenses havebeen charged to revenue account other than those payable under contractual obligationsor in accordance with the generally accepted business practices.
10. The Company has a reasonable system of allocating man-hours utilised to the relative jobscommensurate with its size and nature of its business.
11. There is a reasonable system of authorisation at proper levels, and an adequate systemof internal control commensurate with the size of the Company and the nature of itsbusiness on issue of and allocation of labour to jobs.
12. Clauses (III), (IV), (V), (VI), (XI), (XII), (XIV), (XV), (XVI) AND (XX) of para 4A and Clause(II) of para 4B of the aforesaid Order are not applicable during the period.
SHARP & TANNANChartered Accountants
By the hand ofMumbai, MILIND P. PHADKEDate : 25
th April, 2003 Partner
Directors}For and on behalf of the Board
S. V. SUBRAMANIANA. G. KELKARA. N. MANI
Place : MumbaiDate : 25th April, 2003
AUDITORS’ REPORT TO THE SHAREHOLDERSWe have audited the attached Balance Sheet of L&T Trade.com Limited as at 31st March, 2003and the annexed Profit and Loss Account of the Company for the year ended 31st March, 2003.These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosure in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.We report that in accordance with the provisions of Section 227(4A) of the Companies Act,1956:(a) we have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit;(b) in our opinion proper books of accounts as required by law, have been kept by the Company
so far as appears from our examination of those books;(c) the said Balance Sheet and Profit and Loss Account are in agreement with the books of
accounts of the Company;(d) in our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting
Standards referred to in Section 211(3C) of the Companies Act, 1956;(e) on the basis of the written representations received from the directors of the Company as
at 31st March,2003,and taken on record by the Board of Directors, we report that nodirector is disqualified from being appointed as a director of the Company under clause (g)of sub-section(1) of section 274 of the Companies Act,1956;
(f) in our opinion and to the best of our information and according to the explanations givento us, the said accounts, read together with the significant accounting policies appearingin Schedule 10 and notes appearing in Schedule 11 give the information required by theCompanies Act, 1956 in the manner so required and give a true and fair view:(i) in the case of the Balance Sheet of the state of the company’s affairs as at 31st March,
2003 and(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date.
SHARP & TANNANChartered Accountants
By the hand ofMumbai, MILIND P. PHADKEDate : 25
th April, 2003 Partner
As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 dated7th September,1988 issued by the Central Government under Section 227(4A) of the CompaniesAct, 1956 we report as under:1. The Company has maintained proper records showing full particulars including quantitative
details and situation of fixed assets. As explained to us, all the fixed assets have beenphysically verified by the management, during the period. We are informed by themanagement, that there were no discrepancies noticed on such verification.
2. The fixed assets have not been revalued during the period.3. The company has taken inter-corporate deposits from a Company under the same
management. The rates of interest and other terms and conditions are not prima-facieprejudicial to the interest of Company.
4. (i) The company has not granted any loans, secured or unsecured to Companies, firmsor other parities listed in the register maintained under Section 301 of the the CompaniesAct, 1956 and to companies under the same management as defined under sub-section (1B) of Section 370 of the Companies Act, 1956.
(ii) in respect of loans or advances in the nature of loans given to employees, the recoveryof the principal amounts and where applicable interest thereon was regular and as perstipulation.
5. In our opinion and according to the information and explanations given to us, there is anadequate internal control procedure commensurate with the size of the company and thenature of its business for the purchase of plant and machinery, furniture, office equipmentsand other assets.
6. The Company has not accepted any deposits from the public during the period.7. The Company has regularly deposited during the period, Provident Fund dues and
Employees State Insurance dues with the appropriate authorities.
BALANCE SHEET AS AT 31 ST MARCH, 2003
As at 31.03.2003 As at 31.3.2002Schedule Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs
SOURCES OF FUNDS :Shareholders’ Funds :Share Capital 1 5.00 1.00Loan Funds :Unsecured Loans 2 - 852.03Total 5.00 853.03APPLICATION OF FUNDS :Fixed Assets :Gross Block 3 60.59 60.59Less : Depreciation 25.08 15.26Net Block 35.51 45.33Current Assets,Loans &Advances 4Sundry Debtors 79.50 30.36Cash & Bank Balances 4.16 3.72Loans & Advances 3.38 2.55
87.04 36.63Less:Current Liabilities &Provisions 5Liabilities 103.68 171.66Provisions 73.07 1.61
176.75 173.27Net Current Assets (89.71) (136.64)Profit & Loss Account 59.20 944.34Total 5.00 853.03Significant Accounting Policies 10Notes Forming Part of Accounts 11Balance Sheet Abstract & Company’sGeneral Business Profile 12
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 ST MARCH, 2003Year ended Year ended31.03.2003 31.03.2002
Schedules Rs. Lacs Rs. LacsINCOME :Income From Operations 6 989.94 52.58Total 989.94 52.58EXPENDITURE :Personnel Expenses 7 (0.42) 85.41Administration & Other Expenses 8 0.21 183.04Interest & Finance Charges 9 22.12 70.83Depreciation 9.82 19.26Total 31.73 358.54Profit /(Loss) before taxes 958.21 (305.97)Provision for taxes 73.07 -Profit /(Loss) after taxes 885.14 (305.97)Add: Balance brought forward from last A/c (944.34) (638.37)Balance carried to Balance Sheet (59.20) (944.34)Basic and Diluted earning per Equity Share (Rs.)See Note No. F 3,823.37 (3,059.66)Face value per Equity Share (Rs.) 10.00 10.00Significant Accounting Policies 10Notes Forming Part of Accounts 11Balance Sheet Abstract & Company’sGeneral Business Profile 12
As per our report attachedSHARP & TANNANChartered Accountants S.V. SUBRAMANIANBy the hand of A.G. KELKARMILIND P. PHADKE A.N. MANIPartnerMumbai MumbaiDated : 25th April, 2003 Dated : 25th April, 2003
Directors}
As per our report attachedSHARP & TANNANChartered Accountants S.V. SUBRAMANIANBy the hand of A.G. KELKARMILIND P. PHADKE A.N. MANIPartnerMumbai MumbaiDated : 25th April, 2003 Dated : 25th April, 2003
Directors}
L&T TRADE.COM LIMITED
S-14
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003As at 31.03.2003 As at 31.3.2002
Rs. Lacs Rs. Lacs Rs. Lacs Rs. LacsSCHEDULE - 1SHARE CAPITALAuthorised:100,000 Equity Shares of Rs 10/-. Each 10.00 10.00
10.00 10.00Issued, Subscribed & Paid up50,000 Equity Shares of Rs 10/- each Fully paid up 5.00 1.00(All the above shares are held by L&T Finance Ltd.,the holding Company and its Nominees) 5.00 1.00
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003As at 31.03.2003 As at 31.3.2002
Rs. Lacs Rs. Lacs Rs. Lacs Rs. LacsSCHEDULE - 2UNSECURED LOANSShort Term LoansFrom Others:Intercorporate Deposits - 852.03
- 852.03
GROSS BLOCK DEPRECIATION NET BLOCK
FIXED ASSETS Opening Bal. Additions Sale/ As on Opening Bal. For the Deduction/ As on As on As onAs on 01/04/2002 Adjustment 31/03/2003 As on 01/04/2002 Period Adjustment 31/03/2003 31/03/2003 31/03/2002
OWNED ASSETS
Computer 60.59 - - 60.59 15.26 9.82 - 25.08 35.51 45.33
Total 60.59 - - 60.59 15.26 9.82 - 25.08 35.51 45.33
SCHEDULE - 3FIXED ASSETS Rs. Lacs
As at 31.03.2003 As at 31.3.2002Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs
SCHEDULE - 4CURRENT ASSETS, LOANS & ADVANCESCurrent AssetsSundry Debtors - ( Unsecured)Other Debts:
Considered Good 79.50 30.36Cash & Bank Balances
Cash on Hand 0.01 0.06Balance with Scheduled Bank 4.15 4.16 3.66 3.72Loans & Advances:Unsecured,Considered Good:Advances recoverable in cash or in kind 3.38 2.55
7.54 6.27SCHEDULE - 5CURRENT LIABILITIES AND PROVISIONSLiabilities :Sundry Creditors 103.68 171.66
103.68 171.66Provisions for:Income Tax 73.07 -Gratuity - 1.07Leave Encashment - 0.54
73.07 1.61
TOTAL 176.75 173.27
SCHEDULE - 6INCOME FROM OPERATIONSTransfer of Business Rights 980.50 -Project development & Advisory Services - 40.14Account Opening & Service charges - 0.35Other Income 9.44 12.09
989.94 52.58SCHEDULE - 7PERSONNEL EXPENSESSalaries 0.40 68.91Contribution to and provision for :
Provident fund and Pension fund 0.63 4.21Gratuity (1.07) 0.26Superannuation Fund - 0.61Leave encashment (0.51) 0.24
Welfare & Other Expenses 0.13 11.18
(0.42) 85.41SCHEDULE - 8ADMINISTRATIVE & OTHER EXPENSESTravelling & Conveyance (0.24) 17.10Printing & Stationery - 0.63Internet Expenses - 18.19Co-branding expenses - 48.19Content Providers Expenses - 31.49Telephone, Postage & Telegrams 0.01 5.04Stamp Duty - 0.19Brokerage & Service Charges - 5.13Repairs - Others - 3.80Rent - 37.04Rates & Taxes 0.01 0.63Electricity Charges - 5.78Insurance - 0.50Audit Fees 0.35 0.37Tax Audit Fees 0.15 -Professional Charges 0.02 5.89Business Promotion - 0.03Miscellaneous Expenses (0.09) 3.04
0.21 183.04SCHEDULE - 9INTEREST AND FINANCE CHARGESInterest on Loans 22.12 70.83
22.12 70.83
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 st MARCH,2003SCHEDULE - 10SIGNIFICANT ACCOUNTING POLICIES.A. Method of Accounting :
The Company maintains its accounts on accrual basis following the historical costconvention. The financial statements comply with the mandatory accounting standardsissued by the Institute of Chartered Accountants of India and are in accordance with theprovisions of the Companies Act, 1956.
B. Revenue Recognition :Income from Project Development and Advisory Services is accounted on accrual basis.
C. Retirement Benefits :Contributions to Provident Fund, Family Pension Fund and Superannuation are accountedon actual liability basis. Provision for Gratuity and Leave encashment benefits on retirementare made on actuarial valuation basis.
D. Fixed Assets :1) Fixed Assets are stated at original cost less accumulated depreciation.2) Boughtout computer software packages have been capitalised at cost.
E. Depreciation on Fixed Assets:1) Depreciation on fixed 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.2) Computer software is depreciated at 33.33 %. The rate has been fixed in consonance
with the expected useful life of the assets.F. Borrowing Costs
Borrowing Costs that are attributable to the acquisitions, constructions or production ofqualifying assets are capitalised as part of the cost of such assets. A qualifying asset isan asset that necessarily takes a substantial period of time to get ready for its intended useor sale. All other borrowing costs are recognised as an expense in the period in which theyare incurred.
G. Foreign Currency Transactions :The Foreign Currency transactions are accounted for at the rates prevailing on the date oftransactions. Foreign Currency Assets & Liabilities are converted at contracted rates asapplicable, the exchange difference on settlement are adjusted to the Profit & Loss Account.
H. Miscellaneous ExpenditurePreliminary expenses are amortised in the first year of operations.
SCHEDULE - 11NOTES FORMING PART OF ACCOUNTS AS AT 31 st MARCH, 2003A. The company has taken certain assets on lease costing Rs. Nil
the future lease obligation against which is Rs. Nil (P.Y. Rs.95.06 lacs)B. Expenditure in Foreign currency
On Travelling Rs. Nil (P.Y. Rs. 0.81 lacs)On Content Rs. Nil (P.Y. Rs.11.40 lacs)
C. C.I.F Value of Imports :On Computers/Servers Rs. Nil (P.Y. Rs. 60.59 lacs)
D. ( i ) Segment Reporting : AS - 17The company operates in a single business segment of providing web based solutions( ii ) Related Party Disclosure : AS-18The following related party transactions were carried out during the year ended 31.3.2003
No. Controlling Company Relationship Nature of T ransaction Amount Amount AmountDue to Due from
Rs. Lacs Rs. Lacs Rs. Lacs1 Larsen & Toubro Limited Holding Company Transaction :
ExpenditureExpenses Paid on our behalf - 78.22 -IncomeService Charges Received 0.38 - -
2 L&T Finance Limited Holding Company TransactionEquity Capital 4.00 - -ICD/Advances Received 818.46 - -Expenses Paid on our behalf 0.60 - -IncomeService Charges Received 6.80 - -ExpenditureInterest on ICD given 22.12 - -
3 Larsen & Toubro Fellow Subsidiary Transaction :Infotech Ltd Company ICD borrowed 901.00 - -
IncomeTransfer of Business Rights 980.50 - 79.50Service charges received 9.10 - -Other Receipts 9.40 - -
E. Provision for Taxes :( i ) Income Tax Rs. 73.07 lacs (P.Y. NIL)( ii ) Provision for Income Tax for the period has been restricted to 7.875% of the Book
Profits under section 115JA of the Income Tax Act,1961.
L&T TRADE.COM LIMITED
S-15
( iii) Deferred tax assets are recognised only if there is reasonable certainty that theywill be realised and are reviewed for the appropriateness of their respective carryingvalues at each balance sheet date
F. Earning per share (“EPS”) computed in accordance with Accounting Standard 20:“Earnings per share”:Particulars 2002-03 2001-02(a) Profit after tax for the year (Rs. Lacs) 885.14 (305.97)(b) Weighted average number of equity shares 23,151 10,000(c) i) Nominal Value of Shares (Rs.) 10.00 10.00
ii) Earnings per shareBasic and diluted (Rs.) 3,823.37 (3,059.66)
G. Previous Y ear's Figures :Previous years figures are regrouped / reclassfied wherever necessary
12. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details:
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Total Assets
Reserves & Surplus
1 1 - 1 2 6 5 4 0
3 1 0 3 2 0 0 3
1 1
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Secured Loans
N I L
N I L
5 0 0
Registration No.
Balance Sheet Date
5 0 0
4 0 0
5 0 0
N I L
N I L
Unsecured Loans
N I L
As per our report attachedSHARP & TANNANChartered Accountants S.V. SUBRAMANIANBy the hand of A.G. KELKARMILIND P. PHADKE A.N. MANIPartnerMumbai MumbaiDated : 25th April, 2003 Dated : 25th April, 2003
Directors}
Turnover Total ExpenditureIV. Performance of Company (Amount in Rs. Thousands)
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Dividend Rate %**Earnings per share (in Rs.)
9 5 8 2 1 8 8 5 1 4
9 8 9 9 4 3 1 7 4
Item Code No. (ITC Code)
N . A
Product Description
N I L
T R A D I N G P O R T A L
3 8 2 3 . 3 7
**Annualised
Net Current Assets
Investments
Miscellaneous Expenditure
Application of FundsNet Fixed Assets
3 5 5 1
( 8 9 7 2 ) N I L
N I L
Accumulated Losses
5 9 2 0
L&T TRANSPORTATION INFRASTRUCTURE LIMITED
DIRECTORS' REPORTL&T TRANSPORTATION INFRASTRUCTURE LIMITED
The Directors have pleasure in presenting their report and Accounts for the year ended 31st March2003.I. FINANCIAL RESULTS
2002-2003 2001-2002 Rupees Rupees
Profit before depreciation & tax (82,48,292) (2,43,44,737)Depreciation 3,49,15,935 3,48,00,879Profit / (Loss) before tax (4,31,64,227) (5,91,45,616)Provision for tax - -Profit / (Loss) after tax (4,31,64,227) (5,91,45,616)Balance brought forward fromPrevious year (12,56,38,424) (6,64,92,808)Balance carried to Balance Sheet (16,88,02,651) (12,56,38,424)
II. DIVIDENDDividend is not declared by the company due to accumulated losses.
III. PERFORMANCE OF THE COMPANYThe loss during the year is due to the current economic slow down coupled with the resistanceby a section of users to pay the user fee for the facility at the Athupalam bridge location. Thecompany has taken up the issue of non-payment of user fee as aforesaid at the appropriate levelsin the Central/State Government and is consistently following up with a view to resolve the currentproblems in entirety.The company has completed its efforts of restructuring the high cost term loans with low costloans, the results of which will be reflected in the coming years.
IV. CAPITAL EXPENDITURE:As at 31st March 2003, the gross fixed assets stood at Rs. 994,261,577/- and the net fixed assetsat Rs.877,209,906/-. Additions during the year amounted to Rs.3,64,264/-.
V. DEPOSITS:The Company has not accepted any deposits from the public.
VI. AUDITORS’ REPORT:The Auditors’ Report to the Shareholders does not contain any qualifications.
VII. DISCLOSURE OF PARTICULARS:As the company is engaged in developing, operating and maintaining toll bridge, there are noparticulars to be disclosed as per the Companies’ (Disclosure of Particulars in the Report of theBoard of Directors) Rules, 1988.
VIII. PARTICULARS OF EMPLOYEES:There are no employees covered by the provisions of the Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) Rules, 1975.
IX. DIRECTORS RESPONSIBILITY STATEMENT:The Board of Directors of the Company confirms:i. that in the preparation of the annual accounts, the applicable accounting standards have
been followed and there has been no material departure;ii. that the selected accounting policies were applied consistently and the directors made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the company as at 31st March, 2003 and of the profit of the Companyfor the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern basis.X. DIRECTORS:
During the year, Mr.N.R.Narasimhan resigned from the Board of Directors of the company due topersonal reasons. The Members of the Board expressed their sincere gratitude for his contributiontowards the performance of the company.Mr. K. Venkatesh, who was appointed a DIrector in the casual vacancy caused by the resignationof Mr. N. R. Narasimhan will hold office upto the date of the ensuing General Meeting when Mr.N. R. Narasimhan would have retired by rotation, and is eligible for re-appointment.At the meeting held on 14th December, 2002 Mr.B.Ramakrishnan was appointed as an AdditionalDirector. Mr.B.Ramakrishnan will hold the office of Director upto the date of the ensuing AnnualGeneral Meeting and is eligible for re-appointment.The Company has received a notice from a member under the provisions of Section 257 of theCompanies Act, 1956 proposing the candidature of Mr. K. Venkatesh & Mr.B.Ramakrishnan forthe office of a Director.Mr. K.V. Rangaswami retires from the Board of Directors by rotation and is eligible for reappointment.
XIII. AUDIT COMMITTEE:The Audit Committee consists of three non executive and independent directors. The presentmembers of the Committee are1. Mr.K.V.Rangaswami Member2. Mr.K.Venkatesh Member3. Mr.B. Ramakrishnan MemberThe role, terms of reference, the authority and power of Chairman are in conformity with therequirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors on internalcontrol systems and internal audit report.
XI. AUDITORS:M/s Sharp & Tannan, Chartered Accountants, Statutory Auditors of the Company hold office untilthe conclusion of the ensuing Annual General Meeting and are recommended for reappointment.Certificate from Auditors has been received to the effect that their appointment, if made, would bewithin the limits prescribed under Section 224(1B) of the Companies Act, 1956.
XII. ACKNOWLEDGEMENTS:The Directors acknowledge the invaluable support extended to the company by the FinancialInstitutions, Bankers, employees of the company & staff and management of the parent company.
K V RANGASWAMI
K.VENKATESHPlace : ChennaiDate : 25th April, 2003
} Directors
L&T TRANSPORTATION INFRASTRUCTURE LIMITED
S-16
AUDITORS’ REPORTTO THE MEMBERS OF L&T TRANSPORTATION INFRASTRUCTURE LIMITEDWe have audited the attached Balance Sheet of L&T Transportation Infrastructure Limited asat 31st March, 2003 and also the Profit & Loss Account of the Company for the year ended onthat date annexed thereto. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements basedon our audit.We conducted our audit in accordance with auditing standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by the management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988
issued by the Central Government of India in terms of Section 227 (4A) of the CompaniesAct, 1956 (hereinafter referred to as the Act), we enclose in the Annexure a statement onthe matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph (1) above, we report that:a. We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit;b. In our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
c. The Balance Sheet and the Profit and Loss Account dealt with by this report are inagreement with the books of account;
d. In our opinion, the said Balance Sheet and the Profit and Loss Account, have beenprepared in Compliance with the accounting standards as prescribed under theprovisions of Section 211(3C) of the Act, to the extent applicable;
e. On the basis of written representations received from the Directors, as on 31st March,2003 and taken on record by the Board of Directors, we report that none of theDirectors is disqualified as on 31st March, 2003 from being appointed as a Directorof the Company in terms of Section 274 (1) (g) of the Act;
f. In our opinion and to the best of our information and according to the explanationsgiven to us the said accounts read together with the Significant Accounting policiesin Schedule H and I and elsewhere in the accounts give the information required bythe Act, in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:(i) In the case of the Balance Sheet, of the state of the Company’s affairs as at 31st
March, 2003; and(ii) In the case of the Profit and Loss Account, of the loss of the Company for the year
ended on that date.For SHARP & TANNAN
Chartered AccountantsBy the hand of
Place : Chennai V.R. LALITHADate : 25
th April, 2003 Partner
ANNEXURE TO THE AUDITORS’ REPORTAs required by the Manufacturing and Other Companies (Auditors’ Report) Order, 1988 dated 7
th
September, 1988 issued by the Central Government of India under section 227(4A) of the CompaniesAct, 1956 we report as under:i) The Company is maintaining proper records to show full particulars including quantitative details
and situation of fixed assets. We are informed that the management during the year has physicallyverified these fixed assets. Discrepancies noticed on such verification, which were not material,have been properly dealt with in the books of account.
ii) Fixed assets have not been revalued during the year.iii) The Company has not taken any loans, secured or unsecured, from companies, firms or other
parties listed in the register maintained under section 301 of the Companies Act, 1956 Asexplained to us, there are no companies under the same management as defined under sub-section (1B) of section 370 of the Companies Act, 1956.
iv) The Company has not granted any loans, secured or unsecured, to companies, firms or otherparties listed in the register maintained under section 301 of the Companies Act, 1956. Asexplained to us, there are no companies under the same management as defined under sub-section (1B) of section 370 of the Companies Act, 1956.
v) There are no parties to whom loans or advances in the nature of loans have been given.vi) In our opinion and according to the information and explanations given to us, there is an adequate
internal control procedure commensurate with the size of the Company and the nature of itsbusiness for the purchases of equipment and other assets. There are no sales of goods duringthe year.
vii) According to the information and explanation given to us, no purchase of goods and materialswere made in pursuance of contract or arrangements entered in the register maintained undersection 301 of the Companies Act, 1956 and aggregating during the year to Rs. 50,000/- or morein respect of each party.
viii) The Company has not accepted any deposit from the public.ix) We are of the opinion that the Company has an internal audit system commensurate with its size
and the nature of its business.x) The company has regularly deposited during the year Provident Fund and Employees’ State
Insurance dues with the appropriate authorities.xi) According to the information and explanations given to us, there were no undisputed amounts
payable in respect of income-tax, wealth-tax, sales tax, customs duty and excise duty which wereoutstanding as at 31st March, 2003 for a period of more than six months from the date they becamepayable.
xii) According to the information and explanations given to us and the records of the Companyexamined by us, no personal expenses have been charged to revenue account other than thosepayable under contractual obligations or in accordance with the generally accepted businesspractices.
xiii) The Company is not a sick industrial company within the meaning of clause (O) of sub-section (1)of Section 3 of the Sick Industrial Companies (Special Provisions) Act 1985.
xiv) In respect of its service activities, the Company has a reasonable system of recording receiptscommensurate with its size and nature of its business. In our opinion, there is a reasonable systemof authorisation at proper levels and adequate system of internal control commensurate with thesize of the Company and the nature of its business.
xv) Clauses iii, iv, v, vi, xii, xiv, xvi of para 4 A of the aforesaid order are not applicable during the year.SHARP & TANNAN
Chartered AccountantsBy the hand of
V.R LALITHAPlace : Chennai PartnerDate : 25th
April 2003
Balance Sheet as at 31 st March, 2003
SOURCES OF FUNDS: Sche- As at 31 st March, 2003 As at 31 st March, 2002dules Rupees Rupees Rupees Rupees
Shareholders’ FundsShare Capital A 414,000,000 414,000,000
Loan FundsSecured Loans B 630,490,556 621,000,000
Total 1,044,490,556 1,035,000,000
APPLICATION OF FUNDS :Fixed Assets: C
Gross Block 994,261,577 994,256,044Less : Depreciation 117,051,671 82,152,776Net Block 877,209,906 912,103,268
Current Assets, Loanand Advances D
Sundry Debtors - 295,136Cash and bank balances 3,041,160 1,611,176Loans and advances 2,811,393 3,742,268
5,852,553 5,648,580Less : Current liabilitiesand provisions E
Liabilities 7,979,334 9,116,008Provisions - -
7,979,334 9,116,008Net Current Assets (2,126,781) (3,467,428)Miscellaneous Expenditure(to the extent not written off or adjusted)Preliminary Expenses 604,780 725,736Profit & Loss account 168,802,651 125,638,424
Total 1,044,490,556 1,035,000,000
Significant Accounting Policies H
Notes forming part of Accounts I
Chennai, Dated: 25th April, 2003
Directors}As per our report attached
SHARP & TANNANChartered Accountants
V.R. LALITHAPartner
Chennai, Dated: 25th April, 2003
K. SRINATHANSecretary
K.V. RANGASWAMI
K. VENKATESH
Profit & Loss Account for the year ended 31 st March, 2003
2002-2003 2001-2002
Schedules Rupees Rupees
INCOME
Fee collection from usersof facility 105,216,717 82,851,923
Licence fees for waysideamenities 1,158,526 991,964
Other income F 2,929,443 4,878,236
TOTAL 109,304,686 88,722,123
EXPENDITURE
Operating &maintenance expenses G 20,905,616 19,130,072
Preliminary expenses written off 120,956 120,956
Interest & Finance charge 96,526,406 93,815,832
Depreciation 34,915,935 34,800,879
TOTAL 152,468,913 147,867,739
Profit / (Loss) before taxes (43,164,227) (59,145,616)
Provision for taxes - -
Profit / (Loss) after taxes (43,164,227) (59,145,616)
Add : Profit / (Loss) broughtforward from previous year (125,638,424) (66,492,808)
Balance carried to Balance Sheet (168,802,651) (125,638,424)
Earnings per Share (Basic & Diluted) (1.04) (1.43)
Significant Accounting Policies H
Notes forming part of Accounts I
Chennai, Dated: 25th April, 2003
Directors}As per our report attached
SHARP & TANNANChartered Accountants
V.R. LALITHAPartner
Chennai, Dated: 25th April, 2003
K. SRINATHANSecretary
K.V. RANGASWAMI
K.VENKATESH
L&T TRANSPORTATION INFRASTRUCTURE LIMITED
S-17
SCHEDULES FORMING PART OF ACCOUNTS
As at As at31st March, 2003 31st March, 2002
Rupees Rupees Rupees Rupees
SCHEDULE - A
Share Capital
Authorised :
5,00,00,000 Equity Shares of Rs. 10/- each 500,000,000 500,000,000
Issued and Subscribed:
41,400,000 Equity Shares of Rs. 10/- eachfully paid up ( The entire equity share capital 414,000,000 414,000,000are held by Larsen & Toubro Limited,its subsidiaries and its nominees)
414,000,000 414,000,000
As at As at31st March, 2003 31st March, 2002
Rupees Rupees Rupees Rupees
SCHEDULE - B
Secured LoansFrom BanksTerm Loan-Karnataka Bank 190,490,556 -Term Loan - SBI 290,000,000 290,000,000Term Loan - UBI 150,000,000 150,000,000From Financial InstitutionsTerm Loan - IDBI - 181,000,000(All the above loans are secured by a paripassu charge on all the movable andimmovable properties of the company,present and future )
630,490,556 621,000,000
SCHEDULE - C
Cost Depreciation Book Value
Fixed Assets As at Additions Deletions As at Upto For the Deduction Upto As at As at1-4-2002 31-03-2003 31-03-2002 year 31-3-2003 31-03-2003 31-03-2002
Land 607,315 - - 607,315 - - - - 607,315 607,315Building * 984,009,379 - - 984,009,379 79,127,198 33,750,455 - 112,877,653 871,131,726 904,882,181Plant & Machinery 8,312,348 5,533 - 8,317,881 2,759,034 1,032,131 - 3,791,165 4,526,716 5,553,314Furniture & Fixtures 307,760 - - 307,760 44,248 19,481 - 63,729 244,031 263,512Vehicles 1,019,242 - - 1,019,242 222,296 96,828 - 319,124 700,118 796,946Total (A) 994,256,044 5,533 - 994,261,577 82,152,776 34,898,895 - 117,051,671 877,209,906 912,103,268Leased AssetsVehicles - 358,731 358,731 - 17,040 17,040 - - -Total (B) - 358,731 358,731 - - 17,040 17,040 - - -Total (A+B) 994,256,044 364,264 358,731 994,261,577 82,152,776 34,915,935 17,040 117,051,671 877,209,906 912,103,268Previous Year 993,840,432 415,612 - 994,256,044 47,351,897 34,800,879 - 82,152,776 912,103,268 946,488,535Note:* Building includes Bypass road and bridge over river Noyyal (known as Athupalam bridge) constructed on land provided by Government of Tamilnadu under the Concession Agreementdated 3rd October, 1997 with the Ministry of Surface Transport, Government of India and Department of Highways, Government of Tamilnadu, and the cost of the bridge and bypass are beingamortised equally over a period of 20 years and 30 years respectively, commencing from 12th December 1998 and 19th January 2000 respectively.
(Figures in Rupees)
SCHEDULES FORMING PART OF ACCOUNTS
SCHEDULES FORMING PART OF ACCOUNTS
As at As at31st March, 2003 31 st March, 2002
Rupees Rupees Rupees Rupees
SCHEDULE - DCurrent Assets, Loans and AdvancesSundry Debtors
Other Debts:Considered good - - 295,136 295,136
Cash and bank balances - -Cash on hand 698,383 814,645Balances with scheduled bankon current account 1,599,861 118,487on margin money deposits ( includinginterest accrued thereon Rs.2,42,916(previous year Rs. 1,78,044/- ) 742,916 3,041,160 678,044 1,611,176
Loans & AdvancesAdvances recoverable in cash or in kind 2,811,393 3,742,268
5,852,553 5,648,580
SCHEDULE - E
Current Liabilities and ProvisionsLiabilitiesSundry Creditors- Small scale industries - -- Others 7,979,334 9,116,008
7,979,334 9,116,008
2002-03 2001-02Rupees Rupees
SCHEDULE - FOther income
Interest on fixed deposit 87,241 368,578(tax deducted at source - Rs. 85,626 )previous year Rs. 85,921/- )Cost of Services 4,200,000Miscellaneous Income 2,842,202 309,658
2,929,443 4,878,236SCHEDULE - GOperating & Maintenance ExpensesSecurity services 6,360,373 5,303,948Salaries & wages 4,524,949 4,369,459Rent, Rates & Taxes 1,210,809 563,404Printing & Stationery 480,009 347,027Travelling & conveyance 732,057 558,122Electricity charges 893,468 903,456Insurance 1,891,368 2,218,157
2002-03 2001-02Rupees Rupees
SCHEDULE - G (contd...)Repairs & Maintenance- Buildings 391,809 570,260- Plant & Machinery 414,101 242,269- Others 351,342 702,022Postage & Telephone expenses 239,546 243,149Miscellaneous expenditure 3,415,786 3,108,799
20,905,617 19,130,072
SCHEDULE - HSIGNIFICANT ACCOUNTING POLICIES:1. Basis of Accounting
The company maintains its accounts on accrual basis following the historical cost convention,in compliance with the Accounting Standards referred to in Section 211 (3c) and the otherrequirements of the Companies Act, 1956.
2. IncomeFee collections from users of facility are accounted for as and when the amount is due andrecovery is certain. Licence fees for wayside amenities are accounted on accrual basis.
3. Retirement BenefitsContributions to Provident Fund are accounted on actual liability basis.
4. Fixed AssetsFixed assets are stated at original cost. Pre-operative expenses are capitalised as part of fixedassets till the date of commencement of commercial operations.
5. Leasesi. Assets acquired under leases where the Company has substantially all the risks and
rewards of ownership are classified as finance leases. Such assets are capitalised at theinception of the lease at the lower of the fair value or the present value of minimum leasepayments and a liability is created for an equivalent amount. Each lease rental paid isallocated between the liability and the interest cost, so as to obtain a constant periodic rateof interest on the outstanding liability for each period.
ii. Assets acquired as leases where a significant portion of the risks and rewards ofownership are retained by the lessor are classified as operating leases. Lease rentals arecharged to the Profit & Loss Account on accrual basis.
6. DepreciationDepreciation on assets has been provided on straight line basis at the rates and in the mannerspecified in the Schedule XIV of the Companies Act, 1956. Assets constructed on land notowned by the company are amortised over a period of the rights given under the concessionagreement with the Ministry of Surface Transport, Government of India dated 3rd October,1997.
7. Borrowing CostBorrowing costs that are attributable to the acquisition, construction or production of qualifyingassets are capitalised as part of the cost of such assets. A qualifying asset is an asset thatnecessarily takes a substantial period of time to get ready for its intended use or sale. All otherborrowing costs are recognised as an expense in the period in which they are incurred.
8. Miscellaneous ExpenditurePreliminary expenses are written off over a period of ten years.
L&T TRANSPORTATION INFRASTRUCTURE LIMITED
S-18
15. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details
Registration No.
State Code1 8 - 3 9 1 0 2 1 8
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Secured Loans
Net Fixed Assets
Net Current Assets
Accumulated Losses
Total Assets
Reserves & Surplus
Investments
Unsecured Loan
Miscellaneous Expenditure
Turnover (including other income)
Profit/Loss Before Tax
Total Expenditure
Profit/Loss After Tax
3 1 - 0 3 - 2 0 0 3
N I L
N I L
1 0 4 4 4 9 1
4 1 4 0 0 0
6 3 0 4 9 1
8 7 7 2 1 0
- 2 1 2 7
1 6 8 8 0 3
1 5 2 4 6 9
4 3 1 6 4
6 0 5
Earning Per Share in Rs.
N I L
V. Generic Names of Three Principal Products/Services of Company (As per monetary terms)
Item Code No.
Product Description
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
IV. Performance of Company (Amount in Rs. Thousands)
Dividend Rate %
N A
N I L
Balance Sheet Date
N I L
1 0 4 4 4 9 1
N I L
4 3 1 6 4
+ - + -
✓✓✓✓✓✓✓✓✓✓
INFRASTRUCTURE PROJECT ON BOT BASIS
N I L
N I L
- 1 . 0 4
1 0 9 3 0 5
Chennai, Dated 25th April, 2003
Directors}As per our report attached
SHARP & TANNANChartered Accountants
V.R. LALITHAPartner
Chennai, Dated 25th April, 2003
K. SRINATHANSecretary
K.V. RANGASWAMI
K.VENKATESH
Signatures to Schedules A to I
9. Taxes on IncomeTax on income for the current period is determined on the basis of taxable income and taxcredits computed in accordance of the provisions of the Income Tax Act, 1961, and based onexpected outcome of assessments / appeals.Deferred tax is recognized on timing differences between the accounting income and thetaxable income for the year and quantified using the tax rates and laws enacted or substantivelyenacted as on the Balance Sheet date.Deferred tax assets are recognized and carried forward to the extent that there is a reasonablecertainty that sufficient future taxable income will be available against which such deferred taxassets can be realised.
SCHEDULE - INotes forming part of Accounts1. The company has been awarded a composite contract under Build Operate and Transfer
(BOT) basis for construction of a bypass and a bridge over the River Noyyal (known asAthupalam bridge) in Coimbatore district of Tamil Nadu state and had completed constructionof bypass road on 18.1.2000 and Bridge on 11.12.98
2. The company had no transactions during the year with any small scale industrialundertakings and hence reporting details of interest on overdue outstandings and amountoutstanding for more than thirty days, does not arise.
3. The company is a service company and accordingly information required under paragraph4(C) of Part II of Schedule VI to the Companies Act, 1956 has not been furnished.
4. Manager’s salary and perquisites of Rs.218,612/- (Previous year – Rs.4,36,446/-)for the year ended 31st March, 2003 have been charged to the accounts.
5. Auditor’s remuneration: (Rupees)2002-2003 2001-02
Audit Fees 20,000 20,000Tax Audit Fees 15,000 -Certification Fees 8,663 -Reimbursement of Expenses 7,800 5,536
6. No provision for income tax / wealth tax has been made for the current year as there is notaxable income/wealth under the Income Tax Act, 1961 and Wealth Tax Act 1957.
7. Premium paid on prepayment of term loan amounting to Rs. 94,90,556/- is charged to the Profitand Loss Account and included under Interest and Finance charges.
8. The company has preferred a claim of Rs. 31,12,886/- with the Government of Tamil Nadu onaccount of differential Toll collections for the period from 1st April 02 to 25th August 02, due todelayed issue of toll rate notification by the Government, applicable for the year beginning 1st
April 2002. As per clause 1.2.1 of the Concession Agreement, this amount will be compensatedby the Government by way of increase in the concession period. Accordingly, the aboveamount, will be accrued in the year in which collections will be made on receipt of the necessaryapproval.
9. As per Accounting Standard 22 on Taxes on Income –The Company has a net deferred taxasset of Rs .60,408,161/-. (For the year 2001-02 – Rs.4,61,00,488).
(Amount in Rs.)31.03.03 31.03.02
Deferred tax assetsOn account of Unabsorbed loss / depreciation as per 131,221,962 103,521,309Income tax returnUnpaid statutory liabilities debited to Profit & Loss A/c. 9,070 -
131,231,032 103,521,309Less: Deferred Tax liabilitiesOn account of difference between carrying amount of fixedAssets in the books and WDV for income tax purposes. 70,822,871 57,420,821
70,822,871 57,420,821Net deferred tax asset 60,408,161 46,100,488
However on a prudent basis, the company has not accrued the said deferred tax asset in theseaccounts.
10. The company has not capitalised any borrowing cost during the year (Previous year-Rs. NIL)11. Accounting Standard 18 on Related Party Disclosure is not applicable to the company since
the turnover of the company does not exceed Rs. 50 Crores for the year.12. Leases:
a. The company had acquired a car on finance lease and cancelled during the year.b. The company has taken commercial premises under cancellable operating lease. The
lease agreement is renewable on expiry.c. The rental expenses in respect of operating lease were Rs.1,70,500/- (Previous Year
Rs. 96,000/-)13. Segment Reporting – The Company is in the business of operating a Toll bridge and Bypass
and the entire income represents Collections. Accordingly, segment reporting does not arise.14. Figures for the previous year have been regrouped/re-classified where necessary.
L&T WESTERN INDIA TOLLBRIDGE LIMITEDL&T WESTERN INDIA TOLLBRIDGE LIMITED
DIRECTORS' REPORTThe Directors have pleasure in presenting their report and Accounts for the year ended 31st
March 2003.I. FINANCIAL RESULTS
(Amount in Rupees)Description 2002-03 2001-02Profit before depreciation & tax 7,53,08,955 6,93,39,276Depreciation 5,64,64,277 5,63,38,158Profit / (Loss) before tax 1,89,16,678 1,30,01,118Provision for tax 14,89,688 9,94,586Profit / (Loss) after tax 1,74,26,990 1,20,06,532Balance brought forward from previous year 12,16,800 (17,89,728)Interim Dividend 1,05,00,006 -Proposed Dividend - 90,00,004Balance carried to Balance Sheet 81,43,784 12,16,800
II. DIVIDENDAn interim dividend @ 7% has been paid to the shareholders for the year 2002-03.
III. PERFORMANCE OF THE COMPANYThis was the second full year of operations. The results of this year were affected by thecommunal disturbances in Gujarat, order of the District Collector not to collect toll from thenon-users of the bridge, issue of passes to locals and the general recessionery trend inthe State.
IV. CAPITAL EXPENDITUREAs at 31st March 2003, the gross fixed assets stood at Rs.5,162.06 Lakhs and the net fixedassets at Rs. 3,987.13 Lakhs. Additions during the year amounted to Rs.200.45 Lakhs.
V. DEPOSITSThe Company has not accepted any deposits from the public.
VI. AUDITORS’ REPORTThe Auditors’ Report to the Shareholders does not contain any qualifications.
VII. DISCLOSURE OF PARTICULARSAs the company is engaged in developing, operating and maintaining toll bridge, there areno particulars to be disclosed as per the Companies’ (Disclosure of Particulars in theReport of the Board of Directors) Rules, 1988.
L&T WESTERN INDIA TOLLBRIDGE LIMITED
S-19
VIII. PARTICULARS OF EMPLOYEESThere are no employees covered by the provisions of Section 217(2A) of the CompaniesAct, 1956, read with the Companies (Particulars of Employees) Rules, 1975.
IX. DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirms:i. that in the preparation of the annual accounts, the applicable accounting standards
have been followed and there has been no material departure;ii. that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31st March, 2003 and of the profitof the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. that the annual accounts have been prepared on a going concern basis.X. DIRECTORS
During the year, Mr. N.R.Narasimhan has resigned from the Board and Mr. K.Venkateshhas been appointed as a Director in his place. The Company has received a notice froma member under the provisions of Section 257 of the Companies Act, 1956 proposing thecandidature of Mr. K. Venkatesh for the office of a Director.Mr. R.Balasubramanian retires from the Board of Directors by rotation and is eligible for re-appointment
XI. AUDIT COMMITTEEThe Audit Committee consists of three non executive and independent directors. Thepresent members of the Committee are:-1. Mr.K.V.Rangaswami Member2. Mr.K.Venkatesh Member3. Mr.J. Ganguly MemberThe role, terms of reference, the authority and power of the Chairman are in conformitywith the requirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors oninternal control systems and internal audit report.
XII. AUDITORSThe Auditors, M/s Sharp & Tannan, Chartered Accountants, being statutory auditors of theCompany hold office until the conclusion of the ensuing Annual General Meeting and arerecommended for reappointment. Certificate from the Auditors has been received to theeffect that their appointment, if made, would be within the limits prescribed under Section224(1B) of the Companies Act, 1956.
XIII. ACKNOWLEDGEMENTSThe Directors acknowledge the invaluable support extended to the company by the Bankers,employees of the company & staff and management of the parent company.
For and on behalf of the board
K.V.RANGASWAMIK.VENKATESH
Place : Chennai.Date : 25
th April, 2003
} Directors
AUDITORS’ REPORTTO THE MEMBERS OF L&T WESTERN INDIA TOLLBRIDGE LIMITEDWe have audited the attached Balance Sheet of L&T Western India Tollbridge Limited at 31st
March, 2003 and also the Profit & Loss Account of the Company for the year ended on that dateannexed 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.We conducted our audit in accordance with the auditing standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by the management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988
issued by the Central Government of India in terms of Section 227 (4A) of the CompaniesAct, 1956 (hereinafter referred to as the Act), we enclose in the Annexure a statement onthe matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph (1) above, we reportthat:-a. We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit;b. In our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;c. The Balance Sheet and the Profit and Loss Account dealt with by this report are in
agreement with the books of account;d. In our opinion, the said Balance Sheet and the Profit and Loss Account, have been
prepared in Compliance with the accounting standards as prescribed under theprovisions of Section 211(3C) of the Act, to the extent applicable;
e. On the basis of written representations received from the Directors, as on 31st March,2003 and taken on record by the Board of Directors, we report that none of theDirectors is disqualified as on 31st March, 2003 from being appointed as a Director ofthe Company in terms of Section 274 (1) (g) of the Act;
f. In our opinion and to the best of our information and according to the explanationsgiven to us the said accounts read together with the Significant Accounting policies inSchedules 1 and 2 and elsewhere in the accounts give the information required by theAct, in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:(i) In the case of the Balance Sheet, of the state of the Company’s affairs as
at 31st March, 2003; and(ii) In the case of the Profit and Loss Account, of the profit of the Company for the
year ended on that date.SHARP & TANNAN
Chartered AccountantsBy the hand of
Place : Chennai V.R. LALITHADate : 25th April, 2003 Partner
ANNEXURE TO THE AUDITORS’ REPORTAs required by the Manufacturing and Other Companies (Auditor's Report) Order, 1988 dated7th September, 1988 issued by the Central Government under Section 227(4A) of the CompaniesAct, 1956 we report as under:i) The Company is maintaining proper records to show full particulars including quantitative
details and situation of fixed assets. We are informed that the management during the yearhas physically verified these fixed assets. Discrepancies noticed on such verification,which were not material, have been properly dealt with in the books of account.
ii) Fixed assets have not been revalued during the year.iii) The Company has not taken any loans, secured or unsecured, from companies, firms or
other parties listed in the register maintained under Section 301 of the Companies Act,1956. As explained to us, there are no companies under the same management as definedunder sub-section (1B) of Section 370 of the Companies Act, 1956.
iv) The Company has not granted any loans, secured or unsecured, to companies, firms orother parties listed in the register maintained under Section 301 of the Companies Act,1956. As explained to us, there are no companies under the same management as definedunder sub-section (1B) of Section 370 of the Companies Act, 1956.
v) There are no parties to whom Loans or advances in the nature of loans have been given.vi) In our opinion and according to the information and explanations given to us, there is an
adequate internal control procedure commensurate with the size of the Company and thenature of its business for the purchase of equipment and other assets. There are no saleof goods during the year.
vii) According to the information and explanation given to us, no purchase of goods andmaterials were made in pursuance of contract or arrangements entered in the registermaintained under Section 301 of the Companies Act, 1956 and aggregating during the yearto Rs. 50,000/- or more in respect of each party.
viii) The Company has not accepted any deposit from the public.ix) We are of the opinion that the Company has an internal audit system commensurate with
its size and the nature of its business.x) The provisions of the Employees' State Insurance Act do not apply to the company during
the year. However, Provident Fund registration had been obtained with effect from 1st
October 2002 and contributions were remitted regularly. Voluntary provident fund contributionand deduction upto 30th September 2002 were refunded as per Note No. 9.
xi) According to the information and explanations given to us, there were no undisputedamounts payable in respect of income-tax, wealth-tax, sales tax, customs duty and exciseduty which were outstanding as at 31st March, 2003 for a period of more than six monthsfrom the date they became payable.
xii) According to the information and explanations given to us and the records of the Companyexamined by us, no personal expenses have been charged to revenue account other thanthose payable under contractual obligations or in accordance with the generally acceptedbusiness practices.
xiii) The Company is not a sick industrial company within the meaning of clause (O) ofsub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act1985.
xiv) In respect of its service activities, the Company has a reasonable system of recordingreceipts commensurate with its size and nature of its business. In our opinion, there is areasonable system of authorisation at proper levels and adequate system of internal controlcommensurate with the size of the Company and the nature of its business.
xv) Clauses iii, iv, v, vi, xii, xiv, xvi of para 4 A of the aforesaid order are not applicable duringthe year.
SHARP & TANNANChartered Accountants
By the hand of
Place : Chennai V.R. LALITHADate : 25th April, 2003 Partner
BALANCE SHEET AS AT 31 ST MARCH, 2003As at 31.3.2003 As at 31.3.2002
Sch. Rupees Rupees Rupees RupeesSOURCES OF FUNDSShareholders’ Funds
Share Capital A 150,000,070 150,000,070Reserves & Surplus B 8,143,784 1,216,800
Loan FundsSecured Loans C 223,226,001 316,235,000
Total 381,369,855 467,451,870APPLICATION OF FUNDS
Fixed Assets DGross Block 516,206,405 496,161,885Less : Depreciation 117,493,843 61,029,566
Net Block 398,712,562 435,132,319Capital Work-In-Progress 738,682 399,451,244 - 435,132,319Investments E 26,000 26,000Current Assets,Loan and Advances FCash and bank balances 3,609,305 41,445,526Loans and advances 4,430,224 8,039,529 1,972,378 43,417,904Less : Current liabilitiesand provisions GLiabilities 23,662,644 1,129,763Provisions 2,484,274 26,146,918 9,994,590 11,124,353
Net Current Assets (18,107,389) 32,293,551
Total 381,369,855 467,451,870Significant Accounting Policies 1Notes forming part of Accounts 2
As per our report attachedSHARP & TANNANChartered AccountantsBy the hand of
V.R. LALITHAPartnerPlace : ChennaiDate : 25th April, 2003
V.RAVICHANDRANSecretary
Place : ChennaiDate : 25th April, 2003
K. V. RANGASWAMIK. VENKATESH Directors}
L&T WESTERN INDIA TOLLBRIDGE LIMITED
S-20
SCHEDULE D :(Rupees)
Fixed Assets Cost Depreciation Book Value
As at As at Upto For the year upto As at As at01.04.2002 Additions 31.03.2003 31.03.2002 2002-03 31.03.2003 31.03.2003 31.03.2002
Building 492,921,735 20,000,000 512,921,735 60,452,666 56,046,363 116,499,029 396,422,706 432,469,069
Plant & Machinery 1,534,319 — 1,534,319 187,988 173,735 361,723 1,172,596 1,346,331
Furniture & Fixtures 1,705,831 44,520 1,750,351 388,912 244,179 633,091 1,117,260 1,316,919
Vehicles — — — — — — — —
Total 496,161,885 20,044,520 516,206,405 61,029,566 56,464,277 117,493,843 398,712,562 435,132,319
Previous Year 495,834,720 327,165 496,161,885 4,691,408 56,338,158 61,029,566 435,132,319 —
Building includes bridge over river Watrak constructed on land provided by the Government of Gujarat under the Concession Agreement dated 1st March,1999 with the Ministry of Surface Transport, Governmentof India and Roads and Buildings Department, Government of Gujarat and the cost incurred on the said bridge is being amortised equally over a period of 106 months from 1st March, 2001.
Additions to Building represent claims by the construction contractor accepted during the year and depreciation charged prospectively from 1st March, 2003 till the expiry of the concession period,i.e. 31.12.2009.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31 ST MARCH, 2003Sch. 31.3.2003 31.3.2002
Rupees RupeesINCOME
Fee collection from users of facilities 112,245,423 121,405,869Other income H 10,678,834 2,676,118
TOTAL 122,924,257 124,081,987EXPENDITURE
Operating & maintenance expenses I 14,707,753 14,176,862Interest 32,835,549 40,565,849Depreciation 56,464,277 56,338,158
TOTAL 104,007,579 111,080,869
Profit before taxes 18,916,678 13,001,118Provision for taxes 1,489,688 994,586Profit after taxes 17,426,990 12,006,532Add : Balance brought forward from previous year 1,216,800 (1,789,728)Profit available for appropriation 18,643,790 10,216,804Less: Transfer to General reserve - -Profit available for distribution 18,643,790 10,216,804Interim Dividend 10,500,006Proposed Dividend - 9,000,004Balance carried to Balance Sheet 8,143,784 1,216,800Earnings per share - Basic and Diluted 1.16 0.80Significant Accounting Policies 1Notes forming part of Accounts 2
As per our report attachedSHARP & TANNANChartered AccountantsBy the hand of
V.R. LALITHAPartnerPlace : ChennaiDate : 25th April, 2003
V.RAVICHANDRANSecretary
Place : ChennaiDate : 25th April, 2003
K. V. RANGASWAMIK. VENKATESH Directors}
SCHEDULES FORMING PART OF ACCOUNTSAs at 31.3.2003 As at 31.3.2002
Rupees Rupees Rupees RupeesSCHEDULE - AShare CapitalAuthorised :
21,000,000 Equity Shares of 210,000,000 210,000,000Rs. 10/- each
Issued and Subscribed:15,000,007 Equity Shares ofRs. 10/- each fully paid up 150,000,070 150,000,070150,00,007 shares are held byLarsen & Toubro Limited(the Holding Company) and its nominees 150,000,070 150,000,070
SCHEDULE - BReserves and Surplus :
Profit and Loss AccountTransfer from Profit & Loss Account 8,143,784 1,216,800
8,143,784 1,216,800SCHEDULE - CSecured Loans
From BanksTerm Loan-State Bank ofHyderabad 213,072,223 266,235,000Term Loan-Bank Muscat 10,000,000 50,000,000Interest Accrued and Dueon Term Loan 153,778 223,226,001 - 316,235,000(Secured by pari passu chargeon the company’s movable 223,226,001 316,235,000assets, present and future)
SCHEDULES FORMING PART OF ACCOUNTSAs at 31.03.2003 As at 31.3.2002
Rupees Rupees Rupees RupeesSCHEDULE - EInvestmentsUnquoted :
Intertoll ICS (Ahmedahad -Mahesana)Toll Management Company Pvt. Ltd. -2600 Equity shares of Rs.10 each 26,000 26,000
26,000 26,000SCHEDULE - FCurrent Assets, Loans and Advances:
Cash and bank balancesCash on hand 948,660 1,316,595Balances with scheduled bankon current account on fixed 2,447,208 18,463,361deposits (Including interestaccrued thereon — 21,464,937Rs. Nil /-. Previous yearRs. 18,55,275/-) on margin money(including the interest accruedthereon -Rs.16,377/-.Previous year - Rs.633/-) 213,437 3,609,305 200,633 41,445,526Loans & AdvancesAdvances recoverablein cash or in kind 4,430,224 1,972,378
8,039,529 43,417,904SCHEDULE - GCurrent Liabilities and Provisions:
LiabilitiesSundry Creditors- Small scale industrial undertakings — —- Others 23,662,644 23,662,644 1,129,763
2002-03 2001-02Rupees Rupees
ProvisionsProvision for Taxation 2,484,274 — 994,586 —Proposed dividend — 2,484,274 9,000,004 9,994,590
26,146,918 11,124,353SCHEDULE - HOther income
Other Receipts 9,368,393 —Interest on fixed deposit(tax deducted at source - Rs.3,02,878/-) 1,310,441 2,676,118previous year Rs.5,53,662 /-)
10,678,834 2,676,118SCHEDULE - IOperating Maintenance Expenses
Toll management fees 3,752,905 3,937,161Security Services 2,168,714 1,975,836Salaries & wages 2,865,151 2,346,201Rates & taxes 3,745 12,045Printing & stationery expenses 364,749 460,985Travelling & conveyance 460,241 319,036Electricity charges 397,777 440,705Insurance 1,532,519 745,271Repairs & Maintenance toBuildings 1,244,941 1,478,394Plant and Machinery 297,854 161,353Others 1,080,071 1,317,755Postage & telephone expenses 97,605 144,110Miscellaneous Expenses 441,481 838,010
14,707,753 14,176,862SCHEDULE ‘1’SIGNIFICANT ACCOUNTING POLICIES:1. Basis of Accounting
The company maintains its accounts on accrual basis following the historical cost convention,
L&T WESTERN INDIA TOLLBRIDGE LIMITED
S-21
in compliance with the Accounting Standards referred to in Section 211(3C) and the otherrequirements of the Companies Act, 1956.
2. IncomeFee collections from users of facilities are accounted for as and when the amount is due andrecovery is certain.
3. Retirement BenefitsContributions to Provident fund are accounted on actual liability basis.
4. Fixed AssetsFixed assets are stated at original cost. Pre-operative expenses (incurred till the date ofcommencement of commercial operations) are capitalised as part of fixed assets.
5. DepreciationDepreciation on the assets has been provided on straight line basis at the rates and in themanner specified in the Schedule XIV of the Companies Act, 1956. Assets constructed onland not owned by the company and acquired / installed thereon are amortised over theperiod of the rights given under the concession agreement dated 1st March, 1999 with theMinistry of Surface Transport, Government of India and Public Works Department, Governmentof Gujarat.
6. Borrowing CostBorrowing costs that are attributable to the acquisition, construction or production of qualifyingassets are capitalised as part of the cost of such assets. A qualifying asset is an asset thatnecessarily takes a substantial period of time to get ready for its intended use or for sale.All other borrowing costs are recognised as an expense in the period in which they areincurred.
7. Miscellaneous ExpenditurePreliminary expenses are written off in the year of commencement of commercial operations.
8. Foreign Currency Transactions(i) Foreign currency assets and liabilities are converted at contracted / year-end rates as
applicable.(ii) All other foreign currency transactions are accounted for at the rates prevailing on the
dates of the transactions.(iii) The exchange differences on settlement / conversion are adjusted to:
a. Cost of fixed assets, if the foreign currency liability relates to fixed assetsb. Profit & loss account in other cases. Wherever forward contracts are entered into,
the exchange differences are dealt with in the Profit & Loss account over theperiod of the contracts.
9. Taxes on IncomeTax on income for the current period is determined on the basis of taxable income and taxcredits computed in accordance with the provisions of the Income Tax Act, 1961, andbased on expected outcome of assessments.Deferred tax is recognised on timing differences between the accounting income and thetaxable income for the year and quantified using the tax rates and laws enacted orsubstantively enacted as on the Balance Sheet date.
SCHEDULE ‘2’Notes forming part of Accounts :1. Estimated amount of contracts remaining to be executed on capital account and not provided
for (net of advances) Rs. NIL /- (previous year NIL /-).2. The company had no transactions during the year with any small-scale industrial
undertakings and hence reporting details of interest on overdue outstanding and amountoutstanding more than thirty days, does not arise.
3. The company has been awarded under Build Operate and Transfer (BOT) basis, theconstruction of the second two-lane bridge at Kheda across the River Watrak on NationalHighway 8, in the State of Gujarat.
4. The company is a service company and accordingly information required under paragraph4C of Part II of Schedule VI to the Companies Act, 1956 has not been furnished.
5. Manager’s salary and perquisites on deputation of Rs. 2,13,758 (Previous yearRs.1,91,327/- ) have been charged to accounts.
6. Auditor’s remuneration:(Amount in Rupees)
2002-2003 2001-2002Audit Fees 25,000 25,000Tax Audit Fees 8,500 -Certification Fee 1,500 -Reimbursement of Expenses 1,025 1,900
7. The Company is governed by the provisions of Sec 115JB of the Income Tax Act, 1961.Accordingly, provision for income tax has been made under the provisions of MinimumAlternative Tax under the said Act. No provision for Wealth Tax has been made since theCompany does not have taxable wealth under the provisions of the Wealth Tax Act, 1957.
8. Borrowing cost capitalised during the year is NIL.9. The Company obtained PF registration w.e.f. 01.10.2002 and is regularly depositing the
amount. Recoveries, made upto 30th September 2002 in anticipation of obtaining PFregistration, were refunded to the employees including contribution from the employertogether with interest.
10. Accounting Standard - 18 on Related Party Disclosures is not applicable to the Companysince the turnover of the Company does not exceed Rs. 50 Crores for the year.
11. The Company has not entered into any lease transaction and hence AS19 is not applicable.12. As per Accounting Standard 22 on Accounting for Taxes on Income – the Company has
a deferred tax liability of Rs.1,08,08,798/- as on 31.3.2003 (upto 31.03.02 deferred taxliability of Rs.41,20,187/-).
(Amount in Rs.)Deferred Tax liabilities 31.03.03 31.03.02Difference between carrying amount of fixed assets 49,276,395 40,391,242in the books and the income tax return.Total 49,276,395 40,391,242
V. Generic Names of Three Principal Products/Services of the Company
(as per monetary terms)
Infrastructure Projects on BOT basis
15. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details:
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital (incl. advance against share capital)
Net Current Assets
Accumulated Losses
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Miscellaneous Expenditure
Profit/Loss Before Tax Profit/Loss After Tax
1 8 - 4 2 5 1 8
3 1 0 3 2 0 0 3
1 8
N I L
- 1 8 1 0 7
II. Capital raised during the year (Amount in Rs. Thousands)(including advance against share capital)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
IV. Performance of Company (Amount in Rs. Thousands)
Dividend Rate %
Turnover (including other income)
Secured Loans
N I L
N I L
3 8 1 3 6 9
1 5 0 0 0 0 8 1 4 4
2 2 3 2 2 6
3 9 9 4 5 1
Net Fixed Assets2 6
N I L
1 0 4 0 0 8
Total Expenditure
1 8 9 1 7 1 7 4 2 7
Earnings per share in Rs.
1 . 1 6
Registration No.
+ - + -
Balance Sheet Date
1 2 2 9 2 4
3 8 1 3 6 9
N I L
N I L
3 3
7
N I L
Signatures to Schedules A to I
As per our report attachedSHARP & TANNANChartered AccountantsBy the hand of
V.R. LALITHAPartnerPlace : ChennaiDate : 25th April, 2003
V.RAVICHANDRANSecretary
Place : ChennaiDate : 25th April, 2003
K. V. RANGASWAMIK. VENKATESH Directors}
Less : Deferred tax assetsUnabsorbed loss / depreciation as perthe income tax return 38,376,050 36,096,729Difference between carrying amount of preliminaryexpenses not written off 91,547 1,40,670Unpaid statutory liabilities debitedTo Profit & Loss Account — 33,656Total 38,467,597 36,271,055Net deferred tax liability 10,808,798 41,20,187
However, no provision for the said liability is made since the company is eligible for benefitu/s 80IA of the Income Tax Act, 1961 for the entire period of its operations as per theConcession Agreement.
13. Segment Reporting – The Company is mainly in the business of operating a Toll bridge andthe entire income represents Toll Collections. Accordingly, segment reporting is notapplicable.
14. Figures for the previous year have been regrouped / re-classified where necessary.
NARMADA INFRASTRUCTURE CONSTRUCTION ENTERPRISE LIMITEDDIRECTORS’ REPORTThe Directors have pleasure in presenting their report and Accounts for the year ended31st March 2003.I. FINANCIAL RESULTS Amount in RupeesDescription 2002-03 2001-02Profit before depreciation & tax 6,10,63,588 4,36,24,553Depreciation 11,79,31,226 11,78,56,378Profit / (Loss) before tax (5,68,67,638) ( 7,42,31,825)Provision for tax - -Profit / (Loss) after tax ( 5,68,67,638) ( 7,42,31,825)Balance brought forward from Previous year (10,32,27,674) ( 2,89,95,849)Balance carried to Balance Sheet (16,00,95,312) (10,32,27,674)
II. DIVIDENDDividend is not declared by the company due to accumulated losses.
III. PERFORMANCE OF THE COMPANYThe performance of the company in the initial months was affected due to theunfortunate disturbances in Gujarat, and had improved in the later months. Thecompany has completed the debt restructuring of its high cost loans with low costloans, the effect of which will be reflected in the performance of the coming years.
IV. CAPITAL EXPENDITUREAs at 31st March 2003, the gross fixed assets stood at Rs.141,76,56,267/- and thenet fixed assets at Rs. 113,38,53,956/-. Additions during the year amounted toRs.24,63,834/-
NARMADA INFRASTRUCTURE CONSTRUCTION ENTERPRISE LIMITED
S-22
V. DEPOSITSThe Company has not accepted any deposits from the public.
VI. AUDITORS’ REPORTThe Auditors’ Report to the Shareholders does not contain any qualifications.
VII. DISCLOSURE OF PARTICULARSAs the company is engaged in developing, operating and maintaining toll bridge, there areno particulars to be disclosed as per the Companies’ (Disclosure of Particulars in theReport of the Board of Directors) Rules, 1988.
VIII. PARTICULARS OF EMPLOYEESThere are no employees covered by the provisions of the Section 217(2A) of the CompaniesAct, 1956, read with the Companies (Particulars of Employees) Rules, 1975.
IX. DIRECTORS RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirms:-i. that in the preparation of the annual accounts, the applicable accounting standards
have been followed and there has been no material departure;ii. that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 31, 2003 and of the profitof the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. that the annual accounts have been prepared on a going concern basis.X. DIRECTORS
During the year, the company had repaid the loan of Rs.25 crores availed from IDBI.Consequently IDBI withdrew its nomination of Mr. P.J.Mehta on the Board of Directors of theCompany.The Members of the Board expressed their sincere gratitude for his contribution towardsthe performance of the company.At the meeting held on 14th December, 2002 Mr.B.Ramakrishnan was appointed as anAdditional Director. Mr.B.Ramakrishnan will hold the office of Director upto the date of the
AUDITORS’ REPORTTO THE MEMBERS OF NARMADA INFRASTRUCTURE CONSTRUCTIONENTERPRISE LIMITEDWe have audited the attached Balance Sheet of Narmada Infrastructure ConstructionEnterprise Limited as at 31st March, 2003 and also the Profit & Loss Account of theCompany for the year ended on that date annexed thereto. These financial statementsare the responsibility of the Company’s management. Our responsibility is to expressan opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and dis-closures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by the management, as well as evalu-ating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order,
1988 issued by the Central Government of India in terms of Section 227 (4A) of theCompanies Act, 1956 (hereinafter referred to as the Act), we enclose in the Annex-ure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph (1) above, wereport that:a. We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit;b. In our opinion, proper books of account as required by law have been kept by
the Company so far as appears from our examination of those books;
c. The Balance Sheet and the Profit and Loss Account dealt with by this reportare in agreement with the books of account;
d. In our opinion, the said Balance Sheet and the Profit and Loss Account, havebeen prepared in compliance with the accounting standards as prescribedunder the provisions of Section 211(3C) of the Act, to the extent applicable;
e. On the basis of written representations received from the Directors, as on 31st
March, 2003 and taken on record by the Board of Directors, we report thatnone of the Directors is disqualified as on 31st March, 2003 from being ap-pointed as a Director of the Company in terms of Section 274 (1) (g) of the Act;
f. In our opinion and to the best of our information and according to the expla-nations given to us the said accounts read together with the Significant Ac-counting policies in Schedule H and I and elsewhere in the accounts give theinformation required by the Act, in the manner so required and give a true andfair view in confirmity with the accounting principles generally accepted inIndia:(i) In the case of the Balance Sheet, of the state of the Company’s affairs as
at 31st March, 2003; and(ii) In the case of the Profit and Loss Account, of the loss of the Company for
the year ended on that date.SHARP & TANNAN
Chartered AccountantsBy the hand of
V.R. LALITHAPartner
Place : ChennaiDate : 25th April, 2003
ensuing Annual General Meeting and is eligible for re-appointment.The Company has received a notice from a member under the provisions of Section 257 of theCompanies Act, 1956 proposing the candidature of Mr. B. Ramakrishnan for the office of aDirector.Mr.J.Ganguly retires from the Board of Directors by rotation and is eligible for re-appointment.
XI. AUDIT COMMITTEEThe Audit Committee consists of three non executive directors. The present members ofthe Committee are1. Mr.K.V.Rangaswami Member2. Mr.K.Venkatesh Member3. Mr.K.Ramchand Member4. Mr. Mukund Sapre Alternate Director
The role, terms of reference, the authority and power of Chairman are in conformity withthe requirements of the Companies Act, 1956.
The Committee met periodically during the year and had discussions with the auditorson internal control systems and internal audit report.
XII. AUDITORSThe Auditors, M/s Sharp & Tannan, Chartered Accountants, being statutory auditors ofthe Company hold office until the conclusion of the ensuing Annual General Meeting andare recommended for reappointment. Certificate from Auditors has been received to theeffect that their appointment, if made, would be within the limits prescribed under Section224(1B) of the Companies Act.
XIII. ACKNOWLEDGEMENTSThe Directors acknowledge the invaluable support extended to the company by theFinancial Institutions, Bankers, employees of the Company & staff management of theparent Company.
K.V. RANGASWAMI
K. VENKATESHPlace : ChennaiDate : 25th April, 2003
ANNEXURE TO THE AUDITORS’ REPORTAs required by the Manufacturing and Other Companies (Auditors’ Report) Order, 1988 dated7th September, 1988 issued by the Central Government of India under section 227(4A) of theCompanies Act, 1956 we report as under:
i) The Company is maintaining proper records to show full particulars including quantitativedetails and situation of fixed assets. We are informed that the management during the yearhas physically verified these fixed assets. Discrepancies noticed on such verification,which were not material, have been properly dealt with in the books of account.
ii) Fixed assets have not been revalued during the year.
iii) The Company has not taken any loans, secured or unsecured, from companies, firms orother parties listed in the register maintained under section 301 of the Companies Act,1956. As explained to us, there are no companies under the same management as definedunder sub-section (1B) of section 370 of the Companies Act, 1956.
iv) The Company has not granted any loans, secured or unsecured, to companies, firms orother parties listed in the register maintained under section 301 of the Companies Act,1956. As explained to us, there are no companies under the same management as definedunder sub-section (1B) of section 370 of the Companies Act, 1956.
v) There are no parties to whom Loans or advances in the nature of loans have been given.
vi) In our opinion and according to the information and explanations given to us, there is anadequate internal control procedure commensurate with the size of the Company and thenature of its business for the purchases of equipment and other assets. There are no saleof goods during the year.
vii) According to the information and explanation given to us, no purchase of goods andmaterials were made in pursuance of contract or arrangements entered in the registermaintained under section 301 of the Companies Act, 1956 and aggregating during theyear to Rs. 50,000/- or more in respect of each party.
viii) The Company has not accepted any deposit from the public.
ix) We are of the opinion that the Company has an internal audit system commensurate withits size and the nature of its business.
x) The provisions of the Employees State Insurance Act do not apply to the company duringthe year. However, Provident Fund registration had been obtained with effect from 1st
October 2002 and contributions were remitted regularly. Voluntary provident fund contributionand deduction upto 30th September 2002 were refunded as per Note No. 12.
xi) According to the information and explanations given to us, there were no undisputedamounts payable in respect of income-tax, wealth-tax, sales tax, customs duty and exciseduty which were outstanding as at 31
st March, 2003 for a period of more than six months
from the date they became payable.
xii) According to the information and explanations given to us and the records of the Companyexamined by us, no personal expenses have been charged to revenue account other thanthose payable under contractual obligations or in accordance with the generally acceptedbusiness practices.
xiii) The Company is not a sick industrial company within the meaning of clause (o) ofsub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act1985.
xiv) In respect of its service activities, the Company has a reasonable system of recordingreceipts commensurate with its size and nature of its business. In our opinion, there is areasonable system of authorisation at proper levels and adequate system of internalcontrol commensurate with the size of the Company and the nature of its business.
xv) Clauses iii, iv, v, vi, xii, xiv, xvi of para 4 A of the aforesaid order are not applicableduring the year.
SHARP & TANNANChartered Accountants
By the hand of
V.R. LALITHAPartner
Place : ChennaiDate : 25th April, 2003
Directors}
NARMADA INFRASTRUCTURE CONSTRUCTION ENTERPRISE LIMITED
S-23
BALANCE SHEET AS AT 31 st March, 2003As at As at
31st March, 2003 31 st March, 2002
Sche- Rupees Rupees Rupees Rupees
duleSOURCES OF FUNDS :
Shareholders’ FundsShare Capital A 473,500,070 473,500,070
Loan FundsSecured Loans B 956,930,374 946,500,000
Total 1, 430,430,444 1,420,000,070
APPLICATION OF FUNDS :Fixed Assets: CGross Block 1,415,403,149 1,412,939,315Less : Depreciation 283,802,311 165,871,085Net Block 1,131,600,838 1,247,068,230Capital work-in-progresss 2,253,118 1,133,853,956 4,972,670 1,252,040,900Current Assets,Loans and Advances D
Cash and bankbalances 169,902,985 70,855,097Loans and advances 4,934,721 6,352,565
174,837,706 77,207,662Less:Current liabilities and
provisions ELiabilities 37,788,487 11,908,123Provisions 568,043 568,043
38,356,530 12,476,166Net Current Assets 136,481,176 64,731,496
Profit & Loss account 160,095,312 103,227,674
Total 1, 430,430,444 1,420,000,070Significant AccountingPolicies HNotes forming part ofAccounts I
PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 31 ST
MARCH 20032002-2003 2001-2002
Sche Rupees Rupees Rupees Rupeesdule
INCOMEFee collection fromusers of facility 204,333,083 191,861,760Other income F 27,873,337 5,809,351TOTAL 232,206,420 197,671,111
EXPENDITUREOperating &maintenanceexpenses G 50,599,771 16,798,795Interest & FinanceCharges 120,543,061 137,247,763Depreciation 117,931,226 117,856,378TOTAL 289,074,058 271,902,936
Profit / (Loss) beforetaxes (56,867,638) (74,231,825)Provision for taxes - -Profit / (Loss) aftertaxes (56,867,638) (74,231,825)Add : Profit / (Loss)carried forward fromprevious year (103,227,674) (28,995,849)Balance carried toBalance Sheet (160,095,312) (103,227,674)
Earnings per share (1.20) (1.57)
Significant AccountingPolicies HNotes forming partof Accounts I
Schedules forming part of accountsAs at As at
31st March, 2003 31st March, 2002Rupees Rupees Rupees Rupees
SCHEDULE - A
Share Capital
Authorised :
6,00,00,000 Equity Shares of 600,000,000 600,000,000Rs. 10/- each
Issued and Subscribed :47,350,007 Equity Shares ofRs. 10/- each fully paid up 473,500,070 473,500,070(37,880,007 equity shares areheld by Larsen & Toubro Limited,its subsidiaries and its nominees) 473,500,070 473,500,070
As at As at31st March, 2003 31st March, 2002
Rupees Rupees Rupees RupeesSCHEDULE - BSecured LoansLoans from Banks
Term Loans - SBI 456,930,374 446,500,000Loans from Financial Institutions
Term Loan - IDBI - -Term Loan - IDFC - 250,000,000
500,000,000 250,000,000(All the above loans are securedby a pari passu charge on allthe movable and immovable propertiesof the company, present and future )
956,930,374 946,500,000
K.V. RANGASWAMI
K. VENKATESHDirectors}
Chennai ChennaiDated : 25th April, 2003 Dated : 25th April, 2003
K.R. PARTHASARATHYSecretary
As per our report attachedSHARP & TANNANChartered AccountantsV.R. LALITHAPartner
K.V. RANGASWAMI
K. VENKATESHDirectors}
Chennai ChennaiDated : 25th April, 2003 Dated : 25th April, 2003
K.R. PARTHASARATHYSecretary
As per our report attachedSHARP & TANNANChartered AccountantsV.R. LALITHAPartner
Schedules forming part of accounts
(Figures in Rupees)SCHEDULE - C
Fixed Assets Cost Depreciation Book Value
As at Additions As at Upto For the year upto As at As at01.04.2002 31.03.2003 31.03.2002 31.03.2003 31.03.2003 31.03.2002
Building * 1,391,113,933 - 1,391,113,933 163,624,323 115,802,236 279,426,559 1,111,687,374 1,227,489,610
Plant & Machinery 19,110,257 2,463,834 21,574,091 1,703,982 1,786,055 3,490,037 18,084,054 17,406,275
Furniture & Fixtures 2,012,060 - 2,012,060 448,159 276,144 724,303 1,287,757 1,563,901
Vehicles 703,065 - 703,065 94,621 66,791 161,412 541,653 608,444
Total 1,412,939,315 2,463,834 1,415,403,149 165,871,085 117,931,226 283,802,311 1,131,600,838 1,247,068,230
Previous year 1,383,807,668 29,131,647 1,412,939,315 48,014,707 117,856,378 165,871,085 - 1,247,068,230
Note:* Building includes bridge over river Narmada constructed on land provided by Government of Gujarat under the Concession Agreement dated 21st November, 1997 with Ministryof Surface Transport, Government of India and Public Works Department, Government of Gujarat and the cost incurred on the said bridge is being amortised equally over a periodof 12 years commencing from 11th November, 2000.
NARMADA INFRASTRUCTURE CONSTRUCTION ENTERPRISE LIMITED
S-24
As at As at31st March, 2003 31st March, 2002
Rupees Rupees Rupees RupeesSchedule - DCurrent Assets, Loans andAdvancesCash and bank balancesCash on hand 1,551,436 1,538,383Balances with scheduled bankon current account 51,641,909 1,508,313on fixed deposits (including interestaccrued thereon Rs.99,68,414/-(previous year Rs. 36,79,942) 115,468,414 66,679,942on margin money deposit accounts(including interest accrued thereonRs.2,41,226/- (previous yearRs.1,28,459) 1,241,226 169,902,985 1,128,459 70,855,097Loans & Advances
Advances recoverable incash or in kind 4,934,721 6,352,565
174,837,706 77,207,662
Schedule - ECurrent Liabilities and Provisions:Liabilities
Sundry Creditors - Small scale industrial undertakings - - - Others 26,856,981 4,099,904 - Interest accrued but not due on loans 10,931,506 37,788,487 7,808,219 11,908,123ProvisionsProvision for taxation 568,043 568,043
38,356,530 12,476,166
Schedule - FOther income
Interest on fixed deposit(tax deducted at source -Rs.1,80,978) 8,110,907 5,624,851previous year Rs. 2,10,701/- )
Other income 19,762,430 184,500
27,873,337 5,809,351
Schedule - GOperating Maintenance Expenses
Toll management fees 5,898,013 7,301,155Security Services 2,275,789 2,148,752Salaries & wages 2,776,457 2,492,919Rates & taxes 4,049 13,255Printing & stationery 680,567 577,040Travelling & conveyance 392,711 415,892Electricity charges 294,354 402,225Exchange Gain / Loss 10,906,753 -Professional Fees 20,493,723 -Insurance 4,118,091 823,644Repairs & Maintenance
Building 1,085,352 837,412Plant & Machinery 144,822 61,051Others 645,127 918,573
Postage & Telephone Expenses 128,662 172,088Miscellaneous Expenses 755,302 634,789
50,599,771 16,798,795
8. Foreign Currency Transactions(i) Foreign currency assets and liabilities are converted at contracted / year-end
rates as applicable.(ii) All other foreign currency transactions are accounted for at the rates prevailing
on the dates of the transactions.(iii) The exchange differences on settlement / conversion are adjusted to:
a. Cost of fixed assets, if the foreign currency liability relates to fixedassets
b. Profit & loss account in other cases. Wherever forward contracts areentered into, the exchange differences are dealt with in the Profit &Loss account over the period of the contracts.
9. Taxes on IncomeTax on income for the current period is determined on the basis of taxable incomeand tax credits computed in accordance with the provisions of the Income Tax Act,1961, and based on expected outcome of assessments / appeals.Deferred tax is recognized on timing differences between the accounting incomeand the taxable income for the year and quantified using the tax rates and lawsenacted or substantively enacted as on the Balance Sheet date.Deferred tax assets are recognized and carried forward to the extent that there isa reasonable certainty that sufficient future taxable income will be available againstwhich such deferred tax assets can be realised.
Schedule - INotes forming part of Accounts:1. The company has been awarded under Build Operate and Transfer (BOT) basis for
construction of the second two lane bridge at Zadeshwar across the River Narmadaon National Highway – 8, which was completed on 11.11.2000.
2. Estimated amount of contracts remaining to be executed on capital account andnot provided for (net of advances) is Rs.9,76,421 (previous year Rs.1,205,936/-).
3. The company had no transactions during the year with any small scale industrialundertakings and hence reporting details of interest on overdue outstandings andamount outstanding for more than 30 days, does not arise.
4. The company is a service company and accordingly information required underparagraph 4(C) of Part II of Schedule VI to the Companies Act, 1956 has not beenfurnished.
5. Manager’s salary and perquisites (on deputation) of Rs.1,93,443/- (previous year– Rs.1,73,846/-) for the year ended 31st March 2003 has been charged to theaccounts.
6. Auditor’s Remuneration2002-2003 2001-2002
Statutory Audit Fees (Excluding Service Tax ) 50,000 30,000Tax Audit Fees 7,500 -Certification Expenses 6,300 1,500Reimbursement of Expenses 1,678 -
7. No provision for income tax/wealth tax has been made for the current year in theseaccounts as there is no taxable income/wealth under the provisions of the IncomeTax Act, 1961 and Wealth Tax Act, 1957.
8. CIF value of imports 2002 – 2003 2001 – 2002Capital goods NIL Rs.239,520/-
9. Expenditure in Foreign currency:Interest on Term Loan (FCNRB) Rs. 45,43,278 NIL
10. Premium paid on prepayment of term loan amounting to Rs. 13,108,502/- is chargedto the Profit and Loss account and included under Interest and Finance charges.
11. The company has preferred a claim of Rs.28,34,760 with the Government of Indiaon account of differential toll collections for the period from 1st April 2002 to 1stNovember 2002, due to delayed issue of toll rate notification by the Government,applicable for the year beginning 1st April 2002. As per clause 3.6.1(b1) of theConcession Agreement, this amount will be compensated by the Government byway of increase in the concession period. Accordingly, the above amount, will beaccrued in the year in which collections will be made on receipt of the necessaryapproval.
12. The company had obtained Provident Fund registration w.e.f 01.10.02 and hasbeen regularly remitting the amount. Recoveries made upto 30.09.02 fromemployees, in anticipation of obtaining registration have been refunded to employeestogether with employers’ contribution and interest.
13. Exchange difference arising on account of foreign currency transactions amountingto Rs. 1,09,06,753 has been debited to Profit and Loss account. (Previous year-Nil)
14. a. Foreign Exchange fluctuations capitalised during the year – Nil (Previousyear-Nil)
b. The company has not capitalised any borrowing cost during the year (Previousyear- NIL)
15. As per Accounting Standard 22 on Taxes on Income – the company has a deferredtax asset of Rs.5,76,87,076/- (for the year 2001-02 – Rs.3,72,09,680).
(Amount in Rs.)31.03.03 31.03.02
Deferred Tax AssetsOn account of Unabsorbed loss / depreciationas per income tax return 212,296,455 153,187,302Difference between carrying amount ofpreliminary expenses not written off 456,661 534,627Unpaid statutory liabilities debited toProfit & Loss A/c. 526 -
212,753,642 153,721,929Less: Def erred Tax liabilitiesOn account of Difference between carryingamount of fixed assets in the books and the 155,066,566 116,512,249income tax return.
155,066,566 116,512,249
Net deferred tax asset 57,687,076 37,209,680
Schedules forming part of accounts
Schedule - HSIGNIFICANT ACCOUNTING POLICIES:1. Basis of Accounting
The company maintains its accounts on accrual basis following the historical costconvention, in compliance with the Accounting Standards of Section 211(3C) andthe other requirements of the Companies Act, 1956.
2. IncomeFee collections from users of facilities are accounted for as and when the amountis due and recovery of which is certain.
3. Retirement BenefitsContributions to Provident Fund are accounted on actual liability basis.
4. Fixed AssetsFixed assets are stated at original cost. Pre-operative expenses are capitalised aspart of fixed assets till the date of commencement of commercial operations.
5. DepreciationDepreciation on assets has been provided on straight line basis at the rates andin the manner specified in the Schedule XIV of the Companies Act, 1956. Assetsconstructed on land not owned by the company and acquired / installed thereonare amortised over a period of the rights given under the concession agreementdated 21st November, 1997 with the Ministry of Surface Transport, Government ofIndia and Public Works Department, Government of Gujarat.
6. Borrowing CostsBorrowing costs that are attributable to the acquisition, construction or productionof qualifying assets are capitalised as part of the cost of such assets. A qualifyingasset is an asset that necessarily takes a substantial period of time to get readyfor its intended use or sale. All other borrowing costs are recognised as an expensein the period in which they are incurred.
7. Miscellaneous ExpenditurePreliminary expenses are written off in the year of commencement of commercialoperations.
NARMADA INFRASTRUCTURE CONSTRUCTION ENTERPRISE LIMITED
S-25
The company has not accrued the above deferred tax asset in the accounts, sincethe company is eligible for benefit under Section 80 IA of the Income Tax Actduring the entire concession period under the Concession Agreement concludingon 21.12.2002 and the deferred tax asset will get reversed during the period.
16. The company has not taken any asset on finance / operating lease. The incomefrom cancellable operating lease is accounted on accrual basis.
17. Accounting Standard 18 on Related Party Disclosure is not applicable to thecompany since the turnover of the company does not exceed Rs. 50 Crores for theyear.
18. Segment Reporting – The Company is in the business of operating and maintaininga toll bridge and the majority of its income represents toll collections. Accordingly,segment reporting is not applicable.
19. Figures for the previous year have been regrouped/re-classified where necessary.
20. Balance Sheet Abstract and Company’s General Business ProfileI. Registration Details
1 8 - 3 8 1 7 51 8State Code
Balance Sheet Date 3 1 - 0 3 - 2 0 0 3
II. Capital Raised during the year (Amount in Rupees Thousands)
N I L
Date Month Year
Public Issue
N I L
Bonus Issue
Rights Issue
N I L
Private Placement
III. Position of Mobilisation and Deployment of funds (Amount in Rupees Thousands)
Total Liabilities
1 4 3 0 4 3 0
Total Assets
Paid up Capital Reserves & SurplusSources of Funds
Secured Loans Unsecured Loans
N I L
Registration No.
N I L
1 4 3 0 4 3 0
4 7 3 5 0 0 N I L
9 5 6 9 3 0
IV. Performance of the Company (Amount in Rupees Thousands)
Turnover(including other income)
Total Expenditure
Profit/Loss Before Tax
3
Profit/Loss After Tax
Earning per Share in Rs.
. 2 0 A
Dividend Rate %
N
V. Generic Names of Three Principal Products/Services of the Company(as per monetary terms)
N AItem Code No.(ITC Code)
ProductDescription
1
INFRASTRUCTURE PROJECT ON BOT BASIS
2 3 2 2 0 6 2 8 9 0 7 4
+ / -5 6 8 6 8 3
+ / -5 6 8 6 8
Signatures to Schedules A to I
K.V. RANGASWAMI
K. VENKATESHDirectors}
Chennai ChennaiDated : 25th April, 2003 Dated : 25th April, 2003
K.R. PARTHASARATHYSecretary
As per our report attachedSHARP & TANNANChartered Accountants
V.R. LALITHAPartner
-
Net Fixed Assets Investments
N I L
Application of Funds
Net Current Assets Misc. Expenditure
Accumulated Losses
1 1 3 3 8 5 4
1 3 6 4 8 1 N I L
1 6 0 0 9 5
CYBER PARK DEVELOPMENT AND CONSTRUCTION LIMITED
CYBER PARK DEVELOPMENT AND CONSTRUCTION LIMITED
DIRECTORS’ REPORT
DIRECTORS' REPORT:The Directors have pleasure in presenting their first Report and Accounts for the year ended 31st March2003.FINANCIAL RESULTSSince the Company has not commenced its commercial operations, no Profit and Loss Account hasbeen prepared. All the revenue expenses incurred for bringing up the Project till the balance sheet datehave been grouped under preproject expenses.PERFORMANCE OF THE COMPANYThe Company was incorporated on 28th February, 2002. The main business of the Company is to carryon the business of developers and builders and contractors in order to design, build and construct,upgrade, operate and maintain buildings and structures of all kinds as may be identified from time totime and to design, build, operate and maintain buildings exclusively to cater to the Software Sector.CAPITAL EXPENDITUREAs at 31st March 2003, the gross fixed assets stood at Rs.17,255/- and the net fixed assets atRs.16,709-DEPOSITSThe Company has not accepted any deposits from the public.DISCLOSURE OF PARTICULARSThe Company did not commence any business activities during the year and hence there are noparticulars to be disclosed as per Companies (Disclosure of Particulars in the Report of the Board ofDirectors) Rules, 1988.PARTICULARS OF EMPLOYEESThere are no employees covered by the provisions of the Section 217(2A) of the Companies Act, 1956,read with the Companies (Particulars of Employees) Rules, 1975.DIRECTORS RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable Accounting Standards have beenfollowed and there has been no material departure;
ii. that the selected accounting policies were applied consistently and the directors made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state ofaffairs of the company as at 31st March 2003 and of the profit of the Company for the year endedon that date;
iii. that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern basis.DIRECTORSMr.K.V.Rangaswami, Mr.V.B.Gadgil and Mr.K.Venkatesh are the first directors of the Company. All thethree directors retire at the First Annual General Meeting of the Company and are eligible for re-appointment.AUDITORSThe Auditors, M/s Sharp & Tannan, Chartered Accountants, being statutory auditors of the Companyhold office until the conclusion of the ensuing Annual General Meeting and are recommended forreappointment. Certificate from Auditors has been received to the effect that their appointment, if made,would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.ACKNOWLEDGEMENTSThe Directors acknowledge the valuable support extended by the staff & management of the InvesteeCompany and the Bankers.
Place : ChennaiDated : 24th April, 2003
For and on behalf of the Board
K.V.RANGASWAMI
V.B.GADGIL
K.VENKATESH
Director}AUDITORS’ REPORT
We have audited the attached Balance Sheet of Cyber Park Development andConstruction Limited as at 31st March 2003. This financial statement is the responsibilityof the Company’s management. Our responsibility is to express an opinion on thisfinancial statement based on our audit.We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements.An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by the management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.
1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order,1988 issued by the Central Government of India in terms of Section 227 (4A) of theCompanies Act, 1956 (hereinafter referred to as the Act), we enclose in the Annexurea statement on the matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph (1) above, wereport as under:-a. We have obtained all the information and explanations, which to the best of
our knowledge and belief were necessary for the purposes of our audit;b. In our opinion, proper books of account as required by law have been kept by
the Company so far as appears from our examination of those books;c. The Balance Sheet is in agreement with the books of account;
CYBER PARK DEVELOPMENT AND CONSTRUCTION LIMITED
S-26
d. In our opinion, the said Balance Sheet has been prepared in Compliance withthe accounting standards as prescribed under the provisions of Section 211(3C) of the Act to the extent applicable;
e. On the basis of written representations received from the Directors, as on 31st
March, 2003 and taken on record by the Board of Directors, we report thatnone of the Directors is disqualified as on 31st March, 2003 from being appointedas a Director of the Company in terms of Section 274 (1) (g) of the Act;
f. In our opinion and to the best of our information and according to theexplanations given to us the said accounts read together with the SignificantAccounting policies in Schedule 1 and notes in Schedule 2 give the informationrequired by the Companies Act, 1956 in the manner so required and give atrue and fair view in confirmity with the accounting principles generally acceptedin India:
In the case of the Balance Sheet, of the state of the Company’s affairs asat 31st March, 2003.
SHARP & TANNANChartered Accountants
By the hand of
Place : Chennai L.VAIDYANATHANDate : 24th April, 2003 Partner
ANNEXURE TO THE AUDITORS’ REPORT
As required by the Manufacturing and Other Companies (Auditors’ Report) Order, 1988dated 7th September, 1988 issued by the Central Government of India under Section227(4A) of the Companies Act, 1956 we report as under:
i) The Company is maintaining proper records to show full particulars includingquantitative details and situation of fixed assets. We are informed that these fixedassets have been physically verified by the management at reasonable intervalsand no discrepancies were found during such verification.
ii) Fixed assets have not been revalued during the period.
iii) The Company has not taken any loans, secured or unsecured, from companies,firms or other parties listed in the register maintained under section 301 of theCompanies Act, 1956 and / or from companies under the same management asdefined under sub-section (1B) of section 370 of the Companies Act, 1956.
iv) The Company has not granted any loans, secured or unsecured, to companies,firms or other parties listed in the register maintained under section 301 of theCompanies Act, 1956 or from companies under the same management as definedunder sub-section (1B) of section 370 of the Companies Act, 1956.
v) No loans or advances in the nature of loans have been given by the companyduring the period.
vi) In our opinion and according to the information and explanations given to us, thereis an adequate internal control procedure commensurate with the size of theCompany and the nature of its business for the purchases of plant and machinery,equipment and other assets.
vii) There are no purchases of goods and materials and sale of goods, materials andservices, during the period aggregating to Rs.50,000 or more in respect of eachparty made in pursuance of contracts or arrangements entered in the registermaintained under section 301 of the Companies Act 1956.
viii) The Company has not accepted deposits from public.
ix) Since the paid up share capital of company has not exceeded the prescribedminimum no internal audit needs to be conducted for the year.
x) Provident Fund and Employees State Insurance Acts are not presently applicableto the company.
xi) According to the information and explanations given to us, there were no undisputedamounts payable in respect of Income-tax, Wealth-tax, Sales tax, Customs dutyand Excise duty which were outstanding as at 31st March, 2003, for a period ofmore than six months from the date they became payable.
xii) According to the information and explanations given to us and the records of theCompany examined by us, no personal expenses have been charged to revenueaccount other than those payable under contractual obligations or in accordancewith the generally accepted business practices.
xiii) The Company is not a sick industrial company within the meaning of clause (O) ofsub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions)Act 1985.
xiv) Reporting under clauses ii and iii of paragraph 4(B) of the MAOCARO Order is notapplicable in the current year as the company has not commenced its operations.
xv) Reporting under clauses iii,iv,v,vi,xii,xiv xvi of paragraph 4(A) of the MAOCAROOrder is not applicable in the current year.
SHARP & TANNANChartered Accountants
By the hand of
Place : Chennai L.VAIDYANATHANDate : 24th April, 2003 Partner
Balance Sheet as at 31 st March 2003Sch. As at 31 st March 2003
Rupees RupeesSOURCES OF FUNDS :Shareholders’ FundsShare Capital A 500,000
500,000APPLICATION OF FUNDS :Fixed Assets: B
Gross Block 17,255Less : Depreciation 546Net Block 16,709
Current Assets, Loan and AdvancesCash and bank balances C 500,000Pre-project expenses D 3,270,386
3,770,386
Less : Current liabilities and provisions E 3,489,287Net Current Assets 281,099Miscellaneous expenditure (To the extent not written off or adjusted)
Preliminary expenses 202,192
500,000Significant Accounting Policies 1Notes forming part of Accounts 2
SCHEDULES FORMING PART OF ACCOUNTSSCHEDULE - A As at 31 st March 2003SHARE CAPITAL Rupees
Authorised :1,000,000 Equity Shares of Rs. 10/- each 10,000,000
Issued, Subscribed and paid up:50,000 Equity Shares of Rs. 10/- each fully paid-up 500,000-Issued during the year.(All the shares are held by L&T Holdings Limited and its nominees)
SCHEDULE - BFIXED ASSETS Cost-Additions Depreciation Book Value
From 01.02.02 To 31.03.03 As at 31.03.03Rupees Rupees Rupees
Furniture & Fixtures 17,255 546 16,709
Total 17,255 546 16,709
SCHEDULE - CCURRENT ASSETS, LOANS & ADVANCES
Cash and bank balancesCash on hand -Balances with HDFC bank 500,000
500,000
SCHEDULE - D From 01.02.02PRE-PROJECT EXPENSES to 31.03.03
Rupees
Cost of Designs & Drawings 594,600Service, Agency & Site Maintenance 78,142Professional charges 930,550Rates & Taxes 842,860Printing & Stationery 23,057Travelling & conveyance 364,050Miscellaneous expenses 156,281Advertisement expenses 255,300Depreciation 546Audit Fees 25,000
3,270,386
SCHEDULE - E As at 31 st March, 2003CURRENT LIABILITIES RupeesSundry Creditors
Due to :Small Scale Industrial Undertakings —Larsen & Toubro Limited 3,464,287Others 25,000
3,489,287
SCHEDULE - 1SIGNIFICANT ACCOUNTING POLICIESBASIS OF ACCOUNTINGThe company maintains its accounts on accrual basis following the historical cost conventionin accordance with Generally Accepted Accounting Principles “GAAP” and in compliance withthe Accounting Standards referred to in Section 211(3C) and the other relevant provisions ofthe Companies Act, 1956.SCHEDULES FORMING PART OF ACCOUNTS:FIXED ASSETSFixed Assets are stated at original cost.DEPRECIATIONDepreciation is provided on straight-line basis at the rates and in the manner prescribed underSchedule XIV to the Companies Act, 1956.MISCELLANEOUS EXPENDITUREPreliminary expenses are written off over five years from the year of commercial operations.SCHEDULE - 2NOTES ON ACCOUNTS:1. Capital commitments as at 31st March 2003 is Rs. NIL
For and on behalf of the Board
K.V. RANGASWAMIV.B. GADGILK. VENKATESH
As per our report attachedSHARP & TANNANChartered Accountants
L. VAIDYANATHANPartner
Place : ChennaiDated : 24th April 2003
Directors}
CYBER PARK DEVELOPMENT AND CONSTRUCTION LIMITED
S-27
2. Since the Company has not commenced its commercial operations, all the revenue expensesincurred for bringing up the project till the balance sheet date have been grouped underpreproject expenses.
3. No provision for income tax has been made since the company does not have taxableincome.
4. Auditors remuneration and expenses reckoned in the accounts.2002-2003
(Rs.)Audit Fees (excluding Service Tax) 25,000Certification Fee 2,625Others 10,500
5. Expenditure on Foreign Currency2002-2003
(Rs.)Advertisement 98,300
6. The company does not have any dealings with small-scale industrial undertakings andhence reporting regarding interest on delayed payments and amounts due to them doesnot arise.
7. The company has not entered into any lease transactions during the year. Hence reportingunder AS-19 – Accounting for leases does not arise.
8. Since the company has not commenced its commercial operations, no Profit and Lossaccount has been prepared and hence reporting requirements under the followingAccounting Standards and Part II Schedule VI of the Companies Act 1956 does not arisefor the current year.1. Accounting Standard – 17 : Segment Reporting2. Accounting Standard – 18 : Related Party Disclosures3. Accounting Standard – 20 : Earnings Per share4. Accounting Standard – 22 : Accounting for taxes on income
Net Current Assets Accumulative Losses
Investments
Miscellaneous Expenditure
Profit Before Tax Profit/Loss After Tax
Application of Funds
IV. Performance of Company (Amount in Rs. Thousands)Turnover (Including other income)
Net Fixed Assets
Total Expenditure
N I L
1 7 N I L
2 8 1 2 0 2
N I L N I L
N I L N I L
Dividend Rate %
V. Generic Names of Three Principal Products/Services of the Company(as per monetary terms)
Earnings Per Share in Rs.
N I L N I L
10 Figures for the previous year have not been provided since this is the first accountsof the company.
Item Code No. N A
Product Description
D E V E L O P M E N T O F
S O F T W A R E P A R K
As per our report attachedSHARP & TANNANChartered Accountantsby the hand of
L. VAIDYANATHANPartner
For and on behalf of the Board
K.V.RANGASWAMI
V.B.GADGIL
K.VENKATESH
Directors}Place : ChennaiDated : 24th April, 2003
Place : ChennaiDated : 24th April, 2003
State Code
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities Total Assets
Deferred Tax Liability
C I N - U 4 5 2 0 2 K A 2 0 0 2 P L C 0 3 0 1 8 0
0 8
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
9 BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
I. Registration Details:
Secured/Unsecured Loans
Registration No.
N I L
N I L
N I L
Balance Sheet Date
N I L
5 0 0 5 0 0
N I L
5 0 0
3 1 - 0 3 - 2 0 0 3
Reserves and SurplusPaid up Capital
5 0 0 N I L
L&T INFOCITY LIMITED
L&T INFOCITY LIMITEDThe Directors have pleasure in presenting their Report and Audited Accounts for the year ended31st March, 2003.FINANCIAL RESULTS
2002 – 2003 2001 - 2002Rs. Rs.
INCOME 58,92,72,090 71,26,16,840Profit before depreciation 11,50,16,268 19,79,68,858Depreciation 2,97,54,960 1,36,78,864Profit after depreciation 8,52,61,308 18,42,89,994DIVIDENDThe Directors do not recommend payment of any Dividend for the year.BONUS SHARESThe Directors are pleased to recommend issue of Bonus Shares to Equity Shareholders of theCompany in the proportion of One new fully paid Equity Shares for every Two Existing Equity Shares.PERFORMANCE OF THE COMPANYDuring the year under review, construction of Cyber Gateway - Phase II of HITEC City, wascompleted. The company has sold/leased 90% of space in Cyber Gateway to various IT/SoftwareCompanies predominantly MNCs. Also Phase I of infrastructure works on 145 acres of land inHITEC City are completed and balance works have been undertaken, to enable major IT Giants,MNC’s to build their independent facilities in HITEC City. Despite the global slowdown and moreparticularly in the IT Sector, the company has been able to make profit before tax of Rs. 852.61Lakhs for the year.During 2003-04, the company is planning to undertake build-to-suit facilities for large IT Companies,IT Park at Visakapatnam, Consultancy for setting up IT Parks in other cities in India andsubsequently set up IT Parks in other major cities.CAPITAL EXPENDITUREAs at 31st March, 2003 the gross fixed assets stood at Rs. 15726.25 Lakhs and the net fixed assetsat Rs. 14966.59 Lakhs. Additions during the year amounted to Rs. 6166.67 Lakhs.DEPOSITSDuring the period under review the Company has not accepted any deposits from the public.SUBSIDIARY COMPANIESThe name of Hyderabad International Trade Exposition Centre Limited was changed to ‘HyderabadInternational Trade Expositions Limited’ with effect from 13th May 2002. During the year, thecompany purchased four equity shares from the initial subscribers.During the year under review, L&T Infocity – Ascendas Private Limited was incorporated on 30th
May 2002. Subsequently, it was converted to ‘L&T Infocity - Ascendas Limited’ with effect from 22nd
October 2002. The Company subscribed 25,000 shares of Rs. 10 each fully paid up and 6,38,000redeemable cumulative preference shares of Rs. 100 each fully paid up.Andhra Pradesh Expositions Private Limited (APEX) was incorporated on 11th February 2002 andHyderabad International Trade Expositions Limited (HITEX) has subscribed to 9,998 shares ofRs. 10 each fully paid up in APEX. Thus APEX became the subsidiary of HITEX and consequentlya subsidiary of the Company.As required by Section 212 of the Companies Act, 1956, the Audited statement of Accounts, theReports of the Board of Directors and Auditors of the subsidiary companies are annexed.AUDITORS’ REPORTThe Auditors’ Report to the Shareholders does not contain any qualifications. The notes to theaccounts referred to in the Auditors’ Report are self explanatory and therefore do not call for anyfurther comments of Directors.
DISCLOSURE OF PARTICULARSAs the Company is engaged in the business of construction, operation and maintenance of IT Parks,there are no particulars to be disclosed as per the Companies (Disclosure of Particulars in theReport of Board of Directors) Rules, 1988.PERSONNELThere are no employees covered by the provisions of the Section 217(2A) of the Companies Act,1956 read with the Companies (Particulars of Employees) Rules,1975.DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i) that in the preparation of the annual accounts, the applicable accounting standards have been
followed and there has been no material departure;ii) that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March, 2003 and of the profit of the Companyfor the year ended on that date;
iii) that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the annual accounts have been prepared on a going concern basis.DIRECTORSAt the Board Meeting of the Company held on 23rd December 2002, Mr. Y.M.Deosthalee resignedfrom the Board of Directors of the Company. He was a Director since 28th April 1997.In the same meeting, Mr. V.B.Gadgil was appointed as Director in the casual vacany caused by theresignation of Mr. Y.M.Deosthalee. He holds office upto the date of the ensuing Annual GeneralMeeting when Mr. Y.M.Deosthalee would have retired by rotation, and is eligible for re-appointment.In terms of Section 256 of the Companies Act, 1956, Mr. A.Ramakrishna and Mr. K.V.Rangaswamiretire by rotation and being eligible, offer themselves for re-appointment.AUDIT COMMITTEEThe Audit Committee consists of three directors. The present members of the Committee areMr.K.V.Rangaswami, Mr.M.V.S.Prasad & Mr.K.Venkatesh. Mr. M.V.S.Prasad is the Chairman of theAudit CommitteeThe role, terms of reference, the authority and power of Chairman are in conformity with therequirements of the Companies Act, 1956. The Committee met periodically during the year and haddiscussions with the auditors on internal control systems and internal audit report.AUDITORSThe Auditors, M/s. Sharp & Tannan, Chartered Accountants hold office until the conclusion of theensuing Annual General Meeting and are recommended for re-appointment. Certificate from theauditors has been received to the effect that their re-appointment, if made, would be within the limitsprescribed under Section 224(1B) of the Companies Act, 1956.ACKNOWLEDGEMENTSThe Directors acknowledge the invaluable support extended to the Company by the FinancialInstitutions, Bankers, vendors, suppliers and customers. The Directors are pleased to place onrecord their appreciation for the valuable contribution made by the employees of the Company.
For and on behalf of the Board
Place : HyderabadDate : 18th April, 2003
DIRECTORS' REPORT
A. RAMAKRISHNA
M.V.S. PRASADDirectors}
L&T INFOCITY LIMITED
S-28
We have audited the attached Balance Sheet of L&T Infocity Limited as at 31st March, 2003 and alsothe Profit & Loss Account of the Company for the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includes examining on a testbasis, evidence supporting the amounts and disclosure in the financial statement. An audit alsoincludes assessing the accounting principles used and significant estimates made by themanagement, as well as evaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 issued
by the Central Government under Section 227 (4A) of the Companies Act, 1956, we enclosein the Annexure to our report on the matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph (1) above:a. We have obtained all the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;b. In our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;c. The Balance Sheet is in agreement with the books of account.d. In our opinion and according to the information in explanation given, the said Balance
Sheet is in Compliance with the accounting standards referred to in Section 211(3C) ofthe Companies Act, 1956.
e. On the basis of written representations received from the Directors of the Company as at31st March, 2003 and taken on record by the Board of Directors, we report that noDirectors are disqualified from being appointed as a Director of the company under clause(g) of sub section (1) of section 274 of Companies Act, 1956.
3. In our opinion and to the best of our information and according to the explanations givento us, the said accounts, read together with the Significant Accounting policies in Schedule 14and other notes to accounts in Schedule 15 give the information required by the Act, in themanner so required and give a true and fair view:(i) In the case of the Balance Sheet, of the state of the Company’s affairs as at 31st March, 2003.ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date.
SHARP & TANNANChartered Accountants
By the hand ofPlace : Hyderabad L.VAIDYANATHANDate : 18th April, 2003 Partner
AUDITORS' REPORT
Statement pursuant to Section 212 of the Companies Act, 1956 relating to SubsidiaryCompaniesName of the Subsidiary company Hyderabad International
Trade Expositions LimitedFinancial year of the subsidiary ended on 31st March 2003Number of shares of the subsidiary company held byL&T Infocity Ltd. and / or its nominee at the above date 49,998The net aggregate of profits/(losses), of the subsidiarycompany so far as it concerns the members of L&T Infocity Ltd.(i) Dealt with in the accounts of L&T Infocity Ltd. amounted to:
a) for the subsidiary’s financial year ended 31-3-2003 Nilb) for the previous financial years of the subsidiary since
it became subsidiary of L&T Infocity Ltd. Not applicable(ii) Not dealt with in the accounts of L&T Infocity Ltd. amounted to:
a) for the subsidiary’s financial year ended 31-3-2003 Rs. 23.63 Lakhs *b) for the previous financial years of the subsidiary since
it became subsidiary of L&T Infocity Ltd. Not applicable
* as of 31-3-2003 , the company is 100% subsidiary of L&T Infocity Limited.
xiv) The Company has regularly deposited the Provident Fund dues with the Provident FundAuthorities. The provisions of the Employees State Insurance Act are not applicable to thecompany as all the employees are drawing more than the prescribed limit mentioned therein.
xv) According to the information and explanations given to us, there were no undisputedamounts payable in respect of income-tax, wealth-tax, sales tax, customs duty and exciseduty which were outstanding as at 31st March, 2003, for a period of more than six monthsfrom the date they became payable.
xvi) According to the information and explanations given to us and the records of the companyexamined by us, no personal expenses have been charged to revenue account other thanthose payable under contractual obligations or in accordance with the generally acceptedbusiness practices.
xvii) The Company is not a sick industrial company within the meaning of clause (o) ofsub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act 1985.
xviii) In respect of its service activities, the company has a reasonable system of recordingreceipts, issues and consumption of materials for maintenance and commensurate with thesize and nature of its business. In our opinion, there is a reasonable system of authorisationat proper levels and adequate system of internal control commensurate with the size of thecompany and the nature of its business on the issue of stores and allocation of stores andlabour.
xix) Clauses (xii), (xiv) & (xvi) of Para 4-A of the aforesaid order are not applicable during theyear.
SHARP & TANNANChartered Accountants
By the hand of
Place : Hyderabad L.VAIDYANATHANDate : 18th April, 2003 Partner
ANNEXURE TO THE AUDITORS' REPORT(Refered to in paragraph 1 of our report of even date)
i) The Company has maintained proper records to show full particulars including quantitativedetails and situation of fixed assets. We are informed that the fixed assets have beenphysically verified by the management during the year and no material discrepancies werenoticed on such verification.
ii) None of the fixed assets have been revalued during the year.iii) As explained to us, stocks of finished goods representing property development land and
completed commercial space have been physically verified by the management at reasonableintervals during the year.
iv) As per information given to us, the procedures of physical verification of stocks followed bythe management are, in our opinion, reasonable and adequate in relation to the size of thecompany and the nature of its business.
v) As per information and explanation given, there are no discrepancies noticed by themanagement on physical verification as compared to the books maintained.
vi) On the basis of our examination of stock records, we are of the opinion that the valuation ofstocks is fair and proper, in accordance with the normally accepted accounting principles.The valuation of stocks is on the same basis as in the preceding year.
vii) The Company has not taken any loans secured or unsecured, from companies, firms orother parties listed in the register maintained under section 301 of the Companies Act, 1956.The terms and conditions of such loans are prima facie not prejudicial to the interest of theCompany. As explained to us, there are no Companies under the same management asdefined under sub-section (1B) of section 370 of the Companies Act, 1956.
viii) The Company has not granted any loans, secured or unsecured, to companies, firms orother parties listed in the register maintained under section 301 of the Companies Act, 1956.As explained to us, there are no Companies under the same management as defined undersub-section (1B) of section 370 of the Companies Act, 1956.
ix) The parties to whom loans or advances in the nature of loans have been given are repayingthe principal amount as stipulated and are also regular in payment of interest, whereapplicable.
x) In our opinion and according to the information and explanations given to us, there areadequate internal control procedures commensurate with the size of the company and thenature of its business with regard to purchase of equipment, plant & machinery and otherassets and for the sale of goods (property development land and commercial property).
xi) According to the information, there are no purchases of goods and materials and sale ofgoods, materials and services made in pursuance of contract or arrangements entered inthe register maintained under section 301 of the Companies Act, 1956 and aggregatingduring the year to Rs. 50,000/- or more in respect of each party.
xii) The Company has not accepted deposits during the year to which provisions of Section 58Aof the Companies Act, 1956, are applicable.
xiii) We are of the opinion that the Company has an internal audit system commensurate with itssize and the nature of its business.
BALANCE SHEET AS AT 31 st MARCH 2003Sch. AS AT 31.03.2003 AS AT 31.03.2002No. Rs. Rs. Rs. Rs.
SOURCES OF FUNDSSHAREHOLDERS’ FUNDS :
Share Capital 1 180,000,000 180,000,000Reserves & Surplus 2 308,300,961 218,350,632
LOAN FUNDSSecured Loans 3 1,364,724,458 1,119,330,257
DEFERRED TAX LIABILITY 33,591,543 42,186,614
TOTAL FUNDS EMPLOYED 1,886,616,962 1,559,867,503APPLICATION OF FUNDS
FIXED ASSETS 4GROSS BLOCK 1,572,625,055 1,017,288,721Less: Depreciation 75,966,101 48,277,615NET BLOCK 1,496,658,954 969,011,106INVESTMENTS 5 64,549,980 6,999,940
CURRENT ASSETS,LOANS & ADVANCES 6CURRENT ASSETS
a) Inventories 284,913,557 810,791,957b) Cash and Bank Balances 38,215,302 66,255,278
LOANS & ADVANCES 242,072,649 88,785,641565,201,508 965,832,876
Less: CURRENT LIABILITIES& PROVISIONS 7
a) Current Liabilities 232,963,923 355,283,535b) Provisions 7,695,502 27,732,018
240,659,425 383,015,553NET CURRENT ASSETS 324,542,083 582,817,323MISCELLANEOUS EXPENDITURE(to the extent not written off oradjusted) 865,945 1,039,134
TOTAL ASSETS 1,886,616,962 1,559,867,503SIGNIFICANT ACCOUNTINGPOLICIES 13NOTES ON ACCOUNTS 14
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 st MARCH 2003INCOME Sch. 2002 - 2003 2001-2002
No. Rs. Rs.Sales 364,698,478 558,306,782Other Income 8 224,573,612 149,447,969
TOTAL 589,272,090 707,754,751
EXPENDITURECost of Sale of Space sold 9 286,803,630 395,319,188Staff Expenses 10 4,823,271 5,921,212Sales, Administration andOther Expenses 11 62,309,109 47,553,720Interest & Brokerage 12 117,532,411 50,798,596Depreciation 29,754,960 13,678,864Preliminary Expenses written off 173,189 173,189Provision for doubtful Advances 2,614,212 10,019,988
TOTAL 504,010,782 523,464,757
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand ofL. VAIDYANATHAN U .RAMAKRISHNA(Partner) Secretary
Place : HyderabadDate : 18th April, 2003
A.RAMAKRISHNAM.V.S.PRASADK.V.RANGASWAMIV.B.GADGILK.VENKATESH
Directors}
L&T INFOCITY LIMITED
S-29
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 st MARCH 2003(contd...)Profit / (Loss) for the Year 85,261,308 184,289,994Provision For Taxes 7,391,190 14,098,185Provision for Deferred Tax (8,595,071) 45,557,386
Profit after Tax 86,465,189 124,634,423Excess provision for Tax of earlieryear written back 3,485,140 2,895,060
Balance Carried to Balance Sheet 89,950,329 127,529,483
Earning per Share - Basic 4.33 9.46SIGNIFICANT ACCOUNTINGPOLICIES 13NOTES ON ACCOUNTS 14
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand ofL. VAIDYANATHAN U .RAMAKRISHNA(Partner) Secretary
Place : HyderabadDate : 18th April, 2003
A.RAMAKRISHNAM.V.S.PRASADK.V.RANGASWAMIV.B.GADGILK.VENKATESH
Directors}SCHEDULES FORMING PART OF BALANCE SHEETSCHEDULE - 1SHARE CAPITAL
AS AT 31.03.2003 AS AT 31.03.2002Rs. Rs.
AUTHORISED :6,00,00,000 Equity Shares of Rs10 each 600,000,000 600,000,000ISSUED, SUBSCRIBED AND PAID UP :1,80,00,000 Equity Shares of Rs 10 each 180,000,000 180,000,000Out of the above
1) 19,80,000 shares are alloted as fully paid uppursuant to an agreement without payments beingreceived in cash
2) 1,60,20,000 shares are held by Larsen &Toubro Limited, the Holding Company.
SCHEDULES FORMING PART OF BALANCE SHEET
SCHEDULE - 2RESERVES AND SURPLUS
AS AT 31.03.2003 AS AT 31.03.2002Rs. Rs.
GENERAL RESERVEAs per last Balance Sheet 218,350,632 87,450,377Add: Deferred Tax Asset - 3,370,772
218,350,632 90,821,149
Profit & Loss Account 89,950,329 127,529,483
TOTAL 308,300,961 218,350,632
SCHEDULE - 3SECURED LOANS
AS AT 31.03.2003 AS AT 31.03.2002Rs. Rs.
Term Loan fromHDFC Limited 1,012,957,081 750,000,000Union Bank of India 209,992,602 210,002,436(Including Interest accrued thereon)Andhra Bank 90,682,198 94,281,878(Including Interest accrued thereon)Bank of Baroda 51,092,577 65,045,943(Including Interest accrued thereon)
TOTAL 1,364,724,458 1,119,330,257
Term Loans from HDFC Ltd. and Union Bank of India are secured by mortgage of piece and parcelof land bearing survey no 64 admeasuring 8.65 acres and 6 acres, situated at Madhapur VillageSerlingampally Mandal Ranga Reddy District, Andhra Pradesh, with construction present thereonand future, to the extent owned by the Company.
Term Loan from Andhra Bank is secured by a second charge on the space given on lease toM/s Aristasoft Intl Pvt Ltd, M/s Foursoft Pvt Ltd, M/s Orillion India Software Pvt Ltd, M/s GI SystemsIndia Pvt Ltd and M/s Aleaf Solutions Pvt Ltd.
Term Loan from Bank of Baroda is secured by a second charge on the space given on lease toM/s Amogh Hotels Ltd, M/s Bathina Medical Services Ltd, M/s Ecommsys India and M/s L.T.SolutionsPvt Ltd.
SCHEDULE - 4FIXED ASSETS
GROSS BLOCK (Rs.) DEPRECIATION (Rs.) NET BLOCK (Rs.)
AS AT ADDITIONS DISPOSALS AS AT AS AT FOR THE ON AS AT AS AT AS ATDESCRIPTION 1.04.2002 DURING THE DURING THE 31.03.2003 1.04.2002 YEAR DISPOSALS 31.03.2003 31.03.2003 31.03.2002
YEAR YEAR
Free Hold Land 36,140,461 22,252,904 3,221,118 55,172,247 - - - - 55,172,247 36,140,461Buildings 14,390,102 - - 14,390,102 677,250 234,559 - 911,809 13,478,293 13,712,852Computers 1,563,115 461,950 541,400 1,483,665 807,030 256,325 426,707 636,648 847,017 756,085Furnitures & Fixtures 6,785,831 709,800 - 7,495,631 1,162,831 430,991 - 1,593,822 5,901,809 5,623,000Plant & Machinery 83,195,135 28,862,452 - 112,057,587 5,093,452 4,289,815 - 9,383,267 102,674,320 78,101,683Electrical Items 236,648,149 116,153,261 - 352,801,410 21,503,127 12,601,212 - 34,104,340 318,697,070 215,145,022Office Equipment 2,693,285 - - 2,693,285 459,851 190,415 - 650,266 2,043,019 2,233,434Vehicles 256,743 - - 256,743 23,931 24,391 - 48,322 208,421 232,812Leased out :Buildings 635,615,900 448,226,889 57,568,403 1,026,274,385 18,550,143 11,727,252 1,639,767 28,637,628 997,636,757 617,065,756
TOTAL 1,017,288,721 616,667,256 61,330,921 1,572,625,055 48,277,615 29,754,960 2,066,474 75,966,101 1,496,658,954 969,011,105
Previous year 574,743,142 450,361,054 7,815,475 1,017,288,721 34,824,904 13,678,864 226,152 48,277,615 969,011,105 539,918,238
SCHEDULE - 5INVESTMENTS AS AT 31.03.2003 AS AT 31.03.2002
Rs. Rs.Long Term Investments : (At cost)UnquotedA) Hyderabad International Trade Expositions Limited
(49,998 Shares of Rs. 10/- each fully paid up) 499,980 499,940B) L&T Infocity - Ascendas Limited
(1) 25,000 Shares of Rs. 10/- each fully paid upsubscribed during the year 250,000 -
(2) 6,38,000 Redeemable Cumulative PreferenceShares of Rs.100/- each 63,800,000 -subscribed during the year
Short Term InvestmentsHDFC Mutual Fund - 6,500,000(18230457.38 units of Rs. 10.00 each purchased and18880457.38 units of Rs. 10.00 each sold during the year)ILFS Mutual Fund - -(1267630.48 units of Rs. 10.00 each purchased and soldduring the year)Tata Mutual Fund - -(215012.14 units of Rs. 10.00 each purchased and soldduring the year)TOTAL INVESTMENT 64,549,980 6,999,940
SCHEDULE - 6CURRENT ASSETS, LOANS & ADVANCES AS AT 31.03.2003 AS AT 31.03.2002
Rs. Rs. Rs. Rs.INVENTORIES(At lower of cost or net realisablevalue as certified by a Director)Completed Property 267,625,214 197,847,707Work In Progress 17,288,343 612,944,250
284,913,557 810,791,957
AS AT 31.03.2003 AS AT 31.03.2002SCHEDULE - 6 (contd...) Rs. Rs. Rs. Rs .CASH AND BANK BALANCESCash on hand - -Bank Balances with scheduled Banks
on current accounts 18,895,756 386,473on fixed deposits (including interest 19,319,546 38,215,302 65,868,805 66,255,278accrued thereon Rs. 3,57,556Previous Year Rs.9,40,516/-)
38,215,302 66,255,278LOANS AND ADVANCESAdvances recoverable in cash or in kind 242,072,649 88,785,641or for value to be received.(Unsecured considered good)Advances considered Doubtful 12,634,200 10,019,988Less: Provision for Doubtful Advances 12,634,200 - 10,019,988 -
242,072,649 88,785,641TOTAL 565,201,508 965,832,876SCHEDULE - 7CURRENT LIABILITIES & PROVISIONSA) CURRENT LIABILITIES
a) Sundry Creditors 60,330,381 254,261,125b) Advances from Customers 172,633,542 101,022,410
232,963,923 355,283,535B) PROVISIONS
a) Taxation 7,391,190 27,552,161b) Leave encashment 304,312 179,857
7,695,502 27,732,018
TOTAL 240,659,425 383,015,553
L&T INFOCITY LIMITED
S-30
SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNTSCHEDULE - 8OTHER INCOME
2002-2003 2001-2002Rs. Rs.
Lease Rentals (Tax Deducted at Source Rs. 24,63,067,Previous Year Rs. 1,38,63,631) 139,474,576 120,200,880Maintenance Recovery (Tax Deducted at Source Rs. 2,18,671,Previous Year Rs. 7,85,094) 36,922,656 15,851,956Parking Charges (Tax Deducted at Source Rs.1,38,389,Previous Year Rs. 4,97,343) 9,209,439 5,321,713Miscellaneous Income (Tax Deducted at Source Rs.96,510,Previous Year Rs. 10,02,990) 7,142,232 4,664,419Consultancy Income (Tax Deducted at Source Rs.1,32,683/-,Previous Year Nil) 2,494,031 -Profit on Sale of Fixed Asset (net) 29,330,678 3,409,001
TOTAL 224,573,612 149,447,969
SCHEDULE - 9COST OF SALE OF SPACE SOLDOpening Stock 761,430,154 588,168,296Add :Expenses on Construction during the year 421,958,408 844,879,687Others 57,193,803 138,705,039Total 1,240,582,365 1,571,753,022Less: Internal Capitalisation during the yearBuildings 446,688,266 259,484,498Plant & Machinery 145,015,713 175,780,825Less: transferred to Loans & Advances 104,270,097 -
Total 544,608,289 1,136,487,699Less: Closing Stock 271,660,960 761,430,154
Cost of space sold (A ) 272,947,328 375,057,545Cost of LandOpening Stock 49,361,803 70,401,116Add: Additions during the year - 13,739,287Total 49,361,803 84,140,403Less : Capitalised 22,252,904 14,516,957Total 27,108,899 69,623,446Less: Closing Stock 13,252,597 49,361,803Cost of Land sold (B ) 13,856,302 20,261,643
TOTAL (A + B ) 286,803,630 395,319,188
SCHEDULE - 10STAFF EXPENSESParticluars 2002-2003 2001-2002
Rs. Rs. Rs. Rs.Salaries, Wages and Bonus 4,026,063 4,865,426Contribution to and Provision forProvident Fund 224,586 525,725Superannuation Fund 144,538 156,542Gratuity Fund 81,152 65,201Leave Encashment 124,455 574,731 50,818 798,286Welfare and other expenses 222,477 257,500TOTAL 4,823,271 5,921,212
SCHEDULE - 11SALES, ADMINISTRATION AND OTHER EXPENSESPARTICULARS 2002 - 2003 2001 - 2002
Rs. Rs.Rent 404,317 649,831Electricity & Water Charges 2,097,862 1,191,940Rates & Taxes 3,107,739 1,568,204Telephone Postage & Telegrams 402,560 663,623Advertisement & Publicity 2,158,448 1,820,024Sundries Others 1,265,696 1,366,335Travelling & Conveyance 3,024,090 2,388,215Property Maintenance 36,694,403 27,889,545Professional & Consultancy Fees 12,433,367 7,516,532Insurance Charges 720,627 2,499,471
TOTAL 62,309,109 47,553,720
SCHEDULE - 12INTEREST AND BROKERAGEInterest on Term Loan 102,914,111 33,869,103Interest on others 20,068,612 21,791,582
122,982,723 55,660,685less: Interest received 5,450,312 4,862,089
TOTAL 117,532,411 50,798,596
SCHEDULE - 13SIGNIFICANT ACCOUNTING POLICIES1. BASIS OF ACCOUNTING:
The company maintains its accounts on accrual basis following the historical cost convention, in
compliance with the provisions of Section 211 (3C) and the other provisions of the Companies Act,
1956.
2. FIXED ASSETS:Fixed Assets are stated at original cost.
3. DEPRECIATION:Depreciation is provided in the accounts on straight line basis at the rates and in the manner
prescribed in Schedule XIV of the Companies Act, 1956.
4. INVESTMENTS:Long term investments are stated at cost. Short term investments are stated at cost or market
value whichever is lower.
5. INVENTORIES:(i) Work in Progress is valued at cost plus proportionate direct expenses allocated.
(ii) Completed property is valued at lower of cost or net realisable sales value.
6. SALES:Sales are recognised when the registration of the space sold is complete.
Income from lease of premises is accounted for, based on lease agreements with the lessees.
7. RETIREMENT BENEFITS:Contributions to Super Annuation Fund under LIC Group Super Annuation scheme is made based
on the actual liability basis.
Contributions to Provident Fund are made on actual liability basis.
Gratuity and Leave encashment is accounted for based on actuarial valuation.
8. PRIOR PERIOD AND EXTRA ORDINARY ITEMS:Income and Expenditure pertaining to prior period as well as extraordinary items, where material,
affecting the operating results is disclosed separately.
9. MISCELLANEOUS EXPENDITURE:Preliminary Expenses are written off over a period of ten years
10. BORROWING COSTS:Borrowing costs that are attributable to the acquisition, construction or production of qualifying
assets are capitalised as part of the cost of such asset. A qualifying asset is an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale. All other
borrowing costs are recognised as an expense in the period in which they are incurred.
11. TAXES ON INCOMETaxes on income for the current period is determined on the basis of taxable Income and tax
credits computed in accordance with the provisions of the Income Tax Act 1961, and based on
expected outcome of assessments / appeals.
Deferred tax is recognized on timing differences between the accounting Income and the taxable
income for the year and quantified using the tax rates and laws enacted or substantively enacted
as on the Balance Sheet.
Deferred tax assets are recognized and carried forward to the extent that there is a reasonable
certainty that sufficient future taxable income will be available against which such deferred tax assets
can be realized.
12. LEASESa) Lease rental paid on assets taken on operating lease are charged to profit & loss account.
b) Assets given out under operating lease are Capitalised at original cost. Rental income is
accounted on accrual basis
SCHEDULE - 14NOTES ON ACCOUNTS1. a) The company does not have taxable wealth, hence no provision for the wealth tax has been
made as per the provisions of the Wealth Tax Act, 1957.
b) The Company is governed by the provisions of section 115 JB of the Income Tax Act,1961,
since the taxable income as per normal computation is Nil. Accordingly Provision for tax for
the year has been made under the provision of Minimum Alternate Tax.
2. Additional information pursuant to paragraph 3 of Part II of Schedule VI to the Companies Act, 1956
has been furnished to the extent applicable since the Company is engaged in construction and
sale of immovable property together with land.
3. Expenditure in Foreign Currency 2002-2003 2001-2002Rs. Rs .
(i) Travel 95,565 Nil
(ii) Advertisement Nil 3,376
4. Manager’s salary and perquisites Rs.7,64,438/- (Previous year Rs. 4,82,486/-)
5. The company does not have any dealings with small scale industrial undertakings and hence
reporting regarding interest on delayed payments and amounts due to them does not arise.
6. Auditors’ remuneration and expenses charged to the accounts:
2002-2003 2001-2002Rs. Rs .
Audit fees (excluding service tax) 1,00,000 1,00,000
Taxation matters 90,700 82,688
Expenses reimbursed 32,670 15,682
7. Segment Reporting:
A. PRIMARY SEGMENT INFORMATION (Rs. in Lacs)
S. No. Sale of Space Lease Rental Total
1. SEGMENT REVENUE 3646.98 1394.75 5041.73
2. SEGMENT RESULT 778.95 1235.82 2014.77
Less: Unallocated expenses net of recoveries
and other Income - - 1162.16
PROFIT BEFORE TAX - - 852.61
Less: Provision for tax - - 73.91
Less: Provision for Deferred tax - - -85.95
PROFIT AFTER TAX 864.65
3. SEGMENT ASSETS - 10806.59 10806.59
Unallocated assets - - 4919.66
TOTAL ASSETS - - 15726.25
4. SEGMENT LIABILITIES - - -
Unallocated Liabilities - - 15967.89
TOTAL LIABILITIES - - 15967.89
Note: Sale of space represents property developed and sold. Hence no assets are employed directly for sale
of space.
B. SECONDARY SEGMENT INFORMATIONThe Company is engaged in the business of developing and operating Industrial Parks/Software
Technology Park, and hence does not have any exports. Therefore disclosure of secondary
segment information does not arise.
L&T INFOCITY LIMITED
S-31
8. The disclosure regarding the Related Party transactions are as follows:
A. Controlling Companies: Relationship(i) Larsen & Toubro Limited Holding Company
B. Subsidiary controlled by the Company(i) Hyderabad International Trade Expositions Limited
C. Associate Company(i) L&T Infocity – Ascendas Limited
D. Transactions with Related Parties (Rs. in Lacs)
S. Name of the Relationship Nature of Amount Amount AmountNo Party Transaction due to due from1. Larsen & Holding i) Contract for 4896.17 266.93 Nil
Toubro Limited Company Building
Construction
ii) Syndication of loan 33.19 133.19 Nil
iii) Obtaining 53.10 21.96 Nil
Staff services
2. Hyderabad Subsidiary i) Providing 18.06 - 18.06
International Trade Staff services
Expositions Limited
3 L&T Infocity - Associate i) Providing staff 46.36 - 6.36
Ascendas Ltd services
ii) Lease of office
space 5.16 - 0.15
(No amounts pertaining to the related parties have been written off or written back during the period.)
9. The Company has not entered into any Finance lease.
The Company has taken residential premises under operating leases. These lease agreements
are normally renewed on expiry. The rental expenses in respect of the above operating leases
was Rs. 4,35,875 (Previous year Rs. 5,55,200)
10. The Company has adopted Accounting Standard 22 (AS 22): Accounting for Taxes on Income
which is mandatory with effect from 1st April, 2001. Accordingly, the net decrease in the deferred
tax liability for the year amounting to Rs. 85,95,071 has been accounted.
Major components of Deferred Tax Assets and Deferred Tax Liabilities:
As at 31.03.2003 As at 31.03.2002PARTICULARS Rs. Rs.
Deferred Deferred Tax Deferred Deferred Tax
Tax Assets Liabilities Tax Assets Liabilities
Difference between Depreciation on 41,500,174 45,557,386
Assets as per books of account and
as per provisions of Income Tax Act.
Provision for Doubtful Advances
debited to Profit & Loss Account 4,537,859
Total 4,537,859 41,500,174 - 45,557,386
Net Deferred Tax Liability 36,962,315 45,557,386Net decrease in liability charged to
Profit & Loss Account (8,595,071)11.Details of Earning per Share:
Particulars 2002–2003 2001-2002Rs. Rs.
Profit before Tax 8,52,61,308 18,42,89,994
Less: Provision for Tax 73,91,190 1,40,98,185
Profit after Tax 7,78,70,118 17,01,91,809No. of Equity Shares 1,80,00,000 1,80,00,000
Earning per share – Basic 4.33 9.4612. Loans and Advances include Rs. 1042.70 Lakhs representing expenses incurred on development
of infrastructure facilities for 87 acres of saleable land in HITEC City area, owned by Government of
Andhra Pradesh. As and when land is sold by the Government of Andhra Pradesh, the Government
will reimburse the expenses to the Company. Accordingly, the total amount incurred net off recovery
made has been shown as recoverable in the accounts.
13. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details:
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital (incl. share appl. money)
Total Assets
Reserves & Surplus
Deferred Tax Liability
0 1 - 2 6 8 8 5
3 1 0 3 2 0 0 3
0 1
N I L
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Secured Loans
N I L
N I L
1 8 8 6 6 1 7
Registration No.
Balance Sheet Date
1 8 8 6 6 1 7
1 8 0 0 0 0 3 0 8 3 0 1
3 3 5 9 21 3 6 4 7 2 4
Net Current Assets
Investments
Miscellaneous Expenditure
Application of FundsNet Fixed Assets
Accumulated Losses
Turnover (incl. other income) Total Expenditure (Incl. prior year Adj.)IV. Performance of Company (Amount in Rs. Thousands)
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Dividend Rate %**Earnings per share (in Rs.) (Basic)
8 5 2 6 1 8 6 4 6 5
4 . 3 3
1 4 9 6 6 5 9 6 4 5 5 0
3 2 4 5 4 2 8 6 6
5 8 9 2 7 2 5 0 4 0 1 1
+ -ü
+ -ü
ü
V. Names of three Principal Products / Services of Company (as per monetary terms)
Item Code No. (ITC Code)
N . A
Product Description
D E V E L O P M E N T O F
S O F T W A R E P A R K
14. Previous year figures have been regrouped wherever necessary.
N I L
N I L+ -
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand ofL. VAIDYANATHAN U .RAMAKRISHNA(Partner) Secretary
Place : HyderabadDate : 18th April, 2003
A.RAMAKRISHNAM.V.S.PRASADK.V.RANGASWAMIV.B.GADGILK.VENKATESH
Directors}
ANDHRA PRADESH EXPOSITIONS PRIVATE LIMITED
S-32
DIRECTORS’ REPORT
Your Directors have pleasure in presenting their First Report and Accounts for the periodending 31st March 2003.
FINANCIAL RESULTS
As the company has not started its operations, the Profit and Loss account has not beenprepared. Hence there are no financial results to be reported.
PROSPECTS OF THE COMPANY
Five International Exhibitions were conducted during the period from 21stJanuary to 23
rd
February, 2003 at Hyderabad International Trade Expositions (HITEX), Hyderabad. Thisshows good prospects for bringing International, National and State level exhibitions toHyderabad and your company is expected to leap forward in conducting the events atHyderabad.
DISCLOSURE OF PARTICULARS
As the company is engaged in Organising, Hosting of national and International Trade Fairs,Exhibitions, Seminars, conferences and other related events at HITEX, there are no particularsto be disclosed as per the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules 1988.
There are no employees covered by the provisions of Section 217(2A) of the Companies Act,1956 read with Companies (Particulars of Employees) Rules 1975.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirm:
i) that in the preparation of the annual accounts, the applicable accounting standards havebeen followed and there has been no material departure;
AUDITORS’ REPORTWe have audited the attached Balance Sheet of Andhra Pradesh Expositions PrivateLimited as at 31st March, 2003. Profit & Loss Account has not been prepared as theCompany has not started its operations. In accordance with the provisions of Section227 of Companies Act, 1956, we report as under:We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining on a test basis, evidence supporting the amounts and disclo-sures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by the management, as well as evalu-ating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order,
1988 issued by the Company Law Board under Section 227 (4A) of the Compa-nies Act, 1956, we enclose in the Annexure to our report on the matters specifiedin paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph (1) above:a. We have obtained all the information and explanations, which to the best of
our knowledge and belief were necessary for the purposes of our audit;b. In our opinion, proper books of account as required by law have been kept
by the Company so far as appears from our examination of those books;
c. The Balance Sheet is in agreement with the books of account;d. In our opinion and according to the information in explanation given, the said
Balance Sheet is in Compliance with the accounting standards referred to inSection 211(3C) of the Companies Act, 1956;
e. On the basis of written representations received from the Directors of thecompany as at 31st March, 2003 and taken on record by the Board of Direc-tors, we report that no Director is disqualified from being appointed as aDirector of the company under clause (g) of sub section (1) of section 274of Companies Act, 1956.
3. In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts, read together with the Significant Accountingpolicies in Schedule 5 and other notes to accounts in Schedule 6 give the infor-mation required by the Act, in the manner so required and give a true and fairview:(i) In the case of the Balance Sheet, of the state of the Company’s affairs as
at 31st March, 2003.SHARP & TANNAN
Chartered AccountantsBy the hand of
Place : Hyderabad L.VAIDYANATHANDate : 18
th April, 2003 Partner
ii) that the selected accounting policies were applied consistently and the directors madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at 31
st March, 2003 and of the profit of the
company for the year ended on that date;iii) that proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) that the annual accounts have been prepared on a going concern basis.DIRECTORSShri K.V.Rangaswami and Shri Vivek Bhaskar Gadgil appointed as First Directors under theArticles of Association of the Company, hold office upto the date of the ensuing AnnualGeneral Meeting and are eligible for re-appointment.AUDITORSThe company’s auditors M/s. Sharp & Tannan, Chartered Accountants hold office upto theconclusion of the forthcoming Annual General Meeting and being eligible, are recommendedfor re-appointment.ACKNOWLEDGEMENTThe Directors are pleased to place on record their appreciation of the co-operation extendedby the employees of L&T Infocity Limited and Hyderabad International Trade ExpositionsLimited.
For and on behalf of the Board
Date : 18th April 2003Place: Hyderabad
ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 1 of our report of even date)i) The Company has not taken any loans, secured or unsecured, from Companies,
firms or other parties listed in the register maintained under section 301 of theCompanies Act, 1956 or from bodies corporate under the same managementwithin the meaning of section 370 (1B) of the Companies Act, 1956.
ii) The Company has not granted any loans, secured or unsecured, to companies,firms or other parties listed in the register maintained under section 301 of theCompanies Act, 1956 or from bodies corporate under the same managementwithin the meaning of section 370 (1B) of the Companies Act, 1956.
iii) No loans or advances in the nature of loans have been given by the company.iv) In our opinion and according to the information and explanations given to us,
there are adequate internal control procedures commensurate with the size of theCompany and the nature of its business.
v) According to the information and explanations given to us there are no purchasesof goods and materials and sale of goods, materials and services made in pur-suance of contracts or arrangements entered in the register maintained underSection 301 of the Companies Act, 1956 and aggregating during the period to Rs.50,000/- or more in respect of each party.
vi) The company has not accepted any deposits during the period to which provisionsof Section 58A of the Companies Act, 1956 are applicable.
vii) This being the first period of operation the company is in the process of introduc-ing an internal audit system.
viii) The provisions of the Provident Fund Act and Employees State Insurance Act arenot applicable to the company as there are no employees employed during theyear.
ix) According to the information and explanations given to us, no undisputed amountspayable in respect of income tax, wealth tax, sales tax, customs duty and exciseduty, were outstanding as at 31st March 2003, for a period of more than sixmonths from the date they became payable.
x) According to the information and explanations given to us and the records of theCompany examined by us, no personal expenses have been charged to revenueaccount other than those payable under contractual obligations or in accordancewith the generally accepted business practices.
xi) The Company is not a sick Company within the meaning of clause (o) of subsection (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act,1985.
xii) Clauses (i), (ii), (iii), (iv), (v), (vi), (xii), (xiv) and (xvi) of Para 4A of the aforesaidOrder are not applicable during the period.
SHARP & TANNANChartered Accountants
By the hand of
Place : Hyderabad L.VAIDYANATHANDate : 18
th April, 2003 Partner
ANDHRA PRADESH EXPOSITIONS PRIVATELIMITED
K.V. RANGASWAMI
V.B. GADGIL Directors}
ANDHRA PRADESH EXPOSITIONS PRIVATE LIMITED
S-33
BALANCE SHEET AS AT 31 ST MARCH, 2003
Sch. 31.03.2003No Rs. Rs.
SOURCES OF FUNDSSHAREHOLDERS’ FUNDS :Share Capital 1 100,000
TOTAL FUNDS EMPLOYED 100,000
APPLICATION OF FUNDSCURRENT ASSETS, LOANS &ADVANCES 2CURRENT ASSETSa) Cash and Bank Balances 99,800b) Loans and Advances -
99,800
Less: CURRENT LIABILITIES &PROVISIONS 3a) Current Liabilities 116,350
-116,350
NET CURRENT ASSETS (16,550)MISCELLANEOUS EXPENDITURE 4Preliminary Expenses 116,550 116,550
TOTAL ASSETS 100,000
SIGNIFICANT ACCOUNTING POLICIES 5
NOTES ON ACCOUNTS 6
SCHEDULES FORMING PART OF BALANCE SHEET
SCHEDULE - 1 AS AT 31.03.2003SHARE CAPITAL Rs.
AUTHORISED1,00,000 Equity Shares of Rs10 each 1,000,000
ISSUED SUBSCRIBED & PAID UP10,000 Equity Shares of Rs 10 each fully paid up 100,000Issued during the year9998 Shares are held by Hyderabad InternationalTrade Expositions Limited
SCHEDULE - 2CURRENT ASSETS, LOANS & ADVANCESCASH AND BANK BALANCESa) Cash on hand 20b) Bank Balances with scheduled Banks 99,780in current account 99,800
TOTAL 99,800SCHEDULE - 3CURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIESa) Sundry Creditors 116,350
(Due to Small Scale Industrial undertakings - NIL)
TOTAL 116,350
SCHEDULE - 4PRELIMINARY EXPENSES
PARTICULARSRegistration charges 108,000Filing Fees & Other expenses 8,550
TOTAL 116,550
SCHEDULES FORMING PART OF ACCOUNTS
SCHEDULE - 5SIGNIFICANT ACCOUNTING POLICIES1. BASIS OF ACCOUNTING:
The company maintains its accounts on accrual basis following the historical costconvention, in compliance with the provisions of section 211 (3C) and the otherprovisions of the Companies Act, 1956.
Place : HyderabadDated : 18th April, 2003
As per our report attachedSHARP & TANNANChartered Accountantsby the hand of
L. VAIDYANATHANPartner
For and on behalf of the Board
SCHEDULES FORMING PART OF ACCOUNTS2. MISCELLANEOUS EXPENDITURE:
Preliminary expenses are written off over a period of five years from the start ofcommercial operation.
SCHEDULE - 6NOTES ON ACCOUNTS:1. Additional information pursuant to paragraph 3 of Part II of Schedule VI to the
Companies Act, 1956 is not applicable since the Company is service company.2. The company does not have any dealings with small scale industrial undertakings
and hence reporting regarding interest on delayed payments and amounts due tothem does not arise.
3. Disclosure of Related Parties
A. Controlling Companies: Relationship
(i) HITEX Limited Holding Company(ii) L&T Infocity Limited Ultimate Holding Company
B. Transactions with Related Parties(Rs. in Lacs)
S. Name of Relationship Nature of Amount Amount AmountNo the Party Transaction due to due from
1. L&T Infocity Ultimate Reimbursement 1.11 1.11 NilLimited Holding of Expenses
Company
(No amounts pertaining to the related parties have been written off or written backduring the period.)
4. This being the first period of accounts giving previous year figures does not arise.5. The Company is yet to commence its commercial operations and hence no Profit
& Loss Account has been made.6. Auditors remuneration towards fee for statutory audit is Rs. 5000/-
Place : HyderabadDated : 18
th April, 2003
SHARP & TANNANChartered Accountantsby the hand of
L. VAIDYANATHANPartner
For and on behalf of the Board
Balance Sheet Abstract and Company’s General Business ProfileI. Registration Details
0 1 - 3 8 4 8 70 1State Code
Balance Sheet Date 3 1 - 0 3 - 2 0 0 3
II. Capital Raised during the year (Amount in Rupees Thousands)
N I L
Date Month Year
Public Issue
N I L
Bonus Issue
Rights Issue
1 0 0
Private Placement
III. Position of Mobilisation and Deployment of funds (Amount in Rupees Thousands)
Total Liabilities
1 1 2
Total Assets
Paid up Capital(incl. Share Appl. Money) Reserves & Surplus
Sources of Funds
Secured Loans Unsecured Loans
Net Fixed Assets (includingCWIP & Pre-operative expenses) Investments
N I L
Application of Funds
Net Current Assets Misc. Expenditure
N I L
Registration No.
N I L
IV. Performance of the Company (Amount in Rupees Thousands)Turnover
(including other income)Total Expenditure
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Earning per Share in Rs. Dividend Rate %
V. Names of Three Principal Products/Services of the Company(as per monetary terms)Item Code No. (ITC Code)
Product Description/ Service
O R G A N I S I N G T R A D E
1 1 2
1 0 0 N I L
N I L
- 1 6 1 1 6
N I L N I L
+ / - + / -
N I L
N I L N I L
N I L N I L
N . A
F A I R S & E X H I B I T I O N S
K.V. RANGASWAMI
V.B. GADGILDirectors}
K.V. RANGASWAMI
V.B. GADGILDirectors}
HYDERABAD INTERNATIONAL TRADE EXPOSITIONS LIMITED
S-34
DIRECTORS' REPORT
HYDERABAD INTERNATIONAL TRADE EXPOSITIONS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH 2003Your Directors have pleasure in presenting their Second Report and the Audited Statement ofAccounts for the year ended 31st March 2003.FINANCIAL RESULTSAs the company has started its operations from 14th January 2003, Profit and Loss account isprepared for the period from 14th January to 31st March 2003.Period (14-01-2003 to 31-3-2003)
Rs.Income 18,622,836Profit/(Loss) before depreciation 4,624,028Less :Depreciation & Miscellaneous Expenditure Written off 2,059,578Profit/(Loss) after depreciation 2,564,450
Your company started commercial operation from 14th January 2003. Five events were conductedby prominent organisers like GITEX, Department of Horticulture, Government of Andhra Pradeshand CIDEX. Global participants in the events are immensely satisfied with the facilities andservices provided at the centre. Your company has a confirmed order booking for Eight eventsand prospective Order booking for another three events during the current financial year 2003-04. Executives from Confederation of Indian Industries (CII), Federation of Chamber of Commerceand Industry (FICCI) who visited the Exhibition Centre are highly impressed with the facilitiesand services of International standards provided at HITEX and have shown keen interest inconducting their events at this centre.FINANCEDuring the financial year the company received a sum of Rs 607 lakhs from L&T Infocity Ltd,Rs 200 lakhs from National Academy of Construction, Rs 100 Lakhs from Municipal Corporationof Hyderabad and a sum of Rs 50 lakhs from the Department of Tourism, Government of AndhraPradesh as Equity amount and a sum of Rs 31 Crores from Housing Development FinanceCorporation Ltd. (HDFC) as Construction Finance Loan for the project.CAPITAL EXPENDITUREAs at 31st March, 2003 the gross fixed assets stood at Rs 507,211,858 and the net fixed assetsat Rs.505,077,116 Additions during the year amounted to Rs.506,351,667.DEPOSITSThe Company has not invited or accepted any deposits from the public during the year.SUBSIDIARY COMPANIESDuring the year under review the Companysubscribed to 9998 Equity shares of Rs. 10/- eachfully paid up in Andhra Pradesh Expositions Private Limited (APEX), thus making it a subsidiaryof the Company.As required by Section 212 of the Companies Act, 1956 the Audited statement of Accounts,reports of the Board of Directors and Auditors of APEX is enclosed.DISCLOSURE OF PARTICULARSAs the company is engaged in providing infrastructure facilities to exhibitors there are noparticulars to be disclosed as per the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988.
PERSONNELThere are no employees covered by the provisions of Section 217(2A) of the Companies Act,1956 read with Companies (Particulars of Employees) Rules, 1975.DIRECTORS RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i) that in the preparation of the annual accounts, the applicable accounting standards have
been followed and there has been no material departure;ii) that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at March 31
st, 2003 and of the profit of the
company for the year ended on that date;iii) that proper and sufficient care has been taken for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the annual accounts have been prepared on a going concern basis.DIRECTORSShri A. Ramakrishna and Shri R.C.Sinha retire by rotation at the forthcoming Annual GeneralMeeting and being eligible, offer themselves for re-appointment.AUDIT COMMITTEEThe Audit Committee consists of 3 non-executive directors. The present members of theCommittee are Mr. R.C. Sinha, Mr. V.B. Gadgil and Mr. K. Venkatesh. Mr. R. C. Sinha is theChairman of the Audit Committee. The Audit Committee has met periodically during the year andgiven its report and recommendations to the Board of Directors for Corporate Governance andoverall improvement in the functioning of the company.AUDITORSThe Auditors M/s. Sharp & Tannan, Chartered Accountants, hold office upto the conclusion ofthe forthcoming Annual General Meeting and being eligible, are recommended for re-appointment.Certificate from the Auditors has been received to the effect that their re-appointment if madewould be within the prescribed limits u/s 224(1B) of the Companies Act, 1956.ACKNOWLEDGEMENTThe Directors are pleased to place on record their appreciation of the co-operation extendedby the employees of L&T Infocity Limited, National Academy of Construction, L&T ECCConstruction Division, Housing Development Finance Corporation Ltd. and the Government ofAndhra Pradesh for their active support given to the company. The Directors place on recordtheir appreciation of the valuable contribution made by the staff of the company.
For and on behalf of the Board
Date : 18th April 2003Place : Hyderabad
AUDITORS’ REPORTWe have audited the attached Balance Sheet of Hyderabad International Trade ExpositionsLimited as at 31st March, 2003 and also the Profit & Loss Account of the Company for the periodended on that date annexed thereto. These financial statements are the responsibility of thecompany’s management. Our responsibility is to express an opinion on these financial statementsbased on our audit.We conducted our audit in accordance with auditing standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by the management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988
issued by the Central Government under Section 227 (4A) of the Companies Act, 1956,we enclose in the Annexure to our report on the matters specified in paragraphs 4 and5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph (1) above:a. We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit;b. In our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
c. The Balance Sheet is in agreement with the books of account;d. In our opinion and according to the information in explanation given, the said Balance
Sheet is in compliance with the accounting standards referred to in Section 211(3C)of the Companies Act, 1956;
e. On the basis of written representations received from the Directors of the companyas at 31st March, 2003 and taken on record by the Board of Directors, we report thatno Director is disqualified from being appointed as a Director of the company underclause (g) of sub section (1) of section 274 of the Companies Act, 1956.
3. In our opinion and to the best of our information and according to the explanations givento us, the said accounts, read together with the Significant Accounting policies in Schedule14 and other notes to accounts in Schedule 15 give the information required by the Act,in the manner so required and give a true and fair view:(i) In the case of the Balance Sheet, of the state of the Company’s affairs as at
31st March, 2003.(ii) In the case of the Profit and Loss Account, of the profit for the year ended on that
date.
SHARP & TANNANChartered Accountants
By the hand of
Place : Hyderabad L.VAIDYANATHANDate : 18
th April, 2003 Partner
ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 1 of our report of even date)i) The Company has maintained proper records to show full particulars including quantitative
details and situation of fixed assets. We are informed that the fixed assets have been physi-cally verified by the management during the year and no material discrepancies were no-ticed on such verification.
ii) None of the fixed assets have been revalued during the period.iii) The Company has not taken any loans, secured or unsecured, from Companies, firms or
other parties listed in the register maintained under section 301 of the Companies Act, 1956or from Bodies Corporate under the same management within the meaning of section 370(1B) of the Companies Act, 1956.
iv) The Company has not granted any loans, secured or unsecured, to Companies, firms orother parties listed in the register maintained under section 301 of the Companies Act, 1956or from Bodies Corporate under the same management within the meaning of section 370(1B) of the Companies Act, 1956.
v) The parties to whom loans or advances in the nature of loans have been given are repaying theprincipal amount as stipulated and are also regular in payment of interest, where applicable.
vi) In our opinion and according to the information and explanations given to us, there areadequate internal control procedures commensurate with the size of the Company and thenature of its business with regards to purchases of equipment, plant & machinery and otherassets.
vii)According to the information and explanations given to us there are no purchases of goodsand materials and sale of goods, materials and services made in pursuance of contracts orarrangements entered in the register maintained under Section 301 of the Companies Act,1956 and aggregating during the period to Rs. 50,000/- or more in respect of each party.
viii)The company has not accepted any deposits during the period to which provisions ofSection 58 A of the Companies Act, 1956 are applicable.
ix) We are of the opinion that the Company has an internal audit system commensurate withits size and the nature of its business.
x) The Company has regularly deposited the Provident Fund dues with the Provident FundAuthorities. The provisions of the Employees State Insurance Act are not applicable to thecompany as all the employees are drawing more than the prescribed limit mentioned therein.
xi) According to the information and explanations given to us, no undisputed amounts payablein respect of income tax, wealth tax, sales tax, customs duty and excise duty, were outstand-ing as at 31st March 2003, for a period of more than six months from the date they becamepayable.
xii)According to the information and explanations given to us and the records of the Companyexamined by us, no personal expenses have been charged to revenue account other thanthose payable under contractual obligations or in accordance with the generally acceptedbusiness practices.
xiii)The Company is not a sick Company within the meaning of clause (o) of sub section (1) ofSection 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.
xiv)In respect of its service activities, the company has a reasonable system of recordingreceipts, issues and consumption of materials for maintenance and commensurate with thesize and nature of its business.
xv)Clauses (iii), (iv), (v), (vi), (xii), (xiv) and (xvi) of Para 4A of the aforesaid Order are notapplicable during the period.
SHARP & TANNANChartered Accountants
By the hand of
Place : Hyderabad L.VAIDYANATHANDate : 18
th April, 2003 Partner
A. RAMAKRISHNA
P.V. RAODirectors}
Statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary CompaniesName of the Subsidiary company Andhra Pradesh ExpositionsFinancial year of the subsidiary ended on Private limited
31st March 2003Number of shares of the subsidiary company held by Hyderabad International Trade Expositions Ltd. and / or its nominee at the above date 9,998The net aggregate of profits/(losses), of the subsidiary company so far as it concerns the members of Hyderabad International Trade Expositions Ltd.(i) Dealt with in the accounts of Hyderabad International Trade Expositions Ltd. amounted to:
a) for the subsidiary’s financial year ended 31-3-2003 Nilb) for the previous financial years of the subsidiary since it became subsidiary of Hyderabad International Trade Expositions Ltd. Not applicable
(ii) Not dealt with in the accounts of Hyderabad International Trade Expositions Ltd. amounted to:a) for the subsidiary’s financial year ended 31-3-2003 Nilb) for the previous financial years of the subsidiary since it became subsidiary of Hyderabad International Trade Expositions Ltd. Not applicable *
HYDERABAD INTERNATIONAL TRADE EXPOSITIONS LIMITED
S-35
Balance Sheet as at 31 st March, 2003Sch- As at 31.03.2003 As at 31.03.2002No. Rupees Rupees Rupees Rupees
SOURCES OF FUNDSSHARE HOLDERS' FUNDS
Share Capital 1 500,000 500,000Share Application Money 95,700,060 96,200,060 28,929,818 29,429,818Reserves & Surplus 2 2,362,500 -
LOAN FUNDSSecured Loans 3 310,000,000 -TOTAL 408,562,560 29,429,818
APPLICATION OF FUNDSFIXED ASSETS 4GROSS BLOCK 507,211,858 860,191Less: Depreciation 2,134,742 8,074NET BLOCK 505,077,116 852,117Capital Work in Progress 2,893,310 73,224,723Pre-Operative Expenses 5 - 507,970,426 2,147,711 76,224,551INVESTMENTS 6 99,980 -CURRENT ASSETS,LOANS & ADVANCES 7CURRENT ASSETSa) Cash and Bank Balances 3,251,819 1,279,067b) Loans & Advances 3,770,595 499,980
7,022,414 1,779,047Less: CURRENTLIABILITIES & PROVISIONS 8a) Sundry Creditors 106,423,904 48,693,272b) Provisions 201,950 -
106,625,854 48,693,272NET CURRENT ASSETS (99,603,440) (46,914,225)
MISCELLANEOUSEXPENDITURE(to the extent not writtenoff or adjusted ) 95,594 119,492
TOTAL 408,562,560 29,429,818SIGNIFICANTACCOUNTING POLICIES ANOTES ON ACCOUNTS B
Profit & Loss Account for the period from 14.01.2003 to 31.03.2003
14.01.2003 to 31.03.2003
Schedules RupeesINCOMEIncome from Services 18,560,946Other Income 9 61,890
TOTAL 18,622,836
EXPENDITUREStaff Expenses 10 351,831Sales, Administration and Other Expenses 11 6,848,867Interest & Brokerage 12 6,798,110Depreciation 13 2,035,680Preliminary Expenses written off 23,898
TOTAL 16,058,386
Profit / (Loss) for the Year 2,564,450Provision For Taxes 201,950Provision for Deferred Tax -
Profit after Tax 2,362,500
Balance Carried to Balance Sheet 2,362,500
Earning per Share - Basic/diluted 0.25
SIGNIFICANT ACCOUNTING POLICIES ANOTES ON ACCOUNTS B
SCHEDULES FORMING PART OF BALANCE SHEET
AS AT 31.03.2003 AS AT 31.03.2002Rs. Rs.
SCHEDULE - 1SHARE CAPITALAUTHORISED :1,50,00,000 Equity Shares of Rs10/- each 150,000,000 500,000ISSUED, SUBSCRIBED AND PAID UP :50,000 Equity Shares of Rs.10/- Each fully 500,000 500,000
paid up.49,998 Shares are held by L&T Infocity
Limited - holding company
SCHEDULE - 2RESERVES AND SURPLUS
AS AT 31.03.2003 AS AT 31.03.2002Rs. Rs.
GENERAL RESERVETransfer from P&L A/c 2,362,500 -
TOTAL 2,362,500 -
SCHEDULE - 3
SECURED LOANSAS AT 31.03.2003 AS AT 31.03.2002
Rs. Rs.Term Loan fromHDFC Limited 310,000,000 -(Secured by mortgage of leaseholdrights on 90.36 Acres of LeaseholdLand on survey no.5/2 to 5/23 of IzzatNagar Village, Lingampalli Mandal,Ranga Reddy Dist., AP and allstructures of the Trade Centre bothpresent & future.
TOTAL 310,000,000 -
SCHEDULE 4 - FIXED ASSETS
GROSS BLOCK (RS.) DEPRECIATION (RS.) NET BLOCK (RS.)
DESCRIPTION AS AT ADDITIONS DISPOSALS AS AT AS AT FOR THE ON AS AT AS AT AS AT01.04.2002 DURING DURING 31.03.2003 01.04.2002 YEAR DISPOSALS 31.03.2003 31.03.2003 31.03.2002
THE YEAR THE YEAR
BUILDINGS ** - 466,480,300 - 466,480,300 - 1,604,053 - 1,604,053 464,876,247 -
PLANT & MACHINERY - 36,655,895 - 36,655,895 - 367,312 - 367,312 36,288,583 -
FURNITURES & FIXTURES 124,416 2,754,592 - 2,879,008 652 56,738 - 57,390 2,821,618 123,764
COMPUTERS 330,375 222,887 - 553,262 5,018 66,403 - 71,421 481,841 325,357
OFFICE EQUIPMENTS 405,400 237,993 - 643,393 2,404 32,162 - 34,566 608,827 402,996
TOTAL 860,191 506,351,667 - 507,211,858 8,074 2,126,668 - 2,134,742 505,077,116 -
PREVIOUS PERIOD - 860191 - 860191 - 8074 - 8074 - 852117
Capital Work in Progess - - - - - - - - 2,893,310 73,224,723
Note : ** The Building is constructed on lease hold land (90.36 Acres) on a 66 years Lease Agreement entered with National Academy of Construction (NAC). A sum ofRs.100/- per year for the period Commencing from 01.10.2001 to 30.09.2007 is payable to NAC as Lease Rent and to be paid at a predetermined rate as per leaseagreement dated 01.10.2001 for balance unexpired period of lease.
Directors
As per our report attached
SHARP & TANNANChartered AccountantsBy the hand ofL. VAIDYANATHAN(Partner)Place : HYDERABADDate : 18th April, 2003
For and on behalf of the Board
A. RAMAKRISHNAK.V. RANGASWAMIV.B. GADGILR.C. SINHAP.V. RAOK. VENKATESH
}
Directors
As per our report attached
SHARP & TANNANChartered AccountantsBy the hand of
L. VAIDYANATHAN(Partner)Place : HYDERABADDate : 18th April, 2003
For and on behalf of the Board
A. RAMAKRISHNAK.V. RANGASWAMIV.B. GADGILR.C. SINHAP.V. RAOK. VENKATESH
}
HYDERABAD INTERNATIONAL TRADE EXPOSITIONS LIMITED
S-36
SCHEDULES FORMING PART OF BALANCE SHEET (Cont'd.)
SCHEDULE - 5PRE-OPERATIVE EXPENSES
06.08.2001 to 01.04.2002 to Total31.03.2002 13.01.2003
Rs. Rs. Rs.Staff Expenses 91,897 1,042,114 1,134,011Travelling & Conveyance 1,104,857 2,059,202 3,164,059Professional & Consultancy Fees 787,500 - 787,500Board Meeting Expenses 22,398 - 22,398ADMN/MARKETING &OTHER EXPENSESCar Hire Charges 13,407 221,640 235,047Rates & Taxes 6,200 13,125 19,325Lease Rent 15,400 234,625 250,025Repairs & Maintenance 37,387 260,139 297,526Bank Charges - 1,004,758 1,004,758Sundries - others 38,488 941,454 979,942Telephone Expenses 22,103 131,981 154,084Depreciation on Assets 8,074 90,988 99,062
TOTAL 2,147,711 6,000,026 8,147,737
Pre-operative Expenses apportioned to the following Fixed AssetsValue Apportion Amount
Rs. % Rs.Building 458,986,866 0.9197 7,493,434Plant & Machinery 36,067,063 0.0723 588,832Furniture & Fixtures 2,832,760 0.0057 46,248Office Equipments 633,058 0.0013 10,335Computers 544,375 0.001 8,888
TOTAL 499,064,122 8,147,737
SCHEDULE - 6INVESTMENTS
AS AT 31.03.2003 AS AT 31.03.2002Rs. Rs.
Long Term Investments : (At cost)
UnquotedAndhra Pradesh Expositions 99,980 -Private Limited(9998 sharesof Rs.10/- each fully paid uppurchased during the year)
TOTAL 99,980 -
SCHEDULE - 7CURRENT ASSETS, LOANS & ADVANCES
AS AT 31.03.2003 AS AT 31.03.2002Rs. Rs.
CASH AND BANK BALANCESCash on hand - 60 -Bank Balances withscheduled Bankson current accounts 3,251,819 1,279,007
3,251,819 1,279,067
3,251,819 1,279,067LOANS AND ADVANCESAdvances recoverable incash or in kind 3,770,595 499,980or for value to be received.(Unsecured considered good)
3,770,595 499,980
TOTAL 7,022,414 1,779,047
SCHEDULE - 8CURRENT LIABILITIES & PROVISIONS
AS AT 31.03.2003 AS AT 31.03.2002Rs. Rs.
A) CURRENT LIABILITIES &PROVISIONSa) Sundry Creditors 106,423,904 48,693,272(Due to Small Scale industrialundertakings -NIL)
B) PROVISIONSa) Provision for Current Taxes 201,950 -
TOTAL 106,625,854 48,693,272
SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNT
SCHEDULE - 9OTHER INCOME
Particulars 14.01.2003 to31.03.2003
Rs.Maintenance Recovery (Tax Deducted at Source Rs.3213/- ) 61,890
TOTAL 61,890
SCHEDULES FORMING PART OF PROFIT & LOSS A CCOUNT (Cont'd.)
SCHEDULE - 10STAFF EXPENSES
14.01.2003 to 31.03.2003Rs.
Salaries, Wages and Bonus 214,901Contribution to and Provision forProvident Fund 26,615
241,516Welfare and other expenses 110,315
TOTAL 351,831
SCHEDULE - 11SALES, ADMINISTRATION AND OTHER EXPENSES
14.01.2003 to 31.03.2003Rs.
Rent 33,220Power and Water charges 1,066,706Repairs & Maintenance - others 43,401Sundries - Others 164,214Property Maintenance 876,752Inauguration expenses 1,978,780Advertisement Expenses 1,099,485Telephone Expenses 711,847Travel & Conveyance 733,429Printing & Stationary 141,033
TOTAL 6,848,867
SCHEDULE - 12INTEREST AND BROKERAGE
14.01.2003 to 31.03.2003Rs.
Interest on Term Loan 6,798,110
TOTAL 6,798,110
SCHEDULE - 13DEPRECIATION
14.01.2003 to 31.03.2003Rs.
Depreciation for the year 2,126,668Less : Capitalised under preoperative expenditure 90,988
TOTAL 2,035,680
SCHEDULES FORMING PART OF ACCOUNTS:SCHEDULE - ASIGNIFICANT ACCOUNTING POLICIES1. BASIS OF ACCOUNTING:
The company maintains its accounts on accrual basis following the historical costconvention, in compliance with the provisions of section 211 (3C) and the otherprovisions of the Companies Act, 1956.
2. FIXED ASSETS:Fixed Assets are stated at original cost including preoperative expenses incurred priorto the period of commencement of commercial operations.
3. DEPRECIATION:Depreciation is provided in the accounts on straight line basis at the rates and in themanner prescribed in Schedule XIV of the Companies Act, 1956.
4. RETIREMENT BENEFITS:Contributions to Provident Fund are made on actual liability basis.
5. PRELIMINARY EXPENSES:Preliminary Expenses is charged to revenue over a period of five years on commencementof Commercial Operations.
6. REVENUE RECOGNITION :Income from Services :-a) Rental income from Trade Fair Building is accounted for based on agreements with
the tenants.b) Rental income from Exhibition Halls is accounted for based on the rates agreed
with organizers of exhibitions and where the recovery is certain.7. TAXES ON INCOME :
Deferred tax assets and liabilities are recognized for the future tax consequences oftemporary differences between the carrying values of the assets and liabilities and theirrespective tax basis. Deferred tax assets are recognized subject to management’sjudgement that realization is virtually certain.
SCHEDULES FORMING PART OF ACCOUNTS:SCHEDULE - BNOTES ON ACCOUNTS:1. The Company has started its commercial operations on 14th January, 2003 and
accordingly the Profit and Loss Account has been prepared for the period from 14thJanuary, 2003 to 31st March, 2003.
2. a) The Company does not have taxable wealth under the provisions of the Wealth TaxAct, 1956.b) The Company is governed by the provision of Section 115 JB of the Income Tax Act,1961 and accordingly provision for income tax has been made under the provisions ofMinimum Alternate Tax.
HYDERABAD INTERNATIONAL TRADE EXPOSITIONS LIMITED
S-37
3. Deferred Tax asset of Rs.94,25,340/- pertaining to timing difference on accounts ofdepreciation has not been recognized by the management in the accounts as a measureof prudence.
4. Additional information pursuant to paragraph 3 of Part II of Schedule VI to the CompaniesAct, 1956 has been furnished to the extent applicable to the Company.
5. Expenditure in Foreign Currency2002-2003 2001-2002
Rs. Rs.Travel 4,18,287 50,575Consultancy 20,50,045 15,18,650
6. The company does not have any dealings with small scale industrial undertakings andhence reporting regarding interest on delayed payments and amounts due to them doesnot arise.
7. Auditors’ remuneration and expenses charged to the accounts:2002-2003 2001-2002
Rs. Rs.Audit Fees (Excluding Service Tax) 15,000 10,000Other Matters nil 3,000
8. Disclosure of Related PartiesA. Controlling Companies: Relationship(i) L&T Infocity Limited Holding Company(ii) Larsen & Toubro Limited Ultimate Holding Company
B. Transactions with Related PartiesSr.No Name of the Party Relationship Nature of Amount Amount Amount due
Transaction (Rs.) due to (Rs.) from (Rs.)1. L&T Infocity Limited Holding Providing Staff 18,06,581 18,06,581 Nil
Company services2. Larsen & Toubro Ultimate Building 44,17,79,383 976,96,601 Nil
Limited Holding ConstructionCompany Contract
(No amounts pertaining to the related parties have been written off or written backduring the period.)
9. Manager’s Salary and Perquisites :2002-2003 2001-2002
Rs. Rs.a) Salary 3,04,189 Nilb) Perquisites 2,39,939 9,496
10. The provisions of the Payment of Gratuity Act, 1972 and Payment of Bonus Act, 1965are not applicable since the company is in infancy period.
11. Provision for Leave Encashment is not made since none of the employees are eligiblefor leave encashment as per the terms of employment.
12. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details:
Registration No.
State Code0 1 - 3 7 1 0 5 0 1
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
3 1 - 0 3 - 2 0 0 3
N I L
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
Balance Sheet Date
N I L
N I L
Total Liabilities
Paid-up Capital (Incl. Share Appl. Money)
Secured Loans
Net Fixed Assets (including CWIP &Pre-opeerative expenses)
Net Current Assets
Accumulated Losses
Total Assets
Reserves & Surplus
Investments
Unsecured Loan
Miscellaneous Expenditure
Turnover (including other income)
Profit/Loss Before Tax
Total Expenditure
Profit/Loss After Tax
4 0 8 5 6 3
9 6 2 0 0
3 1 0 0 0 0
5 0 7 9 7 0
- 9 9 6 0 3
N I L
1 6 0 5 8
2 3 6 3
9 6
Earning Per Share in Rs.
N I L
V. Generic Names of Three Principal Products/Services of Company (as per monetary terms)
Item Code No.
Product Description
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
IV. Performance of Company (Amount in Rs. Thousands)
Dividend Rate %
N A
1 0 0
4 0 8 5 6 3
2 5 6 5
+ - + -
P R O V I D I N G
N I L
0 . 2 5
1 8 6 2 3
2 3 6 3
I N F R A S T R U C T U R E
F O R T R A D E F A I R S
13. Previous year figures have been regrouped wherever necessary. Comparativefigures in respect of profit & loss account has not been given since the company hasstarted its operations from 14th January, 2003.
Directors
As per our report attached
SHARP & TANNANChartered AccountantsBy the hand ofL. VAIDYANATHAN(Partner)Place : HYDERABADDate : 18th April, 2003
For and on behalf of the Board
A. RAMAKRISHNAK.V. RANGASWAMIV.B. GADGILR.C. SINHAP.V. RAOK. VENKATESH
}
L&T - ECC CONSTRUCTION (M) SDN. BHD.
S-38
STATUTORY DECLARATIONI, ROY FRANCIS SALDANHA, being the officer primarily responsible for the financial managementof L&T - ECC CONSTRUCTION (M) SDN. BHD., do solemnly and sincerely declare that thefinancial statements set out on pages 7 to 14 are to the best of my knowledge and belief correct,and I make this solemn declaration conscientiously believing the same to be true and by virtue ofthe provisions of the Statutory Declarations Act, 1960.Subscribed and solemnly declared by the above named ROY FRANCIS SALDANHA at KualaLumpur in the Federal Territory this 25th day of April 2003.
ROY FRANCIS SALDANHAREPORT OF THE AUDITORSTO THE MEMBERS OF L&T - ECC CONSTRUCTION (M) SDN. BHD.We have audited the financial statements set out on pages 7 to 14, the preparation of which is theresponsibility of the Company’s directors. Our responsibility is to express an opinion on thesefinancial statements based on our audit.We have conducted our audit in accordance with approved auditing standards. These standardsrequire that we plan and perform the audit to obtain all the information and explanations which weconsidered necessary to provide us with sufficient evidence to give reasonable assurance that thefinancial statements are free of material misstatements. An audit includes examining, on a testbasis, evidence relevant to the amounts and disclosures in the financial statements. An audit alsoincludes an assessment of the accounting principles used and significant estimates made by thedirectors as well as evaluating the adequacy of the presentation of information in the financialstatements. We believe our audit provides a reasonable basis for our opinion.In our opinion:(a) the financial statements are drawn up in accordance with the provisions of the Companies
Act, 1965 and applicable approved accounting standards so as to give a true and fair view of:(i) the state of affairs of the Company at 31st December 2002 and of its results and the cash
flow for the year ended on that date; and(ii) the matters required by Section 169 of the Act to be dealt with in the financial statements.
(b) the accounting and other records and registers required by the Act to be kept by the Companyhave been properly kept in accordance with the provisions of the Act.
AHMAD ABDULLAH & GOH AF-0381 GOH KENG JUAY 461/05/03(J)Chartered Accountants Chartered AccountantAn Independent Member of PartnerBAKER TILLY INTERNATIONAL
Kuala Lumpur,25th April 2003
BALANCE SHEET AT 31 ST DECEMBER 2002Note 2002 2001
RM RS* RM RS*FIXED ASSETS 4 84,335 1,064,308 18,017 229,342CURRENT ASSETSTrade debtors 290,537 3,666,577 1,069,639 13,615,659Other debtors, deposits andprepayments 5 10,660 134,529 664,214 8,454,919Fixed deposits with a licensed bank 28,694 362,118 27,739 353,096Cash and bank balances 475,652 6,002,728 280,287 3,567,832
805,543 10,165,953 2,041,879 25,991,507LESS : CURRENT LIABILITIESTrade creditors 394,505 4,978,653 898,592 11,438,366Other creditors and accruals 44,407 560,416 678,923 8,642,153Hire purchase creditor -current portion 6 10,302 130,011 - -
449,214 5,669,081 1,577,515 20,080,520NET CURRENT ASSETS 356,329 4,496,872 464,364 5,910,987
440,664 5,561,180 482,381 6,140,329Financed by:SHARE CAPITALAuthorised:750,000 ordinary shares of RM1 each 750,000 9,465,000 750,000 9,546,908Issued and fully paid:750,000 ordinary shares of RM1 each 750,000 9,465,000 750,000 9,546,908ACCUMULATED LOSSES (360,762) (4,552,816) (267,619) (3,406,578)HIRE PURCHASE CREDITOR 6 51,426 648,996 - -
440,664 5,561,180 482,381 6,140,329
* Malaysian Ringgit (RM) 1 = Rs. 12.62000 as on 31-12-2002* Malaysian Ringgit (RM) 1 = Rs. 12.72921as on 31-12-2001The notes set out on pages 11 to 14 form an integral part of these financial statements
INCOME STATEMENT FOR THE YEAR ENDED 31 ST DECEMBER 2002Note 2002 2002 2001 2001
RM Rs* RM Rs*INCOMEOperating revenue 7 3,011,527 38,005,471 1,266,823 16,125,656Other operating income 29,028 366,333 10,648 135,541
Total 3,040,555 38,371,804 1,277,471 16,261,197
Operating expenses (2,606,714) (32,896,731) (1,136,462) (14,466,263)Administrative expenses (205,060) (2,587,857) (202,917) (2,582,973)Other operating expenses (317,856) (4,011,343) (198,282) (2,523,973)Hire purchase interest (4,068) (51,338) - -(Loss) before Taxation 8 (93,143) (1,175,465) (260,190) (3,312,013)Taxation 9 - - - -(Loss) after taxation (93,143) (1,175,465) (260,190) (3,312,013)
DIRECTORS’ REPORT AND STATEMENT BY DIRECTORSThe directors have pleasure in submitting their report and the audited financial statements of theCompany for the year ended 31st December 2002.PRINCIPAL ACTIVITIESThe principal activities of the Company consist of engineering and construction. There have beenno significant changes in the nature of these activities during the financial year.RESULTS RMLoss for the year after taxation (93,143)Accumulated losses brought forward (267,619)Accumulated losses carried forward (360,762)RESERVES AND PROVISIONSThere were no material transfers to or from reserves or provisions during the financial year.BAD AND DOUBTFUL DEBTS(a) Before the financial statements of the Company were made out, the directors took reasonable
steps to ascertain that action had been taken in relation to the writing off of bad debts and themaking of provision for doubtful debts, and that all known bad debts had been written off andadequate provision had been made for doubtful debts.
(b) At the date of this report, the directors of the Company are not aware of any circumstancesthat would render the amount written off for bad debts, or the amount of the provision fordoubtful debts, in the Company inadequate to any substantial extent.
CURRENT ASSETS(a) Before the financial statements of the Company were made out, the directors took reasonable
steps to ascertain whether any current assets, other than debts, were unlikely to realise in theordinary course of business their value as shown in the accounting records of the Companyand to the extent so ascertained, were written down to an amount they might be expected torealise.
(b) At the date of this report, the directors are not aware of any circumstances that would renderthe values attributed to the current assets in the financial statements of the Company misleading.
VALUATION METHODSAt the date of this report, the directors are not aware of any circumstances which have arisenwhich render adherence to the existing method of valuation of assets or liabilities in the financialstatements of the Company misleading or inappropriate.CONTINGENT AND OTHER LIABILITIES(a) At the date of this report, there does not exist:
(i) any charge on the assets of the Company that has arisen since the end of the financialyear and which secures the liabilities of any person, or
(ii) any contingent liability in respect of the Company that has arisen since the end of thefinancial year.
(b) No contingent liability or other liability of the Company has become enforceable or is likely tobecome enforceable within the period of twelve months after the end of the financial yearwhich, in the opinion of the directors, will or may substantially affect the ability of the Companyto meet its obligations as and when they fall due.
CHANGE OF CIRCUMSTANCESAt the date of this report, the directors are not aware of any circumstances, not otherwise dealt within this report or the financial statements of the Company, that would render any amount stated inthe respective financial statements misleading.DIRECTORS OF THE COMPANY(a) Directors who served since the date of the last report are:-
Mr. Sivajothi A/L Muhtiah RajendramMr. Anumolu RamakrishnaMr. Kodiyalam Vasudevan RangaswamiMr. Pallipuram Krishnaiyer VenkatakrishnanMr. Rajasingam A/L MayilvaganamEn. Syed Mohsen B. Abdul Rahman Alhabshi (appointed on 8th April 2003)
(b) According to the Register of Directors’ Shareholdings, particulars of interest of directors whoheld office at the end of the financial year in the shares in the Company are as follows:-
Number of SharesName Balance at Balance at
1.1.2002 31.12.2002Sivajothi A/L Muhtiah Rajendram 262,501 262,501Rajasingam A/L Mayilvaganam 262,500 262,500The other directors do not have any interest in the shares in the Company.
(c) In accordance with the Company’s Articles of Association, Mr. Anumolu Ramakrishna andMr. Pallipuram Krishnaiyer Venkatakrishnan retire from the Board at the Annual General Meetingand, being eligible, offer themselves for re-election.
(d) En. Syed Mohsen B. Abdul Rahman Alhabshi who was appointed to the Board since the lastAnnual General Meeting now retires in accordance with the Company’s Articles of Associationand, being eligible, offers himself for re-election.
DIRECTORS’ BENEFITS(a) Since the end of the previous financial year, no director of the Company has received or
become entitled to receive any benefit by reason of a contract made by the Company or arelated corporation with the director or with a firm of which the director is a member, or with acompany in which the director has a substantial financial interest other than those disclosed inthe financial statements.
(b) Neither during nor at the end of the financial year, was the Company a party to any arrangementwhose object is to enable the directors to acquire benefits by means of the acquisition ofshares in or debentures of the Company or any other body corporate.
STATEMENT BY DIRECTORSIn the opinion of the directors, the financial statements set out on pages 7 to 14 are drawn up inaccordance with applicable approved accounting standards so as to give a true and fair view of thestate of affairs of the Company as at 31st December 2002 and of its results and the cash flow forthe year then ended.AUDITORSThe auditors, Messrs. Ahmad Abdullah & Goh, Chartered Accountants, have indicated theirwillingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors,SIVAJOTHI A/L MUHTIAH SYED MOHSEN B. ABDUL RAHMANRAJENDRAM ALHABSHIDirector Director
Date : 25th April 2003
L&T - ECC CONSTRUCTION (M) SDN. BHD.(Incorporated in Malaysia)
L&T - ECC CONSTRUCTION (M) SDN. BHD.
S-39
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31st DECEMBER 2002Share (Accumulated
Capital Losses) TotalRM Rs RM Rs RM Rs
Balance at 1st
January 2001 750,000 9,465,000 (7,429) (93,754) 742,571 9,371,246Profit/(Loss) for the year - - (260,190) (3,283,598) (260,190) (3,283,598)Balance at31 December 2001 750,000 9,465,000 (267,619) (3,377,352) 482,381 6,087,648Balance at1 January 2002 750,000 9,465,000 (267,619) (3,377,352) 482,381 6,087,648Profit/(Loss) for the year - - (93,143) (1,175,465) (93,143) (1,175,465)Balance at31 December 2002 750,000 9,465,000 (360,762) (4,552,816) 389,238 4,912,184
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 20022002 2001
RM Rs RM RsCASH FLOWS FROM OPERATING ACTIVITIESProfit/(Loss) before taxation (93,143) (1,175,465) (260,190) (3,312,013)Adjustments for :Depreciation 25,622 323,350 18,941 241,104Hire Purchase interest 4,068 51,338 - -Gain on disposal of fixed assets (18,833) (237,672) - -Fixed deposit interest (902) (11,383) (10,648) (135,541)Operating profit/(loss) beforeworking capital changes (83,188) (1,049,833) (251,897) (3,206,450)(Increase)/Decrease in debtors 1,432,656 18,080,119 (1,109,451) (14,122,435)(Decrease)/Increase in creditors (1,138,603) (14,369,170) 676,884 8,616,199Net Cash used in operating activities 210,865 2,661,116 (684,464) (8,712,686)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of fixed assets (34,107) (430,430) (3,799) (48,358)Proceeds from disposal of fixed assets 33,000 416,460 - -Interest received 902 11,383 10,648 135,541Net cash from/(used in) investing activities (205) (2,587) 6,849 87,182CASH FLOWS FROM FINANCING ACTIVITIESRepayment of hire purchase loans (10,272) (129,633) - -Hire purchase interest (4,068) (51,338) - -Net cash used in financing activities (14,340) (180,971) - -Net increase / (decrease) in cash andcash equivalents 196,320 2,477,558 (677,615) (8,625,504)CASH AND CASH EQUIVALENTSBrought forward 308,026 3,887,288 985,641 12,546,431CASH AND CASH EQUIVALENTSCarried forward 504,346 6,364,847 308,026 3,920,928
CASH AND CASH EQUIVALENTSFixed deposits 28,694 362,118 27,739 353,096Cash and Bank balances 475,652 6,002,728 280,287 3,567,832
504,346 6,364,847 308,026 3,920,928
NOTES TO THE FINANCIAL STATEMENTS - 31 st DECEMBER 20021. GENERAL INFORMATION
(a) The principal activities of the Company consist of engineering and construction.(b) The Company is a private limited liability company, incorporated and domiciled in Malaysia.(c) The registered office of the Company is located at Suite 21F, 21st Floor, Bangunan Dato’
Zainal, Jalan Melaka, 50100 Kuala Lumpur.(d) The financial statements were authorised for issue by the Board of Directors in accordance
with a resolution of the directors dated 25th April 2003.2. BASIS OF PREPARATION
The financial statements of the Company are prepared in accordance with provisions of theCompanies Act, 1965 and applicable approved accounting standards.
3. SIGNIFICANT ACCOUNTING POLICIES(a) Accounting Convention
The financial statements of the Company are prepared under the historical cost convention.(b) Fixed Assets
Fixed assets are stated at cost less accumulated depreciation. Cost comprises theirpurchase cost and any incidental cost incurred. Where an indication of impairment exists,the carrying value of the asset is assessed and written down immediately to its recoverableamount.
(c) DepreciationFixed assets are depreciated on the straight line basis at rates designed to write off thecost of the assets over the estimated useful lives of the assets concerned. The principalannual rates used are as follows :-Motor vehicles 25%Computers and office equipment 50%
(d) Income RecognitionProfit from engineering and construction projects is recognised on the percentage ofcompletion basis which provides for the periodic recognition of costs and revenue basedon the estimated percentage of completion. Profit is recognised when costs to completecan be reasonably estimated but losses are taken up when they are expected.
(e) Deferred TaxationDeferred taxation is provided on the liability method for all material timing differencesexcept where no tax liability is expected to arise in the foreseeable future. Deferredtaxation benefits are recognised when there is reasonable expectation of realisation inthe near future.
(f) Hire PurchaseThe cost of assets acquired under hire purchase is capitalised as fixed assets anddepreciated over their respective estimated useful lives. The related financing chargesare charged to the income statement over the hire purchase terms.
(g) Financial InstrumentsFinancial instruments carried on the balance sheet include cash and bank balances,fixed deposits, receivables and payables.
(h) Cash Flow StatementThe Company adopts the indirect method in the preparation of the cash flow statement.Cash and cash equivalents comprise cash in hand, bank balances and fixed deposits.
4. FIXED ASSETS
Details of fixed assets are as follows:-Motor Office
Vehicle equipment Computers TotalCOST RM Rs RM Rs RM Rs RM RsBalance at 1.1.2002 40,000 504,800 16,650 210,123 10,799 136,283 67,449 851,206Additions 103,507 1,306,258 - - 2,600 32,812 106,107 1,339,070Disposals (40,000) (504,800) - - - - (40,000) (504,800)
Balance at 31.12.2002 103,507 1,306,258 16,650 210,123 13,399 169,095 133,556 1,685,477Accumulated DepreciationBalance at 1.1.2002 25,000 315,500 16,644 210,047 7,788 98,285 49,432 623,832Current depreciation 22,397 282,650 - - 3,225 40,700 25,622 323,350Disposal (25,833) (326,012) - - - - (25,833) (326,012)
Balance at 31.12.2002 21,564 272,138 16,644 210,047 11,013 138,984 49,221 621,169Net Book ValueBalance at 31.12.2002 81,943 1,034,121 6 76 2,386 30,111 84,335 1,064,308
Balance at 31.12.2001 15,000 189,300 6 76 3011 37,999 18,017 227,375
Depreciation for 2001 10,000 126,200 7,570 95,533 1,371 17,302 18,941 239,035
5. OTHER DEBTORS, DEPOSITS AND PREPAYMENTSIncluded in the above item are advances to subcontractors amounting to RM Nil (2001 :RM 654,054).
6. HIRE PURCHASE CREDITORHire purchase liabilities are payable as follows :-
2002 2001Principal Interest Total Principal Interest Total
RM RM RM RM RM RMBalance at year end 61,728 9,972 71,700 - - -Less : Amount payablewithin the nexttwelve months 10,302 4,038 14,340 - - -
51,426 5,934 57,360 - - -Amount payable :After one and upto two years 23,636 5,044 28,680 - - -After two and upto five years 27,790 890 28,680 - - -
51,426 5,934 57,360 - - -
7. OPERATING REVENUEOperating revenue represents progress billings rendered during the financial year andexcludes all other income.
8. LOSS BEFORE TAXATION2002 2001
RM RMLoss before taxation is arrived at after charging:Audit fee 4,200 4,200Rent 80,403 65,192Hire of motor vehicles 22,000 12,640Hire of machinery - 2,200Fees paid to a firm in which a director has an interest 8,560 2,978Depreciation 25,622 18,941Hire purchase interest 4,068 -and crediting:Fixed deposit interest 902 10,648
L&T - ECC CONSTRUCTION (M) SDN. BHD.
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9. TAXATION2002 2001
RM RMCurrent year’s provision - -
10. DEFERRED TAXATIONDetails of deferred taxation benefit calculated under the liability method are as follows :-
2002 2002 2001 2001(Rs) (RM) (Rs) (RM)
Timing difference between depreciationand corresponding taxation allowances 116,520 9,233 43,419 3,411Unreleived losses (29,288,206) (2,320,777) (29,231,752) (2,296,431)
Total timing difference (29,171,685) (2,311,544) (29,188,333) (2,293,020)Deferred taxation benefit at28% not taken up (8,168,072) (647,232) (8,172,733) (642,046)
11. CASH FLOW STATEMENTDuring the financial year, the Company purchased fixed assets costing RM106,107 ofwhich RM72,000 was financed by means of a hire purchase facility.
12. EMPLOYEES INFORMATION2002 2001
RM RMSalaries and other benefits 217,177 134,277The number of employees of the Company at the end of the financial year was 10 (2001 :10employees).
13. FINANCIAL INSTRUMENTSThe carrying amounts of the financial assets and liabilities of the Company as at 31st
December 2002 approximated their fair values.DETAILED INCOME STATEMENT FOR THE YEAR ENDED 31 st DECEMBER 2002
2002 2001RM RM
INCOMEProgress billings 3,011,527 1,266,823Contract costs (Appendix I) (2,610,782) (1,136,462)Gross profit 400,745 130,361OTHER INCOMEFixed deposit interest 902 10,648Gain on disposal of fixed assets 18,833 -Miscellaneous income 9,293 -
429,773 141,009LESS: EXPENDITURESalaries and allowances 196,281 96,988Medical expenses 4,721 3,301EPF and SOCSO 3,299 2,760Staff training and welfare expenses 9,037 31,553
DETAILED INCOME STATEMENT FOR THE YEAR ENDED 31 st DECEMBER 2002 (contd...)2002 2001
RM RMRent 80,403 65,192Electricity and water 7,307 3,448Travelling and accommodation 33,933 23,979Courier charges 12,349 7,773Hire of motor vehicles 22,000 12,640Repairs and maintenance 20,558 23,890Road tax and insurance 10,600 5,002Bank charges 320 266Entertainment 1,927 811Postage - 123Telephone and telefax 40,835 31,908Printing and stationery 15,119 8,354Audit fee 4,200 4,200Professional fees 4,054 21,635Books and periodicals 1,433 1,607Computer expenses 1,497 2,266Photography expenses 672 485Subscriptions 4,737 3,851CIDB registration and levy - 5,050Gifts and donations - 2,208Parking and toll charges - 1,700Hire purchase interest 4,068 -Tender documents 2,800 5,600Sundry expenses 6,084 8,247Fees paid to a firm in which a director has an interest 8,560 2,978Visa 500 4,443Depreciation 25,622 18,941
522,916 401,199Loss for the year (93,143) (260,190)
APPENDIX I
CONTRACT COSTS FOR THE YEAR ENDED 31 st DECEMBER 20022002 2001
RM RMLabour 107,389 -Mechanical engineering 2,323,370 950,212Refractoring - 171,520Electrical - 8,557Consumables 27,828 3,973Hire of machinery - 2,200Technical fee paid to holding company 152,195 -
2,610,782 1,136,462
LARSEN & TOUBRO (OMAN) LLC
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LARSEN & TOUBRO (OMAN) LLCAUDITORS’ REPORT TO THE SHAREHOLDERS OFLARSEN & TOUBRO (OMAN) LLCWe have audited the accompanying Balance Sheet of Larsen & Toubro (Oman) LLC as of31st December 2002, and the related statements of income, cash flows and changes in equityfor the year then ended. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements basedon our audit.We conducted our audit in accordance with International Standards on Auditing. Those Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.In our opinion, the financial statements present fairly, in all material respects, the financialposition of the company as of 31st December 2002, and the results of its operations and its cashflows for the year then ended in accordance with International Financial Reporting Standards.
ERNST & YOUNGMuscut, Sultanate of Oman19th April 2003
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 st DECEMBER 2002Retained earnings
Share Statutory Reserves (AccumulatedCapi ta l Losses) Tota l
No te R s R O R s R O R s R O R s R OBalance at1 January 2001 31,279,500 250,000 6,900,633 55,153 (3,552,975.85) (28,397) 34,627,157 276,756Net Loss for the year – – (9,648,600) (77,116) (9,648,600) (77,116)Balance at31 December 2001 31,279,500 250,000 6,900,633 55,153 (13,201,576) (105,513) 24,978,558 199,640Net Profit for the year – – – – 29,329,661 234,416 29,329,661 234,416Transfer tostatutory reserve 12 – – 2,932,891 23,441 (2,932,891) (23,441)Balance at31 December 2002 31,279,500 250,000 9,833,524 78,594 13,195,195 105,462 54,308,219 434,056
INCOME STATEMENTYear ended 31 December 2002
Notes 2002 2002 2001 2001Rs* RO Rs* RO
Contract revenue 1,383,111,426 11,054,456 622,463,304 4,953,394Contract costs (1,326,653,179) (10,603,216) (614,527,496) (4,890,243)
Gross profit 56,458,246 451,240 7,935,807 63,151Other Operating income 817,271 6,532 1,655,246 13,172Administration expenses (26,730,335) (213,641) (15,993,760) (127,274)
Profit (Loss) from operations 30,545,182 244,131 (6,402,706) (50,951)Finance costs (net) 3 (1,312,363) (10,489) (3,469,834) (27,612)Profit on sale of equipment 96,841 774 181,836 1,447
NET PROFIT (LOSS) for the year 4 29,329,661 234,416 (9,690,705) (77,116)
* Omani Riyal (RO) 1 = Rs.125.664 as on 31-12-2001* Omani Riyal (RO) 1 = Rs.125.118 as on 31-12-2002
The attached notes 1 to 18 form part of these financial statements
BALANCE SHEET AT 31 st DECEMBER 20022002 2001
Note Rs* RO Rs* ROAssetsNon Current AssetsProperty, Plant and equipment 6 18,359,440 146,737 21,148,120 168,291Current AssetsInventories 7 20,075,809 160,455 13,411,113 106722Work in Progres 8 26,796,897 214173 113,610,183 904,079Accounts receivable and prepayments 9 417,037,938 3,333,157 314,608,620 2,503,570Bank balances and cash 10 13,338,330 106,606 2,083,258 16,578
477,248,973 3,814,391 443,713,175 3,530,949
TOTAL ASSETS 495,608,413 3,961,128 464,861,295 3,699,240EQUITY AND LIABILITIESCapital and reservesShare Capital 11 31,279,500 250,000 31,416,000 250,000Statutory Reserve 12 9,833,524 78,594 6,930,747 55,153Retained earnings (accumulated losses) 13,195,195 105,462 (13,259,186) (105,513)
- -Total Equity 54,308,219 434,056 25,087,561 199,640Non current liabilityEmployees ‘ end of service benefits 13 5,851,894 46,771 3,555,914 28,297Current liabilitiesAccounts payable and accruals 14 435,448,301 3,480,301 376,765,051 2,998,194Bank overdrafts 10 - 59,452,769 473,109
435,448,301 3,480,301 436,217,820 3,471,303
TOTAL EQUITY AND LIABILITIES 495,608,413 3,961,128 464,861,295 3,699,240
The financial statements were authorised for issue in accordance with a resolution of the directors on 12.04.03
T.V. NAGANATHAN HUSAMM AL ZUBAIRGeneral Manager Director
V. GOPINATH A. RAMAKRISHNAFinancial Controller Director
12th April, 2003
The attached notes 1 to 18 form part of these financial statements.
STATEMENT OF CASHFLOWSYear ended 31 December 2002
Note 2002 2002 2001 2001RO Rs RO Rs
CASH FLOWS FROM OPERATING ACTIVITIESProfit/(Loss) before taxation 234,416 29,329,661 (77,116) (9,690,705)Adjustments for :Depreciation 72,961 9,128,734 65,293 8,204,980Accrual for employees’ end of service benefits 25,197 3,152,598 15,200 1,910,093Profit on sale of equipment (774) (96,841) (1,447) (181,836)Net Interest 10,489 1,312,363 27,612 3,469,834Operating profit/(loss) before workingcapital changes 342,289 42,826,515 29,542 3,712,366Inventories and work in progress 636,173 79,596,693 (854,155) (107,336,534)Receivables (829,587) (103,796,266) (1,702,721) (213,970,732)Payables 482,107 60,320,264 2,249,047 282,624,242
Cash from (used in) operations 630,982 78,947,206 (278,287) (34,970,658)
Employee’s end of service benefits paid (6,723) (841,168) (3,871) (486,445)Interest received (10,489) (1,312,363) (27,612) (3,469,834)
Net cash from (used in) operating activities 613,770 76,793,675 (309,770) (38,926,937)INVESTING ACTIVITIESPurchase of property, plant and equipment (51,408) (6,432,066) (83,143) (10,448,082)Proceeds from sale of equipment 775 96,966 1,451 182,338
Net cash used in investing activities (50,633) (6,335,100) (81,692) (10,265,743)INCREASE/ (DECREASE) in cash andcash equivalents 563,137 70,458,575 (391,462) (49,192,681)Cash and cash equivalents at thebeginning of the year (456,531) (57,120,246) (65,069) (8,176,831)Cash and cash equivalents at the endof the year 10 106,606 13,338,330 (456,531) (57,369,512)
The attached notes 1 to 18 form part of these financial statements
NOTES TO THE FINANCIAL STATEMENTSAt 31st December, 2002
1. ACTIVITIESLarsen & Toubro (Oman) LLC is a limited liability company registered in the Sultanate of Omanand is engaged in civil and building contracting work. The ultimate parent company is ZubairCorporation LLC, a company incorporated in the Sultanate of Oman. The registered address ofthe company is PO Box 1127, Ruwi, Postal Code 112, Sultanate of Oman.The company operates in the Sultanate of Oman and employed 470 employees as of31st December 2002 (2001 - 364).2. SIGNIFICANT ACCOUNTING POLICIESBasis of preparationThe financial statements have been prepared in accordance with Standards issued, or adoptedby the International Accounting Standards Board, and interpretations issued by the InternationalFinancial Reporting Interpretations Committee and applicable requirements of the CommercialCompanies Law of Oman.The financial statements have been presented in Rial Omani.Accounting conventionThe financial statements are prepared under the historical cost convention.The accounting policies are consistent with those used in the previous year.Revenue recognitionContract revenue comprises the total value of construction work performed during the year.Profit on long-term contracts is recognised on a percentage of completion basis. No profit istaken until a contract has progressed to the point where the ultimate realisable profit can bereasonably determined. Provision is made for all losses incurred to the accounting date togetherwith any further losses that are foreseen in bringing contracts to completion.Interest revenue is recognised as it accrues.Income taxTaxation is provided for in accordance with Omani fiscal regulations.Property, plant and equipmentProperty, plant and equipment is stated at cost less accumulated depreciation and any impairmentin value.Depreciation is calculated on a straight line basis over the estimated useful lives of assets asfollows:Fabricated buildings over 6 2/3 yearsMachinery over 3 to 6 2/3 yearsOther equipment over 3 to 6 2/3 yearsVehicles over 3 yearsFurniture over 3 years
LARSEN & TOUBRO (OMAN) LLC
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The carrying values of property, plant and equipment are reviewed for impairment when eventsor changes in circumstances indicate the carrying value may not be recoverable. If any suchindication exists and where the carrying values exceed the estimated recoverable amount, theassets are written down to their recoverable amount.Impairment and uncollectibility of financial assetsAn assessment is made at each balance sheet date to determine whether there is objectiveevidence that a financial asset or group of financial assets may be impaired. If such evidenceexists, the estimated recoverable amount of that asset is determined and any impairment lossrecognised for the difference between the recoverable amount and the carrying amount.Impairment losses are recognised in the income statement.InventoriesInventories are stated at the lower of cost and net realisable value. Costs are those expensesincurred in bringing each product to its present location and condition, as follows:Stores and spares weighted average costConstruction materials weighted average costNet realisable value is based on estimated selling price less any further costs expected to beincurred on disposal.Work in progressWork in progress on long term contracts is calculated at cost plus attributable profit less anylosses foreseen in bringing contracts to completion less amounts received and receivable asprogress payments. Cost for this purpose includes direct labour, direct expenses and anappropriate allocation of overheads. For any contracts where receipts plus receivables exceedthe book value of work done, the excess is included in accounts payable and accruals.Accounts receivableAccounts receivable are stated at original invoice amount less an allowance for any uncollectableamounts. An estimate for doubtful debts is made when collection of the full amount is no longerprobable. Bad debts are written off as incurred.Cash and cash equivalentsCash and cash equivalents comprise cash at hand and bank balances.For the purpose of the statement of cash flows, cash and cash equivalents consist of cash andcash equivalents as defined above, net of outstanding bank overdrafts.Accounts payable and accrualsLiabilities are recognised for amounts to be paid in future for goods or services, whether billedby the supplier or not.Employees’ end of service benefitsPayment is made to the Omani Government Social Security scheme under Royal Decree 72/91for Omani employees.Accrual is made for amounts payable under the Oman labour law applicable to non Omaniemployees’ accumulated periods of service as of the balance sheet date.
Foreign currenciesTransactions in foreign currencies are recorded at the rate ruling at the date of the transaction.Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate ofexchange ruling at the balance sheet date. All differences are taken to the income statement.Fair valuesThe fair value of interest-bearing items is estimated based on discounted cash flows usinginterest rates for items with similar terms and risk characteristics.3. FINANCE COSTS (NET)
2002 2001RO RO
Bank interest expense (10,496) (32,994)Bank interest income 7 5,382
Finance costs (net) (10,489) (27,612)
4. NET PROFIT (LOSS) FOR THE YEARThe net profit (loss) for the year is stated after charging:
2002 2001RO RO
Staff costs 745,200 543,377
5. TAXATIONThe tax rate applicable to the company is 12% (2001 - 12%). For the purpose of determining thetaxable result for the year, the accounting profit has been adjusted for tax purposes. Adjustmentsfor tax purposes include items relating to both income and expense. The adjustments are basedon the current understanding of the existing tax laws, regulations and practices.The company’s taxable profit for the year after set off against tax losses brought forward fromearlier years is less than the minimum amount subject to taxation. Therefore, the applicable taxrate is nil. Accordingly, the average effective tax rate cannot be determined.In the opinion of the board of directors and consistent with the position set out by the companyto the tax authorities, technical fees paid/payable to Larsen & Toubro, India has been consideredas fully deductible expenditure for tax purposes. Accordingly, no related charge for Omaniincome tax has been made in the financial statements. However, in the assessments issued bythe tax department for tax years 1994 to 1996 the tax department has disallowed a majorportion of the technical fees paid. The company has filed an appeal with the Tax Committee inrespect of technical fees disallowed in the assessment for tax years 1994 to 1996. The decisionon the appeal is still pending. Should the Tax Committee reject the claim made by the company,the additional tax payable for tax years 1994 to 2002 would be approximately RO 57,237, basedon the applicable tax rates.
6. PROPERTY, PLANT & EQUIPMENTDetails of fixed assets are as follows:-
Fabricated Otherbulidings Machinery equipment Vehicles Furniture Total
COST Rs RO Rs RO Rs RO Rs RO Rs RO Rs RO
Balance at 1.1.2002,net of accumulated depreciation 1,298,349 10,377 11,562,029 92,409 6,018,676 48,104 1,721,123 13,756 456,055 3,645 21,056,233 168,291Additions - - 4,408,533 35,235 684,896 5,474 538,007 4,300 800,630 6,399 6,432,066 51,408Disposals - - - - - - - (125) (1) - (125) (1)Depreciation (336,067) (2,686) (5,587,144) (44,655) (2,029,414) (16,220) (756,213) (6,044) (419,896) (3,356) (9,128,734) (72,961)
Balance at 31.12.2002 962,283 7,691 10,383,418 82,989 4,674,158 37,358 1,502,792 12,011 836,789 6,688 18,359,440 146,737net of accumulated depreciationProperty, Plant and equipmentAt cost 2,240,113 17,904 59,326,952 474,168 14,474,901 115,690 11,407,884 91177 2,099,855 16,783 89,549,705 715,722.00Provision for depreciation (1,277,830) (10,213) (48,943,534) (391,179) (9,800,743) (78,332) (9,905,092) (79,166) (1,263,066) (10,095) (71,190,265) (568,985.00)
Net carrying amount 31.12.2002 962,283 7,691 10,383,418 82,989 4,674,158 37,358 1,502,792 12,011 836,789 6,688 18,359,440 146,737
The depreciation charge for the year has been dealt with in the income statement as follows:2002 2001
RO RO
Contract costs 65,701 63,813Administration expenses 7,260 1,480
72,961 65,293
7. INVENTORIES2002 2001
RO ROStores and spares 136,473 96,920Construction material 23,982 9,802
160,455 106,722
8. WORK IN PROGRESS2002 2001
RO RO
Gross value of work in progress 14,537,450 8,995,577Less: Amounts received or receivable (14,323,277) (8,091,498)
214,173 904,0799. ACCOUNTS RECEIVABLE AND PREPAYMENTS
2002 2001RO RO
Amounts due from related parties (note 16) 2,783,118 699,183Contract receivables 216,011 1,119,299Contract retentions receivable 247,037 214,947Advances to subcontractor 32,777 425,527Other receivables 29,222 19,264Prepaid expenses 24,992 25,350
3,333,157 2,503,570
10. CASH AND CASH EQUIVALENTSCash and cash equivalents included in the statement of cash flows comprise the followingitems:
2002 2001RO RO
Bank balances and cash 106,606 16,578Bank overdrafts - (473,109)
106,606 (456,531)
11. SHARE CAPITAL Authorised, issued and fully paid
2002 2001RO RO
Shares of RO 100 each 250,000 250,000
12. STATUTORY RESERVEAs required by the commercial company’s law of the Sultanate of Oman, 10% of the profit ofeach year is to be transferred to statutory reserve until the reserve has reached a minimum onethird of the issued share capital. The company may resolve to discontinue such transfers infuture when the reserve reaches one third of the issued share capital.13. EMPLOYEES’ END OF SERVICE BENEFITSMovements in the liability recognised in the balance sheet are as follows:
2002 2001RO RO
Liability as at 1st January 28,297 16,968Expense recognised in the income statement 25,197 15,200End of service benefits paid (6,723) (3,871)
Liability as at 31st December 46,771 28,297
14. ACCOUNTS PAYABLE AND ACCRUALS2002 2001
RO RO
Trade accounts payable 703,455 186,169Subcontract payables 683,343 194,275Amounts due to related parties (note 16) 452,883 578,110Accrued expenses 1,323,199 1,698,112Retentions payable 293,666 162,034Advance on contract 23,755 179,494
3,480,301 2,998,194
LARSEN & TOUBRO (OMAN) LLC
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15. CONTINGENT LIABILITIESContingent liabilitiesAt 31st December 2002 the company had contingent liabilities in respect of bank and otherguarantees and other matters arising in the ordinary course of business from which it isanticipated that no material liabilities will arise, amounting to RO 1,182,293 (2001- RO 625,717).16 . RELATED PARTY TRANSACTIONSThese represent transactions with related parties i.e. shareholders and companies of whichthey are principal owners. Prices and terms of payment for these transactions are approved bythe company’s management.Transactions with related parties included in the income statement are as follows:
2002 2001RO RO
Contract revenue 9,186,032 2,120,887Contract costs 284,174 2,240,183Amounts due from and due to related parties are disclosed in notes 9 and 14 respectively.The following amounts are included in amounts due from and due to related parties:i) contract receivable of RO 2,565,332 (2001 - RO 425,023) and contract retention of RO
176,832 (2001 - RO 272,941) due from related parties.ii) contract retentions amounting to RO 51,135 (2001 - RO 51,135) and a contract advance of
RO 70,726 (2001 - RO 384,363) payable to related parties.17. RISK MANAGEMENTInterest rate riskThe company is exposed to interest rate risk on its interest bearing assets and liabilities (bankdeposits and borrowings). The management monitors the interest rate risk by setting limits onthe interest rate gaps for stipulated periods.
LARSEN & TOUBRO INTERNATIONAL FZE
Credit riskThe company seeks to limit its credit risk with respect to customers by setting credit limits forindividual customers and monitoring outstanding receivables.The company carries out contracts for customers in Oman. One customer accounts for 46% ofoutstanding accounts receivable at 31st December 2002 (2001 - one customer, 91%).Liquidity riskThe company limits its liquidity risk by ensuring that bank facilities are available. The company’sterms of sales require amounts to be paid within 60 days of the date of sale. Trade payables arenormally settled within 60 days of the date of purchase.Currency riskAccounts receivable includes an amount of RO 2,678,406 (2001 – RO 521,795) due in foreigncurrencies mainly in US Dollars and UAE Dhirams.Trade accounts payable include an amount of RO 765,740 (2001 – RO 490,813) due in foreigncurrencies mainly in US Dollars and UAE Dhirams.Management consider these not to be significant risk as the Rial Omani and UAE Dhirams arepegged to the US Dollar.18. FAIR VALUES OF FINANCIAL INSTRUMENTSFinancial instruments comprise of financial assets and liabilities.Financial assets consist of cash and bank balances and receivables. Financial liabilities consistof payables and accrued expenses.The fair values of the financial assets and liabilities are not materially different from their carryingvalues.
AUDITORS' REPORT TO THE SHAREHOLDERS OFLARSEN & TOUBRO INTERNATIONAL FZEWe have audited the accompanying financial statements of LARSEN & TOUBRO INTERNATIONALFZE (the “enterprise”) for the period from 25th September 2001 to 31st December 2002 set out onpages 2 to 7.Respective responsibilities of the management and the auditorsThese financial statements are the responsibility of the enterprise’s management. Our responsibilityis to express an opinion on these financial statements based on our audit.Basis of opinionWe conducted our audit in accordance with International Standards on Auditing. Those Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thefinancial 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 includesassessing the accounting principles used and significant estimates made by management, as wellas evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.OpinionIn our opinion, the financial statements give a true and fair view of the financial position of LARSEN& TOUBRO INTERNATIONAL FZE as of 31st December 2002 and of the results of its operationsand its cash flows for the period then ended in accordance with International Accounting Standards.Also, as required by the Hamriyah Free Zone Implementing Rules and Regulations issued pursuantto Sharjah Emiri Decree No (6) of 1995, we confirm that proper books of account and other recordshave been maintained and the financial statements have been properly prepared by the enterprisein accordance with the said regulations.Abu Dhabi PANNELL KERR FORSTERUnited Arab Emirates12th April 2003
BALANCE SHEET AS AT 31 st DECEMBER 2002Notes Rs* USD
CURRENT ASSETSCash and cash equivalents 3 12,458,857 259,776CURRENT LIABILITIESAccrued expenses (65,705) (1,370)
NET CURRENT ASSETS 12,393,152 258,406SHAREHOLDER’S FUNDSShare capital 4 14,388,000 300,000Accumulated loss (1,994,848) (41,594)
12,393,152 258,406
The accompanying notes form an integral part of these financial statements.The report of the auditor is set forth on page 1.Approved by the directors on 12th April 2003.
For LARSEN & TOUBRO INTERNATIONAL FZEDate : 12th April, 2003 P.K. VENKATAKRISHNAN
Director
INCOME STATEMENTPERIOD FROM 25TH SEPTEMBER 2001 (DATE OF INCEPTION) TO 31 ST DECEMBER 2002
Notes 2002 2002Rs. * USD
Administrative expenses 5 1,994,848 41,594
NET (LOSS) FOR THE PERIOD 1,994,848 41,594*US Dollars (USD) 1 = Rs.47.9600 as on 31-12-2002The accompanying notes form an integral part of these financial statements.The report of the auditor is set forth on page 1.
STATEMENT OF CHANGES IN EQUITYPERIOD FROM 25TH SEPTEMBER 2001 (DATE OF INCEPTION) TO 31 ST DECEMBER 2002
Share AccumulatedCapital Loss Total
Rs USD Rs USD Rs USD
Share capital subscribed 14,388,000 300,000 — — 14,388,000 300,000Net loss for the period — — (1,994,848) (41,594) (1,994,848) (41,594)
As at 31.12.2002 14,388,000 300,000 (1,994,848) (41,594) 12,393,152 258,406
The accompanying notes form an integral part of these financial statements.The report of the auditor is set forth on page 1.
CASH FLOW STATEMENTPERIOD FROM 25TH SEPTEMBER 2001 (DATE OF INCEPTION) TO 31 ST DECEMBER 2002
2002 2002USD Rs
Cash flows from operating activitiesProfit/(Loss) for the period (41,594) (1,994,848)
Operating Profit/(Loss) before changes in Operating Liability (41,594) (1,994,848)Increase in accruals 1,370 65,705
Net cash used in operating activities (A) (40,224) (1,929,143)Cash flows from financing activitiesSubscription to share capital 300,000 14,388,000
Net cash introduced from financing activities (B) 300,000 14,388,000Net increase in cash and cash equivalents (A+B) 259,776 12,458,857Cash and cash equivalents at beginning of the period —Cash and cash equivalents at end of the period 259,776 12,458,857
The accompanying notes form an integral part of these financial statements.The report of the auditor is set forth on page 1.
NOTES TO THE FINANCIAL STATEMENTSPERIOD FROM 25TH SEPTEMBER 2001 (DATE OF INCEPTION) TO 31 ST DECEMBER 20021. LEGAL STATUS AND BUSINESS ACTIVITY
a) LARSEN & TOUBRO INTERNATIONAL FZE (the “enterprise”) was incorporated on25th September 2001 in the Hamriya Free Zone, Sharjah as a Free Zone Establishmentwith Limited Liability under the Hamriya Free Zone Implementing Rules and Regulationsissued pursuant to Sharjah Emiri Decree No. 6 of 1995. The enterprise is a wholly ownedsubsidiary of Larsen and Toubro Limited, a company incorporated in India,which is theultimate parent company.
b) The enterprise is licenced to carry on business of import and hire of plant, machinery andother equipment.
2. SIGNIFICANT ACCOUNTING POLICIESThe financial statements are prepared under the historical cost convention and in accordancewith International Accounting Standards adopted by the International Accounting StandardsBoard (IASB) and interpretations issued by the International Financial Reporting InterpretationsCommittee of the IASB. The significant accounting policies adopted are as follows:a) Cash and cash equivalents
Cash and cash equivalents comprise cash, bank current accounts, bank deposits free ofencumbrance with a maturity date of three months or less from the date of deposit andhighly liquid investments with a maturity date of three months or less from the date ofinvestment.
US$3. CASH AND CASH EQUIVALENTS
Bank balance in demand deposit account 259,7764. SHARE CAPITAL
Authorised, issued and paid-up:2 shares of US$ 150,000 each 300,000
5. ADMINISTRATIVE EXPENSESRent 10,954
Maintenance & other expenses 18,596Licence & other professional fees 12,044
41,594
6. NUMBER OF EMPLOYEESThe enterprise did not have any employees at the year end.
7. FINANCIAL INSTRUMENTS : CREDIT, INTEREST RATE & EXCHANGE RATE RISKEXPOSURESCredit riskThe only financial asset which potentially exposes the enterprise to credit risk is the enterprise’sbank deposit which is placed with a high credit quality financial institution.Exchange rate riskThere is no exchange rate risk as the bank deposit is denominated in US Dollars.
8. COMPARATIVE FIGURESAs this is the first period of operation, comparative figures are not applicable.
For LARSEN & TOUBRO INTERNATIONAL FZE
Date : 12th April, 2003 P.K. VENKATAKRISHNANDirector
LARSEN & TOUBRO INTERNATIONAL FZE
L&T CEMENT LIMITED
S-44
L&T CEMENT LIMITEDDIRECTORS' REPORT
The Directors are pleased to present the Annual Report and Balance Sheet for the year ended 31st
March 2003.FINANCEDuring the period under review, the Company did not carry on any business activity and accordinglyno profit and loss account has been prepared.CAPITAL EXPENDITUREDuring the period under review, the Company did not incur any capital expenditure.FIXED DEPOSITSDuring the period under review, the Company did not accept any fixed deposits from the public.SUBSIDIARYDuring the period, the Company subscribed and acquired 17,000 Equity Shares of Rs. 10/- each,fully paid-up of Dakshin Cements Limited, a wholly owned subsidiary of the Company.As required by Section 212 of the Companies Act, 1956, the Audited statement of Accounts, theReports of the Board of Directors and Auditors of Dakshin Cements Limited are annexed.AUDITORS’ REPORTThe notes to the accounts referred to in the Auditors’ Report are self explanatory and therefore donot call for any further comments of Directors.DISCLOSURE OF PARTICULARSThe Company did not carry on business activities and hence there are no particulars to be disclosedas per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.PARTICULARS OF EMPLOYEESThere are no employees covered by the provisions of Section 217 (2A) of the Companies Act, 1956,read with the Companies (Particulars of Employees) Rules, 1975.DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i. that in the preparation of the annual accounts, the applicable accounting standards have been
followed and there has been no material departure;ii. that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company as at 31st March 2003;
iii. that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern basis.DIRECTORSMr. J.P.Nayak and Mr. Y.M.Deosthalee are liable to retire by rotation and are eligible for re-appointment.AUDITORSThe Auditors, M/s. Sharp & Tannan, Chartered Accountants, hold office until the ensuing AnnualGeneral Meeting and are recommended for reappointment. Certificate has been received from theAuditors to the effect that if re-appointed, it would be within the limits of Section 224(1B) of theCompanies Act, 1956.
Place: MumbaiDate: 8th May 2003
Statement pursuant to Section 212 of the Companies Act, 1956 relating to SubsidiaryCompaniesName of the subsidiary company Dakshin Cements LimitedFinancial year of the subsidiary ended on 31st March, 2003Number of shares of the Subsidiary Companyheld by L&T Cement Limited and/or its nominee at 50,000the above date.The net aggregate of profits/ (losses), of the SubsidiaryCompany so far as it concerns the members of L&T CementLimited:(i) Dealt with in the accounts of L&T Cement Limited amounted to:
a) for the subsidiary’s financial year ended 31/3/2003 Nilb) for the previous financial years of the subsidiary since
it became subsidiary of L&T Cement Limited Nil(ii) Not dealt with in the accounts of L&T Cement Limited
amounted to:a) for the subsidiary’s financial year ended 31/3/2003 Nilb) for the previous financial years of the subsidiary
since it became subsidiary of L&T Cement Limited Nil
Place : MumbaiDate : 8th May 2003
AUDITORS' REPORT TO THE SHAREHOLDERS OFL&T CEMENT LIMITEDWe have audited the attached Balance sheet of L&T Cement Limited as at 31st March, 2003.No Profit and Loss Account has been prepared, as the Company has not carried out anyactivities. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.In accordance with the provisions of Section 227 of the Companies Act, 1956, we report that:1. As the Company has carried out no activities, the requirements of the Manufacturing and
Other Companies (Auditor’s Report) Order, 1988, issued by the Central Government ofIndia under Section 227 (4A) of the Companies Act, 1956, are not applicable.
2. Further to our comments in paragraph 1 above, we report as under:(a) we have obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit;(b) in our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
(c) the said Balance sheet dealt with by the report is in agreement with the books ofaccount;
(d) in our opinion, the Balance sheet complies with the accounting standards referred toin Section 211 (3C) of the Companies Act, 1956, to the extent applicable;
(e) on the basis of written representations received from the Directors as on 31st March,2003 and taken on record by the Board of Directors, none of the Director is disqualifiedfrom being appointed as a Director of the Company under Section 274 (1) (g) of theCompanies Act, 1956; and
(f) in our opinion and to the best of our information and according to the explanationsgiven to us, the said Balance sheet read together with the Significant AccountingPolicies in Schedule ‘A’ and other notes appearing in Schedule ‘B’, gives the informationrequired by the Companies Act, 1956, in the manner so required and gives a true andfair view in conformity with the accounting principles generally accepted in India, ofthe state of the Company’s affairs as at 31
st March, 2003.
SHARP & TANNANChartered Accountants
by the hand of
R.D. KAREMumbai, 8th May 2003 Partner
BALANCE SHEET AS AT 31 ST MARCH, 2003SOURCES OF FUNDS As at As at
31-03-2003 31-03-2002Shareholders’ funds: Rupees Rupees RupeesShare capitalAuthorised:30,000,000 Equity shares of Rs.10 each 300,000,000 300,000,000Issued and subscribed:30,000,000 Equity shares of Rs.10 each 300,000,000 300,000,000Paid up:7 Equity shares of Rs.10 each fully paid 70 7029,999,993 Equity shares of Rs.10 each Re.1 paid 29,999,993 29,999,993
30,000,063 30,000,063(All the shares are allotted to Larsen & Toubro Limited,the holding company)Total 30,000,063 30,000,063APPLICATION OF FUNDSInvestments (at cost, unquoted)Long term investments
Fully paid equity shares of subsidiary companyDakshin Cements Limited50,000 shares of Rs.10 each 12,070,000 11,900,000(17,000 shares subscribed during the year)
Current assets, loans and advancesCash and bank balances:Balance with a scheduled bankon current account 320,554 460,165Loans and advances,unsecured and considered good - -Advances recoverable in cash or in kindor for value to be received - -Advance payment of income tax 713,307 299,230Inter-corporate deposits 18,815,671 17,642,688 (including interest accrued thereon)
19,528,978 17,841,918
19,849,532 18,302,083Less: Current liabilities and provisions
Liabilities- Sundry creditors 902,681 541,931Provisions- For income tax 1,199,510 335,000
2,102,191 876,931
Net current assets 17,747,341 17,425,152Miscellaneous expenditure(to the extent not written off or adjusted)Preliminary and pre-operative expenses(net of pre-operative income) 182,722 674,911
Total 30,000,063 30,000,063Significant Accounting Policies ‘A’Notes on Accounts ‘B’
J.P. NAYAK
K. VENKATARAMANAN } Directors
SCHEDULES FORMING PART OF ACCOUNTS : 31 ST MARCH 2003SCHEDULE ‘A’ : SIGNIFICANT ACCOUNTING POLICIES1) Basis of presentation
The Accounts have been prepared using historical cost convention and on the going concernbasis, with the revenues recognised and expenses on accrual basis including for committedobligations.
2) Miscellaneous Expenditure (to the extent not written off or adjusted)Expenditure incurred under this head is being amortised over a period of five years commencingfrom the year in which the Company has commenced its operations.
SCHEDULE ‘B’ : NOTES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 20031) Contingent liabilities not provided for Rs. Nil2) No Profit and Loss Account has been prepared, as the Company did not carry any activity
during the year.3) Auditors remuneration (excluding service tax) Rs.5,000.4) Additional information required to be disclosed under Part II to Schedule VI of the Companies
Act, 1956, is not presently applicable to the Company.
J.P. NAYAK
K. VENKATARAMANAN } Directors
For and on behalf of the Board
For and on behalf of the Board
} Directors
As per our report attachedSHARP & TANNANChartered Accountantsby the hand of
R.D. Kare HEMA KRISHNAMOORTHY J.P. NAYAKPartner Secretary K. VENKATARAMANAN
Mumbai, 8th May 2003 Mumbai, 8th May 2003
L&T CEMENT LIMITED
S-45
State Code
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities Total Assets
Unsecured Loans
1 1 - 1 2 8 4 2 0 1 1
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
5) BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
I. Registration Details
Secured Loans
Registration No.
N I L
N I L
N I L
Balance Sheet Date
N I L
3 0 0 0 0 3 0 0 0 0
N I L
N I L
3 1 - 0 3 - 2 0 0 3
Reserves and SurplusPaid up Capital
N I L3 0 0 0 0
Net Current Assets Accumulated Losses
Investments
Miscellaneous Expenditure
Application of FundsNet Fixed Assets
N I L
N I L 1 2 0 7 0
1 7 7 4 7 1 8 3
Profit/Loss Before Tax Profit/Loss After Tax
IV. Performance of Company (Amount in Rs. Thousands)Turnover Total Expenditure
+ -
N I L N I L
N I L + - N I L
Dividend Rate %
V. Generic Names of Three Principal Products/Services of the Company
Earnings Per Share in Rs.
No activities during the year.
N I L N I L
6) Previous year's figures have been regrouped wherever necessary.
} Directors
As per our report attachedSHARP & TANNANChartered Accountantsby the hand of
R.D. KARE HEMA KRISHNAMOORTHY J.P. NAYAKPartner Secretary K. VENKATARAMANAN
Mumbai, 8th May 2003 Mumbai, 8th May 2003
DAKSHIN CEMENTS LIMITED
Your Directors present the Tenth Annual Report and Balance Sheet for the year ended 31st
March 2003.FINANCIAL RESULTSDuring the year under review, your Company did not carry on any business activities andaccordingly no Profit and Loss Account has been prepared.FINANCEDuring the year under review, your Company made a Rights Issue of 17,000 Equity Sharesof Rs. 10/- each, fully paid-up and the same were fully subscribed by our holding company,L&T Cement Limited. With the said Rights Issue, the paid up capital of the Company standsincreased to Rs.5,00,000 consisting of 50,000 Equity Shares of Rs.10/- each fully paid up.CAPITAL EXPENDITUREDuring the period under review, the Company did not incur any capital expenditure.FIXED DEPOSITSDuring the period under review, the Company did not accept any fixed deposits from thepublic.AUDITORS’ REPORTThe Auditors’ Report to the Shareholders does not contain any qualifications.The notes to the accounts referred to in the Auditors’ Report are self explanatory andtherefore do not call for any further comments of Directors.DISCLOSURE OF PARTICULARSAs the Company has not yet started commercial operations, there are no particulars to bedisclosed as per Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1988.PARTICULARS OF EMPLOYEESThere are no employees covered by the provisions of Section 217 (2A) of the CompaniesAct, 1956, read with the Companies (Particulars of Employees) Rules, 1975
DIRECTORS' REPORTDAKSHIN CEMENTS LIMITED
DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i. that in the preparation of the annual accounts, the applicable accounting standards
have been followed and there has been no material departure ;ii. that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31
st March, 2003;
iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. that the annual accounts have been prepared on a going concern basis.DIRECTORSMr.J.P.Nayak retires from the Board of Directors by rotation and is eligible for re-appointment.AUDITORSThe Auditors, M/s. Sharp & Tannan, Chartered Accountants, retire at the ensuing AnnualGeneral Meeting and are eligible for re-appointment. Certificate has been received fromSharp & Tannan to the effect that if re-appointed, it would be within the limits prescribedunder Section 224(1B) of the Companies Act, 1956.
For and on behalf of the Board
J.P. NAYAK
C.R.V. SUBRAMANIAM
V.J. SHUKLAPlace : MumbaiDate : 22nd April, 2003
} Directors
AUDITORS’ REPORTTo
The Members of Dakshin Cements LimitedWe have audited the attached Balance Sheet of Dakshin Cements Limited as at 31stMarch, 2003. The Profit and Loss Account has not been prepared as the Company has notstarted its operations. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statementsbased on our audit.We conducted our audit in accordance with the auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating theoverall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988issued by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Companies Act, 1956, we enclose in the Annexure a statement on the matters specifiedin paragraphs 4 and 5 of the said order.Further to our comments in the Annexure referred to above, we report that :i. We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit;
ii. In our opinion, proper books of account as required by law have been kept by thecompany so far as appears from our examination of those books;
iii. The Balance Sheet dealt with by this report is in agreement with the books of account;iv. In our opinion, the Balance Sheet dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;v. On the basis of written representations received from the directors, as on 31st March
2003 and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on 31st March, 2003 from being appointed as a director interms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to the explanationsgiven to us, the said Balance Sheet, read together with the notes thereon, give theinformation required by the Companies Act, 1956 in the manner so required and givea true and fair view of the state of affairs of the company as at 31st March, 2003;
As the company has carried out no activities, the provision of the Manufacturing and OtherCompanies (Auditor’s Report) Order, 1988 dated 7th September, 1988, issued by theCompany Law Board under section 227(4A) of the Companies Act, 1956 are not applicable.
for SHARP & TANNANChartered Accountants
by the hand of
Place : Secunderabad PERCY H. ITALIADate : 24th April, 2003 Partner
DAKSHIN CEMENTS LIMITED
S-46
PARTICULARS Sche- AS AT AS ATdules 31.03.03 31.03.02
Rs. Rs. Rs. Rs.
I. SOURCES OF FUNDSSHARE HOLDERS’ FUNDSShare Capital 1 500,000 330,000
500,000 330,000II. APPLICATION OF FUNDS :1. Incidental Expenditure pending
allocation / 2 894,595 543,997Capitalisation
2. Current Assets, Loans &Advances 3 202,546 17,046
1,097,141 561,043
Less : Current Liabilities &Provisions 4 634,535 462,606 268,437 292,606
3. Miscellaneous Expenditure(to the extent not written off oradjusted) 37,394 37,394
500,000 330,000Notes on Accounts 5
BALANCE SHEET AS AT 31 st MARCH, 2003
SCHEDULES FORMING PART OF THE BALANCE SHEET
AS AT AS AT31.03.03 31.03.02
Rs. Rs.SCHEDULE - 1SHARE CAPITALAuthorised Share Capital
500000 Equity shares of Rs 10/- each 5,000,000 5,000,000Issued, Subscribed & Paid up Capital
50000 Equity shares of Rs 10/- each fully paid 500,000 330,000(previous year 33000 equity shares ofRs 10 each fully paid)
SCHEDULE - 2Incidental Expenditure pending allocationCapitalisationa. Travelling & Conveyance 134,629 134,629b. Subscription 1,000 1,000c. Survey Expenses 90,750 90,750d. Testing Charges 8,000 8,000e. Consultancy Charges 2,500 21,750f. Auditors’ Remuneration 66,000 51,000g. Printing & Stationery 3,764 3,764h. Office Expenses 2,745 1,645i. Bank Charges 325 325j. Directors sitting fees 7,500 7,500k. Filing fees 10,170 9,670l. Royalty 276,319 206,956m. Legal Fees 250,000 -n. Interest 7,008 7,008o. Misc. Expenses 21,885 -
894,595 543,997
SCHEDULE - 3Current Assets, Loans & Advancesa. Cash & Bank Balances
Cash on Hand 241 241Balance with Scheduled BankCanara Bank, Basheerbagh 200,305 14,805
b. Loans & Advances( Unsecured, considered good, recoverablein cash or in kind or for value to be received )Deposit in post office 2,000 2,000
202,546 17,046
SCHEDULE - 4CURRENT LIABILITIES & PROVISIONSDue to Directors — 171,187Creditors for expenses 30,000 97,250Due to Larsen & Toubro Limited 433,348 —Due to Others 171,187 —
634,535 268,437
SCHEDULE - 5NOTES ON ACCOUNTS1. Significant Accounting Policies :
The Company maintains its accounts on accrual basis following the historical costconvention in accordance with generally accepted accounting principles (“GAAP”) andin compliance with the accounting standards referred to in Sec 211 (3C) and otherrequirements of the Companies Act, 1956.
2. As the company has not yet started commercial operation no Profit & Loss account hasbeen prepared. The statement showing the unallocated, pre-operative expenditureincurred up to 31.03.2003 is shown in Schedule - 2. Auditors Remuneration - Audit feesRs.15,000/- (previous year Rs.15,000/-) has been included in this schedule.
3. The pre operative expenditure pending allocation will be allocated to appropriate fixedassets on commencement of the commercial production.
4. Contingent liabilities - Nil ( previous year - Nil )
5. Previous year figures have been regrouped wherever considered necessary.
6. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Net Current Assets
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Miscellaneous Expenditure
0 1 - 0 1 6 0 0 2
3 1 0 3 2 0 0 3
0 1
N I L
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
Secured Loans
N I L
1 7 0
5 0 0
Net Fixed Assets
Registration No.
Balance Sheet Date
Accumulated Losses
Turnover (incl. other income) Total Expenditure
IV. Performance of Company (Amount in Rs. Thousands)
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Dividend Rate %Earnings per share (in Rs.)
N A
5 0 0
8 9 5 (4 3 2 )
+ - + -
+ -
V. Generic Names of Three Principal Products/Services of the Company (As per monetary terms)
N I L
N A
3 7N I L
N I L
5 0 0
N I L
N I L
N I L
N I LN I L
N I L
No Activities during the year
As per the books of accounts and other relevantrecords produced before me for verification.
SHARP & TANNANChartered Accountantsby the hand of
PERCY H. ITALIAPartner
Place : Secunderabad Place : Mumbai,Date : 24th April, 2003 Date : 22nd April, 2003
For and behalf of the Board
J.P. NAYAK
C.R.V. SUBRAMANIAM
V.J. SHUKLA} Directors
As per the books of accounts and other relevantrecords produced before me for verification.
SHARP & TANNANChartered Accountantsby the hand of
PERCY H. ITALIAPartner
Place : Secunderabad Place : Mumbai,Date : 24th April, 2003 Date : 22nd April, 2003
For and behalf of the Board
J.P. NAYAK
C.R.V. SUBRAMANIAM
V.J. SHUKLA} Directors
LARSEN AND TOUBRO CEYLINCO (PRIVATE) LIMITED
S-47
The Directors have pleasure in presenting their Annual Report and audited Accounts for the yearended 31st December, 2002.FINANCIAL RESULTS AND OPERATIONSCEMENT OPERATIONSDuring the year, the Company dispatched 0.29 million metric tonnes of bulk and bagged cementput together as against 0.33 million tonnes in the previous year and achieved a market share of11% which is lower by 1% in comparison to previous year, mainly due to new entrants in themarket.The sales and other income for the financial year under review were Rs.1594 million as againstRs.1728 million during the previous year, and the loss for the year was Rs.39 million as againstRs.48 million during the previous year.The performance for the year was better in comparison with the previous year, which was mainlydue to the exchange rate being stable during the year at around Rs.96 against a dollar. Also therewas reduction in custom duty on imports from 9.5% to 6.5% and surcharge from 40% to 20%. Theinterest rate came down during the year and also the company received Rs.200 million towardsshare capital, which was utilized to reduce the bank overdraft, hence reducing the interest burdenfurther.CONSTRUCTION ACTIVITYThe construction of the power project is going on as per schedule and is expected to be completedby July 2003.
LARSEN AND TOUBRO CEYLINCO (PRIVATE) LIMITED
TO THE MEMBERS OF LARSEN & TOUBRO CEYLINCO (PRIVATE) LIMITEDWe have audited the balance sheet of Larsen & Toubro Ceylinco (Private) Limited as at 31st
December 2002, and the related statement of income, changes in equity and cash flows for theyear then ended, together with the accounting policies and notes thereon.Respective Responsibilities of Directors and Auditors:The Directors are responsible for preparing and presenting these financial statements in accordancewith the Sri Lanka Accounting Standards. Our responsibility is to express an opinion on thesefinancial statements, based on our audit.Basis of Opinion:We have conducted our audit in accordance with the Sri Lanka Auditing Standards, which requirethat we plan and perform the audit to obtain reasonable assurance about whether the said financialstatements are free of material misstatements. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the said financial statements, assessing the accountingprinciples used and significant estimates made by the Directors, evaluating the overall presentationof the financial statements, and determining whether the said financial statements are preparedand presented in accordance with the Sri Lanka Accounting Standards. We have obtained all theinformation and explanations which to the best of our knowledge and belief were necessary for the
REPORT OF THE DIRECTORSFINANCEDuring the year, the company repaid Rs.60 million to DFCC Bank against project finance. Also thecompany received Rs.200 million towards the Rights Issue of shares from M/s. Larsen & ToubroLimited, and Rs.50 million from M/s. Ceylinco Insurance Company Limited was received during theyear 2003. The shares against the rights were allotted in March 2003.MARKETThe economy has started looking up and there is an expected growth in construction and relatedactivities. The year 2003 is expected to be a turnaround. First quarter of the year 2003 hasrecorded a profit of Rs.17 million.EMPLOYEESThe Management wishes to express its appreciation to all the employees of the Company for theiroutstanding contribution to the operations of the Company during the year.AUDITORSThe Auditors, M/s. KPMG Ford, Rhodes, Thornton & Company, holds office until the conclusion ofthe ensuing Annual General Meeting and is recommended for re-appointment.
For and on behalf of the Board of DirectorsINTERNATIONAL CONSULTANCY & CORPORATE SERVICES (PVT.) LTD.
Secretaries
REPORT OF THE AUDITORSpurposes of our audit. We, therefore, believe that our audit provides a reasonable basis for ouropinion.Opinion:In our opinion, so far as appears from our examination, the Company maintained proper books ofaccounts for the year ended 31st December 2002, and to the best of our information and accordingto the explanations given to us, the said balance sheet, related statement of income, cash flows,changes in equity, the accounting policies and notes thereto, which are in agreement with the saidbooks and have been prepared and presented in accordance with the Sri Lanka AccountingStandards, provide the information required by the Companies Act No.17 of 1982, and give a trueand fair view of the Company’s state of affairs as at 31st December 2002, and of its loss, cash flowsand changes in equity for the year then ended.Directors’ Interest in Contracts with the Company:According to the information made available to us, the Directors of the Company were not directlyor indirectly interested in contracts with the Company during the year ended 31st December 2002except as stated in Note 20 to these financial statements.
Colombo For KPMG FORD, RHODES, THORNTON & CO.24th
April, 2003 CHARTERED ACCOUNTANTS
BALANCE SHEET AS AT 31 ST DECEMBER 2002Notes As at 31.12.2002 As at 31.12.2001
ASSETS SLR INR SLR INRNON - CURRENT ASSETSLeasehold land 6 33,456,268 16,583,032 34,593,642 17,908,392Property, Plant & Equipment 7 562,686,234 278,902,718 590,660,830 305,772,548
596,142,501 295,485,750 625,254,472 323,680,940CURRENT ASSETSInventories 8 69,492,090 34,444,654 69,995,870 36,235,373Goods in Transit - - 53,075,720 27,476,171Construction of Power Plant 885,272,430 438,796,743 406,418,222 210,394,068Trade Receivables 9 106,685,405 52,880,002 109,549,243 56,711,313Other Receivables 10 86,253,698 42,752,762 131,753,955 68,206,220Prepayments & Advances 10,734,417 5,320,653 4,926,141 2,550,158Cash and Cash Equivalents 11 35,787,990 17,738,781 20,829,098 10,782,781
1,194,226,030 591,933,596 796,548,249 412,356,085
TOTAL ASSETS 1,790,368,531 887,419,346 1,421,802,721 736,037,025
EQUITY AND LIABILITIESCAPITAL AND RESERVESShare Capital 12 250,000,000 123,915,737 250,000,000 129,419,682Advance Received in lieuof Share Capital 13 200,000,000 99,132,590 - -Retained Losses (311,249,384)(154,274,788) (272,713,642) (141,178,051)
Shareholders Funds 138,750,616 68,773,539 (22,713,642) (11,758,369)Pre - Operational Expenses - (11,365,412) (5,883,632)
138,750,616 68,773,539 (34,079,054) (17,642,001)NON - CURRENT LIABILITIESRedeemable Secured Debentures 14 90,000,000 44,609,665 150,000,000 77,651,809Retirement Benefit Obligations 15 1,081,975 536,295 673,800 348,812
91,081,975 45,145,960 150,673,800 78,000,621CURRENT LIABILITIESRedeemable Secured Debentures 14 60,000,000 29,739,777 60,000,000 31,060,724Trade Payables 16 376,099,555 186,418,615 518,429,351 268,379,847Other Payables 17 52,724,790 26,133,725 60,302,772 31,217,462Accruals 4,500,454 2,230,708 4,169,019 2,158,212
Progress Payments byAES Kelanitissa (Pvt.) Ltd. 819,264,769 406,079,192 386,429,183 200,046,168Bank Overdraft 247,946,372 122,897,830 275,877,650 142,815,991
1,560,535,940 773,499,846 1,305,207,975 675,678,405
TOTAL EQUITY AND LIABILITIES 1,790,368,531 887,419,346 1,421,802,721 736,037,025The figures in INR is convertedat the rate of : 2.0175=96.76/47.96 1.9317=93.05/48.17The above balance sheet is to be read in conjunction with the accounting policies and notes to theaccounts.
Notes As at 31.12.2002 As at 31.12.2001SLR INR SLR INR
INCOME STATEMENT FOR THE YEAR ENDED 31 ST DECEMBER 2002Notes 31.12.2002 31.12.2001
SLR INR SLR INRRevenue 1,594,407,053 807,499,140 1,728,181,464 928,780,278Cost of Sales (1,466,631,997) (742,786,527) (1,545,304,395) (830,496,262)Gross Profit 127,775,056 64,712,614 182,877,069 98,284,016Other Operating Income 1 1,737,488 879,964 6,223,348 3,344,627Administrative Expenses (31,513,648) (15,960,318) (34,966,112) (18,791,913)Distribution Expenses (51,709,812) (26,188,813) (65,267,239) (35,076,713)Pre - Operational Expenses Amortised (11,365,412) (5,756,096) (11,365,412) (6,108,138)Other Operating Expenses (1,779,872) (901,429) (932,462) (501,135)Profit from Operating Activities 2 33,143,800 16,785,920 76,569,192 41,150,745Finance Expenses 3 (71,679,542) (35,886,661) (124,749,406) (66,092,617)Loss before Taxation (38,535,742) (19,100,740) (48,180,214) (24,941,872)Income tax Expenses 4 - - - -Loss after taxation (38,535,742) (19,100,740) (48,180,214) (24,941,872)Net loss for the year (38,535,742) (19,100,740) (48,180,214) (24,941,872)
Loss per Share 5 (1.54) (1.93)The figures in INR is 1.9745 = ((93.05+96.76)/2)/ 1.8607 = ((83.55+93.05)/2)/
((48.17+47.96)/2) ((46.74+48.17)/2)converted at the rate of :The above Income statement is to be read in conjunction with the Accounting Policies and Notes tothe Accounts.Difference between Balance sheet and Income statement for the conversion of loss for the periodin INR, is adjusted in finance expenses which include exchange differences for Rs. 415969 (previousyear Rs 951724)
For and on behalf of the BoardColombo LALITH KOTELAWALA24th April, 2003 AJAY SINHA
Directors}
LARSEN AND TOUBRO CEYLINCO (PRIVATE) LIMITED
S-48
ACCOUNTING POLICIES1. GENERAL
Larsen & Toubro Ceylinco (Private) Limited is a company incorporated and domiciled in SriLanka.1.1 STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with the accountingstandards issued by the Institute of Chartered Accountants of Sri Lanka (ICASL), andthe requirements of the Companies Act No. 17 of 1982.
1.2 BASIS OF PREPARATIONThe financial statements are prepared on the historical cost basis.
1.3 FOREIGN CURRENCY TRANSACTIONSTransactions in foreign currencies are translated to rupees at the foreign exchangeruling at the date of the transaction. Monetary assets and liabilities denominated inforeign currencies at the balance sheet date are translated to rupees at the foreignexchange rate ruling at that date. Foreign exchange differences arising on translationare recognised in the income statement. Non-monetary assets and liabilitiesdenominated in foreign currencies, which are stated at historical cost, are translated torupees at the foreign exchange rate ruling at the date of the transaction.
2. ASSETS AND BASIS OF THEIR VALUATIONS2.1 Property, Plant & Equipment
2.1.1 Leasehold PropertyLease hold Property located at 81/11/1, New Nuge Road, Peliyagoda has beensub leased for a period of 30 years from East West Properties (Pvt.) Limitedwho have taken on lease the said premises for a period of 99 years from theUrban Development Authority.The sub-lease rentals and related expenses are amortised on yearly basis asper the schedule of the agreement
2.1.2 Owned assetsItems of Property, Plant and Equipment are stated at cost less accumulateddepreciation. Where an item of Property, Plant and Equipment comprises majorcomponents having different useful lives, they are accounted for as separateitems of Property, Plant and Equipment.
2.1.3 Subsequent ExpenditureExpenditure incurred to replace a component of an item of Property, Plant andEquipment that is accounted for separately, is capitalised with the carryingamount of the component being written off. Other subsequent expenditure iscapitalised only when it increases the future economic benefits embodied inthe item of Property, Plant and Equipment. All other expenditure is recognisedin the income statement as an expense as incurred.
2.1.4 DepreciationDepreciation is charged on straight-line basis over the estimated useful lives ofthe assets. No depreciation is charged in the year of purchase and fulldepreciation is charged in the year of disposal.The estimated useful lives are as follows.ASSET No. of YearsBuilding 25Plant and Machinery 25Lab Equipment 06Electronic Installation 25Office Equipment 06Motor Cars 07Motor Cycles 10HT Power line 25Computers 06Furniture & Fittings 06
2.2 InventoriesInventories are stated at the lower of cost and net realisable value. Net realisable
value is the estimated selling price in the ordinary course of business, less the estimatedcosts and selling expenses.The cost of inventory is based on the FIFO cost price principle and includes expenditureincurred in acquiring the inventories and bringing them to their existing location andcondition.
2.3 Trade and other receivablesTrade and other receivable are stated at the amounts estimated to be realised.Provisions have been made in accounts where necessary for bad and doubtful debts.
2.4 Cash and Cash EquivalentCash and cash equivalents comprise cash balance and short-term highly liquidinvestments that are readily convertible to known amounts of cash.For the purpose of Statement of Cash Flow, cash and cash equivalents are presentednet of bank overdraft.
3. LIABILITIES AND PROVISIONSAll known liabilities have been accounted in preparing the financial statements.3.1 Classification of Liabilities
Liabilities classified as current liabilities on the Balance Sheet date are those, whichfall due for payment on demand within one year from Balance Sheet date. Non currentliabilities are those balances that fall due for payment after one year from the BalanceSheet date.
3.2 Retirement Benefit Plans3.2.1 Defined Benefit Plan
Provision has been made in the accounts for retiring Gratuity payable under thePayment of Gratuity Act, No. 12 of 1983 and it is provided from the first year ofservice for all employees in conformity with SLAS 16(Retirement Benefit Costs).However, according to the Act, liability to an employee arises on completion offive years service. The liability is not externally funded nor is it actuarially valued.
3.2.2 Defined Contribution PlansContributions to Employees Provident Fund and Employees Trust Fund arerecognised as an expense in the Income Statement as incurred.
4. REVENUE RECOGNITIONRevenue is generally accounted for on accrual basis and is recognised as follows:4.1 On sale of goods all significant risks and rewards of ownership have been transferred
to the buyer, which normally occurs on delivery of the goods.4.2 Interest income on short-term investment is accounted on cash basis.
5. SEGMENT REPORTINGA segment is a distinguishable component of the group that is engaged either in providingproducts or services (business segment), or in providing products or services within aparticular economic environment (geographical segment), which is subject to risks andrewards, that are different from those of other segments.Segmentation has been determined based on activities of the company. The activities ofthe segments are described under note 16. Segment Information is based on the primaryformat representing the business segment of the company.
6. BORROWING COSTSBorrowing costs are recognised as an expense in the year in which they are incurred,except to the extent where borrowing costs that are directly attributable to the acquisition,construction or production of a qualifying asset that take a substantial period of time to getready for intended use or sale is capitalised as part of that asset.
7. TAXATION7.1 The liability to taxation has been computed according to the provisions of the Inland
Revenue Act No. 38 of 2000 and amendments thereto.7.2 Deferred tax is provided using the liability method, providing for timing differences
between the carrying amounts of assets and liabilities for financial reporting purposesand the amounts used for taxation purpose.
8. PRE-OPERATIONAL EXPENDITUREPre-Operational expenses are charged to the Income Statement over a period of 3accounting years commencing from 1st January 2000.
9. CASH FLOWThe Cash Flow Statement has been prepared using indirect method.
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 ST DECEMBER 2002
1 Other Operating Income 31.12.2002 31.12.2001SLR INR SLR INR
Service charges 1,507,580 763,525 3,752,386 2,016,653Scrap sales 24,050 12,180 4,600 2,472Profit on Disposal of Property,Plant & Equipment. 198,399 100,481 - -Interest received 7,459 3,778 2,466,362 1,325,502
1,737,488 879,964 6,223,348 3,344,6272 Profit from Operating Activities
stated after chargingDirectors’ Emoluments 1,093,882 554,005 852,250 458,027Auditors’ Fees 225,000 113,953 180,000 96,738Depreciation and Amortisationof Leasehold land 27,958,497 14,159,786 27,471,420 14,764,024Defined Benefit Plan - Gratuity 408,175 206,723 301,100 161,821Defined Contribution Plan - EPF & ETF 1,688,735 855,272 1,614,960 867,931Provision for Bad &Doubtful Receivables 6,055,668 3,066,937 10,768,127 5,787,138
3 Finance ExpensesInterest on Debentures - DFCC Bank 32,025,000 16,219,296 44,557,500 23,946,633Interest on Debentures - Deutsche Bank - - 32,466,473 17,448,526Interest on Overdraft 21,346,007 10,810,842 251,144 134,973Foreign Exchange Loss 18,308,535 8,856,523 47,474,289 24,562,485
71,679,542 35,886,661 124,749,406 66,092,617
4 TaxationCurrent Taxation -The Company is liable for 35% of Income tax on taxable income. For the current year, there isno tax liability since there is a carried forward tax loss of Rs. 789,453,681.Deferred Tax -No provision has been made in respect of deferred taxation since the company has incurredtax losses and the timing differences are not expected to reverse within the next 3 years, andfor a reasonable period thereafter. The amount of the cumulative timing differences not providedin the accounts is Rs. 531,499,437 and the resultant tax effect is Rs. 186,024,803.
5 Loss per ShareThe Loss per Share has been calculated by dividing the loss attributable for the year by25,000,000 ordinary shares in issue throughout the period. There were dilutive potential ordinaryshares outstanding at the year as advance towards share capital.
6 Leasehold Land
31.12.2002 31.12.2001SLR INR SLR INR
Cost 38,946,767 19,304,469 38,946,767 20,161,913Cumulative AmortisationBalance as at 01.01.2002 4,353,125 2,339,509 3,378,387 1,890,007Charge for the year 1,137,374 576,031 974,738 523,856Exchange diff (194,103) (160,342)
Balance as at 31.12.2002 5,490,499 2,721,438 4,353,125 2,253,520
Written Down Value as at 31.12.2002 33,456,268 16,583,032 34,593,642 17,908,392
Leasehold Land is amortised over its lease period of 30 years.
7. Property, Plant and Equipment
DESCRIPTION COST ADDITIONS/DEDUCTION COST DEPRECIATION W.D.VNET FOR THE YEAR
As at 1-1-2002 For the year As at 31-12-2002 As at 1-1-2002 Additions Disposals As at 31-12-2002 As at 31-12-2002 As at 31-12-2001
SLR INR SLR INR SLR INR SLR INR SLR INR SLR INR ex-dif (INR) SLR INR SLR INR SLR INRBUILDING 37,574,084 19,451,304 - (827,223) 37,574,084 18,624,081 1,398,218 723,828 1,502,963 761,187 (47,006) 2,901,181 1,438,008 34,672,903 17,186,073 36,175,866 18,727,476PLANT & MACHINERY 489,473,995 253,390,275 - (10,776,151) 489,473,995 242,614,124 19,610,036 10,151,699 19,578,959 9,915,907 (643,073) 39,188,995 19,424,533 450,285,000 223,189,591 469,863,959 243,238,577OFFICE EQUIPMENTS 2,336,044 1,209,320 - (51,430) 2,336,044 1,157,890 548,198 283,790 389,341 197,185 (16,272) 937,539 464,703 1,398,505 693,187 1,787,846 925,530LAB EQUIPMENTS 1,935,807 1,002,126 104,015 8,938 2,039,822 1,011,064 512,885 265,510 322,635 163,401 (14,774) 835,520 414,136 1,204,302 596,928 1,422,922 736,616COMPUTERS 3,829,801 1,982,607 81,501 (43,919) 3,911,302 1,938,687 809,339 418,978 638,299 323,271 (24,708) 1,447,638 717,541 2,463,664 1,221,147 3,020,462 1,563,629ELECTRICAL INSTALLATION 71,748,890 37,142,874 - (1,579,608) 71,748,890 35,563,266 2,872,373 1,486,966 2,869,955 1,453,510 (94,217) 5,742,328 2,846,259 66,006,562 32,717,007 68,876,517 35,655,908H T POWER LINE 1,167,013 604,138 - (25,693) 1,167,013 578,445 93,362 48,331 46,680 23,641 (2,559) 140,042 69,413 1,026,971 509,032 1,073,651 555,807FURNITURE & FITTINGS 1,331,146 689,106 15,985 (21,383) 1,347,131 667,723 274,955 142,338 221,858 112,362 (8,448) 496,813 246,252 850,318 421,4 71 1,056,191 546,768MOTOR VEHICLES 6,827,658 3,534,533 (1,740,108) (1,012,823) 5,087,551 2,521,710 1,752,120 907,035 975,380 493,988 (743,229) (376,414) (41,080) 1,984,271 983,530 3,103,280 1,538,181 5,075,538 2,627,498MOTOR CYCLE 2,750,531 1,423,891 (507,937) (312,321) 2,242,594 1,111,571 442,653 229,152 275,053 139,303 (149,841) (75,888) (11,097) 567,865 281,470 1,674,729 830,101 2,307,878 1,194,739
TOTAL 618,974,969 320,430,175 (2,046,544) (14,641,612) 616,928,426 305,788,563 28,314,139 14,657,627 26,821,123 13,583,755 (893,070) (452,302) (903,235) 54,242,192 26,885,845 562,686,233 278,902,718 590,660,830 305,772,548
LARSEN AND TOUBRO CEYLINCO (PRIVATE) LIMITED
S-49
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 ST DECEMBER 2002 (contd...)31.12.2002 31.12.2001
SLR INR SLR INR8 Inventories
Naked Cement 54,066,548 26,798,785 55,232,525 28,592,703Bags 2,593,008 1,285,258 4,053,128 2,098,218Stores and Spares 12,832,534 6,360,612 10,710,217 5,544,452
69,492,090 34,444,654 69,995,870 36,235,3739 Trade Receivables
Trade Receivables 127,617,750 63,255,390 124,425,920 64,412,652Provision for Bad &Doubful Receivables (20,932,345) (10,375,388) (14,876,677) (7,701,339)
106,685,405 52,880,002 109,549,243 56,711,31310 Other Receivables
Taxes receivable from AES 78,650,441 38,984,110 128,938,828 66,748,889GST Recoverable 5,703,847 2,827,186 - -Other Receivables 1,899,410 941,467 2,815,127 1,457,331
86,253,698 42,752,762 131,753,955 68,206,22011 Cash and Cash Equivalents
Cash in Hand 1,248,001 618,588 337,965 174,957Cash at Bank 34,539,989 17,120,193 20,491,133 10,607,824
35,787,990 17,738,781 20,829,098 10,782,78112 Share Capital
Authorised100,000,000 Ordinary Shares ofRs 10/= each 1,000,000,000 1,000,000,000Issued and fully paid25,000,000 Ordinary shares ofRs10/= each 250,000,000 123,915,737 250,000,000 129,419,682
13 The company received an advance in lieu of share Capital, a sum of Rs. 200,000,000 (INR101,291,466) from Larsen & Toubro Limited during the period under review.
14 Redeemable Secured DebenturesSecured Debentures Redeemableafter 1 yearRs. 100/= Debentures DFCC (W.A.I) 90,000,000 44,609,665 150,000,000 77,651,809Secured Debentures Redeemablewithin 1 yearRs. 100/= Debentures DFCC (W.A.I) 60,000,000 29,739,777 60,000,000 31,060,724
Total 150,000,000 74,349,442 210,000,000 108,712,533
Leasehold Land, Plant & Machinery have been pledged as securities against the debentureloan of Rs. 150 Million.
15 Retirement Benefit Obligation - GratuityAs at the beginning of the year 673,800 348,812 372,700 208,503Add : Provision for the year 408,175 206,723 301,100 161,821Exchange difference (19,240) (21,512)
As at the end of the year 1,081,975 536,295 673,800 348,81216 Trade Payables
Related Party Payables -Larsen & Toubro Limited 371,889,984 184,332,086 510,430,550 264,239,038Other Payables 4,209,571 2,086,528 7,998,801 4,140,809
376,099,555 186,418,615 518,429,351 268,379,84717 Other Payables
Retention Money from Contractors 25,145,008 12,463,449 38,493,050 19,927,033VAT Payable 12,650,687 6,270,477 1,128,561 584,232Debtors Deposit 9,178,684 4,549,534 8,599,960 4,452,016Other Payables 5,750,411 2,850,266 12,081,201 6,254,181
52,724,790 26,133,725 60,302,772 31,217,46218 Segment Information
The balance sheet comprises the following assets and liabilities relating to the on going powerproject being executed by the company.Construction of Power Plant 885,272,430 438,796,743 406,418,222 210,394,068Other Receivables 88,154,900 43,695,118 132,831,375 68,763,977Cash and Cash Equivalents 226,778 112,406 48,967 25,349Other Payables 29,607,806 14,675,493 45,863,315 23,742,463Advance Received from AES 819,264,768 406,079,191 386,429,183 200,046,168Bank Overdraft 124,781,533 61,849,583 122,877,150 63,610,887
19 Related Party TransactionsThe Company’s transactions with its related Companies are as follows
31.12.2002SLR INR
Larsen & Toubro Limited- Import of Cement 1,027,157,877 509,124,103- Import of Spares for Machinery 1,690,024 837,682- Amount Payable as at the Balance Sheet date 371,889,984 184,332,086Ceylinco Developers (Pvt) Ltd- Sale of Cement 15,748,900 7,806,146- Amount Receivable as at the Balance Sheet date 1,098,298 544,386Ceylinco Homes International (Lotus Tower) Ltd.- Sale of Cement 5,319,680 2,636,768- Amount Receivable as at the Balance Sheet date 872,804 432,617International Consultancy & Corporate Services (Pvt) Ltd- Secretarial services 189,561 93,958Ceylinco Insurance Company Ltd- Insurance Services 2,394,007 1,186,621- Commission on Sales 675,237 334,690- Amount payable as at the balance sheet date 335,707 166,398Ceylinco International Trading Company Ltd- Commission on Sales 510,080 252,828Ceylinco CISCO Security Transport & Allied Services (Pvt) Ltd- Cash Transportation services 248,416 123,131The Golden Key Company Ltd- Testing Charges for an Accounting System 8,256 4,092Larsen & Toubro Limited holds 80% of the Ordinary Share Capital of the company and thebalance 20% is held by Ceylinco Insurance Company Ltd.
20 Directors Interest in ContractsNo director of the Company is directly or indirectly interested in any contract with the Companyother than the following:Mr. J.P.Nayak and Mr.Y.M.Deosthalee are the directors of the company and also directors ofLarsen and Toubro Limited.Mr. Ajith Gunawardena, a Director of the company is also a director of following companies:Ceylinco Developers (Pvt) LtdCeylinco Homes International (Lotus Tower) LtdCeylinco International Trading Company Ltd.Mr. Lalith Kotelawala, a Director of the Company is also a Director of the following Companies:Ceylinco Developers (Pvt) LtdCeylinco Homes International (Lotus Tower) LtdCeylinco International Trading Company Ltd.Ceylinco Insurance Company LtdCeylinco CISCO SecuritiesTransport & Allied Services (Pvt) Ltd
21 Capital CommitmentsAs at 31.12.2002 there were no capital commitments which would require disclosure.
22 Post Balance sheet EventsCompany has received advance in lieu of share capital of Rs 200,000,000 during the year fromLarsen and Toubro Limited and Ordinary Shares were alloted to Larsen and Toubro Limited inMarch 2003.Company received a further sum of Rs.50,000,000/= subsequently from Ceylinco InsuranceCompany Ltd for which shares were issued in March 2003.Other than the above as at the date of the Balance Sheet no circumstances have arisen whichwould require disclosure or adjustment to the accounts.
23 Contingent LiabilitiesThere are no Contingent Liabilities as at the balance sheet date which would require provisionor disclosure.
24 Comparative FiguresFigures shown for the previous year have been re-classified to facilitate comparison with thecurrent year.
CASH FLOW STATEMENTFOR THE YEAR ENDED 31ST DECEMBER 2002
31.12.2002 31.12.2001SLR INR SLR INR
Cash Flows from Operating ActivitiesNet Loss Before Taxation (38,535,742) (19,100,740) (48,180,214) (24,941,872)Adjustments for :Depreciation and Amortisation of Leashold land 27,958,497 14,159,786 27,471,420 14,764,024Provision for Retiring Gratuity 408,175 206,723 301,100 161,821Interest Expenses 53,371,007 27,030,138 78,207,579 42,031,267Profit on Disposal of Property, Plant & Equipment (198,399) (100,481) - -Interest Income (7,459) (3,778) (2,466,362) (1,325,502)Exchange difference - 7,925,046 - 12,159,485Amortisation of Pre-Operational expenses 11,365,412 5,756,096 11,365,412 6,108,138
Operating Profit before Working Capital Changes 54,361,491 35,872,791 66,698,935 48,957,361
(Increase)/Decrease in Inventories 53,579,500 29,266,890 (74,731,886) (36,668,353)(Increase)/Decrease in Trade & Other Receivables 42,555,819 26,514,274 (164,181,786) (79,910,072)Increase in Constructional WIP (478,854,208) (228,402,675) (363,052,288) (186,133,406)Increase/(Decrease) in Trade Creditors &Other Payables (149,576,343) (86,972,474) 215,259,814 94,425,161Increase in AES Advances 432,835,586 206,033,023 342,862,783 175,673,357
(99,459,646) (53,560,962) (43,843,363) (32,613,313)Cash Generated from Operations (45,098,155) (17,688,172) 22,855,572 16,344,048Interest Paid (53,371,007) (27,030,138) (78,207,579) (42,031,267)
Net Cash used in Operating Activities (98,469,162) (44,718,309) (55,352,007) (25,687,219)
Cash Flows from Investing ActivitiesPurchase & Construction of Property, Plant & Equipment (201,501) (102,052) (1,571,027) (844,320)Interest Received 7,459 3,778 2,466,362 1,325,502Proceeds from Sale of Property,Plant & Equipment 1,553,374 786,718 - -
Net Cash from Investing Activities 1,359,332 688,444 895,335 481,182
Cash Flows from Financing ActivitiesDebenture Redemption (60,000,000) (30,387,440) (245,000,000) (131,670,877)Advance Received in lieu of Share Capital 200,000,000 101,291,466 - -
Net Cash from Financing Activities 140,000,000 70,904,026 (245,000,000) (131,670,877)
Net Increase/(Decrease) inCash & Cash Equivalents 42,890,170 26,874,161 (299,456,672) (156,876,914)Cash and Cash Equivalentsat the beginning of the year (255,048,552) (132,033,210) 44,408,120 24,843,703
Cash and Cash Equivalents at the end of the year (212,158,382) (105,159,050) (255,048,552) (132,033,210)
31.12.2002 31.12.2001 Change 31.12.2001 31.12.2000 ChangeRs Rs Rs Rs Rs Rs
Cash in Hand 1,248,001 337,965 910,036 337,965 34,297,284 (33,959,319)Cash at Bank 34,539,989 20,491,133 14,048,856 20,491,133 - 20,491,133Bank Overdraft (247,946,372) (275,877,650) 27,931,278 (275,877,650) 10,110,836 (285,988,486)
(212,158,382) (255,048,552) 42,890,170 (255,048,552) 44,408,120 (299,456,672)
Converted to INR (105,159,050) (132,033,210) 26,874,161 (132,033,210) 24,843,703 (156,876,914)
Conversion rate 2.0175 1.9317 1.9317 1.7875
L&T FINANCE LIMITED
S-50
L&T FINANCE LIMITEDThe Directors have pleasure in presenting their Report and Accounts for the year ended 31st
March, 2003.I. FINANCIAL RESULTS
Year ended Year ended31/03/2003 31/03/2002
Rs. Lacs Rs. Lacs
Gross Income 6430.17 5898.00Profit before Tax 614.36 1175.02Provision for Tax 5.50 56.17Profit after Tax 608.86 1118.85Add: Balance brought forward fromprevious year 362.33 417.47Balance available for appropriations 971.19 1536.32Appropriations:Reserve u/s 451C of RBI Act, 1934 123.00 224.00Debenture Redemption Reserve 25.00 50.00General Reserve - 1 300.00 600.00Interim Dividend 360.00 -Final Dividend - 300.00Tax on Dividend - -Surplus carried forward to Balance Sheet 163.19 362.33
II. DIVIDENDInterim dividend of 6% was paid during the year on paid up equity capital.
III. PERFORMANCE OF THE COMPANYThe Company further expanded its operations in the areas of construction equipmentfinancing and tractor financing during the current year. Although spreads have come underpressure owing to intense competition from the banking sector, the Company has carvedout a niche for itself and has been able to register significant growth in each of its businesssegments.The Company has continued to restructure its operations and initiate cost reductionmeasures. After reviewing the exposures in certain small and medium size enterprises, theCompany decided to make a higher provision for prospective risk assets.
IV. DEPOSITSDuring the year, the Company decided to prepay fixed deposits raised from the public.Necessary approval was obtained from Reserve Bank of India. Accordingly, the fixeddeposits stand at Rs 417.63 lacs as of 31st March, 2003, as against Rs.5070.84 lacs duringthe previous year.866 Nos. deposits totalling to Rs 101.69 lacs due for repayment on or before March 31,2003 were unclaimed by depositors. Deposits aggregating to Rs 20.89 lacs have sincebeen claimed and paid as on the date of this Report. The Company has sent reminderintimation to depositors for the balance unclaimed deposits.
V. SUBSIDIARY COMPANIESDuring the year under review, the Company subscribed to 40,000 equity shares ofRs.10/- each and 5,00,000 equity shares of Rs.10/- each in L&T Trade.Com Limited andL&T Capital Company Limited respectively, its wholly owned subsidiaries.As required under Section 212 of the Companies Act, 1956, the Audited Statement ofAccounts, the Reports of the Board of Directors and Auditors of the subsidiary companiesare annexed.
VI. AUDITORS’ REPORTThe Auditors Report to the shareholders does not contain any qualifications.The notes to the accounts referred to in the Auditors Report are self-explanatory andtherefore do not call for any further comments of Directors.
VII. DISCLOSURE OF PARTICULARSAs the Company is engaged in rendering non-banking financial services, there are noparticulars to be disclosed as per Companies (Disclosure of Particulars in the Report ofthe Board of Directors) Rules, 1988.The Company has no foreign exchange inflow. There has been foreign exchange outgo ofRs 2796.10 lacs for import of Lease/Hire Purchase assets and interest on loans.
VIII. PERSONNELThere are no employees covered by the provisions under Section 217(2A) of the CompaniesAct, 1956, read with the Companies (Particulars of the Employees) Rules, 1975.
IX DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i) that in the preparation of the annual accounts, the applicable accounting standards
have been followed and there has been no material departure;ii) that the selected accounting policies were applied consistently and the Directors made
judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31, 2003 and of the profitof the Company for the year ended on that date;
iii) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) that the annual accounts have been prepared on a going concern basis.X. DIRECTORS
Mr. J. P. Nayak retires by rotation and being eligible offers himself for re-appointment.At the meeting of the Board of Directors held on 25th April, 2003 Mr. R. Shankar Ramanwas appointed as an Additional Director. Mr. R. Shankar Raman will hold the office ofDirector upto the date of the ensuing Annual General Meeting and is eligible forreappointment.Mr. A. M. Naik resigned as a Director of the Company with effect from 25th April, 2003. TheDirectors record their appreciation for the valuable services rendered by Mr. A. M. Naik.
XI. AUDIT COMMITTEEThe Audit Committee consists of three non executive Directors .The present members ofthe Committee are Mr. A.M. Naik, Mr. J. P. Nayak and Mr. Y.M. Deosthalee. Mr. Y. M.Deosthalee is the Chairman of the Audit Committee.The role, terms of reference, the authority and power of Chairman are in conformity withthe requirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors oninternal control systems and internal audit report.
XII. AUDITORSThe Auditors, M/s. Sharp and Tannan, Chartered Accountants, hold office until the conclusionof the ensuing Annual General Meeting and are recommended for re-appointment. Certificatefrom the Auditors has been received to the effect that their re-appointment, if made, wouldbe within the limits prescribed under Section 224 (1B) of the Companies Act, 1956.
XIII. NON-BANKING FINANCIAL COMPANIES AUDITORS’ REPORT (RESERVE BANK)DIRECTIONS, 1998Pursuant to the Non-Banking Financial Companies Auditors’ Report (Reserve Bank)Directions, 1998, a report from the statutory auditors to the Board of Directors, has beenreceived by your Company. This report has certified that the Company has complied withall the Directions and Prudential Norms as prescribed under the Reserve Bank of India Act,1934.
XIV. ACKNOWLEDGEMENTS
The Directors acknowledge the invaluable support extended to the Company by the FinancialInstitutions, Bankers, vendors, suppliers and customers. The Directors are pleased toplace on record their appreciation for the valuable contribution made by the employees ofthe Company.
For and on behalf of the Board
Place : Mumbai J.P. NAYAK Y. M. DEOSTHALEEDate : 25
th April, 2003 Director Director
DIRECTORS' REPORT
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIESACT,1956 RELATING TO SUBSIDIARY COMPANIESName of the subsidiary company L&T Capital L&T Trade.Com
Co. Ltd. Ltd.Financial year of the subsidiary ended on 31st March, 2003 31st March, 2003Number of shares of the subsidiary company 55,00,000 50,000held by L&T Finance Ltd.and/or its nominee atthe above date.The net aggregate of profits/ (losses), of thesubsidiary company so far as it concerns themembers of L&T Finance Ltd.(I) Dealt with in the accounts of
L&T Finance Ltd. amounted toa) for the subsidiary’s financial year
ended 31/3/2003 Nil Nilb) for the previous financial years of the subsidiary
since it became subsidiary of L&T Finance Ltd. Not applicable Not applicable(II) Not dealt with in the accounts of
L&T Finance Ltd. amounted toa) for the subsidiary’s financial year
ended 31/3/2003 Rs. 47.55 lacs Rs. 885.14 lacsb) for the previous financial years of
the subsidiary since it became subsidiaryof L & T Finance Ltd. Rs. 23.17 lacs Rs. (305.97) lacs
AUDITORS' REPORT TO THE SHAREHOLDERSWe have audited the attached Balance Sheet of L&T Finance Limited as at 31st March, 2003and the annexed Profit and Loss Account of the Company for the year ended 31st March, 2003.These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosure in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.We report that in accordance with the provisions of Section 227 of the Companies Act, 1956:1. we have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit;2. in our opinion proper books of account as required by law, have been kept by the Company
so far as appears from our examination of those books;3. the said Balance Sheet and the Profit and Loss Account are in agreement with the books
of account;4. in our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting
Standards referred to in Section 211(3C) of the Companies Act, 1956;5. on the basis of the written representations received from the directors of the Company as
at 31st March, 2003, and taken on record by the Board of Directors, we report that nodirector is disqualified from being appointed as a director of the Company under Clause(g) of sub-section 1 of Section 274 of the Companies Act, 1956;
6. in our opinion and to the best of our information and according to the explanations givento us, the said accounts, read together with the significant accounting policies appearingin Schedule 14 and the notes appearing in Schedule 15 give the information required bythe Companies Act, 1956 in the manner so required and give a true and fair view:(i) in the case of the Balance Sheet of the state of the company’s affairs as at 31st March,
2003 and(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date.
SHARP & TANNANChartered Accountants
By the hand of
Mumbai MILIND P.PHADKEDate : 25th April, 2003 Partner
As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 dated7th September, 1988, issued by the Central Government under Section 227(4A) of the CompaniesAct, 1956 we report as under:1. The Company has maintained proper records showing full particulars including quantitative
details and situation of fixed assets. In respect of owned assets as explained to us, all thefixed assets have been physically verified by the management during the period. In respectof leased assets the Company has formulated a programme of physical verification of allfixed assets over a period of three years which in our opinion is reasonable. Accordingly,on the basis of the verifications carried out by the management, no material discrepancieswere noticed on such verification.
2. The fixed assets have not been revalued during the period.3. The Company has not taken any loans, secured or unsecured from companies, firms or
other parties listed in the register maintained under Section 301 of the Companies Act,1956 and from companies under the same management as defined under Sub-section (1B)of Section 370 of the Companies Act, 1956 other than intercorporate deposits, withcompanies under the same management where the rates of interest and other terms andconditions are not prejudicial to the interest of the Company.
4. The Company has granted loans, secured or unsecured to companies, firms or otherparties listed in the register maintained under Section 301 of the Companies Act, 1956 andto companies under the same management as defined under Sub—section (1B) of Section
L&T FINANCE LIMITED
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370 of the Companies Act, 1956, where the rate of interest and other terms and conditionsof deposits, are not prejudicial to the interest of the Company.
5. (a) In respect of Hire Purchase Finance provided by the Company, repayment of principalamount and charges thereon has not, in few cases been effected on the due dates. On thebasis of information and explanations given to us, the Company is taking reasonable stepsagainst the hirers for the recovery of hire dues.(b) The parties, to whom loans or advances in the nature of loans have been given arerepaying the principal amounts as stipulated and are also regular in payment of interestwhere applicable, except in respect of few parties where there have been delays. Thecompany is taking reasonable steps against these parties to recover the amount overdueincluding interest thereon.
6. In our opinion and according to the information and explanations given to us, there is anadequate internal control procedure commensurate with the size of the company and thenature of its business for the purchase of plant and machinery, furniture, office equipmentsand other assets.
7. The Company has accepted deposits from the public and in our opinion and according tothe information and explanations given to us, the directives issued by the Reserve Bankof India and the provisions of Section 58A of the Companies Act, 1956 and the rulesframed thereunder, where applicable, have been complied with.
8. We are of the opinion that the Company has an internal audit system commensurate withits size and the nature of its business.
9. The Company has regularly deposited during the period, Provident Fund and EmployeesState Insurance dues with appropriate authorities.
10. According to the information and explanations given to us, there were no undisputedamounts payable in respect of income tax, wealth tax, sales tax and custom duty whichwere outstanding as at 31st March, 2003 for a period of more than six months from the datethey became payable.
11. According to the information and explanations given to us, no personal expenses havebeen charged to revenue account other than those payable under contractual obligationsor in accordance with the generally accepted business practices.
12. In respect of the Company’s Hire Purchase, leasing activities and loans or advances onthe basis of security by way of pledge of shares, debentures and other securities; adequatedocuments and records are maintained by the Company. The Company’s Leasing activityis considered to be under the purview of Clause 4(D) of the Manufacturing and otherCompanies (Auditor’s Report) Order, 1988.
13. Clauses (III), (IV), (V), (VI), (XI), (XII), (XIV), (XVI) AND (XX) of Para 4A and Clause (III)and (IV) of Para 4D of the aforesaid Order are not applicable during the period.
SHARP & TANNANChartered Accountants
By the hand of
Mumbai, MILIND P. PHADKEDate : 25th April, 2003 Partner
As at 31.03.2003 As at 31.3.2002Schedule Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs
SOURCES OF FUNDS :Shareholders’ Funds :Share Capital 1 6,000.00 6,000.00Reserves & Surplus 2 1,492.08 2,168.22Loan Funds :Secured Loans 3 15,220.75 15,475.06Unsecured Loans 4 31,471.89 24,447.39
Total 54,184.72 48,090.67
APPLICATION OF FUNDS :
Fixed Assets :Gross Block 5 5,505.68 16,551.97Less : Depreciation 247.33 4,514.18
Net Block 5,258.35 12,037.79Less: Lease Terminal Adjustment - 1,596.54Net Block After Lease TerminalAdjustment 5,258.35 10,441.25Capital Work-in-Progress 876.21 6,134.56 804.02 11,245.27
Investments 6 2,004.71 2,390.54Current Assets,Loans & Advances 7Stock-on-Hire 12,653.39 12,352.86Sundry Debtors 400.93 1,695.67Cash & Bank Balances 1,362.23 671.06Other Current Assets 897.22 1,068.86Loans & Advances 35,065.36 23,599.15
50,379.13 39,387.60Less:Current Liabilities &Provisions 8Liabilities 4,306.00 4,583.27Provisions 29.58 371.52
4,335.58 4,954.79Net Current Assets 46,043.55 34,432.81Miscellaneous Expenditure 9 1.90 22.05(To the extent not written off oradjusted)Total 54,184.72 48,090.67Significant Accounting Policies 14Notes Forming Part of Accounts 15Balance Sheet Abstract &Company’s GeneralBusiness Profile 16
BALANCE SHEET AS AT 31 ST MARCH, 2003
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 ST MARCH, 2003Schedules Year Ended Year Ended
31.03.2003 31.03.2002Rs. Lacs Rs. Lacs
INCOME :Income From Operations 10 6,430.17 5,897.99
Total 6,430.17 5,897.99EXPENDITURE :Personnel Expenses 11 268.12 227.67Administration & Other Expenses 12 1,081.27 797.43Interest & Other Finance Charges 13 4,286.56 3,669.02Depreciation 179.86 28.85
Total 5,815.81 4,722.97
Profit before taxes 614.36 1,175.02Provision for taxes 5.50 56.17
Profit after taxes 608.86 1,118.85Add:Balance brought forward from lastAccounts 362.33 417.48
Profit available for appropriation 971.19 1,536.33Transfer to Reserve u/s. 45 IC ofRBI Act,1934 123.00 224.00Transfer to Debenture RedemptionReserve 25.00 50.00Transfer to General Reserve - I 300.00 600.00Proposed Equity Dividend - 300.00Interim Equity Dividend 360.00 -
Balance carried to balance Sheet 163.19 362.33
Basic and Diluted earnings per Equity Share (Rs.) 1.01 1.86(See note No. 15 L(iii))Face Value per Equity Share (Rs.) 10.00 10.00Significant Accounting Policies 14Notes Forming Part of Accounts 15Balance Sheet Abstract & Company’s GeneralBusiness Profile 16
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003AS AT 31.03.2003 AS AT 31.03.2002
Rs. Lacs Rs. Lacs Rs. Lacs Rs. LacsSCHEDULE - 1SHARE CAPITALAuthorised6,00,00,000 (Previous Year 6,00,00,000) 6,000.00 6,000.00Equity Shares of Rs. 10 each.
6,000.00 6,000.00Issued,Subscribed & Paid up6,00,00,000 Equity Shares of 6,000.00 6,000.00Rs. 10 each, fully paid up.(All the shares are held by the holdingCompany, M/s Larsen & Toubro Limited)
6,000.00 6,000.00SCHEDULE - 2RESERVES & SURPLUSReserve u/s. 45 1C of RBI Act, 1934.As per last Balance Sheet 780.89 556.89Add : Transferred from Profit & Loss A/c 123.00 903.89 224.00 780.89Debenture Redemption ReserveAs per last Balance Sheet 100.00 50.00Add : Transferred from Profit & Loss A/c 25.00 125.00 50.00 100.00General Reserve - IAs per last Balance Sheet 925.00 800.00Add : Transferred from Profit & Loss A/c 300.00 600.00Less : Utilised during the period 925.00 300.00 475.00 925.00Profit & Loss Account 163.19 362.33
1,492.08 2,168.22SCHEDULE - 3SECURED LOANSSecured Redeemable Non Convertible Debentures 10,500.00 10,500.00From Banks :Cash Credit / WorkingCapital Demand Loans 400.00 3,162.62Term Loan 1,978.64 1,812.44Foreign Currency Loan 2,342.11 -
15,220.75 15,475.06SCHEDULE - 4UNSECURED LOANSFixed Deposits 417.63 5,070.84(Repayable within one year-Rs 242.44 Lacs)Loans and advances from subsidiary 512.00 450.00Short Term Loans & Advances :From Banksi) Non Convertible Debentures 2,000.00 3,500.00ii) Foreign Currency Loan 2,489.58 2,526.55iii) Others 6,490.00 3,500.00From Othersi) Non Convertible Debentures 10,100.00 2,950.00ii) Others 9,462.68 6,450.00
31,471.89 24,447.39
As per our Report attachedSHARP & TANNAN A. N. MANI J. P. NAYAKChartered Accountants Manager Y. M. DEOSTHALEEBy the hand of
MILIND P. PHADKE V. C. RAJEPartner Vice President - Accounts &
Company SecretaryMumbai MumbaiDated : 25th April, 2003 Dated : 25th April, 2003
Directors}
As per our Report attachedSHARP & TANNAN A. N. MANI J. P. NAYAKChartered Accountants Manager Y. M. DEOSTHALEEBy the hand of
MILIND P. PHADKE V. C. RAJEPartner Vice President - Accounts &
Company SecretaryMumbai MumbaiDated : 25th April, 2003 Dated : 25th April, 2003
Directors}
L&T FINANCE LIMITED
S-52
SCHEDULE 5 - FIXED ASSETS
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003
NET NETBLOCK BLOCK
FIXED ASSETS GROSS BLOCK DEPRECIATION NET BLOCK NET BLOCK LEASE AFTER AFTERTERMINAL LEASE LEASE
ADJUSTMENT TERMINAL TERMINALADJUSTMENT ADJUSTMENT
Opening Additions Sale / As On Opening For the Deduction / As On As On As On As On As On As OnBalance Adjustment 31/03/03 Balance Period Adjustment 31/03/03 31/03/03 31/03/02 31/03/03 31/03/03 31/03/02
ASSETS As on As on01/04/02 01/04/02
Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs
LEASED ASSETS **Plant & Machinery 6,435.58 - 6,435.58 - 1,618.33 - 1,618.33 - - 4,817.25 - - 3,377.65Computers 3,762.08 - 3,762.08 - 1,517.02 - 1,517.02 - - 2,245.06 - - 2,183.52Vehicles 2,869.58 - 2,869.58 - 1,310.48 - 1,310.48 - - 1,559.10 - - 1,463.70
13,067.24 - 13,067.24 - 4,445.83 - 4,445.83 - - 8,621.41 - - 7,024.87OWNED ASSETSBuilding 3,349.42 69.62 - 3,419.04 36.75 58.99 - 95.74 3,323.30 3,312.67 - 3,323.30 3,312.67Plant & Machinery 44.47 1,087.82 2.41 1,129.88 6.50 57.57 0.67 63.40 1,066.48 37.97 - 1,066.48 37.97Furniture & Fixtures 18.56 6.52 0.07 25.01 3.46 1.57 0.07 4.96 20.05 15.10 - 20.05 15.10Motor Cars - 811.78 - 811.78 - 42.69 - 42.69 769.09 - - 769.09 -Computers 34.43 21.41 0.77 55.07 18.91 10.00 0.14 28.77 26.30 15.52 - 26.30 15.52
3,446.88 1,997.15 3.25 5,440.78 65.62 170.82 0.88 235.56 5,205.22 3,381.26 - 5,205.22 3,381.26MOTOR CARTAKEN ON LEASEMotor Cars 37.85 27.05 - 64.90 2.73 9.04 - 11.77 53.13 35.12 - 53.13 35.12
37.85 27.05 - 64.90 2.73 9.04 - 11.77 53.13 35.12 - 53.13 35.12
TOTAL 16,551.97 2,024.20 13,070.49 5,505.68 4,514.18 179.86 4,446.71 247.33 5,258.35 12,037.79 - 5,258.35 10,441.25
Previous Year 16,670.16 2,757.96 2,876.16 16,551.97 4,351.74 1,570.21 1,407.77 4,514.18 12,037.79 1,596.54
Add:CapitalWork-in-Progress 876.21 804.02
6,134.56 11,245.27
** Lease Assets have been transferred to Loans & Advances in conformity with Accounting Standards - 19 - Leases. Accordingly figures for the previous year have been regrouped in the accountswherever necessary.
SCHEDULE - 6INVESTMENTS(At cost or market value whichever is lower)Long Term Investments :Government Securities 13.55 13.55Bonds 200.00 1,315.25Shares 1,791.15 2,004.70 501.00 1,829.80Current Investments :Shares 73.79 110.96Mutual Funds - 550.52Others 0.01 -
2,078.50 2,491.28Less: Diminution in Value of Investments 73.79 100.74TOTAL 2,004.71 2,390.54NOTE :Quoted Investments(Market Value-Rs.2,13,81,900/-) 213.52 1,889.51(Previous Year Rs. 19,00,91,681/-)Unquoted Investments 1,791.19 501.03
2,004.71 2,390.54Particulars of Investments :LONG TERM INVESTMENTSGovernment Securities :12.50% Maharashtra State DevelopmentLoan 2004 13.52 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 SalesTax authorities)TOTAL (A) 13.55 13.55Bonds :13.85% Pradeshiya Industrial andInvestment Corporation 200.00 200.00of U.P Ltd. 2006200 State Government Guaranteed,Non-Convertible, Non-Cummulative ,Redeemable,Taxable Bonds of Rs.1,00,000/-each.15.10% Rajasthan State Electricity Board,2004 - 515.25500 State Government Guaranteed,Secured,Redeemable Non- Convertible Bonds ofRs.1,00,000/-each. Sold during the year.14.00% Maharashtra State Road DevelopmentCorp.Ltd., 2002 - 600.00600 State Government Guaranteed,Secured,Redeemable, Non-Convertible Bonds ofRs.1,00,000/- each. Redeemed during the year.TOTAL (B) 200.00 1,315.25
Shares (fully paid up of Rs.10/- each) :Subsidiary Companies :L&T Capital Co. Ltd. 550.00 500.00(55,00,000 equity shares)L&T Trade.com Ltd. 5.00 1.00(50,000 equity shares)
555.00 501.00Other Investments :Narmada Infrastructure Construction Enterprise Limited 1,236.15 -(64,73,675 Equity shares)
1,236.15 -
TOTAL (C) 1,791.15 501.00CURRENT INVESTMENTSShares:Shares (fully paid up of Rs.10/- each) :JJ Spectrum Ltd. 8.95 8.95(89,500 equity shares)Metropoli Overseas Ltd. 14.91 14.91(99,400 equity shares )Anil Chemicals Ltd. 8.00 8.00(40,000 equity shares )Pashupati Fabrics Ltd. 14.98 14.98(1,49,800 equity shares )Elque Polyesters Ltd. 19.43 19.43(1,94,300 equity shares )Monnet Industries Ltd. 7.52 7.52(18,800 equity shares )Tamil Nadu Newsprint and Papers Ltd. - 27.50(25,000 equity shares. Sold during the year)Kothari Petrochemicals Ltd - 9.67(96,700 equity shares. Sold during the year)TOTAL (D) 73.79 110.96Mutual Funds:IDBI Principal - Cash Management Fund - 550.52(55,05,225 units of Rs. 10/- each.Redeemed during the year.)TOTAL (E) - 550.52OthersLTFL Securitisation Trust 2002 0.01 -
TOTAL (F) 0.01 -
Total (A+B+C+D+E+F) 2,078.50 2,491.28
Less: Diminution in Value of Investments 73.79 100.74
TOTAL 2,004.71 2,390.54
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31st MARCH, 2003AS AT 31.03.2003 AS AT 31.03.2002
Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31st MARCH, 2003AS AT 31.03.2003 AS AT 31.03.2002
Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs
L&T FINANCE LIMITED
S-53
Details of Investments purchased and sold during the yearFace Value Nos. Cost
Rs. Per Unit Rs. LacsMoney Market Mutual FundIDBI Principal- Cash Management Fund - Money at Call Dividend 10 5,00,50,000.00 5,005.00- Cash Management Fund - Money at Call Growth 10 17,40,71,673.37 19,914.22- Cash Management Fund - Liquid Growth 10 3,84,38,626.99 4,451.00- Income Fund - Short Term Plan Growth 10 2,44,70,079.33 2,500.09HDFC Liquid Fund - Growth 10 1,47,87,882.38 1,700.00HDFC Short Term Plan - Growth 10 49,14,487.91 500.00Prudential ICICI Liquid Plan - Growth 10 1,98,73,209.44 2,900.00Prudential ICICI Short Term Plan - Growth 10 47,20,320.98 500.00
AS AT 31.03.2003 AS AT 31.03.2002Rs. Lacs Rs. Lacs Rs. Lacs Rs.Lacs
SCHEDULE - 7CURRENT ASSETS, LOANS & ADVANCESCurrent AssetsStock-on-Hire 12,613.97 12,299.78(Secured by Hire Purchase Agreements)Stock on Hire of Assets Repossessed 39.42 53.08(at cost or market value whichever is less)
12,653.39 12,352.86Sundry DebtorsUnsecured - Considered GoodOutstanding for more than six months 111.83 902.76Others 289.10 400.93 792.91 1,695.67
400.93 1,695.67Cash & Bank BalancesCash in hand 0.86 1.34Balances with Scheduled Bankson Current Account 1,357.11 665.05In Fixed Deposit(Including interest accrued thereon) 4.26 4.67(Pledged with Sales Tax Authorities assecurity & with Banks as margin moneyagainst guarantees issued).
1,362.23 671.06Other Current AssetsAccrued Interest : Investments 18.17 53.78
Others 879.05 897.22 1,015.08 1,068.86897.22 1,068.86
Loans & Advances:Secured,Considered Good :Loans against pledge of shares - 285.00Other Loans 1,362.63 3,054.57Unsecured,Considered Good :Bills Discounted 9,933.14 3,069.72Other LoansSubsidiary Companies 1.40 853.35Others 18,045.93 18,047.33 14,151.29 15,004.64(Including Intercorporate DepositsRs. 783.00 lacs, P.Y. Rs. 998.76 lacs)Unsecured, Considered DoubtfulBills Discounted 225.36 68.56Loans against pledge of shares 75.00 40.00Other Loans 2,764.92 270.10(Including Intercorporate DepositsRs. 94.00 lacs, P.Y. Rs. 38.00 lacs) 3,065.28 378.66Less: Provision for Non Performing Assets 1,427.54 1,637.74 371.82 6.84Advances towards capital assets 58.00 85.21Advances recoverable in cash or in kind 4,026.52 2,093.17
35,065.36 23,599.15SCHEDULE - 8CURRENT LIABILITIES AND PROVISIONSLiabilities :Sundry Creditors 3,124.26 1,018.18Security Deposits 533.27 529.20Advances Received - Hire Purchase/Lease 203.19 959.77Income /Charges accounted in Advance 155.67 1,136.30Interest accrued but not due 289.61 939.82
4,306.00 4,583.27Provisions for:Taxes 5.50 56.17Proposed Equity Dividend - 300.00Gratuity 4.43 -Leave Encashment 19.65 15.35
29.58 371.52SCHEDULE - 9MISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)Deferred Revenue Expenses :Brokerage on Fixed Deposits 1.90 22.05
1.90 22.05
SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNT FOR THEYEAR ENDED 31ST MARCH, 2003.
Year Ended Year Ended31.03.2003 31.03.2002
Rs. Lacs Rs. Lacs Rs. Lacs Rs. LacsSCHEDULE - 10INCOME FROM OPERATIONSLease & Hire Purchase 4,126.75 3,308.67Bills Discounting 647.98 321.91Other Financing Activities 1,339.48 1,862.67Income from Investments 301.45 256.10Other Income 14.51 148.64
6,430.17 5,897.99
SCHEDULE - 11PERSONNEL EXPENSESSalaries 208.30 182.52Contribution to and provision for :
Provident fund and Pension fund 11.43 11.33Gratuity fund 4.43 (0.14)Superannuation Fund 4.21 -Leave encashment 6.54 6.59
Welfare & Other Expenses 33.21 27.37
268.12 227.67SCHEDULE - 12ADMINISTRATIVE & OTHER EXPENSESTravelling & Conveyance 104.88 80.42Printing & Stationery 12.35 11.74Telephone, Postage & Telegrams 37.01 43.11Directors’ Sitting Fees 0.18 0.28Stamp Duty 6.21 3.27Brokerage & Service Charges 32.78 101.37Advertising & Publicity 1.18 0.32Repairs & Maintenance - Building 0.06 0.46Repairs & Maintenance - Plant & Machinery 4.86 2.75Repairs & Maintenance - Others 9.25 22.28Rent 61.86 50.46Rates & Taxes 36.89 21.87Interest Tax - (11.18)Electricity Charges 10.00 8.35Insurance 6.02 4.22Auditors Remuneration :
Audit Fees 1.00 1.00Tax Audit Fees 0.42 0.42Certification 2.21 0.47Expenses Reimbursed 0.45 4.08 0.14 2.03
Provision for Non-Performing Assets /Write offs 1,494.75 785.14Less : Transfer from ContingencyReserve 925.00 569.75 475.00 310.14Provision for Diminution in Value ofInvestments 2.55 2.93Miscellaneous Expenses 181.36 142.61
1,081.27 797.43SCHEDULE - 13INTEREST & OTHER FINANCE CHARGESFixed Loans 3,644.88 3,519.24Others 641.68 149.78
4,286.56 3,669.02
SCHEDULE - 14SIGNIFICANT ACCOUNTING POLICIES.A. Method of Accounting :
The Company maintains its accounts on accrual basis following the historical costconvention, in compliance with the Accounting Standards specified to be mandatory by theInstitute of Chartered Accountants of India and the relevant provisions of the CompaniesAct, 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, Othercompensation and Investments are accounted on accrual basis.
(ii) Income from operating lease are recognized on straight line basis over the lease termand accounted as per the due dates of receipts as per the terms of the contract.
C. Brokerage on Fixed Deposits is charged over the period of Deposits.D. The Company has complied with the guidelines issued by the Reserve Bank of India in
respect of Prudential Norms for Income Recognition and Provisioning for Non-PerformingAssets.
E. Retirement Benefits :Contributions to Provident Fund, Family Pension Fund and Superannuation are accountedon actual liability basis. Contributions to Gratuity fund and Provision for Leave encashmentbenefit on retirement are made on actuarial valuation basis.
F. Fixed Assets :Owned Assets :Assets held for own use are stated at original cost less accumulated depreciation.Leased Assets :Assets leased under finance lease are stated as “Loans & Advances” as recommendedunder Accounting Standards 19 – Leases, issued by the Institute of Chartered Accountantsof India.Assets leased under operating lease are stated at original cost less accumulateddepreciation.Assets Taken on Lease :Assets taken on lease on or after 1.4.2001 are stated at original cost less accumulateddepreciation as required under Accounting Standards 19 – Leases issued by the Instituteof Chartered Accountants of India.
G. Depreciation on Fixed Assets :Owned Assets :Depreciation on assets held for own use has been provided on Straight Line Basis as perSchedule XIV to the Companies Act, 1956.Depreciation on assets acquired and given to employees under the Hard Furnishing Schemehas been provided @ 18% per annum on Straight Line Basis.Assets given on Lease :(i) In respect of the assets given on finance lease, Accounting Standard 19 – Leases hasbeen applied.Investment in those leased assets is shown under Loans & Advances as required underthe said standard. The cost of such assets is recovered over the lease period andappropriated towards Loans & Advances.(ii) In respect of assets given on operating lease, depreciation has been provided onstraight line basis pro-rata from the month of acquisition/capitalization at the rates which
SCHEDULE - 6 (CONT'D) Year Ended Year Ended31.03.2003 31.03.2002
Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs
L&T FINANCE LIMITED
S-54
have been determined on the basis of type of the asset, lease tenor, economic life of theasset etc. None of the rates are below the rates specified in Schedule XIV of the CompaniesAct, 1956 as applicable to these assets. (These rates are subject to periodic review toensure the appropriate charge to the assets and to reflect its balance economic life for areasonable period).The rates of depreciation as applied are :Motor Cars 15%Computers 20%Cranes 10%Medical Equipments 15%Assets taken on Lease :Accounting Standard 19 - Leases , has been applied to the assets taken on lease on orafter 1.4.2001. These assets have been depreciated over the period of lease for a valuenet of its residual value implied in the transaction.
H. Investments :Current investments are carried at lower of cost or market value. The determination of thecarrying costs of such investments is done on the basis of specific identification. Long-terminvestments are carried at cost, after providing for any diminution in value, if such diminutionis of a permanent nature.
I. Foreign Currency Transactions :The Foreign Currency transactions are accounted for at the rates prevailing on the dateof transactions. Wherever forward contracts are entered into, the exchange differences aredealt with in the Profit & Loss Account over the period of the Contracts.Foreign Currency Assets & Liabilities are converted at contracted rates as applicable, theexchange difference on settlement are adjusted to the Profit & Loss Account.
J. Borrowing Costs :Borrowing Costs that are attributable to the acquisitions, constructions or production ofqualifying assets are capitalised as part of the cost of such assets. A qualifying asset isan asset that necessarily takes a substantial period of time to get ready for its intended useor sale. All other borrowing costs are recognized as an expense in the period in which theyare incurred.
SCHEDULE - 15NOTES FORMING PART OF ACCOUNTS AS AT 31 st MARCH, 2003A. Contingent Liabilities :
i) Estimated amount of contracts remaining to be executed on Capital Account (net ofadvances) and not provided for including own assets : Rs. Nil (P.Y. Rs. 86.63 Lacs)
ii) Income Tax Liability in respect of matters in Appeal : Rs. 1547.48 lacs(P.Y. Rs 1401.44 lacs)
iii) Interest Tax liability in respect of matters in Appeal : Rs. 53.67 lacs (P.Y. Rs. 33.20lacs)
iv) Sales Tax Liability in respect of matters in Appeal : Rs. 451.85 lacs (P.Y. Rs. 313.70lacs)
v) Counter guarantees given to banks against guarantees given by them on behalf of theCompany Rs. 20.87 lacs (P.Y. Rs. 23.96 lacs)
B. Secured Redeemable Non-convertible Debentures :Sr. Face Value Date of Amount Interest RedemptionNo. Allotment Rs. In
Lacsi Rs. 100.00 September 4, 1000.00 12.25% p.a. Redeemable at par, at the end of 36
lacs each 2000 payable quarterly months from the date of allotment oron exercise of Put or Call option at theend of 24 months .
ii Rs. 100.00 September 4, 500.00 12.00% p.a. Redeemable at par, at the end of 36lacs each 2000 payable quarterly months from the date of allotment.
iii Rs. 100.00 September 4, 1000.00 12.25% p.a. Redeemable at par, at the end of 36lacs each 2000 payable quarterly months from the date of allotment or
on exercise of Put or Call option at theend of 24 months .
iv Rs. 100.00 January 4, 1000.00 Mibor + 145bps Redeemable at par, at the end of 24lacs each 2002 payable quarterly months from the date of allotment or
on exercise of Put or Call option – 12months after date of allotment.
v Rs. 100.00 February 27, 1000.00 9.25% p.a. Redeemable at par, at the end of 24lacs each 2002 payable half yearly months from the date of allotment or
on exercise of Put or Call option – 12months after date of allotment.
vi Rs. 100.00 November 20, 2000.00 8.25% p.a. Redeemable at par, at the end of 24lacs each 2002 payable annually months from the date of allotment.
vii Rs. 100.00 December 4, 2000.00 8.10% p.a. Payable Redemption at par at the end of 24lacs each 2002 quarterly months from the date of allotment.
viii Rs. 100.00 December 31, 1000.00 8.00% p.a. Redemption at par at the end of 24lacs each 2002 payable half yearly months from the date of allotment or
on exercise of Put of Call option – 12months after date of allotment.
ix Rs. 100.00 January 6, 1000.00 8.00% p.a. Redemption at par at the end of 24lacs each 2003 payable half yearly months from the date of allotment or
on exercise of Put or Call option – 12months after date of allotment.
TOTAL 10500.00
Security: The Debentures are/will be secured by way of first/second charge, having paripassu rights, as the case may be, on the Company’s immovable and specified HirePurchase/Lease/Term Loan receivables, in certain cases.
C. (i) Cash Credit of Rs. 400.00 lacs 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. 1875.00 lacs is secured by hypothecation of specified Hire Purchase/Lease/Loan receivables.
(iii) Term Loan of Rs. 103.64 lacs is secured by assignment of specified Lease receivables.(iv) Foreign Currency loan of Rs. 2342.11 lacs is secured by hypothecation of specified
Hire Purchases/Lease Assets and book debts relating to Lease, Hire Purchase andother Activities.
D. The Company has taken certain assets on lease costing Rs. 149.71 lacs (P.Y. Rs. 156.11lacs) the future lease obligation against which is Rs. 81.99 Lacs (P.Y. Rs. 94.02 Lacs )
E. Finance Lease Obligations taken on lease on or after 1.4.2001 :The Company normally acquires assets/equipments under finance lease with the respectiveunderlying assets/equipments as security. Minimum lease payments outstanding as on 31st
March 2003 in respect of these assets are as under:
(Rs. Lacs)Due Total Minimum Lease Interest Present Value of
Payments outstanding as Not Due Minimum LeaseOn 31st March 2003 Payments
Within one year 15.26 6.21 9.05Later than one year andnot later than five years 44.40 9.05 35.35
59.66 15.26 44.40Finance Lease Obligations given on lease :The Company has given assets on finance lease to its customers with respective underlyingassets / equipments as security.Minimum Lease payments outstanding as on 31st March 2003 in respect of these assetsare as under:
(Rs. Lacs)Due Total Minimum Lease Interest Present Value of
Payments outstanding as Not Due Minimum LeaseOn 31st March , 2003 Payments
Within one year 1430.78 383.79 1046.99Later than one year andnot later than five years 2171.77 287.71 1884.07Later than five years 24.98 1.16 23.81
3627.53 672.66 2954.87F. Income from other financing activities include interest on Loans & Advances of Rs.1602.31
Lacs (P.Y. Rs. 1844.00 Lacs) {Tax deducted at source Rs. 78.67 Lacs (P.Y. Rs. 60.96Lacs) }
G. Advances recoverable in cash or in kind include :i) Loan to Officers Rs. 4.11 Lacs (P.Y. Rs. 5.19 Lacs) , Maximum amount outstanding
during the year Rs. 6.07 Lacs (P.Y. Rs. 7.08 Lacs)ii) Rs. 28.18 Lacs 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 TaxAct in respective states with respect to such transactions, recovery of the same fromthe customers is kept in abeyance. The Company has since then been paying salestax on such transactions under protest in various states to the extent it is collectedfrom the customers.
H. Stock-on-hire includes receivables of Rs. 1636.85 Lacs (P.Y. Rs. 1903.80 Lacs ) detailedhereunder:
As at 31.03.2003 As at 31.03.2002Secured (Rs. Lacs) (Rs. Lacs)Outstanding for more than six monthsConsidered Good 760.30 927.07Others: Considered Good 1224.20 1078.73
1984.50 2005.80Less : Provision for non-performingassets 347.65 102.00
1636.85 1903.80I. Assignment of Receivables :
The Company has assigned/sold some of the Lease and Hire Purchase receivablesamounting to Rs. 16646.05 Lacs . This assignment/sale is without recourse to the Company.The Company has given additional cash collateral of Rs. 363.00 Lacs to the Assignee/s/Purchaser/s and has also hypothecated underlying Lease and Hire purchase assets infavor of Assignees/Purchasers. The Company does not expect any contingent or otherliability in future in respect of these assigned/sold receivables except to the extent of cashcollateral placed with the Assignees/Purchasers.
J. Managers salary and perquisites amounting to Rs. 12.97 Lacs (P.Y. Rs. 15.02 Lacs) havebeen charged to the Accounts.
K. Value of imports (on CIF basis) : Capital Goods Rs. 2059.01 Lacs (P.Y. Rs. 1181.40 Lacs)L. (i) Segment Reporting : AS-17
The Company operates in a single business segment of fund based financing activity.(ii) Related Party Disclosure : AS-18
The following related party transaction were carried out during the year ended31.3.2003:
No. Controlling Company Relationship Nature of Amount Amount AmountTransaction Due to Due From
(Rs. Lacs)(Rs. Lacs) (Rs. Lacs)1 Larsen & Toubro Limited Holding Company Transaction :
ICD borrowed 9,600.00 3,000.00Lease Finance given (AS-19) 370.58 452.62IncomeLease Finance Charges 100.18Lease Management Fees 1.19Service charges received 25.59 89.68ExpenditureService Charges paid 5.73Reimbursement of Expenses 29.40Payment of Interest on ICD 218.58 5.10
2 India Infrastructure Fellow Subsidiary Transaction :Developers Limited Company Hire Purchase & Term Loan
Securitised 1,241.26 1,168.86Term Loan Receivable 1,312.50DiscountingICD borrowed 862.68 362.68Expenses reimbursed 0.08ExpenditurePayment of Interest on ICD 11.02 0.13IncomeService Charges 12.00Interest on Term LoanReceivable 24.55
3 L&T Netcom Limited Fellow Subsidiary Transaction :Company Lease Finance given (AS-19)
IncomeLease Finance Charges 20.79
4 Larsen & Toubro Fellow Subsidiary Transaction :Infotech Ltd. Company Lease Finance given (AS-19) 74.65
Expenses reimbursed 0.31 0.31IncomeLease Finance Charges 21.74 16.76
L&T FINANCE LIMITED
S-55
NOTES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003 (Cont'd)5 HPL Cogeneration Fellow Subsidiary Transactions
Limited Company ICD Borrowed 4,000.00 4,000.00Bills Discounted 1,200.00 1,200.00IncomeBill Discounting Charges 0.46 0.46ExpenditureInterest paid on ICD 363.97 6.52
6 L&T Capital Company Subsidiary TransactionLimited Company ICD Borrowed 537.00 512.00
Equity Investment 50.00Expenses reimbursed 1.52 1.40ExpenditurePayment of ICD Interest 45.84 0.31
7 L&T Trade.Com Limited Subsidiary TransactionCompany ICD/Advances given 818.46
Equity Investment 4.00Expenses Paid on their behalf 0.60IncomeInterest on ICD given 22.12ExpenditureService Charges Paid 6.80
8 Tractor Engineers Limited Fellow Subsidiary TransactionsCompany Lease Finance given (AS-19)
IncomeLease Finance Charges 0.13
9 L&T-Niro Limited Associate TransactionCompany Lease Finance given (AS-19) 13.80 13.34
IncomeLease Finance Charges 0.75
10 L&T-Chiyoda Limited Associate TransactionsCompany Lease Finance given (AS-19) 5.82 1.08
IncomeLease Finance Charges 7.87
11 L&T-Sargent & Lundy Associate TransactionsLimited Company Lease Finance given (AS-19) 6.47 6.95
IncomeLease Finance Charges 5.75
12 L&T-John Deere Associate TransactionsLimited Company Lease Finance given (AS-19) 103.67 9.69
Lease Management Fees 0.54ICDs given 100.00Term Loan 247.50 220.39IncomeLease Finance Charges 34.58ICD interest recd 0.19Term Loan Interest 10.70 4.64
13 L&T-Case Equipment Associate TransactionsLimited Company Lease Finance given (AS-19) 5.97 3.61
IncomeLease Finance Charges 1.14
14 Audco Limited Associate TransactionsCompany Lease Finance given (AS-19)
IncomeLease Finance Charges 3.69
15 LTM Limited Fellow Subsidiary TransactionsCompany Investment Purchase 1,236.15
(iii) Earning per Share [“EPS”] computed in accordance with Accounting Standard 20:"Earning per Share"
(Rs. Lacs)Particulars 2002-03 2001-02a. Profit after tax for the year 608.86 1118.85b. Weighted average number of equity shares 6,00,00,000 6,00,00,000c. Nominal value of Shares (Rs.) 10.00 10.00d. Earnings per Share
Basis and Diluted (Rs.) 1.01 1.86M. Expenditure in Foreign currency:
On Interest Rs. 178.38 Lacs (P.Y. Rs. 97.37 Lacs)On other matters Rs. 558.71 Lacs (P.Y. Rs. 114.57 Lacs)
N. PROVISION FOR TAXES :(a) i) Income Tax Rs. Nil/- (P.Y. Rs. 52.67 Lacs)
ii) Wealth Tax Rs. 5.50 Lacs (P.Y. Rs. 3.50 Lacs)(b) No Provision has been made for Income Tax for the year since the Company does
not have book profits as computed under section 115JA of the Income Tax Act, 1961.(c) The Company is entitled to a future Tax Credit of Rs 71.55 Lacs under section
115JAA of the Income Tax Act, 1961.(d) Deferred Tax Liability : In terms of the interim injunction dated 6th December 2001
restraining the Institute of Chartered Accountants of India from implementing theAccounting Standards 22 Accounting for Taxes on Income, with reference to Non-Banking Finance Companies, issued by the High Court of Judicature of Madras inresponse to the Miscellaneous Petition no. 27682 of 2001 in Writ Petition No. 18827of 2001 filed by the Association of Leasing & Financial Services Companies of whichthe Company is a member, pending final disposal of this Petition no provision hasbeen made in the accounts towards deferred tax liability, if any.
O. The Company has entered into certain derivative transactions including transactionsinvolving foreign currencies. These derivative transactions, being considered as off-BalanceSheet transactions, the cash flows arising therefrom are recognised in the books of accountas and when the settlements take place in accordance with the terms of the respectivecontracts over the tenor thereof.
P. Miscellaneous Expenditure includes Rs. 107.11 Lacs (P.Y. Rs. 73.45 Lacs) on account ofloss on foreclosure of certain Hire Purchase agreements.
Q Schedule to the Balance Sheet of a Non-Banking Financial Company as required in termsof Paragraph 9BB of Non-Banking Financial Companies Prudential Norms (Reserve Bank)Directions, 1998
As per our Report attachedSHARP & TANNAN A. N. MANI J. P. NAYAKChartered Accountants Manager Y. M. DEOSTHALEEBy the hand of
MILIND P. PHADKE V. C. RAJEPartner Vice President - Accounts &
Company SecretaryMumbai MumbaiDated : 25th April, 2003 Dated : 25th April, 2003
Directors}
(Rs. Lacs)Particulars Amount Amount
Liabilities side : Outstanding Overdue1 Loans and advances availed by the NBFCs inclusive
of interest accrued thereon but not paid:(a) Debentures : Secured 10,603.10 NIL
: Unsecured 12,192.40 NIL(other than falling within the meaning of public deposits*)
(b) Deferred Credits NIL NIL(c) Term Loans 8,869.63 NIL(d) Inter-corporate loans and borrowing 10,009.16 NIL(e) Commercial Paper NIL NIL(f) Public Deposits* 446.18 NIL(g) Other Loans (Foreign Currency Loan) 4,860.92 NIL
2 Break-up of (1)(f) above (Outstanding public depositsinclusive of interest accrued thereon but not paid):(a) In the form of Unsecured debentures NIL NIL(b) In the form of partly secured debentures i.e. NIL NIL
debentures where there is a shortfall in the value ofsecurity
(c) Other public deposits 446.18 NILAmount
Assets side : Outstanding3 Break-up of Loans and Advances including bills receivables
[other than those included in (4) below] :(a) Secured 1,362.63(b) Unsecured 26,309.07
4 Break up of Leased Assets and stock on hire andhypothecation loans counting towards EL/HP activities(i) Lease assets including lease rentals under sundry debtors :
(a) Financial lease 3,633.37(b) Operating lease 1,862.10
(ii) Stock on hire including hire charges under sundry debtors:(a) Assets on hire 12,613.97(b) Repossessed Assets 39.42
(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 -(ii) Debentures and Bonds -(iii) Units of mutual funds -(iv) Government Securities -(v) Others (Please specify) -
Long Term investments :1. Quoted :
(i) Share : (a) Equity - (b) Preference -
(ii) Debentures and Bonds 213.52(iii) Units of mutual funds -(iv) Government Securities -(v) Others (Please specify) -
2. Unquoted :(i) Shares : (a) Equity 1,791.15
(b) Preference -(ii) Debentures and Bonds -(iii) Units of mutual funds -(iv) Government Securities 0.03(v) Others 0.01
6 Borrower group-wise classification of all leased assets, stock-on-hireand loans and advances :Category Amount net of provisions
Secured Unsecured Total1. Related Parties
(a) Subsidiaries - 1.40 1.40(b) Companies in the same group - 3,407.36 3,407.36(c) Other related parties - - -
2. Other than related parties 1,362.63 41,049.17 42,411.80Total 1,362.63 44,457.93 45,820.56
7 Investor group-wise classification of all investments (current and longterm) in shares and securities (both quoted and unquoted):Category Market Value Book Value
/ Break up or (Net offair value or Provisions)
NAV1. Related Parties
(a) Subsidiaries 555.00 555.00(b) Companies in the same group 1,236.15 1,236.15(c) Other related parties - -
2. Other than related parties 213.56 213.56Total 2,004.71 2,004.71
8 Other informationParticulars Amount
(i) Gross Non-Performing Assets(a) Related parties -(b) Other than related parties 3,472.99
(ii) Net Non-Performing Assets(a) Related parties -(b) Other than related parties 1,697.80
(iii) Assets acquired in satisfaction of debt 1,864.38
R. Previous year figures are regrouped / reclassified wherever necessary.
L&T FINANCE LIMITED
S-56
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 ST MARCH, 20032002-2003
Rs. LacsA. Cash Flow from Operating Activities
Net Profit before tax 614.36Adjustment for :Depreciation 179.86(Profit)/ Loss on Sale of Investments (net) (71.43)(Profit)/Loss on Sale of Fixed Assets 0.90Interest and Dividend received on Investments (230.02)Provision for Leave Encashment 4.30Miscellaneous Expenditure written off 20.15Provision for Diminution in value of Investments 2.55Provision for Non Performing Assets (net) 569.75Operating Profit before working capital changes 1,090.42Adjustment for :(Increase)/ Decrease in net Stock on Hire (300.53)(Increase)/ Decrease in Trade and Other Receivables (4,231.27)Increase/ (Decrease) in Trade and other payables (272.84)Cash Generated from Operations (3,714.22)Direct Taxes paid (294.62)Net cash flow from Operating Activities (A) (4,008.84)
B. Cash Flows from Investing ActivitiesPurchase of Fixed assets (including capital work in progress) (2,096.38)Proceeds/Adjustments from sale of Fixed Assets 1.47Purchase of Investments (38,760.46)Sale of Investments 39,215.17Interest and Dividend received on Investments 230.02Net cash from Investing Activities (B) (1,410.18)
C. Cashflows from Financing ActivitiesIncrease / (Decrease ) in Secured Loans (254.31)Increase / (Decrease ) in Unsecured Loans (net) 7,024.50Dividends paid during the year (660.00)Net Cash generated/(used in) from financing activities (C) 6,110.19Net Cash increase/(decrease) in cash and cash equivalents (A+B+C) 691.17Cash and cash equivalent as at beginning of the year 671.06Cash and cash equivalent as at end of the year 1,362.23
Notes :1. Cash Flow statement has been prepared under indirect method as set out in the Accounting
Standard - 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.
To,The Board of Directors,L&T Finance Limited,Mumbai
The above Cash Flow Statement has been compiled from and is based on the audited accounts ofL&T Finance Limited for the year ended 31st March, 2003 and reported by us on 25th April, 2003.According to the information and explanation given, the aforesaid Cash Flow Statement has beenprepared in consonance with the requirements of the Accounting Standard (AS)–3 on Cash FlowStatements issued by the Institute of Chartered Accountants of India.
SHARP & TANNANChartered Accountants
By the hand of
Mumbai, MILIND P. PHADKEDate : 25th April, 2003 Partner
J. P. NAYAK
Y. M. DEOSTHALEE
MumbaiDated : 25th April, 2003
DirectorsA. N. MANIManager
V. C. RAJEVice President - Accounts &Company Secretary
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details:
State Code
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Net Current Assets
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Miscellaneous Expenditure
1 1 - 8 3 1 4 7
3 1 0 3 2 0 0 3
1 1
N I L
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
Secured Loans
N I L
N I L
5 4 1 8 4 7 2
Net Fixed Assets
Registration No.
Balance Sheet Date
Accumulated Losses
Turnover Total ExpenditureIV. Performance of Company (Amount in Rs. Thousands)
Profit Before Tax Profit After Tax
Dividend Rate %**Earnings per share in Rs.
6 0 8 8 6
5 4 1 8 4 7 2
6 0 0 0 0 0
1 5 2 2 0 7 5
6 1 3 4 5 6
4 6 0 4 3 5 5
6 4 3 0 1 7 5 8 1 5 8 1
Item Code No.(ITC Code)
N . A
Product Description
N I L
6 . 0 0
1 8 9
6 1 4 3 6
1 . 0 1
Date Month Year
1 4 9 2 0 8
3 1 4 7 1 8 9
2 0 0 4 7 1
**Annualised
H I R E P U R C H A S E F I N A N C E
L E A S I N G
B I L L S D I S C O U N T I N G
As per our Report attachedSHARP & TANNAN A. N. MANI J. P. NAYAKChartered Accountants Manager Y. M. DEOSTHALEEBy the hand of
MILIND P. PHADKE V. C. RAJEPartner Vice President - Accounts &
Company SecretaryMumbai MumbaiDated : 25th April, 2003 Dated : 25th April, 2003
Directors}
SCHEDULE - 16
}
L&T CAPITAL COMPANY LIMITED
S-57
The Directors have pleasure in presenting their Report and Audited Accounts for the yearended 31st March 2003.1. FINANCIAL RESULTS
Year ended (Rs. Lakhs)31.03.03 31.03.02
Gross Income 251.65 195.18Total Expenses 173.87 162.94Profit Before Tax 77.78 32.24Profit After tax 47.55 23.17Adjustments (Deferred tax) (0.97) (0.41)Equity Dividend - -Surplus carried forward to Balance Sheet 75.09 27.54
2. DIVIDENDThe Directors do not recommend payment of any dividend for the year.
3. YEAR IN RETROSPECT/ PERFORMANCE OF THE COMPANYThis was the company’s second full year of operations. The company’s operating incomerecorded an impressive 25% growth with money market syndication fee contributing morethan 56% of the total income. The company obtained a Portfolio Management licensefrom SEBI during the year.
4. FINANCEDuring the year, the company increased its paid up capital to Rs. 550 lakhs to meet thenetworth requirements as per SEBI rules.
5. CAPITAL EXPENDITUREThe Company incurred capital expenditure of Rs.8.55 lakhs during the year.
6. DEPOSITSDuring the period under review the Company has not accepted any deposits from thepublic.
7. AUDITORS’ REPORTThe Auditors’ Report to the Shareholders is enclosed and does not contain anyqualifications.
8. DISCLOSURE OF PARTICULARSAs the company is engaged in non-banking financial services, there are no particulars tobe disclosed as per the Companies’ (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 relating to conservation of energy and technology absorption.The Foreign Exchange Earnings outgo during the year was Rs.0.79 lakhs. There was noForeign Exchange earning for the year.
9. PERSONNELThere are no employees covered by the provisions of the Section 217(2A) of theCompanies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975.
10. DIRECTORS' RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i. that in the preparation of the annual accounts, the applicable accounting standards
have been followed and there has been no material departure;ii. that the selected accounting policies were applied consistently and the directors
made judgements and estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at 31st March, 2003 and of theprofit of the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities;
iv. that the annual accounts have been prepared on a going concern basis.11. DIRECTORS
In terms of Section 256 of the Companies Act 1956, Mr. S.V Subramanian andMr. N Sivaraman retire by rotation and being eligible, offer themselves for re-appointment.
12. AUDIT COMMITTEEThe Audit Committee consists of three non executive directors. The present members ofthe Committee are Mr. S.V.Subramanian, Mr. Shankar Raman and Mr. N Sivaraman. Mr.S.V.Subramanian is the Chairman of the Audit Committee. The role, terms of reference,the authority and power of Chairman are in conformity with the requirements of theCompanies Act, 1956. The Committee met periodically during the year and haddiscussions with the auditors on internal control systems and internal audit report.
13. AUDITORSThe Statutory Auditors, M/s. Sharp & Tannan, Chartered Accountants, hold office until theconclusion of the ensuing Annual General Meeting and are recommended for re-appointment. Certificate from the auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of theCompanies Act, 1956.
14. ACKNOWLEDGEMENTSThe Directors acknowledge the invaluable support extended to the Company by theFinancial Institutions, Bankers, Investors and customers. The Directors are pleased toplace on record their appreciation for the valuable contributions made by the employeesof the Company.
For and on behalf of the Board
L&T CAPITAL COMPANY LIMITEDDIRECTORS’ REPORT
We have audited the attached Balance Sheet of L&T Capital Company Limited as at 31st
March, 2003 and the annexed Profit and Loss Account of the Company for the year ended onthat date. 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.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 assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosure in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.We report that in accordance with the provisions of Section 227 of the Companies Act, 1956:(a) we have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit;(b) in our opinion proper books of account as required by law, have been kept by the
Company so far as appears from our examination of those books;(c) the said Balance Sheet and Profit and Loss Account dealt with by the report are in
agreement with the books of account of the Company;(d) in our opinion, the Profit and the Loss Account and the Balance Sheet complies with the
Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;(e) on the basis of the written representations received from the directors of the Company as
at 31st March, 2003, and taken on record by the Board of Directors, we report that nodirector is disqualified from being appointed as a director of the Company under clause(g) of sub-section(1) of section 274 of the Companies Act,1956;
(f) in our opinion and to the best of our information and according to the explanations givento us, the said accounts, read together with the Notes and the Significant AccountingPolicies appearing in Schedule 14 and notes appearing in Schedule 15 give theinformation required by the Companies Act, 1956 in the manner so required and give atrue and fair view:(i) in the case of the Balance Sheet of the state of the company’s affairs as at 31st March,
2003 and(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date.
SHARP & TANNANChartered Accountants
By the hand of
MILIND P. PHADKEPartner
As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 dated7th September, 1988 issued by the Central Government of India under Section 227(4A) of theCompanies Act, 1956 we report as under:1. The Company has maintained proper records showing full particulars including quantitative
details and situation of fixed assets. As explained to us, all the fixed assets have beenphysically verified by the management, during the period. We are informed by themanagement, that there were no discrepancies noticed on such verification.
AUDITORS’ REPORT TO THE SHAREHOLDERS2. The fixed assets have not been revalued during the period.3. The Company has not taken any loans, secured or unsecured from companies, firms or
other parties listed in the register maintained under Section 301 of the Companies Act,1956 and from companies under the same management as defined under Sub-section(1B) of Section 370 of the Companies Act, 1956.
4. The Company has granted unsecured loans to a company listed in the register maintainedunder Section 301 of the Companies Act, 1956, which is also a company under the samemanagement as defined under Sub-section (1B) of Section 370 of the Companies Act,1956,where the rate of interest and other terms and conditions of advances, are notprejudicial to the interest of the Company.
5. In respect of loans or advances in the nature of loans given to employees, the recoveryof the principal amounts and where applicable interest thereon was regular and as perstipulation.
6. In our opinion and according to the information and explanations given to us, there is anadequate internal control procedure commensurate with the size of the company and thenature of its business for the purchase of plant and machinery.
7. The Company has not accepted any deposits from the public during the period.8. The Company has an internal audit system commensurate with its size and the nature of
its business.9. The Company has regularly deposited during the period, Provident Fund dues with
appropriate authorities. We have been informed that the Employees State Insurance Act,1948 and the rules framed thereunder are not applicable to the Company.
10. According to the records of the Company and the information and explanations given tous, there was no amount payable in respect of income tax, outstanding as at 31st March,2003 for a period of more than six months from the date they became payable. Asexplained to us, the Company had no liability in the course of business in respect of exciseduty, sales tax and custom duty during the period.
11. According to the information and explanations given to us, no personal expenses havebeen charged to revenue account other than those payable under contractual obligationsor in accordance with the generally accepted business practices.
12. The Company has a reasonable system of allocating man hours utilised to the relativejobs commensurate with its size and nature of its business.
13. There is a reasonable system of authorisation at proper levels, and an adequate systemof internal control commensurate with the size of the Company and the nature of itsbusiness on issue of and allocation of labour to jobs.
14. Clauses (III), (IV), (V), (VI), (XI), (XII), (XIII), (XIV), (XV), (XVI) and (XX) of para 4A andClause (II) of para 4B of the aforesaid Order are not applicable during the period.
SHARP & TANNANChartered Accountants
By the hand of
MILIND P. PHADKEPartner
Date : 25th
April, 2003Place : Mumbai
Date : 25th
April, 2003Place : Mumbai
Y.M.DEOSTHALEES.V.SUBRAMANIANR.SHANKAR RAMANN.SIVARAMAN
Directors}
Date : 25th
April, 2003Place : Mumbai
L&T CAPITAL COMPANY LIMITED
S-58
BALANCE SHEET AS AT 31 st MARCH, 2003Sche- AS AT 31.03.2003 AS AT 31.03.2002dule Rs. Rs. Rs. Rs.
SOURCES OF FUNDS :Shareholders’ Funds :
Share Capital 1 55,000,000 50,000,000Reserves & Surplus 2 7,508,711 2,753,741
Total 62,508,711 52,753,741Loan Funds:
Finance Lease Obligations 3 1,343,814 826,157
Total 63,852,525 53,579,898APPLICATION OF FUNDS :Fixed Assets :
Gross Block 4 3,247,401 2,392,388Less : Depreciation 548,832 197,282Net Block 2,698,569 2,195,106
Investments 5 5,711,756 1,002,773Current Assets, Loans &Advances 6
Sundry Debtors 3,369,278 3,459,260Cash & Bank Balances 2,220,748 2,931,340Loans & Advances 59,857,192 49,065,283
65,447,217 55,455,883Less:Current Liabilities &Provisions 7
Liabilities 5,373,682 3,737,321Provisions 4,800,156 1,704,572
10,173,838 5,441,893Net Current Assets 55,273,379 50,013,991Deferred tax (See Note 15 (ii))
Deferred tax assets 60,235 60,235Deferred tax liability (96,609) (36,374) - 60,235
Miscellaneous Expenditure 8 205,196 307,793(To the extent not written off oradjusted)
Total 63,852,525 53,579,898
Significant Accounting Policies 14Notes Forming Part of Accounts15Balance Sheet Abstract 16
Year ended Year ended31-03-2003 31-03-2002
Schedule Rs. Rs.INCOME :Income From Operations 9 19,848,606 15,935,100Other Income 10 5,316,314 3,582,917Total 25,164,920 19,518,017EXPENDITURE :Personnel Expenses 11 8,464,561 8,336,778Administration & Other Expenses 12 8,346,198 7,621,477Interest & Other Finance Charges 13 122,337 36,206Depreciation 351,550 196,993Preliminary Expenses written off 102,598 102,598Total 17,387,244 16,294,051Profit/(Loss) Before Taxes 7,777,676 3,223,966Provision for Taxes
Current Taxes 2,926,097 866,085Deferred Taxes 96,609 40,982
Profit/Loss after taxes 4,754,970 2,316,899Profit: Opening Balance 2,753,741 335,624Add: Opening Deferred Tax Asset - 101,218Current Period 4,754,970 2,316,899Balance carried to balance Sheet 7,508,711 2,753,741Earning Per ShareBasic and Diluted (Rs.) 0.90 0.46
Significant Accounting Policies 14Notes Forming Part of Accounts 15Balance Sheet Abstract 16
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 st MARCH, 2003
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003
AS AT 31/03/2003 AS AT 31/03/2002Rs. Rs.
1 SHARE CAPITALAuthorised
55,00,000 Equity Shares of Rs 10. Each 55,000,000 50,000,000
55,000,000 50,000,000Issued,Subscribed & Paid up
55,00,000 Equity Shares of Rs 10 eachFully paid up 55,000,000 50,000,000(54,99,994 shares are held by the holdingCompany, M/s L&T Finance Ltd.)(Issued during the year 5,00,000 EquityShares of Rs.10/- each) 55,000,000 50,000,000
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003
AS AT 31/03/2003 AS AT 31/03/2002Rs. Rs.
2 RESERVES & SURPLUSProfit & Loss Account 7,508,711 2,753,741
7,508,711 2,753,7413 FINANCE LEASE OBLIGATIONS
Lease Finance (Due within a year) 213,783 112,916Lease Finance (Due beyond one year) 1,130,031 713,241
1,343,814 826,157
4 - FIXED ASSETSAmount in Rs.
Fixed Assets Gross Block Depreciation Net Block
As at 1/04/02 Additions As at 31/03/03 As at 1/04/02 For the Year As at 31/03/03 As at 31/03/03 As at 31/3/02
Plant & Machinery 522,877 17,500 540,377 3,398 25,119 28,517 511,860 519,479
Computers & Peripherals 1,012,480 136,559 1,149,039 157,846 179,520 337,366 811,673 854,634
Leased Assets 857,031 700,954 1,557,985 36,038 146,911 182,949 1,375,036 820,993
Total 2,392,388 855,013 3,247,401 197,282 351,550 548,832 2,698,569 2,195,106
Previous Year
Plant & Machinery 50,288 472,589 522,877 289 3,109 3,398
Computers & Peripherals - 1,012,480 1,012,480 - 157,846 157,846
Leased Assets - 857,031 857,031 - 36,038 36,038
Total 50,288 2,342,100 2,392,388 289 196,993 197,282 2,698,569 2,195,106
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand of
MILIND P. PHADKE M.PUSHPANGADANPartner Chief ExecutivePlace : MumbaiDate : 25
th April, 2003
Y.M. DEOSTHALEES.V. SUBRAMANIANR. SHANKAR RAMANN. SIVARAMAN
Directors}As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand of
MILIND P. PHADKE M.PUSHPANGADANPartner Chief ExecutivePlace : MumbaiDate : 25
th April, 2003
Y.M. DEOSTHALEES.V. SUBRAMANIANR. SHANKAR RAMANN. SIVARAMAN
Directors}
L&T CAPITAL COMPANY LIMITED
S-59
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003
AS AT 31/03/2003 AS AT 31/03/2002Rs. Rs.
5 INVESTMENTS(At cost or market valuewhichever is lower)Current Investments:Units of Mutual Fund(unquoted) 5,711,756 1,002,773
5,711,756 1,002,7735,711,756 1,002,773
Particulars of investments:Mutual FundsJM Income Fund (Growth Option) - 1,000,000 1,002,77346210 units of Rs.10 eachJM Income Fund (Growth Option) - 500,000 -22914.75 units of Rs.10 each(purchased during the year)JM Income Fund (Growth Option) - 2,300,000 -102176.81 units of Rs.10 each(purchased during the year)IDBI Principal - Income Fund 1,000,000 -76630.70 units of Rs.10 each(purchased during the year)Pioneer ITI Income Builder 500,000 -34530.39 units of Rs.10 each(purchased during the year)HDFC MF – Liquid Scheme 300,000 -29588.71 units of Rs.10 each(purchased during the year)HDFC MF – Liquid Scheme - Dividend 400,000 -39413.53 units of Rs.10 each(purchased during the year)HDFC MF – Liquid Scheme - Dividend 8,492 -845.66 units of Rs.10 each(dividend reinvested during the year)JM Income Fund (Growth Option-13599.27units of Rs.10 each (296,736) -(sold during the year)
6 CURRENT ASSETS, LOANS &ADVANCESCurrent AssetsSundry Debtors -Unsecured:Debts outstanding for periodexceeding six months 1,528,571 -Other Debts - Considered Good 1,840,707 3,459,260
3,369,278 3,459,260Cash & Bank BalancesCash in Hand 1,029 9,700Balance with Scheduled BankOn Current Account 159,550 2,921,640In Fixed Deposit 2,060,169 -(Including interest accrued thereon)
2,220,748 2,931,340Loans & Advances -Unsecured considered goodUnsecuredInter Corporate DepositHolding Company 51,200,000 45,000,000Advances recoverable in cashor in kind 6,997,291 4,065,283Deposit with IndustrialDevelopment Bankof India(Including interest accrued thereon) 826,269 -Deposit with Kotak Mahindra Bank Ltd.(Including interest accrued thereon) 833,632 -
59,857,192 49,065,28365,447,218 55,455,883
7 CURRENT LIABILITIES AND PROVISIONSLiabilitiesSundry Creditors 5,373,682 3,737,321
5,373,682 3,737,321Provisions forTaxes 4,004,408 866,086Gratuity 365,207 378,707Leave Encashment 430,541 459,779
4,800,156 1,704,5728 MISCELLANEOUS EXPENDITURE
(To the extent not written off oradjusted)Preliminary Expenses 205,196 307,793
205,196 307,7939 INCOME FROM OPERATIONS
Arrangers Fee 4,054,158 5,534,625Consultancy Fees 4,599,800 7,185,500Syndication Fees - Money Markets 11,194,648 3,214,975
19,848,606 15,935,100
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH, 2003
AS AT 31/03/2003 AS AT 31/03/2002Rs. Rs.
10 OTHER INCOMEInterest on:Inter Corporate Deposit 4,584,284 2,361,973Tax Deducted at Source -Rs.9,80,164/- (PY - Rs.4,65,740/-)Fixed Deposit 257,991 29,746Tax Deducted at Source -Rs.24,610/-(PY - Rs.2,182/-)Interest received from Income Tax 279,239 -Income from Mutual Fund 9,488 1,004,998Profit on Sale of Investment 491 -Others 240 15,577Provision for expenses written back 184,581 170,624
5,316,314 3,582,917
5,316,314 3,582,91711 PERSONNEL EXPENSES
Salaries 7,463,303 6,749,211Contribution to and provision for :Provident fund and Pension fund 353,758 397,143Gratuity 74,135 89,187Superannuation 133,560 131,400Leave Encashment 239,705 563,679Welfare & Other Expenses 200,100 406,159
8,464,561 8,336,77812 ADMINISTRATIVE & OTHER EXPENSES
Travelling & Conveyance 1,715,253 1,808,337Printing & Stationery 127,699 214,007Telephone, Postage & Telegrams 502,703 732,853Registration Charges 500,000 -Service Charges 100 1,284,935Computer Software Expenses 19,660 56,369Repairs & MaintenancePlant & Machinery 161,427 85,400Building 449,755 152,614Others 400 15,598Rent 482,257 891,197Rates & Taxes 81,763 245,715Insurance 55,011 56,082Loss on sale of Investments - 326,659Diminution in Investments - -Auditors’ Remuneration :Audit Fees 54,000 52,500Tax Audit Fee 16,200 15,750Other matters 32,400 -Expenses reimbursed 1,363 -Professional Charges 2,765,250 724,200Business Promotion 25,650 1,000Bad Debts 589,800 -Miscellaneous Expenses 765,507 958,260
8,346,198 7,621,47613 INTEREST & OTHER FINANCE CHARGES
Interest on leased assets 122,188 36,206Interest on others 149 -
122,337 36,206
14 SIGNIFICANT ACCOUNTING POLICIESa) Accounting Convention
The accounts are prepared on accrual basis under the historical cost convention. Thefinancial statements comply with the mandatory accounting standards issued by theInstitute of Chartered Accountants of India and are in accordance with the provisionsof the Companies Act, 1956.
b) Revenue RecognitionPlacement fees are recognized as income on successful completion of assignment.
c) Fixed Assets(i) Fixed assets are stated at original cost less depreciation(ii) Assets taken on Financial lease have been capitalised at fair value on the date
of execution of Schedule to the Lease Agreementd) Depreciation
(i) Depreciation on assets held has been provided on Straight Line Basis as perSchedule XIV to the Companies Act, 1956.
(ii) Depreciation on assets taken on Financial lease have been provided on StraightLine Basis over the lease term of the asset.
e) Borrowing CostsBorrowing costs that are attributable to the acquisitions, constructions or productionof qualifying assets are capitalised as part of the cost of such asset. A qualifyingasset is an asset that necessarily takes a substantial period of time to get ready forits intended use or sale. All other borrowing costs are recognised as an expense inthe period in which they are incured.
f) InvestmentsCurrent investments are valued at the lower of cost or market value. Marketablesecurities are valued at market value. Diminution in value has been providedwherever necessary.
g) Retirement BenefitsContribution to Provident Fund, Family Pension Fund and Superannuation areaccounted on actual liability basis. Provision for gratuity and leave encashmentbenefit on retirement are made on actuarial valuation basis.
L&T CAPITAL COMPANY LIMITED
S-60
h) TaxationIn accordance with Accounting Standard 22 - Accounting for Taxes on Income,issued by the Institute of Chartered Accountants of India, the deferred tax for timingdifferences between the book and tax profits for the year is accounted for using thetax rates and laws that have been enacted or substantively enacted as of the balancesheet date.Deferred tax assets arising from temporary timing differences are recognised to theextent there is reasonable certainty that the assets can be realised in future.The accumulated net deferred tax asset arising on account of timing differences ason 1st April 2001 has been credited to the opening balance of Profit & Loss Account.
i) Miscellaneous ExpenditurePreliminary expenses are amortised over a period of five years from the year ofcommencement of operations.
15 NOTES FORMING PART OF ACCOUNTSi) Finance Lease Obligations
The Company normally acquires vehicles under finance lease with the respectiveunderlying assets as security. Minimum lease payments outstanding as of 31st
March 2003 in respect of these assets are as under:(Rs.)
Due Total Minimum Lease Interest Present Value ofPayments outstanding Not Due Minimum Leaseas on 31st March 2003 Payments
Within one year 361,720 147,936 213,783Later than one year andnot later than five years 1,673,959 543,928 1,130,031
2,035,679 2,727,544 1,343,814ii) Deferred Tax
The Company has adopted Accounting Standard 22 - Accounting for Taxes onIncome with effect from 1st April 2001. The accumulated net deferred tax asset hasbeen credited to the Reserves and Surplus Account.The break up of net deferred tax asset as at 31st March 2003 is as under:-
(Rs.)
As at 31st March 03 As at 31st March 02Deferred Deferred Deferred Deferredtax asset tax liability tax asset tax liability
Timing differences on account of:Difference between Book - 330,367 - 249,806Depreciation and Depreciationunder the Income Tax Act, 1961Expenditure under Section 43Bof theIncome-tax Act, 1961- Payment / reversal of provision - - - -- Provision 285,475 - 308,144 -Lease Assets 8,518 - 1,898
293,993 330,367 310,042 249,806
Net Deferred Tax Asset 36,374 60,235Net Incremental liability chargedto Profit and Loss Account 96,609
iii) Advances recoverable in cash or in kind include Loan to officers Rs.3,83,700/-(P.Y.Rs.6,27,514/-).
iv) Managerial Remuneration: (Rs.)Salary 1,500,260Perquisites 36,231PF Employer’s Contribution 57,600Retirement Benefits 72,000Total 1,666,091P. Y. Rs.11,10,911/-
v) Segment Reporting: Accounting Standard 17The Company operates in a single business segment of Merchant Banking Activity
vi) Related Party Disclosures: Accounting Standard 18a) List of Related Parties
Parties where control exists:L&T Finance Limited(Holding Company)Larsen & Toubro Limited(Parent Holding Company)Other related parties with whom transactions have taken place during the year:Fellow Subsidiaries of Larsen & Toubro LimitedTractor Engineers Ltd.Narmada Cement Company Ltd.L&T Transportation Infrastructure Ltd.Associates of Larsen & Toubro LimitedL&T-Ramboll Consulting Engineers Ltd.
b) Transaction with related parties: -Parent Holding Subsi- Asso-
Holding Co. Co. diaries ciates(L&T) (LTF) of L&T of L&T
i) Sales, Services and otherincomeArranger’s Fee 650,000 - 1,577,453Consultancy Fees 2,725,000 - - 690,000Syndication Fees - MoneyMarkets 374,287 - - -Other IncomeInterest on ICD - 4,584,284 - -Expenses Reimbursed 197,006 - - 78,245
ii) Expenditure on Consultancy - - - -Services
iii) Expenditure on other servicesProfessional Charges paid for 1,570,500 - 89,250 -various services
vi) Capital expenditure forOffice EquipmentsFixed Assets - - - -
v) Other expenditureExpenses Reimbursed 729,589 152,055 - -
vi) Outstanding balances as at31st March 2003Debtors 2,741,121 - - 588,245Creditors 1,848,626 140,332 89,250 -Loans & Advances - 51,230,685 - -
vii) Expenditure in Foreign Currency:Travel & Other Expenses Rs.79,400 (Previous year Rs.25,004)
viii) Earning Per Share (EPS) - Computed in accordance with Accounting Standard 20:"Earning Per Share"Particulars 2002-2003 2001-2002(a) Profit after tax for the year (Rs.) 4,754,970 2,316,899(b) Weighted average number of equity shares 5,304,740 5,000,000(c) (i) Nominal value of shares (Rs.) 10 10
(ii) Earning per share - Basic and Diluted (Rs.) 0.90 0.46ix) Previous year’s figures are regrouped / reclassified, wherever necessary.
SIGNIFICANT ACCOUNTING POLICIES (CONTD...)
16. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Net Current Assets
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Miscellaneous Expenditure
1 1 - 1 2 5 6 5 3
3 1 0 3 2 0 0 3
1 1
N I L
5 0 0 0
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
Secured Loans
N I L
N I L
6 3 8 5 2
Net Fixed Assets
Registration No.
Balance Sheet Date
Deferred Tax
Turnover Total ExpenditureIV. Performance of Company (Amount in Rs. Thousands)
Profit Before Tax Profit After Tax
Dividend Rate %Earnings per share in Rs.
7 7 7 8 4 7 5 5
0 . 9 0
6 3 8 5 2
5 5 0 0 0 7 5 0 8
1 3 4 4
2 6 9 8
5 5 2 7 3
2 5 1 6 5 1 7 3 8 7
Item Code No. (ITC Code)
N . A
Product Description
- 0 3 6
M E R C H A N T B A N K E R
N I L
5 7 1 2
2 0 5
Accumulated Losses
N I L
0 . 0 0
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand of
MILIND P. PHADKE M.PUSHPANGADANPartner Chief ExecutivePlace : MumbaiDate : 25
th April, 2003
Y.M. DEOSTHALEES.V. SUBRAMANIANR. SHANKAR RAMANN. SIVARAMAN
Directors}I. Registration Details
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand of
MILIND P. PHADKE M.PUSHPANGADANPartner Chief ExecutivePlace : MumbaiDate : 25
th April, 2003
Y.M. DEOSTHALEES.V. SUBRAMANIANR. SHANKAR RAMANN. SIVARAMAN
Directors}
L&T HOLDINGS LIMITED
S-61
The Directors have pleasure in presenting their report and Accounts for the year ended 31st
March 2003.
I. FINANCIAL RESULTSAmount in Rs. Lakhs
Description 2002-03 2001-02Gross Income (Incl. other Income) 2.90 134.86
Total Expenses 222.28 113.50
Profit before depreciation & tax (219.38) 21.36
Depreciation - -
Profit / (Loss) before tax (219.38) 21.36
Provision for tax (4.54) 39.17
Profit / (Loss) after tax (214.83) (17.81)
Balance brought forward from Previous year (17.81) -
Balance carried to Balance Sheet (232.64) (17.81)
II. DIVIDEND:Dividend is not declared by the company due to accumulated losses.
III. PERFORMANCE OF THE COMPANY:During the period under review, the Company made investments in project companies inRoad, Airport, Port and IT service sectors.
The Company posted an income of Rs. 2.91 lakhs and the losses after tax is Rs. 214.83lakhs. As the Company's investments are in their early stages, the revenues of the Companyare essentially from short-term investment activities.
The Company plans to explore opportunities in new areas / sectors like the urbaninfrastructure, transport terminals, construction of food silos in the immediate future.
To augment the resources for investments in infrastructure projects the Company issuedRedeemable Non Convertible Debentures aggregating to Rs. 50 crores during the year.
IV. CAPITAL EXPENDITURE:The Company has not incurred capital expenditure during the period under review
V. DEPOSITS:The Company has not accepted any deposits from the public.
VI. AUDITORS’ REPORT:The Auditors’ Report to the Shareholders does not contain any qualifications.
VII. DISCLOSURE OF PARTICULARS:There are no particulars to be disclosed as per the Companies’ (Disclosure of Particularsin the Report of the Board of Directors) Rules, 1988.
VIII. PARTICULARS OF EMPLOYEES:There are no employees covered by the provisions of the Section 217(2A) of the CompaniesAct, 1956, read with the Companies (Particulars of Employees) Rules, 1975.
IX. DIRECTORS RESPONSIBILITY STATEMENT:The Board of Directors of the Company confirms:i. that in the preparation of the annual accounts, the applicable accounting standards
have been followed and there has been no material departure;ii. that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31st March, 2002 and of the profitof the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. that the annual accounts have been prepared on a going concern basis.X. DIRECTORS:
Mr.R. Shankar Raman retires from the Board of Directors by rotation and is eligible forreappointment.
XI. AUDIT COMMITTEE:The Audit Committee consists of three non executive directors. The present members ofthe Committee are:-1. Mr.Y.M.Deosthalee Member2. Mr.K.V.Rangaswami Member3. Mr.R.Shankar Raman MemberThe role, terms of reference, the authority and power of Chairman are in conformity withthe requirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors oninternal control systems and internal audit report.
XII. AUDITORS:The Statutory Auditors, M/s Sharp & Tannan, Chartered Accountants, hold office until theconclusion of the ensuing Annual General Meeting and are recommended for reappointment.Certificate from Auditors has been received to the effect that their appointment, if made,would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.
XIII. ACKNOWLEDGEMENTS:The Directors acknowledge the invaluable support extended to the company by the FinancialInstitutions, Bankers, Investors and Reserve Bank of India.The Directors are pleased to place on record their appreciation for the support receivedfrom the parent company.
For and on behalf of the Board
Y.M.DEOSTHALEER.SHANKAR RAMAN
Place : ChennaiDate : 29
th April, 2003
L&T HOLDINGS LIMITED
Directors
DIRECTORS' REPORT
}
Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary companies
Name of the subsidiary Company Cyberpark Developmentand Construction Limited
Financial year of the subsidiary company ended on 31.03.03
Number of shares in the subsidiary company held by L&T Holdings Limited and/or its nominees at the above date 50000The net aggregate of profits, less losses, of the subsidiary company so far as its concerns the members of L&T Holdings Ltd:(i) Dealt with in the accounts of L&T Holdings Limited amounted to:
(a) for the subsidiary’s financial year ended 31st March 2003 Nil(b) for previous financial years of the subsidiary since it became subsidiary of L&T Holdings Ltd. Nil
(ii) Not dealt with in the accounts of L&T Holdings Limited amounted to:(a) for the subsidiary’s financial year ended 31st March 2003 Nil(b) for previous financial years of the subsidiary since it became subsidiary of L&T Holdings Ltd. Nil
Note : Cyberpark Development and Construction Limited is yet to commence operations.
For and on behalf of the Board
Y.M. DEOSTHALEER.SHANKAR RAMAN
Place : ChennaiDate: 29th April, 2003
We have audited the attached Balance Sheet of L&T–HOLDINGS LIMITED , as at 31st March2003 and also the Profit & Loss Account for the year ended on that date annexed thereto.These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on those financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 issuedby the Central Government of India in terms of sub-section (4A) of section 227 of the CompaniesAct, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4and 5 of the said order.Further to our comments in the Annexure referred to above, we report that:(1) We have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purposes of our audit;(2) In our opinion, proper books of account as required by law have been kept by the Company
so far as appears from our examination of those books;(3) The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement
with the books of account;
AUDITORS’ REPORT TO THE SHAREHOLDERS(4) In our opinion, the Balance Sheet and the Profit & Loss Account dealt with by this report
comply with the accounting standards referred to in sub-section (3C) of Section 211 of theCompanies Act, 1956;
(5) On the basis of written representations received from the Directors of the company as at31st March 2003 and taken on record by the Board of Directors, we report that none of theDirectors of the Company is disqualified from being appointed as director under clause (g)of sub-section (1) of section 274 of the Companies Act, 1956.In our opinion and to the best of our information and according to the explanations given tous, the said accounts read together with Significant Accounting Policies in Schedule -1 andNotes on Accounts in Schedule -2 give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India;(a) in the case of Balance Sheet of the state of the Company’s affairs as at 31st March,
2003 and(b) in the case of the Profit & Loss Account, of the loss for the year ended on that date.
SHARP & TANNANChartered Accountants
By the hand of
Place : Mumbai L.VAIDYANATHANDate : 29
th April, 2003 Partner
Directors}
L&T HOLDINGS LIMITED
S-62
SCHEDULES FORMING PART OF ACCOUNTSAs at 31.03.2003 As at 31.03.2002
Rupees Rupees Rupees RupeesSCHEDULE - AShare CapitalAuthorised :
17,50,00,000 Equity Shares ofRs. 10/- each 1,750,000,000 1,750,000,000
Issued and Subscribed:8,40,50,000 Equity Shares ofRs. 10/- each fully paid 840,500,000 840,500,000(The entire equity shares areheld by Larsen & ToubroLimited and its nominees)
SCHEDULE - BUnsecured loans
Debentures8% Redeemable non convertibleDebentures - Series I 300,000,0007.85 % Redeemable nonconvertible Debentures -Series II 200,000,000 500,000,000 -Other loans 375,380,000 37,305,000
875,380,000 37,305,000
SCHEDULE - CInvestmentsLong Term Investments (At Cost)Trade investments - UnquotedFully paid equity shares :L&T Transportation Infrastructure 407,751,014 407,751,014
Limited (20,286,000 equityshares of Rs. 10/- each )
Narmada Infrastructure ConstructionEnterprise Limited 248,402,835 248,402,835(13,731,500 equity shares ofRs.10/- each)
Bangalore International Airport Limited 650,000 –(65,000 equity shares ofRs.10/- each acquiredduring the year )
Ahmedabad Mehsana Toll RoadCompany Limited 200,000,000 -(20,000,000 equity shares ofRs.10/- each acquired duringthe year )
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULES FORMING PART OF ACCOUNTS
As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 dated7th September, 1988 issued by the Central Government under section 227(4A) of the CompaniesAct, 1956, we report as under:(i) The Company does not have any Fixed Asset, as at the year end and hence reporting under
this clause does not arise.(ii) Reporting on revaluation of fixed assets does not arise since the company has no fixed assets.(iii) The Company has not taken any loans, secured or unsecured, from companies, firms or other
parties listed in the register maintained under section 301 of the Companies Act, 1956. Asexplained to us, there are no transactions with the companies under the same management,as defined under the Sub-section (1B) of Section 370 of the Companies Act, 1956.
(iv) The Company has not granted any loans, secured or unsecured, to companies, firms or otherparties listed in the register maintained under section 301 of the Companies Act, 1956. Asexplained to us, there are no transactions with the companies under the same management,as defined under the Sub-section (1B) of Section 370 of the Companies Act, 1956.
(v) The parties to whom loans, or advances in the nature of loans have been given are repayingthe principal amounts as stipulated and are also regular in payment of interest, where applicable.
(vi) In our opinion and according to the information and explanation given to us, there are adequateinternal control procedures commensurate with the size of the Company and the nature of itsbusiness for the purchase of investments, stock-in-trade and sale of stock-in-trade.
(vii) According to the information and explanations given to us, there are no transactions made inpursuance of contracts or arrangements entered in the register maintained under Section 301of the Companies Act, 1956 and aggregating during the year to Rs. 50,000/- or more in value.
(viii) The company has not accepted deposits from the public.(ix) The company has an adequate internal audit system commensurate with its size and nature of
business.(x) Paragraph 4A(xvii) of the order with respect to the Provident Fund laws and Employees State
Insurance Scheme are not presently applicable, to the Company(xi) The Central Government has not prescribed the maintenance of cost records under section
209(1)(d) of the Companies Act, 1956(xii) According to the information and explanation given to us, there were no undisputed amounts
payable as on 31st March 2003 in respect of income tax, wealth tax and customs duty whichwere outstanding for a period of more than six months from the date when they becamepayable.
(xiii) According to the information and explanations given to us, and the records of the Companyexamined by us, no personal expenses have been charged to revenue account, other thanthose payable under contractual obligations or in accordance with the generally acceptedbusiness practices.
(xiv) The Company being an investment company, provisions of paragraph 4A(iii), (iv),(v),(vi),(xii),(xiv)and (xx) of the order are not applicable.
(xv) Since the company has not granted any secured loans and advances, the reporting requirementreferred to in Clause (ii) of Paragraph (D) of the Order are not applicable.
(xvi) In our opinion and according to the information and explanation given to us, the Company hasmaintained proper records of transactions and contracts and has made timely entries therein inrespect of dealings in shares, securities and other investments. Further, all these investmentshave been held by the company in its own name.
(xvii)In our opinion the provisions of any special statute applicable to chit fund, Nidhi or mutualbenefit society do not apply to the company.
SHARP & TANNANChartered Accountants
By the hand of
Place : Mumbai L.VAIDYANATHANDate : 29
th April, 2003 Partner
ANNEXURE TO THE AUDITORS’ REPORT
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered Accountants
L.VAIDYANATHAN R.SRIDHAR Y.M.DEOSTHALEEPartner Secretary R.SHANKAR RAMAN
Mumbai, 29th April, 2003 Chennai, 29th April, 2003
} Directors
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered Accountants
L.VAIDYANATHAN R.SRIDHAR Y.M.DEOSTHALEEPartner Secretary R.SHANKAR RAMAN
Mumbai, 29th April, 2003 Chennai, 29th April, 2003
} Directors
BALANCE SHEET AS AT 31 ST MARCH 2003Sch. As at As at
31.03.2003 31.03.2002Rupees Rupees Rupees Rupees
SOURCES OF FUNDSShareholders’ FundsShare Capital A 840,500,000 840,500,000Loan FundsUnsecured loans: B 875,380,000 37,305,000
TOTAL 1,715,880,000 877,805,000APPLICATION OF FUNDSInvestments C 1349,348,139 657,403,849Current Assets, DLoan and Advances
Cash and bank balances 81,925 14,368Loans and advances 353,038,846 232,403,206
353,120,771 232,417,574Less : Current liabilities Eand provisions
Liabilities 6,390,542 9,880,475Provisions 3,475,372 3,475,372
9,865,914 13,355,847Net Current Assets 343,254,858 219,061,727
Deferred Tax Asset / (Liability) F 13,181 (441,372)Miscellaneous Expenditure(to the extent not written off or adjusted) -Profit & Loss Account 23,263,822 1,780,796
TOTAL 1,715,880,000 877,805,000Significant Accounting Policies 1Notes forming part of Accounts 2
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 ST MARCH 2003Sch. 2002-03 26.2.01 to 31.3.02
Rupees Rupees Rupees Rupees
INCOMEIncome from Operations 50,469 11,863,967
Other Income G 240,366 1,622,454
TOTAL 290,835 13,486,421
EXPENDITUREOperating Expenses H 5,716,648 10,961,498
Interest & Finance Charges I 16,511,766 327,739
Preliminary Expenses written off - 61,236
TOTAL 22,228,414 11,350,473
Profit / (Loss) before taxes (21,937,579) 2,135,948
Provision for taxes
Current Tax - 3,475,372
Deferred Tax (454,553) 441,372
Profit after Tax (21,483,026) (1,780,796)
Add: Balance brought forward fromprevious year (1,780,796) -
Balance carried to Balance Sheet (23,263,822) (1,780,796)
Earnings per share(Basic and diluted) (0.26) (0.02)
Significant Accounting Policies 1
Notes forming part of Accounts 2
L&T HOLDINGS LIMITED
S-63
ISP Haldia (Private) Limited 67,144,290 923,948,139 - 656,153,849(6,714,429 equity shares ofRs.10/- each acquired duringthe year )
Subsidiary companyCyberpark development &Construction Limited(50,000 equity shares of Rs. 10/-each acquired during the year) 500,000 –
Current-QuotedMutual fundsJM Income Fund Growth Plan 1,250,000
115,740 units of Rs. 10/- eachsold during the year –
Kotak Mutual Fund - K Bond Unitscheme 99 Institutional Plan -Growth 16,046,213,094 unitsof Rs. 10/- each acquiredduring the year 250,000,000
JM Mutual Fund - JM High LiquidityFund - Growth Plan10,439,672,947 units of Rs. 10/-each acquired during the year 174,900,000 424,900,000
1,349,348,139 657,403,849
As at As at31.03.03 31.03.02
Quoted investmentsBook value 424,900,000 1,250,000Market value 426,412,945 1,255,787
Unquoted investmentsBook value 924,448,139 656,153,849
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULE - DCurrent Assets, Loans and AdvancesCash and bank balances
Balances with scheduled bankon current account 81,925 14,368
Loans & Advances:Unsecured considered good:Inter Corporate Deposits 70,000,000 17,600,000Advances recoverable in cash or in kind 3,583,136Other Advances 279,455,710 353,038,846 214,803,206 232,403,206
353,120,771 232,417,574
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULE - ECurrent Liabilities and Provisions:Liabilities
Sundry Creditors- Small scale industries- Others 5,991,832 9,555,770- Interest accrued but not due 398,710 6,390,542 324,705 9,880,475
ProvisionsProvision for taxes 3,475,372 3,475,372
9,865,914 13,355,847
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULE - FDeferred Tax Asset / (Liability)Balance brought forward fromprevious year (441,372) -Add : Deferred Tax Liability
for the year - (441,372)Less : Deferred Tax Asset for the year 454,553 13,181 - (441,372)Deferred Tax Asset / (Liability)carried to Balance Sheet 13,181 (441,372)
2002-03 26.2.01 to 31.3.02Rupees Rupees
SCHEDULE - GOther IncomeInterest on intercorporate deposit 240,366 1,622,454(tax deducted at source - Rs. 46,791 -Previous year - Rs.2,87,907)
240,366 1,622,454SCHEDULE - HOperating ExpensesCost of Services 304,699 82,561Rates & Taxes 4,037,969 8,801,000Professional Fees 10,000 1,000,000Service & Agency Fee 1,100,000 -Miscellaneous expenses 263,980 1,077,937
5,716,648 10,961,498SCHEDULE - IInterest & Finance ChargesInterest on fixed loans 10,985,616 327,739Finance charges 5,526,150 -
16,511,766 327,739
SCHEDULES FORMING PART OF ACCOUNTS (Contd...)SCHEDULE 1Significant Accounting Policies:a. Basis of Accounting
The company maintains its accounts on accrual basis following the historical cost conventionand in compliance with the Accounting Standards referred to in Section 211(3C) and theother provisions of the Companies Act, 1956.
b. Revenue Recognition:Income from Investments is accounted when the same is legally due. Sale of Investmentsis accounted for on the basis of contracts with parties.
c. InvestmentsLong term investments are carried at cost, after providing for any diminution in value, ifsuch diminution is of a permanent nature. Current investments are stated at lower of costor market value
d. Stock-in-tradeStock-in-trade is valued at cost or market value whichever is lower.
e. Taxes on incomeTaxes on income for the current period is determined on the basis of taxable incomeand tax credits computed in accordance of the provisions of the Income Tax Act,1961, andbased on expected outcome of assessments / appeals.
Deferred tax is recognized on timing differences between the accounting income and thetaxable income for the year and quantified using the tax rates and laws enacted orsubstantively enacted as on the Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent that there is areasonable certainty that sufficient future taxable income will be available against whichsuch deferred tax assets can be realised.
f. Miscellaneous Expenditure:Preliminary expenses are written off in the year of commencement of operations.
SCHEDULE 2Notes forming part of Accounts1. The company had no transactions during the year with any small scale industrial undertaking
and hence reporting details on outstanding exceeding 30 days and interest on over dueoutstanding does not arise.
2. The company is an investment company and accordingly information required underparagraph 4(C) of Part II of Schedule VI of the Companies Act, 1956 has not been furnished.
3 a. The Redeemable Non convertible Debentures for Rs.50 crores issued during the yearare guaranteed by unconditional irrevocable guarantee by M/s. Larsen & Toubro Limited,the holding company.
b. 8 % Redeemable Non convertible Debentures - Series I of Rs.30,00,00,000 areredeemable at par on 31.03.08 or on exercise of put option by the subscriber.
c. 7.85 % Redeemable Non convertible Debentures - Series II of Rs.20,00,00,000 areredeemable at par on 31.03.06 or on exercise of put option by the subscriber.
d. Since the above debentures are privately placed, creation of Debenture RedemptionReserve does not arise.
4. Unsecured loans from others represent inter-corporate deposit from M/s. Larsen & ToubroLimited, the holding company. The maximum amount outstanding at any time during theyear is Rs. 70,26,50,000 (Previous Year Rs. 4,30,00,000)
5. Auditor’s Remuneration:
2002-03 2001-02Audit fees - Rs. 50,000 Rs. 50,000
Certification - Rs. 3,150 Rs. 1,575
Tax Audit Fee - Rs. 8,925 -
Reimbursement of expenses - Rs. 1,209 -
6. Since the turnover of the Company has not exceeded Rs. 50 crores during the year,reporting under the following Accounting Standards does not arise.
Accounting Standard – 17 - Segment Reporting
Accounting Standard – 18 - Related Party Disclosures
7. Other advances represent advances made against investments in equity shares yet to beallotted by the respective companies.
8. Deferred Tax Liability
Taxes on income have been accounted for as per the Accounting Standard 22, as per thedetails given below:
As at 31.03.03 As at 31.03.02Rupees Rupees
Deferred Tax Liability
Short term capital loss NIL (4,59,375)
Deferred Tax Asset
Preliminary Expenses 13,181 18,003
Net Asset / (Liability ) 13,181 (4,41,372)Net incremental credit accrued in
the profit & loss account (4,54,553)
9. The company has given the following undertakings jointly with Larsen & Toubro Limited(holding company), to the term lenders of L&T Transportation Infrastructure Limited (LTTIL)and Narmada Infrastructure Construction Enterprise Limited (NICE), the subsidiarycompanies of Larsen & Toubro Limited:
i. not to reduce their joint shareholding in LTTIL & NICE below 51% until the financialassistance received from the term lenders is repaid in full by LTTIL & NICE and
ii. to jointly meet the shortfall in the Working Capital requirements of LTTIL & NICE untilthe financial assistance received from the term lenders is repaid in full by LTTIL &NICE.
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
L&T HOLDINGS LIMITED
S-64
7 Investor group-wise classification of all investments(current and long term) in shares and securities (bothquoted and unquoted):Please see note 3 belowCategory Market Value / Book Value
Break up or fair (Net ofvalue or NAV Provisions)
1. Related Parties **(a) Subsidiaries 5.00(b) Companies in the same group 6,561.54(c) Other related parties 2,671.44
2. Other than related parties 6.50Total 9,244.48** As per Accounting Standard of ICAI (Please see Note 3)
8 Other informationParticulars Amount(i) Gross Non-Performing Assets -(ii) Net Non-Performing Assets -
(a) Related parties(b) Other than related parties
(iii) Assets acquired in satisfaction of debt -
Notes forming part of Accounts (Contd...)10. Schedule to the Balance Sheet of a Non-Banking Financial Company
[as required in terms of Paragraph 9BB of Non-Banking Financial Companies PrudentialNorms (Reserve Bank) Directions, 1998]
(Rs. in lakhs)Amount Amount
Outstanding OverdueLiabilities side :1 Loans and advances availed by the NBFCs inclusive of
interest accrued thereon but not paid:(a) Debentures : Secured
: Unsecured 5,000.00 -(other than falling within the meaning of public deposits*)
(b) Deferred Credits - -(c) Term Loans - -(d) Inter-corporate loans and borrowing 3,753.80(e) Commercial Paper - -(f) Public Deposits* - -(g) Other Loans (specify nature) - -
* Please see Note 1 below2 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 - -
* Please see Note 1 belowAssets side :
Amountoutstanding
3 Break-up of Loans and Advances including bills receivables[other than those included in (4) below] :(a) Secured -(b) Unsecured 3,530.39
4 Break up of Leased Assets and stock on hire andhypothecation loans counting towards EL/HP activities(i) Lease assets including lease rentals under sundry debtors:
(a) Financial lease -(b) Operating lease -
(ii) Stock on hire including hire charges under sundry debtors: -(a) Assets on hire -(b) Repossessed Assets -
(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 4,249.00(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 investments :1. Quoted :
(i) Share : (a) Equity -(b) Preference -
(ii) Debentures and Bonds -(iii) Units of mutual funds -(iv) Government Securities -(v) Others (Please specify) -
2. Unquoted :(i) Share : (a) Equity 9,244.48
(b) Preference -(ii) Debentures and Bonds -(iii) Units of mutual funds -(iv) Government Securities -(v) Others (Please specify) -
6 Borrower group-wise classification of all leased assets,stock-on-hire and loans and advances :Please see Note 2 belowCategory Amount net of provisions
Secured Unsecured Total1. Related Parties **
(a) Subsidiaries - - -(b) Companies in the same group - - -(c) Other related parties - 454.56 454.56
2. Other than related parties - 3,075.83 3,075.83
Total - 3,530.39 3,530.39
11. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Net Current Assets
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Miscellaneous Expenditure
U 6 5 9 9 3 T N 2 0 0 1 P L C 4 6 6 9 1
3 1 0 3 2 0 0 3
1 8
N I L
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
Secured Loans
N I L
N I L
1 7 1 5 8 8 0
Net Fixed Assets
Registration No.
Balance Sheet Date
Deferred Tax Asset / (Liability)
Turnover (incl. other income) Total ExpenditureIV. Performance of Company (Amount in Rs. Thousands)
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Dividend Rate %Earnings per share (in Rs.) (Basic)
2 1 4 8 3
0 . 2 6
1 7 1 5 8 8 0
8 4 0 5 0 0 N I L
8 7 5 3 8 0N I L
N I L 1 3 4 9 3 4 8
3 4 3 2 5 5 N I L
2 9 1 2 2 2 2 8+ -ü
+ -ü
ü
V. Names of three Principal Products / Services of Company (as per monetary terms)Item Code No. (ITC Code)
N A
Product Description
12. Figures for the previous period have been regrouped / reclassified wherevernecessary and are not comparable as the previous period figures are for morethan twelve months being the first period of operations.
1 3
N I L
+ -
Accumulated Losses
2 3 2 6 4
2 1 9 3 7
I N V E S T M E N T I N S E C U R I T I E S
As per our report attachedSHARP & TANNANChartered Accountants
L.VAIDYANATHAN R.SRIDHAR Y.M.DEOSTHALEEPartner Secretary R.SHANKAR RAMAN
Place : Mumbai Place : ChennaiDated : 29th April, 2003 Dated : 29th April, 2003
} Directors
I. Registration Details
L&T EQUIPMENT LEASING COMPANY LIMITED
S-65
Annexure ‘A’ to the Directors’ Report(Additional information given in terms of notification issued by the Department of Company Affairs)FOREIGN EXCHANGE EARNINGS & OUTGOActivities relating to exports; initiatives taken to increase exports; development of new exportmarkets for products and services; and export plans :-The Company does not envisage any foreign exchange earnings in the immediate future.Total Foreign Exchange used and earned:
2002-03 2001-02Foreign Exchange earned Nil NilForeign Exchange used Rs 16,50,000 Rs. 258,94,671AUDITORS’ REPORTTO THE MEMBERS OF L&T EQUIPMENT LEASING COMPANY LIMITEDWe have audited the attached Balance Sheet of L&T Equipment Leasing Company Limited as at31st March, 2003 and also the Profit & Loss Account of the Company for the year ended on thatdate annexed thereto. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements based onour audit.We conducted our audit in accordance with the auditing standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An audit includes examining, ona test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by themanagement, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.1. As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 issued
by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956(hereinafter referred to as the Act), we enclose in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph (1) above, we report that:a. we have obtained all the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;b. in our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;c. the Balance Sheet and the Profit and Loss Account dealt with by this report are in
agreement with the books of account;d. in our opinion, the said Balance Sheet and the Profit and Loss Account, have been
prepared in compliance with the accounting standards as prescribed under the provisionsof Section 211(3C) of the Act to the extent applicable;
e. on the basis of written representations received from the Directors, (as on 31st March,2003 ) and taken on record by the Board of Directors, we report that none of the Directorsis disqualified as on 31st March, 2003 from being appointed as a Director of the Companyin terms of Section 274 (1) (g) of the Act; and
f. in our opinion and to the best of our information and according to the explanations givento us the said accounts read together with the Significant Accounting Policies in Schedule‘1’, and other notes appearing in Schedule ‘2’ and elsewhere in the accounts give theinformation required by the Act, in the manner so required and give a true and fair view inconfirmity with the accounting principles generally accepted in India:(i) In the case of the Balance Sheet, of the state of the Company’s affairs as at 31st
March, 2003; and(ii) In the case of the Profit and Loss Account, of the Profit of the Company for the year
ended on that date.For SHARP & TANNAN
Chartered AccountantsBy the hand of
Chennai, L.VAIDYANATHANDated : 13
th May, 2003 PARTNER
ANNEXURE TO THE AUDITORS’ REPORTAs required by the Manufacturing and Other Companies (Auditors’ Report) Order, 1988 issued bythe Government of India under Section 227 (4A) of the Companies Act, 1956, we report as under:1 The Company is maintaining proper records to show full particulars including quantitative
details and situation of fixed assets. The company has physically verified the assets duringthe year and no discrepancies were noticed on such verification.
2 The fixed assets have not been revalued during the year.3 The Company has not taken any loans, secured or unsecured from companies, firms or other
parties listed in the register maintained under Section 301 of the Companies Act, 1956. Asexplained to us there are no companies under the same management as defined under Sub-section (1B) of Section 370 of the Companies Act, 1956.
4 The Company has not granted any loans, secured or unsecured, to companies, firms or otherparties listed in the register maintained under Section 301 of the Companies Act, 1956. Asexplained to us there are no companies under the same management as defined under Sub-section (1B) of Section 370 of the Companies Act, 1956.
5 The Company has not granted any loans or advances in the nature of loan to any party.6 In our opinion and according to the information and explanations given to us, there is an
adequate internal control procedure commensurate with the size of the said Company and thenature of its business for the purchase of fixed assets and other assets and for lease rentals.
7 There were no purchases of goods and materials and sale of goods and materials andservices during the year aggregating to Rs 50,000/- or more in respect of each party made inpursuance of contracts or arrangements entered in the register maintained under section 301of the Companies Act, 1956.
8 The Company has not accepted any deposit from the public and hence the provisions ofSection 58A of the Companies Act, 1956 and the rules framed there under do not apply to theCompany.
9 We are of the opinion that the company has an internal audit system commensurate with itssize and the nature of its business.
10 The company has covered its employees under the provident fund since 1st January 2003 andhas been regular in remitting the dues. The provisions of Employee State Insurance Actpresently do not apply to the company.
L&T EQUIPMENT LEASING COMPANY LIMITEDDIRECTORS’ REPORTThe Directors have pleasure in presenting their Annual Report and Accounts for the year ended31st March 2003.FINANCIAL RESULTS
Rupees2002-03 2001-02
Profit before depreciation and tax 4,38,82,604 2,13,29,904Less : Depreciation on Fixed Assets 2,01,15,565 1,17,44,703Profit before tax 2,37,67,040 95,85,201Provision for tax (current tax and deferred tax): 1,03,09,200 42,61,840Profit after tax 1,34,57,840 53,23,361Add : Balance brought forward from previous period 56,42,931 5,23,935Balance carried forward to Reserves & Surplus 1,91,00,771 58,47,296YEAR IN RETROSPECTThe Company had acquired concreting equipment, crushers and impactors mainly based on therequirements of the holding company.The Income (including other income) for the financial year under review was Rs.677 lakhs registeringa growth of above seventy five percent over the previous year. The Company has posted goodresults on account of the high deployment of assets during the year.FINANCEDuring the year 2002-03 the company had swapped off the loan availed from the Bank of NovaScotia Rs.10.5 Crores (Interest @ 12% per annum) with the term loan from Federal Bank (Interest@ 9.5% Floating rate, per annum). Total term loan drawn as on 31st March 2003 was Rs. 12.77crores.The net profit before providing for tax for the year ended 31st March 2003 was Rs.237.67 lacs.Provision has been made for deferred tax liability as detailed in the Notes forming part of theAccounts in compliance with the relevant Accounting Standards.CAPITAL EXPENDITUREDuring the year, your Company has equipped itself with sophisticated, state-of-the-art crushers,impactors, batching plants, mini-mixers and generator sets. As at 31st March 2003, the gross fixedassets stood at Rs. 2,222.09 lakhs after additions of Rs 707.02 lakhs and the net fixed assets atRs. 1,871.02 lakhs excluding capital work in progress of Rs.74.97 lakhs.OUTLOOKYour Company will continue to cater to the equipment needs of the Construction Division of Larsen& Toubro Limited. The asset base is expected to grow to around Rs.39 crores by the end of 2003-04. The company will also endeavour to maximise the utilisation of spare capacity of equipment ofthe said division by hiring out the same to the external market.DISCLOSURE OF PARTICULARSAs the Company is engaged in leasing of equipment, there are no particulars to be disclosed asper the Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988,relating to conservation of energy and technology absorption.Information relating to foreign exchange earnings and outgo are given in Annexure “A” forming partof this Report.PERSONNELThere were no employees during the year covered under the provisions of Section 217 (2A) of theCompanies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended.DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirms:i. that in the preparation of the annual accounts, the applicable accounting standards have been
followed along with proper explanation for material departures, if any;ii. that the directors have selected such accounting policies and applied them consistently and
made judgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2003 and of the profit of theCompany for the year ended on that date;
iii. that the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. that the directors have prepared the annual accounts on a going concern basis.AUDIT COMMITTEEThe Audit Committee consists of three non-executive Directors, Mr.K.Venkataraman, Mr. K.G.Hariharan and Mr. R.Shankar Raman. Mr.K.Venkataraman is the Chairman of the Audit Committee.The role, terms of reference, the authority and power of Chairman are in conformity with therequirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors on internalcontrol systems and internal audit report.DIRECTORSMr K G Hariharan retires from the Board of Directors by rotation and is eligible for re-appointment.AUDITORSThe Auditors, M/s Sharp & Tannan, Chartered Accountants, hold office until conclusion of theensuing Annual General Meeting and are recommended for re-appointment. Certificate from theAuditors has been received to the effect that their re-appointment, if made, would be within theprescribed limits under Section 224 (1B) of the Companies Act, 1956.ACKNOWLEDGEMENTThe Directors are pleased to place on record their appreciation of the cooperation extended by UTIBank and The Federal Bank Limited. The Directors also place on record their appreciation of thevaluable contribution made by the staff of the Company and the employees of Larsen & ToubroLimited.
For and on behalf of the Board of Directors
J.P.NAYAKK.VENKATARAMANK.G.HARIHARAN
Place : ChennaiDate : 13th May, 2003
Directors}
L&T EQUIPMENT LEASING COMPANY LIMITED
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PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 st MARCH 20032002-2003 2001-2002
Schedule Rupees Rupees Rupees RupeesSOURCES OF FUNDSINCOMELease rentals 65,901,473 37,715,025Sales - Trading 1,650,000 -Other Income H 182,964 1,044,455
TOTAL 67,734,437 38,759,480EXPENDITUREPurchases - Trading 1,650,000 -Operating & Administrative Expenses I 7,267,681 9,038,597Staff Expenses J 268,465 1,066,696Interest & Finance Charges K 14,665,686 7,324,283Depreciation 20,115,565 11,744,703
TOTAL 43,967,397 29,174,279
PROFIT BEFORE TAX 23,767,040 9,585,201PROVISION FOR TAXESCurrent Tax 1,871,654 733,268Deferred Tax 8,437,546 3,528,572
10,309,200 4,261,840PROFIT AFTER TAX 13,457,840 5,323,361Add: Balance brought forwardfrom previous year 5,642,931 523,935Less : Deferred tax liability upto 01.04.01 - 204,365BALANCE CARRIED TO BALANCE SHEET 19,100,771 5,642,931
Earnings per equity share (Basic & diluted) 2.69 1.06Significant Accounting Policies 1Notes Forming Part of Accounts 2
11 According to the information and explanations given to us, there were no undisputed amountspayable in respect of income tax, wealth tax, sales tax, customs duty and excise duty, whichwere outstanding as at 31st March 2003, for a period of more than six months from the datethey became payable.
12 According to the information and explanations given to us and the records of the Companyexamined by us, no personal expenses have been charged to revenue account other thanthose payable under contractual obligations or in accordance with the generally acceptedbusiness practices.
13 In respect of service activities, the Company has a reasonable system of recording receiptsand operating expenses to the respective contracts commensurate with its size and nature ofits business. The system provides for a reasonable allocation of stores and operating expensesand man-hours for respective contracts commensurate with its size and nature of business. Inour opinion, there is a reasonable system of authorisation at proper levels and adequatesystem of internal control commensurate with the size of the Company and the nature of itsbusiness on the allocation of operating expenses and stores to contracts.
14 The Company is not a sick Company within the meaning of clause reporting under Section3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985.
15 Clauses (iii), (iv), (v), (vi), (xii), (xiv), (xvi), and (xxi) of para 4A of the aforesaid Order are notapplicable for the year.
For SHARP & TANNANChartered Accountants
By the hand of
Chennai, (L.VAIDYANATHAN)Dated : 13
th May, 2003 Partner
BALANCE SHEET AS AT 31 st MARCH 2003
As at 31.03.2003 As at 31.3.2002Schedule Rupees Rupees Rupees Rupees
SOURCES OF FUNDSShareholders’ FundsShare Capital A 50,000,060 50,000,060Reserves & Surplus B 19,100,771 69,100,831 5,642,931 55,642,991Secured Loans C 127,719,421 100,000,000
TOTAL 196,820,252 155,642,991APPLICATION OF FUNDSFixed Assets DGross Block 222,209,750 151,515,534Less Depreciation 35,107,545 14,993,057Net Block 187,102,205 136,522,477Capital Work-in-Progress 7,497,514 21,850,422
194,599,719 158,372,899Current Assets, Loans &Advances ESundry Debtors 10,460,509 3,218,244Cash & Bank Balances 2,271,540 12,239,839Loans & Advances 14,465,405 1,734,762
27,197,454 17,192,845Less Current Liabilities &Provisions FLiabilities 10,150,765 15,405,733Provisions 2,655,673 784,083
12,806,438 16,189,816Net Current Assets 14,391,016 1,003,029Deferred Tax Liability G (12,170,483) (3,732,937)
TOTAL 196,820,252 155,642,991Significant Accounting Policies 1Notes Forming Part of Accounts 2
SCHEDULE D (Rupees)
GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK
FIXED ASSETS As at Additions Dedu- As at As at For the Year Dedu- As at As at As at31.3.2002 ctions 31.03.2003 31.03.2002 31.03.2003 ctions 31.03.2003 31.03.2003 31.03.2002
Plant & Machinery 129,023,612 70,651,216 - 199,674,828 11,619,851 16,466,568 - 28,086,419 171,588,409 117,403,761
Office Equipments 460,651 51,000 8,000 503,651 115,458 77,728 1,077 192,109 311,542 345,193
Vehicles 22,031,271 - - 22,031,271 3,257,748 3,571,269 - 6,829,017 15,202,254 18,773,523
Total 151,515,534 70,702,216 8,000 222,209,750 14,993,057 20,115,565 1,077 35,107,545 187,102,205 136,522,477
Previous year 74,214,335 77,301,199 - 151,515,534 3,248,354 11,744,703 - 14,993,057 - -
Add: Capital Work-in-Progress 7,497,514 21,850,422
194,599,719 158,372,899
As per our report attachedSHARP & TANNANChartered Accountantsby the hand of S.J. PUNNOSE J.P. NAYAK
Manager K. VENKATARAMANL. VAIDYANATHAN S. SRINIVASAN K.G. HARIHARANPartner Secretary
Place : ChennaiDate : 13th May, 2003
Directors}
SCHEDULES FORMING PART OF ACCOUNTSAs at 31.03.2003 As at 31.3.2002
Rupees Rupees Rupees RupeesSCHEDULE ASHARE CAPITALAuthorised:1,00,00,000 Equity shares of Rs.10/- each 100,000,000 100,000,000Issued, Subscribed and Paid-up :50,00,006 Equity shares Rs.10/- each fully paid-up 50,000,060 50,000,060[All the shares are held by Larsen & Toubro Limited(the holding company) and its nominees] 50,000,060 50,000,060
SCHEDULE BRESERVES & SURPLUSProfit & Loss Account 19,100,771 5,642,931
19,100,771 5,642,931SCHEDULE CSECURED LOANSTerm LoanFrom Federal Bank * 127,719,421 -From Bank of Nova Scotia ** - 100,000,000
127,719,421 100,000,000*(Secured by hypothecation of specific plant andmachinery and vehicles purchased out of the loan)**(Secured by hypothecation of goods and book debts)
As per our report attachedSHARP & TANNANChartered Accountantsby the hand of S.J. PUNNOSE J.P. NAYAK
Manager K. VENKATARAMANL. VAIDYANATHAN S. SRINIVASAN K.G. HARIHARANPartner Secretary
Place : ChennaiDate : 13th May, 2003
Directors}
L&T EQUIPMENT LEASING COMPANY LIMITED
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SCHEDULES FORMING PART OF ACCOUNTS (contd...)As at 31.03.2003 As at 31.3.2002
Rupees Rupees Rupees RupeesSCHEDULE ECURRENT ASSETS, LOANS & ADVANCESCurrent Assets:Sundry DebtorsUnsecured, Considered GoodOutstanding for more than six months -Others 10,460,509 3,218,244
10,460,509 3,218,244Cash and Bank Balances:Balances with Scheduled banksOn current accounts 629,549 8,141,384On fixed deposits includinginterest accrued thereon 1,641,991 4,098,455(includes deposit of Rs 6,466 pledgedas security with 2,271,540 12,239,839Sales-tax Authorities;Previous year: Rs 5,884)Loans and Advances:Unsecured, Considered GoodAdvances recoverable in Cash orin kind or for value to be received 4,458,282 1,734,762Inter-Corporate Deposit 10,000,000 -
14,458,282 -Other Current AssetsInterest accrued onInter-corporate deposit 7,123 -
27,197,454 17,192,845SCHEDULE FCURRENT LIABILITIES AND PROVISIONSLiabilitiesSundry creditorsDue to Small Scale Industrial undertakings - -Others 10,150,765 12,769,842
10,150,765 12,769,842Interest accrued but not due onterm loan from bank - 2,635,891
10,150,765 15,405,733ProvisionsFor Taxation 2,653,437 781,783For Leave Encashment 2,236 2,655,673 2,300 784,083
12,806,438 16,189,816SCHEDULE GDEFERRED TAX LIABILITYLiability as on 1.4.2002 3,732,937 204,365Add: Deferred Tax Liability for the year 8,437,546 3,528,572
12,170,483 3,732,937
12,170,483 3,732,937
2002-03 2001-02Rupees Rupees
SCHEDULE HOTHER INCOMEInterest Income 171,743 516,254(Tax deducted at Source Rs.35,873/- (Previous year Rs.1,10,348/-)Miscellaneous Receipts 11,221 528,201
182,964 1,044,455SCHEDULE IOPERATING & ADMINISTRATIVE EXPENSESFuel and lubricants 224,932 1,494,217Rates and taxes 714,553 784,147Repairs & Maintenance - Plant & Machinery 316,740 208,006Insurance 1,619,063 1,025,335Travel and conveyance 454,890 643,460Cost of Administrative services 695,223 1,247,730Cost of Services 2,528,017 2,800,425Loss on sale of office equipment 5,423 -Miscellaneous expenses 708,840 835,277
7,267,681 9,038,597SCHEDULE JSTAFF EXPENSESSalaries and wages 257,303 1,062,646Contribution to Employee’s Provident Fund 7,472 -Staff welfare expenses 1,454 -Leave Encashment 2,236 4,050
268,465 1,066,696SCHEDULE KINTEREST & FINANCE CHARGESInterest on fixed loans 11,890,686 7,324,283Finance Charges 2,775,000 -
14,665,686 7,324,283
SCHEDULE - 1SIGNIFICANT ACCOUNTING POLICIES1. Basis of Accounting
The Company maintains its accounts on accrual basis following the historical cost conventionand in compliance with the Accounting Standards referred to in Section 211(3C) and the otherprovisions of the Companies Act, 1956.
2. Revenue from Operating LeasesLease income from operating leases entered into after 1st April 2001 are recognised onstraight-line basis over the lease term. In other cases, lease charges are accounted for onactual usage of the asset and the recoverability of the amount is certain.
3. Retirement benefitLeave encashment is provided on accrual basis.
4. Fixed AssetsFixed assets are stated at original cost.
5. DepreciationDepreciation on assets are provided on straight-line basis at the rates and in the mannerprescribed in Schedule XIV of the Companies Act, 1956 and assets given on lease aredepreciated at 5% to 17% which are higher than the rates specified in Schedule XIV of theCompanies Act, 1956. Depreciation on additions/ deductions is calculated pro rata from/ to themonth of additions/ deductions.
6. Miscellaneous ExpenditurePreliminary expenses are written off in the year of commencement of operations.
7. Taxes on IncomeTax on income for the current period is determined on the basis of taxable income and taxcredits computed in accordance of the provisions of the Income Tax Act, 1961, and based onexpected outcome of assessments / appeals.Deferred tax is recognized on timing differences between the accounting income andthe taxable income for the year and quantified using the tax rates and laws enacted orsubstantively enacted as on the Balance Sheet date.Deferred tax assets are recognized and carried forward to the extent that there is a reasonablecertainty that sufficient future taxable income will be available against which such deferred taxassets can be realised.
SCHEDULE - 2NOTES FORMING PART OF ACCOUNTS1. Estimated amount of contracts remaining to be executed on capital account and not
provided for (net of advances) Rs. 4,83,31,908/- (Previous year: Rs. 88,60,314/-)2. The company is a service company and accordingly information required under paragraph
4(C) of Part II of Schedule VI to the Companies Act, 1956 has not been furnished.3. Auditor’s remuneration (excluding service tax):
2002-03 2001-02Rs. Rs.
Audit Fees 60,000 50,000Tax Audit Fees 10,000 10,000Certification work 4,000 3,500
4. Value of imports (on C.I.F. basis):Capital goods NIL 2,59,01,452Trading goods 16,50,000 NIL
5. The Company is governed by the provisions of Section 115JB of the Income Tax Act 1961.Accordingly provision for current Income tax has been made under Minimum Alternate Tax.
6. As per Accounting Standard 22 on Taxes on Income – the company has a deferred tax liabilityas per details given below:
As at 31.03.03 As at 31.03.02Rs. Rs.
Deferred Tax liabilitiesDifference between carrying amountof fixed assets in the books and theincome tax return. 1,88,76,303 1,04,53,783
1,88,76,303 1,04,53,783Less: Deferred tax assetsUnpaid statutory liability debitedto Profit and loss account - 845Unabsorbed loss / deprecationas per income tax return 66,18,230 65,85,412Difference between carryingamount of preliminary expensesnot written off 87,590 1,34,589
67,05,820 67,20,846Net deferred tax liability 1,21,70,483 37,32,937Net Increase in deferred tax Liability charged to profit and loss account for the year(2002-03) 84,37,546/-
7. No provision has been made for wealth-tax, as there is no taxable wealth under the provisionof Wealth Tax Act, 1957.
8. Manager’s salary and perquisites amounting to Rs.1.22 Lakhs (Last Year: Rs.NIL) have beencharged to the accounts.
9. Disclosure is made under Accounting Standard 19 for operating leases as under:a) Gross value of assets and accumulated depreciation as on balance sheet date:
2002-03 2001-02Rs. Rs.
- Gross value of assets:Plant & machinery 19,96,74,828 12,90,23,612Vehicles 2,20,31,271 2,20,31,271
- Accumulated depreciationPlant & machinery 2,80,86,419 1,16,19,851Vehicles 68,29,017 32,57,748
b) The total lease income recognised in the Profit and Loss Account for the year is Rs6,59,01,473 (previous year : Rs. 377,15,025). No contingent rents are included in theProfit & Loss Account for the year (previous year: Rs. Nil).
c) The Company generally provides construction equipment on operating lease for varyingperiods and the lease can be renewed as per mutual agreement. Contractually, thelessee has the option to reduce the lease period and hence the agreements are treatedas cancellable in nature.
L&T EQUIPMENT LEASING COMPANY LIMITED
S-68
NOTES FORMING PART OF ACCOUNTS (contd...)
10. Earnings per equity share is determined based on the basic earnings per equity share afterconsidering provision for current and deferred tax for the year and the weighted averagenumber of equity shares outstanding during the year as per Accounting Standard 20.Earnings per share (basic & diluted):
2002-03 2001-02Profit after tax Rs.1,34,57,839/- Rs.53,23,361/-Weighted average numberof equity shares outstanding 50,00,006 50,00,006Earnings Per Share Rs.2.69 Rs.1.06
11. Accounting Standard 18 on Related Party Disclosures is not applicable since the turnover ofthe Company does not exceed Rs.50 crores for the year.
12. The company has covered its employees under provident fund since 1st January 2003 andhas remitted the contributions to Larsen & Toubro Officers and Supervisory Staff ProvidentFund.
13. During the year, the company has placed Rs.100 Lacs as Inter-Corporate Deposit with Larsen& Toubro Limited, Mumbai. (Maximum amount outstanding during the year is Rupees 100Lacs Only)
14. Finance charges include Rs.20 Lacs paid towards compensation for pre-closure of term loan.
15. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details:
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Total Assets
Reserves & Surplus
1 8 - 4 4 9 1 6
3 1 0 3 2 0 0 3
1 8
N I L
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Secured Loans
N I L
N I L
1 9 6 8 2 0
Registration No.
Balance Sheet Date
1 9 6 8 2 0
5 0 0 0 0 1 9 1 0 1
1 2 7 7 1 9
Net Current Assets
Investments
Miscellaneous Expenditure
Application of FundsNet Fixed Assets
Accumulated Losses
Turnover (incl. other income) Total ExpenditureIV. Performance of Company (Amount in Rs. Thousands)
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Dividend Rate %Earnings per share (in Rs.)
2 3 7 6 7 1 3 4 5 8
2 . 6 9
1 9 4 5 9 9
1 4 3 9 1
6 7 7 3 4 4 3 9 6 7+ -ü
+ -ü
+ -ü
V. Generic Names of Three Principal Products/Services of the Company (As permonetary terms)Item Code No.
N A
Product Description
N I L
N I L
N I L
N I L
H I R I N G O F
E Q U I P M E N T
Deferred Tax Liability
- 1 2 1 7 0
16. Figures for the previous year have been regrouped or re-classified wherever necessary.
As per our report attachedSHARP & TANNANChartered Accountantsby the hand of S.J. PUNNOSE J.P. NAYAK
Manager K. VENKATARAMANL. VAIDYANATHAN S. SRINIVASAN K.G. HARIHARANPartner Secretary
Place : ChennaiDate : 13th May, 2003
Directors}
INDIA INFRASTRUCTURE DEVELOPERS LIMITED
INDIA INFRASTRUCTURE DEVELOPERS LIMITEDDIRECTORS’ REPORT
The Directors have pleasure in presenting their Report and Audited Accounts for the year ended31st March, 2003.1. FINANCIAL RESULTS
Year ended Year ended31-03-2003 31-03-2002(Rs.lakhs) (Rs.lakhs)
Gross Income 6799.39 7362.23Profit before depreciation 2555.49 2189.61Depreciation 2574.79 2717.65Loss before tax (19.30) (528.03)Less : Provision for taxation
- Current year (short provision for prior year) Nil 4.10- Deferred tax liability Nil 428.80
Profit/(Loss) after taxation (19.30) (960.93)Less : Deferred tax liability Nil 2048.60Add : Deferred tax liability for prior 2477.39 Nil
Years (no longer required) written backAdd : Debit balance brought forward (3920.53) (911.00)
From previous yearsLoss carried forward to Balance Sheet (1462.44) (3920.53)
2. DIVIDENDThe Directors do not recommend payment of any dividend for the year.
3. YEAR IN RETROSPECT/ PERFORMANCE OF THE COMPANYThe company was formed to provide 2 X 45 MW captive cogeneration plant on lease to IndianPetrochemicals Corporation Limited at Gandhar. The lease rentals are received in time.
4. DEPOSITSDuring the period under review the Company has not accepted any deposits from the public.
5. AUDITORS’ REPORTAs regards Auditors’ comment vide para 2 (iv) & (v) of the Auditors’ Report in respect ofAccounting for Taxes on Income, the Company has relied on the interim injunction dated 6th
December, 2001 restraining the Institute of Chartered Accountants of India from implementingthe Accounting Standard-22, “Accounting for Taxes on Income” with reference to Non-BankingFinance Companies, issued by the High of Judicature at Chennai. A detailed note to this effectis attached to the Notes forming part of the Accounts. (Refer Schedule No. 8, Note No. 5)There are no other qualifications in the Auditors’ Report to the Shareholders.The notes to the accounts referred to in the Auditors’ Report are self explanatory and thereforedo not call for any further comments of Directors.
6. DISCLOSURE OF PARTICULARSAs the Company is engaged in leasing activities, there are no particulars to be disclosed asper the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
7. OTHER DISCLOSURESPursuant to Clause 34 of NSE (Debt Market Segment) Listing Agreement, a report on CorporateGovernance is given in Anexure "A".
8. PERSONNELThere are no employees covered by the provisions of the Section 217(2A) of the CompaniesAct, 1956 read with the Companies (Particulars of Employees) Rules,1975.
9. DIRECTORS RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i) that in the preparation of the annual accounts, the applicable accounting standards have
been followed and there has been no material departure;ii) that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31, 2003 and of the profit of theCompany for the year ended on that date;
iii) that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the annual accounts have been prepared on a going concern basis.10. DIRECTORS
At the meeting held on 24th January, 2001, Mr.V.K. Magapu was appointed as a Director ofthe Company in the casual vacancy caused by the resignation of Mr.A.M. Naik. He will holdoffice upto the date of the Annual General Meeting when Mr.A.M. Naik would have retired byrotation, and is eligible for re-appointment. The Company has received a notice from a memberunder the provisions of Section 257 of the Companies Act, 1956 proposing the candidatureof Mr.V.K.Magapu for the office of a Director.Mr.K.Venkataramanan retires from the Board of Directors by rotation and is eligible for re-appointment.
11. AUDIT COMMITTEEThe Audit Committee consists of three non executive directors. The present members of theCommittee are Mr.K.Venkataramanan, Mr.V.K.Magapu and Mr.N.Sivaraman.Mr. K. Venkataramanan is the Chairman of the Committee. The role, terms of reference, theauthority and power of Chairman are in conformity with the requirements of the CompaniesAct, 1956.The Committee met periodically during the year and had discussions with the auditors oninternal control systems and internal audit report.
12. AUDITORSThe Auditors, M/s.Sharp & Tannan, hold office until the conclusion of the ensuing AnnualGeneral Meeting and are recommended for re-appointment. Certificate from the auditors hasbeen received to the effect that their re-appointment, if made, would be within the limitsprescribed under Section 224(1B) of the Companies Act, 1956.
13. NON-BANKING FINANCIAL COMPANIES AUDITORS’ REPORT (RESERVE BANK)DIRECTIONS, 1998Pursuant to the Non-Banking Financial Companies Auditors’ Report (Reserve bank) Directions,1998, a report from the statutory auditors to the Board of Directors has been received by yourCompany. This report has certified that the Company has complied with all the Directions andPrudential Norms as prescribed under the Reserve Bank of India Act, 1934.
14. ACKNOWLEDGEMENTSThe Directors acknowledge the invaluable support extended to the Company by the FinancialInstitutions, Bankers, and the customers.
For and on behalf of the Board
K.VENKATARAMANANPlace : Mumbai V.K.MAGAPUDate : 10th May, 2003 N.SIVARAMAN
Directors}
INDIA INFRASTRUCTURE DEVELOPERS LIMITED
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Annexure ‘A’ to Directors’ ReportCORPORATE GOVERNANCE(a) Company’s philosophy
The Company firmly believes in and continues to practice good Corporate Governance.The Company’s essential character is shaped by the very values of transparency,professionalism and accountability. The Company continuously endeavors to improve onthese aspects on an ongoing basis.
(b) Board of DirectorsThe Board of Directors comprises of 3 Non-Executive Independent Directors.During the year, 6 Board Meetings were held on 24-05-02, 31-07-02, 29-10-02, 23-12-02,06-01-03 and 29-01-03.The attendance of Directors at Board Meetings held during the year and at the last AnnualGeneral Meeting as also number of other directorships/ memberships of committees are asfollows:
Name of Director No. of Attendance No. of otherBoard at last AGM Director Committee Membershipmeetings Ships Member Chairmanattended
Mr. K. Venkataramanan 6 Yes 10 1 2Mr. V. K. Magapu 5 No 4 3 -Mr. N. Sivaraman 6 No 4 3 -
(c) Audit Committee:1. Terms of reference:
The terms of reference of Audit Committee includes review and discussions with theauditors about internal control systems, the scope of audit including the observationsof the auditors, and the review of quarterly, half yearly and annual financial statementsbefore they are submitted to the Board of Directors.
2. Composition:The Audit Committee of the Board of Directors was formed in 2001 and as on todayit comprises of 3 Non- Executive Independent Directors. The Committee met 3 timesduring the year and the attendance of Members at the Meeting was as follows:Name of Member Status No. of Meetings AttendedMr. K. Venkataramanan Chairman 3Mr. V.K. Magapu Member 3Mr. N. Sivaraman Member 3The Company Secretary is the Secretary of the Committee.
(d) Remuneration of Directors:No remuneration was paid to the Directors during the year.
(e) General Body Meetings:The last three General Meetings were held as under:
Financial Year Date Time Location2001-02 27.9.02 10.00 A.M. L&T House, Ballard Estate, Mumbai – 400 0012000-01 27.9.01 3.00 P.M. L&T House, Ballard Estate, Mumbai – 400 0011999-00 31.8.00 9.00 A.M. L&T House, Ballard Estate, Mumbai – 400 001
No special resolutions were required to be put through postal ballot last year.No special resolutions on matters requiring postal ballot are placed for shareholders’ approvalat the ensuing Annual General Meeting.
(f) Disclosures:1. During the year, there were no transactions of material nature with the directors or the
management or their subsidiaries or relatives that had potential conflict with the interestof the Company.
2. There were no instances of non-compliance on any matter related to the capital markets,during the last 3 years.
(g) Means of Communication:1. Quarterly results are published in prominent daily newspapers viz. Free Press Journal
and Navshakti.2. Management Discussion & Analysis forms part of the Annual Report sent to the
shareholders.(h) General Shareholders Information:
1. Annual General Meeting will be held on : 22nd August, 20032. Financial Calendar:
Annual results of previous year Mid MayFirst Quarterly results End JulySecond Quarterly results End OctoberThird Quarterly results End January
3. Dates of Book Closure: 13th August, 2003 to 22nd August, 2003 (both days inclusive)4. Listing of equity shares/debentures on Stock Exchanges at: The Debentures are
listed in the wholesale Debt Market Segment of the National Stock Exchange of IndiaLimited (NSE). The equity shares of the Company are not listed on the Stock Exchange.
5. Distribution of shareholding as on 31 st March, 2003:No. of Shareholders ShareholdingShares Nos. % Nos. %100 6 85.72 600 00.0134999400 1 14.28 34999400 99.99
7 100.00 35000000 100.006. Dematerialisation of Debentures:
As on 31stMarch, 2003, 100% of the Company’s Debentures (constituting 818debentures) were held in dematerialised form. These debentures are partly redeemedon a monthly basis and interest payments are also on a monthly basis.
7. Address for correspondence:L&T House, Ballard Estate, Mumbai – 400 001.Tel. : 2268 5656, Fax : 2268 5893
8. The Company adopted the following non- mandatory requirements on CorporateGovernance recommended under Clause 34 of Listing Agreement with NSE (DebtMarket Segment).i) The half yearly results of the Company are communicated to the shareholders
individually.ii) The Company has not passed any resolution requiring approval of the shareholders
by postal ballot.
AUDITORS’ REPORT ON COMPLIANCE OF CORPORATE GOVERNANCETo the shareholders of India Infrastructure Developers LimitedWe have examined the compliance of conditions of Corporate Governance by India InfrastructureDevelopers Limited, for the year ended on 31st March, 2003 as stipulated in Clause 34 of the ListingAgreement of the said Company with the National Stock Exchange of India Limited.The compliance of Corporate Governance is the responsibility of the management. Our examination waslimited to procedures and implementation thereof, adopted by the Company for ensuring the complianceof the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on thefinancial statements of the Company.In our opinion and to the best of our information and according to the explanations given to us, we certifythat the Company has complied in all material respects with the conditions of Corporate Governance asstipulated in the above mentioned Listing Agreement.We further state that such compliance is neither an assurance as to the future viability of the Companynor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
SHARP & TANNANChartered Accountants
by the hand ofR.D. KARE
Mumbai, 10th May, 2003 Partner
AUDITOR’S REPORT TO THE SHAREHOLDERS OF INDIA INFRASTRUCTUREDEVELOPERS LIMITEDWe have audited the attached Balance Sheet of India Infrastructure Developers Limited as at 31st March,2003 and also the Profit and Loss Account for the year ended on that date annexed thereto and the CashFlow Statement for the year ended on that date. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financial statements basedon our audit.We conducted our audit in accordance with auditing standards generally accepted in India. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial 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 includesassessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.In accordance with the provisions of Section 227 of the Companies Act, 1956, we report that:1. As required by Manufacturing and Other Companies (Auditor’s Report) Order, 1988 issued by the
Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose inthe Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to above, we report as under:(i) we have obtained all the information and explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;(ii) in our opinion, proper books of account as required by law have been kept by the Company so
far as appears from our examination of those books;(iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report
are in agreement with the books of account;(iv) in our opinion, the Profit and Loss Account, Balance Sheet and Cash Flow Statement dealt with
by this report comply with the accounting standards referred to in Section 211(3C) of the CompaniesAct, 1956, to the extent applicable, except in respect of Accounting Standard (AS) 22 – Accountingfor Taxes on Income and (AS) 5 – Net Profit or Loss for the Period, Prior Period Items andChanges in Accounting Policies, the Company, during the year, having changed the accountingpolicy in respect of accounting for taxes on income which was hitherto followed. The Companyhas reversed the deferred tax liability of Rs. 247,739,421 as appearing on 31st March, 2002.(Refer Note 5 of Schedule 8). Consequently, the loss for the year is lower by Rs. 247,739,421,deferred tax liability and debit balance in profit and loss account are lower by the like amounts;
(v) on the basis of written representations received from the directors, as on 31st March, 2003, andtaken on record by the Board of Directors, none of the directors is disqualified as on 31st March,2003 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act,1956; and
(vi) in our opinion and to the best of our information and according to the explanations given to us,the said accounts read together with the Significant Accounting Policies in Schedule-7 and othernotes appearing in Schedule - 8, give the information required by the Companies Act, 1956, inthe manner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,
2003;(b) in the case of the Profit and Loss Account, of the loss for the year ended on that date;(c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
SHARP & TANNANChartered Accountants
by the hand of
R.D. KAREMumbai, 10th May, 2003 Partner
ANNEXURE TO THE AUDITOR’S REPORT(Referred to in paragraph 1 of our Report of even date)
1. The Company is maintaining records showing full particulars including quantitative details and situationof all fixed assets. In respect of owned assets, we are informed that these assets have been physicallyverified by the management at year-end. In respect of leased assets, the Company has formulateda programme of physical verification of all fixed assets at regular intervals, which in our opinion isreasonable. Accordingly, the physical verification of the fixed assets has been carried out by themanagement during the year and no material discrepancies were noticed on such verification.
2. The fixed assets have not been revalued during the year.3. The Company has not taken / granted any loans, secured or unsecured, from / to companies, firms
or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Asexplained to us, there are no companies under the same management, as defined under Section 370(1-B) of the Companies Act, 1956.
4. The parties to whom loans and advances in the nature of loans have been given are repaying theprincipal amounts as stipulated and are also regular in payment of interest, where applicable.
5. In our opinion and according to the information and explanations given to us, there is an adequateinternal control procedure commensurate with the size of the Company and the nature of its businessfor the purchase of plant and machinery, equipment and other assets.
6. The Company has not accepted any deposits from public to which the provisions of Section 58A ofthe Companies Act, 1956 and the rules framed thereunder apply.
7. We are of the opinion that the Company has an internal audit system commensurate with its size andnature of its business.
8. According to the information and explanations given to us, there were no undisputed amounts payablein respect of income tax, wealth tax, sales tax, customs duty and excise duty which were outstandingas at 31st March, 2003 for a period of more than six months from the date they became payable.
9. According to the information and explanations given to us, and the records of the Company examinedby us, no personal expenses have been charged to revenue account other than those payable undercontractual obligations or in accordance with the generally accepted business practices.
10.The Company is not a sick industrial company within the meaning of Section 3 (1) (o) of the SickIndustrial Companies (Special Provisions) Act,1985, as amended.
11.Clauses (iii), (iv), (v), (vi), (xi), (xii), (xiv), (xvi), (xvii) of Paragraph 4A and Clauses (ii), (iii), (iv) ofParagraph 4D of the aforesaid Order are not applicable to the Company.
SHARP & TANNANChartered Accountants
by the hand of
R.D. KAREMumbai, 10th May, 2003 Partner
INDIA INFRASTRUCTURE DEVELOPERS LIMITED
S-70
BALANCE SHEET AS AT 31 ST MARCH, 2003As at As at
Sche- 31-03-2003 31-03-2002SOURCES OF FUNDS : dules Rupees Rupees Rupees RupeesShareholders’ Funds :Share Capital 1 350,000,000 350,000,000Loan FundsSecured Loans14.25% Secured RedeemableNon-Convertible Debentures 2,670,474,155 3,179,798,720(Due within one year Rs.58,48,32,069;previous year Rs.50,93,24,565)Unsecured LoansTerm loan - (holding company) 363,269,439 387,902,093
3,033,743,594 3,567,700,813Deferred tax liability - 247,739,421Total 3,383,743,594 4,165,440,234APPLICATION OF FUNDS :Fixed Assets 2Gross Block 4,832,001,248 5,192,751,687Less : Depreciation 853,705,607 658,131,423Net Block 3,978,295,641 4,534,620,264Less : Lease TerminalAdjustment 949,668,316 876,456,798
3,028,627,325 3,658,163,466Current Assets, Loans andAdvances 3Sundry Debtors 71,808,537 70,303,709Cash and Bank Balances 46,058,456 4,496,140Loans and Advances 283,820,665 389,197,439
401,687,658 463,997,288Less: Current Liabilities andProvisions 4Liabilities 193,167,682 349,478,197Provisions - -
193,167,682 349,478,197Net Current Assets 208,519,976 114,519,091Miscellaneous Expenditure(to the extent not written off or adjusted)Preliminary Expenses 352,251 704,501Profit and Loss Account 146,244,042 392,053,176Total 3,383,743,594 4,165,440,234Significant accounting policies 7Notes forming part of accounts 8
As per our report attachedSHARP & TANNANChartered Accountantsby the hand ofR.D.KarePartnerMumbai, 10th May, 2003
K. VENKATARAMANANV.K. MAGAPUN. SIVARAMAN
Mumbai, 10th May, 2003
Directors}A.N. MANIManager
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 ST MARCH, 2003Schedules 2001 - 02
INCOME Rupees Rupees RupeesLease Rentals 572,602,264 697,738,604(Tax deducted at source Rs.1,338,641;Previous year Rs.1,898,111)Interest 34,508,157 36,289,710(Tax deducted at source Rs.764,751;Previous year Rs.1,182,009)Bill Discounting Charges 3,174,758 2,122,877Profit on sale of receivables 23,809,531 -Other Income 45,843,990 72,000
679,938,700 736,223,191EXPENDITUREAdministration Expenses 5 3,743,146 4,038,676Interest 6 420,294,632 512,870,925Depreciation 257,478,959 271,764,676Preliminary Expenses written off 352,250 352,250
681,868,987 789,026,527Profit / (Loss) before taxation (1,930,287) (52,803,336)Provision for taxation- Current year (including short provision for prior year Rs.409,800) - 409,800- Deferred tax liability - 42,879,893
43,289,693Profit / (Loss) after taxation (1,930,287) (96,093,029)Add : Debit balance brought forward
from the previous year (392,053,176) (91,100,619): Deferred tax liability for prior years - (204,859,528): Deferred tax liability for prior years
(no longer required) written back 247,739,421 -
Debit balance carried to Balance Sheet (146,244,042) (392,053,176)
Basic / diluted earnings per share (0.06) (2.75)Nominal value per share 10 10Significant accounting policies 7Notes forming part of accounts 8
As per our report attachedSHARP & TANNANChartered Accountantsby the hand ofR.D.KarePartnerMumbai, 10th May, 2003
K. VENKATARAMANANV.K. MAGAPUN. SIVARAMAN
Directors}A.N. MANIManager
Mumbai, 10th May, 2003
SCHEDULE FORMING PART OF ACCOUNTS : 31 ST MARCH, 2003SCHEDULE -1 As at As at
31-03-2003 31-03-2002SHARE CAPITAL Rupees RupeesAuthorised35,000,000 Equity shares of Rs. 10 each 350,000,000 350,000,000Issued and Subscribed35,000,000 Equity shares of Rs.10 each, fully paid 350,000,000 350,000,000(All the shares are held by Larsen & Toubro Limited,holding company)
350,000,000 350,000,000
SCHEDULE - 2
LeaseTerminal Net Block after Lease
FIXED ASSETS Gross Block Depreciation Net Block Adjustment Terminal Adjustment
As at Additions Deductions As At Upto For the Deductions 31/03/2003 As at As at As at As at As at01-04-2002 31-03-2003 31-03-2002 Year 31-03-2003 31-03-2002 31-03-2003 31-03-2003 31-03-2002
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Owned AssetsBuilding 833,000 - - 833,000 38,671 13,578 - 52,249 780,751 794,329 - 780,751 794,329Computer 35,700 - - 35,700 15,019 5,787 - 20,806 14,894 20,681 - 14,894 20,681
868,700 - - 868,700 53,690 19,365 - 73,055 795,645 815,010 - 795,645 815,010Leased AssetsBuilding 106,133,487 - - 106,133,487 8,250,631 3,544,858 - 11,795,489 94,337,998 97,882,856 10,756,908 83,581,090 94,425,914Plant and machinery 5,085,749,500 - 360,750,438 4,724,999,061 649,827,102 253,914,736 61,904,775 841,837,063 3,883,161,998 4,435,922,398 938,911,408 2,944,250,590 3,562,922,542
5,191,882,987 - 360,750,438 4,831,132,548 658,077,733 257,459,594 - 853,632,552 3,977,499,996 4,533,805,254 949,668,316 3,027,831,680 3,657,348,456Total 5,192,751,687 - 360,750,438 4,832,001,248 658,131,423 257,478,959 - 853,705,607 3,978,295,641 4,534,620,264 949,668,316 3,028,627,325 3,658,163,466Previous year 5,192,751,687 - - 5,192,751,687 386,366,747 271,764,676 - 658,131,423 4,534,620,264 4,806,384,940 876,456,798 3,658,163,466 -
INDIA INFRASTRUCTURE DEVELOPERS LIMITED
S-71
SCHEDULE - 3 As at As at31-03-2003 31-03-2002
CURRENT ASSETS, LOANS ANDADVANCES Rupees Rupees Rupees RupeesSundry Debtors, unsecuredDebts outstanding for a periodexceeding six monthsConsidered good 2,475,756 2,475,756Considered doubtful 5,185,656 5,185,656
7,661,412 7,661,412Other debts, considered good 69,332,781 67,827,953
76,994,193 75,489,365Less : Provision for non-performing assets 5,185,656 5,185,656
71,808,537 70,303,709Cash and Bank BalancesCash & cheque on hand 45,801,990 9,343Balances with Scheduled Bankson current accounts 256,466 4,486,797
46,058,456 4,496,140Loans and Advances,unsecured, considered goodLoans including interest accruedthereon 273,048,359 204,584,883Bills discounted - 161,793,840Advances recoverable in cash orin kind or forvalue to be received 10,772,306 22,818,716
283,820,665 389,197,439401,687,658 463,997,288
SCHEDULE - 4CURRENT LIABILITIES ANDPROVISIONSLiabilitiesSundry creditors 179,756,370 334,861,033Unmatured lease rentals 13,411,312 13,127,060Unearned discounting charges - 1,490,104
193,167,682 349,478,197Provisions - -
193,167,682 349,478,197
2002-03 2001-02Rupees Rupees Rupees
SCHEDULE - 5ADMINISTRATION EXPENSESService charges 1,418,100 1,365,000Rent 12,000 12,000Rates and taxes 83,745 95,525Legal and professional charges 1,934,400 2,320,050Auditors remuneration (excluding service tax)-Audit fees 50,000 40,000-Tax audit fees 12,500 12,500-Certification 22,500 7,500
85,000 60,000Travelling and conveyance 107,163 54,788Bank charges 6,284 17,423Miscellaneous expenses 96,454 113,890
3,743,146 4,038,676
SCHEDULE - 6INTERESTDebentures 420,054,315 488,224,539Fixed loan - 24,632,654Others 240,317 13,732
420,294,632 512,870,925
Tenure : 105 monthsInterest : 14.25% p.a. on monthly basisRedemption : Redemption of debentures is structured on monthly basis, payment starting
from 31st January, 2000 as per debenture redemption schedule. TheCompany has repaid Rs.1,419,525,845 as per the repayment scheduleupto 31st March, 2003.
Security : The debentures as aforesaid are secured by way of :a) a first charge on the power plant assets pertaining to the captive co-
generation plant being put up at Indian Petrochemicals CorporationLimited (IPCL), Gandhar Petrochemicals Complex; and
b) a first charge on all the monies, including the lease rentals received /to be received from IPCL during the tenure of the debentures.
2. Lease rentals are net of lease equalisation Rs. 264,616,712; (Previous year Rs. 219,957,372)3. During the year, the Company has entered into derivative transactions for foreign currency /
fixed rate interest exposure. The transactions being off the balance sheet, cash flow arisingthereon is recognised at the year-end.
4. No provision has been made for income tax as the Company does not have tax liability forthe current year.
5. As per the terms of the interim injunction dated 6th December, 2001 restraining the Instituteof Chartered Accountants of India from implementing the Accounting Standard (AS) 22 –“Accounting for Taxes on Income”, with reference to the Non Banking Finance Companies,issued by the High Court of Judicature at Chennai in response to the Miscellaneous PetitionNo. 27682 of 2001 in Writ Petition No. 18827 of 2001 filed by the Association of Leasing andFinancial Services Companies, pending final disposal of this Petition, the Company has reversedthe provision made in the accounts towards deferred tax liability as at 31st March, 2002amounting to Rs. 247,739,421.
SCHEDULE – 7SIGNIFICANT ACCOUNTING POLICIES1. Basis of Accounting:
The Company maintains its accounts on accrual basis following the historical cost conventionin accordance with generally accepted accounting principles and in compliance with theaccounting standards referred to in Section 211(3C) and other requirements of the CompaniesAct, 1956, to the extent applicable.
2. Revenue Recognition:Income from lease transactions and bill discounting are accounted on accrual basis.
3. Lease Equalisation:Lease equalisation adjustment is the difference between capital recovery included in leaserentals and depreciation provided in books.
4. Fixed Assets:Assets held for own use and leased assets are stated at original cost. Interest on borrowingsfor acquisition of fixed assets and revenue expenses incurred are capitalised as part of assetcost in so far as such interest and expense relate to the period prior to its installation.
5. Depreciation:(a) Owned assets:
Depreciation on assets held for own use has been provided on straight line method atthe rates and in the manner specified in the Schedule XIV to the Companies Act, 1956.Depreciation on additions / deductions is calculated pro rata from / to the month ofadditions / deductions.
(b) Leased assets:Leased assets are depreciated over the primary period of lease. Accordingly, statutorydepreciation on such assets is provided for on straight line method at the rates and inthe manner specified in the Schedule XIV to the Companies Act, 1956 and the differenceis adjusted through the lease equalisation and lease adjustment account.However, with respect to assets where the primary period of lease is over, depreciationis provided for on straight line method at the rates and in the manner specified in theSchedule XIV to the Companies Act, 1956.
6. Preliminary expenses:Preliminary expenses are written off over a period of five years.
SCHEDULE – 8NOTES FORMING PART OF ACCOUNTS1. The Company issued 818 secured redeemable non convertible debentures of Rs. 50 lacs
each in March, 1999. The terms of issue are as under:
6. Related party disclosures:
The Following related party transaction were entered into during the year
Name of the Relationship Nature of 2002-03 2001-02 (Due to) / (Due to) /Company Transactions Rupees Rupees from from
2002-03 2001-02Rupees Rupees
Larsen & Holding - Inter Corporate 1,213,331,950 1,405,021,305 13,500,000 -Toubro company depositsLimited Income :
- Interest on inter 11,416,355 34,211,320 81,740 -corporate deposits
- Income from 45,801,990 - - -Hedging operations
Expenditure :- Interest on term - 24,632,654 - -
loan- Interest accrued - - - (24,632,654)
and due
L&T Finance Fellow Sundry creditors - - - (23,778,340)Limited subsidiary balance
Inter Corporate 70,000,000 - 36,267,894 -DepositsIncome :- Interest on inter 1,102,065 - 10,052 -
corporate depositsExpenditure :- Service charges 1,200,000 1,200,000 - -- Interest on credit
balance 240,317 13,732 - -
Note : No amounts pertaining to the related parties have been written off or written back duringthe year
7. As the Company’s business activity falls within a single primary business segment namely,financial services, and a single geographical segment, i.e. India, the disclosure requirementof Accounting Standard AS 17 - Segment Reporting, issued by the Institute of CharteredAccountants of India, is not applicable.
8. Calculation of Earnings Per Share in accordance with the Accounting Standard AS 20 -Earnings Per Share issued by the Institute of Chartered Accountant of India, as amended fromtime to time :-Net Profit / (Loss) after tax and extra ordinary items (Rs.1,930,287)Number of Equity shares outstanding 35,000,000Basic / Diluted earnings per share (Rs.0.06)Nominal value per Equity share Rs.10/-
9. Schedule to the Balance Sheet of a Non-Banking Financial Company as required in terms ofParagraph 9BB of Non-Banking Finance Companies Prudential Norms (Reserve Bank)Directions, 1998Particulars (in Rupees)Liabilities side Amount Amount
Outstanding Overdue(A) Loans and advances availed by the NBFC
inclusive of interest accrued thereon by not paid:(a) Debentures : Secured 2,670,474,155 NIL
: Unsecured NIL NIL(other than falling within themeaning of public deposits*)
(b) Deferred Credits NIL NIL(c) Term Loans (from holding company) 363,269,439 NIL(d) Inter-corporate loans and borrowing NIL NIL(e) Commercial paper NIL NIL(f) Public Deposits* NIL NIL(g) Other Loans (Foreign Currency Loan) NIL NIL
(B) Break-up of (A)(f) above (Outstanding public depositsInclusive of interest accrued thereon but not paid):(a) In the form of Unsecured debentures NIL NIL(b) In the form of partly secured debentures i.e. NIL NIL
debentures where there is a shortfall in thevalue of security.
(c) Other public deposits NIL NIL(C) Break-up of Loans and Advances including bills
receivables (other than those included in (D) below)(a) Secured NIL(b) Unsecured 273,048,359
INDIA INFRASTRUCTURE DEVELOPERS LIMITED
S-72
Assets Side : AmountOutstanding
(D) Break-up of Leased Assets and stock on hire andHypothecation loans counting towards EL/HP activities(i) Lease assets including lease rentals under sundry debtors:
(a) Financial Lease 3,099,640,217(b) Operating lease NIL
(ii) Stock on hire including hire charges under sundry debtors(a) Assets on hire NIL(b) Repossessed Assets NIL
(iii) Hypothecation loans counting towards EL/HP activities(a) Loans where assets have been repossessed NIL(b) Loans other than (a) above NIL
(E) Break-up of Investments:Current Investments:1. Quoted:(i) Shares: (a) Equity NIL
(b) Preference NIL(ii) Debentures and Bonds NIL(iii) Units of mutual funds NIL(iv) Government Securities NIL(v) Others (Please specify) NIL2. Unquoted:(i) Shares: (a) Equity NIL
(b) Preference NIL(ii) Debentures and Bonds NIL(iii) Units of mutual funds NIL(iv) Government Securities NIL(v) Others (Please specify) NIL
Long Term investments:1. Quoted:
(i) Shares: (a) Equity NIL(b) Preference NIL
(ii) Debentures and Bonds NIL(iii) Units of mutual funds NIL(iv) Government Securities NIL(v) Others (Please specify) NIL
2. Unquoted:(i) Shares: (a) Equity NIL
(b) Preference NIL(ii) Debentures and Bonds NIL(iii) Units of mutual funds NIL(iv) Government Securities NIL(v) Others (Please specify) NIL
(F) Borrower group-wise classification of all leased assets,Stock -on-hire and loans and advancesCategory Amount net of provisions
Secured Unsecured Total1. Related Parties
(a) Subsidiaries NIL NIL NIL(b) Companies in the same group NIL 49,859,686 NIL(c) Other related parties NIL NIL NIL
2. Other than related parties 3,099,640,217 223,188,673 3,372,688,576Total 3,099,640,217 273,048,359 3,372,688,576
(G) Investor group-wise classification of all investments (current and long term) in shares andsecurities (both quoted and unquoted)Category Market Value Book Value
/Break up or (Net offair value or Provisions)
NAV1. Related Parties
(a) Subsidiaries NIL NIL(b) Companies in the same group NIL NIL(c) Other related parties NIL NIL
2. Other than related parties NIL NILTotal NIL NIL
(H) Other informationParticulars Amount(i) Gross Non-Performing Assets
(a) Related parties NIL(b) Other than related parties 5,185,656
(ii) Net Non-Performing Assets(a) Related parties NIL(b) Other than related parties NIL
(iii) Assets acquired in satisfaction of debt NIL
State Code1 0 8 1 7 9 1 1
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Secured Loans
Total Assets
Reserves & Surplus
Unsecured Loans
3 1 0 3 2 0 0 3
N I L
N I L
3 3 8 3 7 4 3
3 5 0 0 0 0
2 6 7 0 4 7 4 3 6 3 2 6 9
II. Capital raised during the Period (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Sources of Funds
Balance Sheet Date
N I L
3 3 8 3 7 4 3
N I L
10. Balance Sheet Abstract and Company’s General Business Profile
N I L
I. Registration DetailsRegistration No.
Others
-
Turnover Total Expenditure
IV. Performance of Company (Amount in Rs. Thousands)
Loss Before Tax Loss After Tax
6 7 9 9 3 9 6 8 1 8 6 9
1 9 3 0 1 9 3 0
Earning Per Share in Rs.
(0 . 0 6) N I L
Dividend Rate %
Net Fixed Assets
Net Current Assets
Accumulated Losses
Investments
Miscellaneous Expenditure
3 0 2 8 6 2 7
3 5 2
Application of Funds
N I L
2 0 8 5 2 0
1 4 6 2 4 4
V. Generic Names of three principal products/services of the Company
11. Previous year figures are regrouped wherever necessary.
Signature to Schedule 1 to 8
L E A S I N G
SHARP & TANNANChartered Accountantsby the hand of
R.D.KarePartner
Mumbai, 10th May, 2003
K. VENKATARAMANANV.K. MAGAPUN. SIVARAMAN
Directors}A.N. MANIManager
Mumbai, 10th May, 2003
Cash Flow Statement for the year ended 31 st March 20032001-02
Rupees RupeesA. Cash Flow from operating activities
Profit / (Loss) before taxation and extraordinary item (1,930,287) (53,213,136)Add :Depreciation 257,478,959 271,764,676Lease Equalisation 264,616,712 219,957,372Miscellaneous Expenditure written off 352,250 352,250Operating Profit before working capital changes 520,517,634 438,861,162Add :/(Less)(Increase) /Decrease in Sundry Debtors (1,504,828) 5,134,312(Increase) /Decrease in Loans and Advances 105,376,774 4,963,802(Increase /Decrease in Trade Payables (156,310,515) (29,028,785)Cash generated from Operations 468,079,065 419,930,491Net Cash from Operating Activities 468,079,065 419,930,491
B. Cash flow from investing activities :Sale of Receivables pertaining to fixed assets 107,440,470 -Net Cash (used in)/from Investing Activites 107,440,470 -
C. Cash flow from financing activities :Repayment of long term borrowings (509,324,565) (441,154,341)Proceed from other borrowings (Net) (24,632,654) 24,632,654Net Cash (used in)/from Financing Activites (533,957,219) (416,521,687)Net (decrease)/increase in cash and cash equivalents(A+B+C) 41,562,316 3,408,804Cash and cash equivalents at beginning of the year 4,496,140 1,087,336Cash and cash equivalents at end of the year 46,058,456 4,496,140
41,562,316 3,408,804Notes :1. Cash flow statement has been prepared under the indirect method as set out in the Accounting
Standard (AS) - 3 issued by the Institute of Chartered Accountants of India.2. Cash and cash equivalents represent cash and bank balances.3. Previous year’s figures have been regrouped/reclassified wherever applicable.
K. VENKATARAMANANV.K. MAGAPUN. SIVARAMAN
Directors}A.N. MANIManager
Mumbai, 10th May, 2003
ToThe Board of DirectorsIndia Infrastructure Developers LimitedMumbaiWe have examined the attached cash flow statement of India Infrastructure Developers Limited forthe year ended 31st March, 2003. The statement has been prepared by the Company in accordancewith the requirements of Accounting Standard AS 3 - Cash Flow Statement made mandatorilyapplicable from 1st April, 2001 in case of enterprises whose equity or debt securities are listed onthe recognised stock exchanges and is based on and in agreement with the corresponding Profit& Loss Account and Balance Sheet of the Company covered by our report of 10th May, 2003 tothe members of the Company
SHARP & TANNANChartered Accountants
by the hand of
R.D. KAREMumbai, 10th May, 2003 Partner
HPL COGENERATION LIMITED
S-73
HPL COGENERATION LIMITEDDIRECTORS’ REPORTThe Directors have pleasure in presenting their Report and Audited Accounts for the year ended31st March, 2003.1. FINANCIAL RESULTS
Rs. In Lacs2002 - 2003 2001 - 2002
Profit before depreciation and tax 9804.95 9396.84Less : Depreciation on Fixed Assets 2716.74 2769.74Profit/(Loss) before tax 7088.21 6627.10Provision for current tax 558.19 506.97Provision for deferred tax (net) 2488.74 3046.93 2454.65 2961.62Profit/(Loss) after Tax 4041.28 3665.48Add/(Less): Balance Brought forward from last year 1102.64 1255.39Less : Adjustment for Deferred Tax Liability in excess of available reserves - 1102.64 1452.60 (197.21)Balance available for disposalof which the Directors appropriate asfollows: 5143.92 3468.27
General Reserve 404.13 274.92Dividend 4000.00 1897.20Additional Tax on Dividend - 193.51
4404.13 2365.63leaving a balance to be carriedforward of 739.79 1102.642. DIVIDENDThe Directors recommend a final Dividend of 15 % ( Rs. 1.50 per share) on 6,12,00,000 Preferenceshares of Rs. 10 each, and 50% (Rs. 5.036 per share) on 6,12,00,000 Equity shares of Rs 10each.3. YEAR IN RETROSPECTThe plant is operating in a stable manner and is meeting the power and steam requirements ofHaldia Petrochemicals Limited successfully. The Sales and Other Income for the financial yearunder review were Rs. 14391.60 Lacs. Profit before Tax and Profit after Tax for the financial yearunder review was Rs. 7088.21 Lacs and Rs. 4041.28 Lacs respectively.4. FINANCEDuring the year the Company did not borrow any money. The Company repaid loan installments ofRs. 5383.98 Lacs during the year.5. CAPITAL EXPENDITUREAs at 31st March, 2003 the gross fixed assets stood at Rs. 52865.42 Lacs and the net fixed assetsat Rs. 44197.04 Lacs. Additions during the year amounted to Rs. 7.92 Lacs.6. DEPOSITSDuring the period under review the Company has not accepted any deposits from the public.7. AUDITORS’ REPORTThe Auditors’ Report to the Shareholders, together with the notes to the accounts referred to in theAuditors’ Report, are self-explanatory and therefore does not call for any further comments.8. DISCLOSURE OF PARTICULARSInformation as per the Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earningsand outgo are given in Annexure ‘A’ forming part of the report.9. PERSONNELThere are no employees covered by the provisions of the Section 217(2A) of the Companies Act,1956 read with the Companies (Particulars of Employees) Rules,1975.10. DIRECTORS' RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i) that in the preparation of the annual accounts, the applicable accounting standards have been
followed and there has been no material departure;ii) that the selected accounting policies were applied consistently and the directors made judgements
and estimates that are reasonable and prudent so as to give a true and fair view of the state ofaffairs of the Company as at 31
st March, 2003 and of the profit of the Company for the year
ended on that date;iii) that proper and sufficient care has been taken for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the annual accounts have been prepared on a going concern basis.
AUDITORS’ REPORT TO THE SHAREHOLDERS OFHPL COGENERATION LIMITED1.0 We have audited the attached Balance Sheet of HPL COGENERATION LIMITED
as at 31st March, 2003, the Profit and Loss Account for the year ended on thatdate annexed thereto and also the cash flow statement for the period ended onthat date. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.
2.0 We conducted our audit in accordance with auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.
3.0 As required by the Manufacturing and Other Companies (Auditor's Report) Order,1988, issued by the Central Government of India in terms of sub-section (4A)Section 227 of the Companies Act, 1956, we enclose in the Annexure a statementon the matters specified in paragraphs 4 and 5 of the said Order.
4.0 Further to our comments in the Annexure referred to vide para 3.0 above, wereport that:a) We have obtained all the information and explanations which, to the best of
our knowledge and belief, were necessary for the purposes of our audit;b) Subject to accounting for certain payments on cash basis as referred to
vide Accounting Policy I (a) of Schedule M, in our opinion, proper books ofaccount as required by law have been kept by the Company so far as itappears from our examination of such books ;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statementdealt with by this report are in agreement with the books of account;
d) Subject to accounting for certain payments on cash basis as referred tovide Accounting Policy I (a) of Schedule M, in our opinion, the Balance
Sheet, Profit and Loss Account and Cash Flow Statement dealt with by thisreport comply with the Accounting Standards referred to in sub-section (3C)of section 211 of the Companies Act, 1956.
e) On the basis of written representations received from the directors, as on31st March 2003, and taken on record by the board of Directors, we reportthat none of the directors is disqualified as on 31st March 2003 from beingappointed as a director in terms of clause (g) of sub-section (1) of section274 of the Companies Act, 1956.
f) Without qualifying our opinion, we draw attention to Note No. II 1(a)(ii) ofSchedule M to the financial statements regarding claims from HaldiaPetrochemicals Ltd. which are under discussion against which the Companydoes not expect to incur any significant liability. The ultimate outcome ofthe matter cannot presently be determined and no provision for any liabilitythat may result has been made in the financial statements.
In our opinion and to the best of our information and according to explanations given tous and the said "accounts" read together with Notes in Schedule M, give the informationrequired by the Companies Act, 1956 in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India.a) in case of the Balance Sheet, of the state of affairs of the company as at 31st
March, 2003, andb) in case of the Profit and Loss Account, of the loss of the company for the year
ended on that date, andc) in the case of cash flow statement, of the cash flows for the year ended on that
date.S.R. BATLIBOI & CO.
Chartered AccountantsBy the hand of
RAHUL ROYKolkata. PartnerDate : 12th May, 2003
11. DIRECTORSMr. R.B.Saldanha resigned as a Director of the Company with effect from 30th April, 2002. He was aDirector since 22nd August, 2000.Mr. Swapan Chakraborty resigned as a Director of the Company with effect from 30th December,2002. He was a Director since 22nd August, 2000. He was also a Member of the Audit Committee.The Directors record their appreciation of the valuable services rendered byMr. R. B. Saldanha and Mr. Swapan Chakraborty.At the meeting held on 20th June, 2002, Mr. Swapan K .Bhowmik was appointed a Director in thecasual vacancy caused by the resignation of Mr. R.B. Saldanha and will hold office upto the date ofthe General Meeting when Mr. R.B. Saldanha would have retired by totation, and is eligible for re-appointment.At the meeting held on 30th December,2002 , Mr. A.Bose was appointed a Director in the casualvacancy caused by the resignation of Mr.Swapan Chakraborty and will hold office upto the date ofthe General Meeting when Mr. Swapan Chakraborty would have retired by rotation, and is eligiblefor re-appointment.The Company has received a notice from a member under the provisions of Section 257 of theCompanies Act, 1956 proposing the candidature of Mr. Swapan K. Bhowmik and Mr. A. Bose forthe office of a Director.Mr.K.Venkataramanan, Mr.V.K.Magapu & Mr. N. Sivaraman retire by rotation and are eligible for re-appointment.12. AUDIT COMMITTEEThe Audit Committee consists of three non executive directors. The present members of theCommittee are Mr. V.K.Magapu, Mr. N.Sivaraman & Mr. A.Bose. Mr. A.Bose is the Chairman of theAudit CommitteeThe role, terms of reference, the authority and power of Chairman are in conformity with therequirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors on internalcontrol systems and internal audit report.13. AUDITORSThe Auditors, M/s.S.R.Batliboi & Co. , Chartered Acccountants, hold office until the conclusion ofthe ensuing Annual General Meeting and are recommended for re-appointment. Certificate from theauditors has been received to the effect that their re-appointment, if made, would be within thelimits prescribed under Section 224(1B) of the Companies Act, 1956.14. ACKNOWLEDGEMENTSThe Directors acknowledge the invaluable support extended to the Company by the FinancialInstitutions, Bankers, vendors, suppliers and customers. The Directors are pleased to place onrecord their appreciation for the valuable contribution made by the employees of the Company.
For and on behalf of the Board
K. VENKATARAMANAN
N. SIVARAMANPlace : KolkataDate : 23rd April, 2003
ANNEXURE – A TO THE DIRECTORS’ REPORTA. CONSERVATION OF ENERGY
a) Energy Conservation measures taken1) Agitator Motors of Auxiliary Boiler Dosing Tank, Hydrazine Dosing Tank,
HRSG#1&2 HP Dosing Tank, Ammonia Dosing Tank are being run for TwoHours in a Day instead of 24hrs.
2) Stopping of HRSG# 1&2 Guillotine Damper Sil Air Fan when HRSG in operationby logic modification.
3) Running of Three (03) Cooling Tower Fans in slow Speed Instead Of Two (02)Cooling Fans in High Speed, during normal operation.
b) Additional investments and proposals, if any, being implemented for reductionof conservation of energy :Not Applicable.
c) Impact of measures at (a) and (b) above for reduction of energy consumptionand consequent impact on the cost of production of the goods.Total energy savings during the year is 169131KWH.
d) Total energy consumption and energy consumption per unit of production asper Form A of the Annexure in respect of the industries specified in the scheduletheretoNot Applicable.
B TECHNOLOGY ABSORPTIONe) There are no particulars to be disclosed under this head
C FOREIGN EXCHANGE EARNINGS AND OUTGOf) There are no particulars to be disclosed under this head.
} Director
HPL COGENERATION LIMITED
S-74
Annexure to the Auditors’ ReportWith reference to paragraph 3 of our report to the members of HPL COGENERATIONLIMITED of even date, we report that, in our opinion and to the best of our knowledge andbelief and as per the information and explanations furnished to us and the books andrecords examined by us in the normal course of audit :1. The Company has maintained proper records to show full particulars including quantitative
details and situation of the fixed assets. Most of the fixed assets have been physicallyverified by the management during the year and as explained to us, no materialdiscrepancies have been noticed on such verification.
2. None of the fixed assets have been revalued during the year under report.3. The stock of stores and spare parts have been physically verified by the management
at reasonable intervals during the year.4. The procedures followed by the management for physical verification of stores and
spares are, in our opinion, reasonable and adequate in relation to the size of thecompany and the nature of its business.
5. No material discrepancies were noticed during physical verification of stores andspares.
6. In our opinion and on the basis of our examination, the valuation of stores and spareparts is fair and proper and in accordance with the normally accepted accountingprinciples.
7. The Company has not taken any loans, secured or unsecured from Companies, firmsor other parties listed in the registers maintained under Sections 301 of the CompaniesAct, 1956 or from the Companies under the same management as defined under SubSection (1B) of the Section 370 of the Companies Act, 1956.
8. The Company has not granted any loans, secured or unsecured to Companies, firms orother parties listed in the registers maintained under Sections 301 of the CompaniesAct, 1956 or to the Companies under the same management as defined under SubSection (1B) of Section 370 of the Companies Act, 1956.
9. There are adequate internal control procedures commensurate with the size of theCompany and the nature of its business for purchase of stores and spare parts includingcomponents.
10.According to information and explanations given to us, the transactions of purchasesof stores and spare parts made in pursuance of contracts or arrangements entered in
the register maintained under Section 301 of the Companies Act 1956 and aggregatingduring the year to Rs 50,000 or more in respect of its holding company have been madeat prices, which in our opinion, are reasonable having regard to prevailing market pricesof such goods, materials or services and the Company’s business needs and exigencies.
11.The Company has a regular procedure for the determination of the unserviceable anddamaged stores on the basis of technical assessment and necessary adjustments forthe loss on the basis of such assessment are made in the accounts.
12.The Company has not accepted any deposits within the meaning of section 58 A of theCompanies Act, 1956.
13.As explained to us, the Company’s operations do not generate any by-products orscrap.
14.The Company has an internal audit system commensurate with the size and nature ofits business.
15.We have broadly reviewed the books of account maintained by the Company pursuantto the Order made by the Central Government for the maintenance of cost records underSection 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie theprescribed accounts and records have been made and maintained.
16.Provident Fund dues have been regularly deposited with the appropriate authoritiesduring the year. According to the information and explanations given to us theEmployees’ State Insurance Act does not apply to the Company.
17.According to the information and explanation given to us and the books and recordsexamined by us, there are no undisputed amounts payable, in respect of income tax,sales tax, customs duty and excise duty outstanding as at 31st March 2003 for a periodexceeding six months from the date they became payable.
18.No personal expenses of employees or directors have been charged to revenueaccount, other than those payable under contractual obligations or in accordance withgenerally accepted business practice.
19.The Company is not a sick industrial company within the meaning of Clause (o) of SubSection (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.
S.R. BATLIBOI & CO.Chartered Accountants
By the hand of
Kolkata. RAHUL ROYDate : 12th May, 2003 Partner
BALANCE SHEET AS AT 31 st MARCH, 2003As at As at
31st March 2003 31st March 2002Sche- Rupees Rupees Rupees Rupeesdule
SOURCES OF FUNDSSHAREHOLDERS’ FUNDSShare Capital A 1,224,000,000 1,224,000,000Reserves & Surplus B 141,883,515 137,755,561LOANS
Secured Loans C 3,195,568,001 3,772,346,667Deferred TaxLiability(net) 697,578,257 448,704,588TOTAL 5,259,029,773 5,582,806,816
APPLICATION OF FUNDSFIXED ASSETS DGross Block 5,286,541,695 5,325,200,302Less : Depreciation 866,837,998 595,164,017Net Block 4,419,703,697 4,730,036,285Capital Work-in-Progress - 4,419,703,697 - 4,730,036,285CURRENT ASSETS,LOANS AND ADVANCES EInventory 36,216,229 39,061,036Sundry Debtors 46,515,257 154,476,627Cash and Bank Balances 98,456,825 39,472,228Loans and Advances 860,517,375 872,769,364
1,041,705,686 1,105,779,255LESS : CURRENTLIABILITIES ANDPROVISIONS FCurrent Liabilities 147,344,211 184,551,630Provisions 55,835,191 70,056,677
203,179,402 254,608,307NET CURRENT ASSETS 838,526,284 851,170,948MISCELLANEOUSEXPENDITURE G(to the extent not writtenoff or adjusted) 799,792 1,599,583TOTAL 5,259,029,773 5,582,806,816
Accounting Policies &Notes to the Accounts M
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST
MARCH 20032002-2003 2001-2002
Sche Rupees Rupees Rupees Rupeesdule
INCOMEEarnings fromfacilitation charges 1,431,452,983 1,509,680,577Other Income H 7,706,803 5,620,858
1,439,159,786 1,515,301,435EXPENDITUREOperating Expenses I 125,923,087 181,543,073Staff Expenses J 537,484 574,538Administration &Other Expenses K 43,927,004 36,456,178Interest L 288,276,930 357,044,038Depreciation 271,673,981 276,973,937
730,338,486 852,591,764Profit/(Loss) bef ore Tax 708,821,300 662,709,671
Provision for current tax 55,819,677 50,697,290Provision for deferredtax(net) 248,873,669 245,463,786Profit/(Loss) after tax 404,127,954 366,548,595Add/(Less): Balancebrought forward fromprevious year 110,264,416 125,538,649Less: Adjustment foropening Deferred TaxLiabilityin excess of availablereserves - 145,260,243
110,264,416 (19,721,594)Profit available forappropriation 514,392,370 346,827,001Less: Transferred to :General Reserve 40,412,795 27,491,145
Profit available for distribution 473,979,575 319,335,856
Preference dividend 91,800,000 91,800,000Interim Equity dividend 308,200,000 97,920,000Additional tax on dividend - 19,351,440Balance/(Deficit) carriedto Balance Sheet 73,979,575 110,264,416Accounting Policies &Notes to the Accounts MEarnings Per Share -Basic and Diluted (Rs.) 5.10 4.34
Director
As per our report attached of even dateS.R. BATLIBOI & CO.Chartered Accountants S.M. SHAMIM EQBALBy the hand of ManagerRAHUL ROY P.R. LILAOONWALAPartner Secretary
Kolkata, Kolkata,Date : 12th May, 2003 Date : 23rd April, 2003
K. VENKATARAMANAN
N. SIVARAMAN }
Director
As per our report attached of even dateS.R. BATLIBOI & CO.Chartered Accountants S.M. SHAMIM EQBALBy the hand of ManagerRAHUL ROY P.R. LILAOONWALAPartner Secretary
Kolkata, Kolkata,Date : 12th May, 2003 Date : 23rd April, 2003
K. VENKATARAMANAN
N. SIVARAMAN }
HPL COGENERATION LIMITED
S-75
Schedules forming part of the accountsAs at As at
31st March, 2003 31st March, 2002
Rupees Rupees Rupees RupeesSchedule A- Share CapitalAuthorised :63,800,000 (previous year: 63,800,000)Equity Shares of Rs. 10 each 638,000,000 638,000,00061,200,000 (Previous year: 61,200,000)Preference Shares of Rs. 10 each 612,000,000 612,000,000
1,250,000,000 1,250,000,000Issued, Subscribed and Paid up :61,200,000 Equity Shares of Rs. 10 eachfully paid [Of the above, 31,212,000(previous year: 31,212,000) shares areheld by Larsen & Toubro Limited(the holding company)] 612,000,000 612,000,00061,200,000(61,200,000) 15% CumulativeRedeemable Preference Shares 612,000,000 612,000,000of Rs. 10 each fully paid.[Of the above, 20,512,000 (previous year:20,512,000) shares are held by Larsen &Toubro Limited (the holding company)]
1,224,000,000 1,224,000,000Note:(1) 15% Cumulative Redeemable Preference Shares are redeemable at par on
11.10.2007.
As at As at31st March, 2003 31st March, 2002
Rupees Rupees Rupees RupeesSchedule B- Reserves & SurplusGeneral ReserveAs per last Balance Sheet 27,491,145 57,980,559Less : Adjustment for DeferredTax Liability(net) as on 1st April, 2001. - 57,980,559Add: Transferred from :
Profit & Loss Account 40,412,795 67,903,940 27,491,145 27,491,145Profit & Loss Account 73,979,575 110,264,416
141,883,515 137,755,561
Schedule C- Secured Loans
Term Loans from Banks - Foreign Currency loan 1,367,568,000 1,639,680,000
- Rupee loan 1,828,000,001 3,195,568,001 2,132,666,667 3,772,346,667
3,195,568,001 3,772,346,667
Note: 1. The above Term Loans are secured by equitable mortgage of all immovable propertiesof the company and by hypothecation of all its movable assets including book debts.
2. Out of the above Rs. 532,594,667 is due for repayment within 1 year.
As at As at31st March, 2003 31 st March, 2002
Rupees Rupees Rupees Rupees
Schedule E - Current Assets, Loans and AdvancesCurrent Assets:(a) Inventories:
- Stores & Spare Parts 36,216,229 36,216,229 — 39,061,036(b) Sundry Debtors:
Unsecured, considered goodDebts outstanding for morethan six monthsOther Debts 46,515,257 46,515,257 154,476,627 154,476,627
(c) Cash and Bank Balances:With scheduled Banks :- on Current accounts * 88,393,733 3,371,139- on Fixed Deposits 10,050,000 36,049,995(including Rs. 50,000pledged with bank againstletter of guarantee)Interest accrued onFixed Deposits 13,092 98,456,825 51,094 39,472,228Loans and AdvancesUnsecured, considered good- Loans to employees 1,000 40,000- Advances recoverable incash or in kind 105,064,320 107,524,336or for value to be received- Intercorporate Depositsincluding accrued interestthereon 755,452,055 860,517,375 765,205,028 872,769,364
1,041,705,686 1,105,779,255
* (including cheques in hand of Rs. 50,000,000 (previous year Nil))
Schedule F - Current Liabilities and ProvisionsCurrent Liabilities :- Sundry Creditors 1,530,317 62,073,488- Interest accrued but not
due on loans 65,425,280 78,163,014- Other liabilities 80,388,614 147,344,211 44,315,128 184,551,630Provisions:-Provisions for Taxation 55,819,677 50,697,290-Additional Tax on Dividend - 19,351,440-Gratuity 9,225 4,292-Leave Encashment 6,289 55,835,191 3,655 70,056,677
203,179,402 254,608,307
Schedule D - Fixed Assets
Gross Block Depreciation Net Block
Particulars As at Additions Deductions As at As at Additions Deductions As at As at As at1-4-2002 31-03-2003 01-04-2002 31-3-2003 31-03-2003 31-03-2002
Rs. Rs. Rs Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Leasehold Land 1 — — 1 0 — — 0 1 1Building-Freehold 164657506 56000 1236966 163476540 11828763 5236797 — 17065560 146410980 152828743-Leasehold 19624165 — 139751 19484414 758099 314070 — 1072169 18412245 18866066Plant, Machinery &Equipments 5139331143 702101 38063359 5101969885 582381991 266024466 — 848406457 4253563428 4556949152Furniture & Fixtures 1587487 33957 10589 1610855 195164 98648 — 293812 1317043 1392323Sub Total 5325200302 792058 39450665 5286541695 595164017 271673981 0 866837998 4419703697 4730036285Capital Work in Progress 0 — — 0 — — — — 0 0Total 5325200302 792058 39450665 5286541695 595164017 271673981 0 866837998 4419703697 4730036285Previous Year Total 5230796323 95335504 931525 5325200302 318190080 276973937 0 595164017 — —
As at As at31st March, 2003 31 st March, 2002
Rupees Rupees Rupees Rupees
Schedule G - Miscellaneous Expenditure(to the extent not written off or adjusted)
1) Preliminary expenses 1,513,160 2,277,056Less: Written off during the year 756,580 756,580 763,896 1,513,160
(2) Deferred Revenue Expenditure 86,423 138,276Less: Written off during the year 43,211 43,212 51,853 86,423
799,792 1,599,583
2002-2003 2001-2002Rupees Rupees Rupees Rupees
Schedule H - Other IncomeProvision no longer required 5,892,958 2,352,000Miscellaneous Income:Miscellaneous Scrap Sale 140,706 109,000Insurance Claims 1,456,950 1,597,656 3,159,858 3,268,858Exchange Gain 216,189 -
7,706,803 5,620,858
Schedule I - Operating Expenses
Stores & SparesOpening Stock 39,061,036 10,449,600Add: Purchase 36,993,996 116,682,330Less: Closing Stock 36,216,229 39,838,803 39,061,036 88,070,894
Expenses for O&M operator 86,084,284 93,472,179
125,923,087 181,543,073Schedule J - Staff ExpensesSalaries 429,374 445,414Contribution to and provisionfor Provident & other Funds 31,654 29,984Welfare & Other Expenses 76,456 99,140
537,484 574,538
Schedule K - Administration &Other ExpensesRent:
Rent Subsidy 353,859 363,903Lease Rental 318,164 672,023 121,547 485,450
Rates & Taxes 21,031 16,516Travelling & Conveyance 21,90,899 2,861,142Courier Charges 80,840 58,994
HPL COGENERATION LIMITED
S-76
Schedules forming part of the accountsSchedule M - Accounting Policies and Notes to the AccountsI Significant Accounting Policies(a) Basis of Accounting
The Company maintains its accounts on accrual basis, following the historical costconvention, in compliance with the Accounting Standards specified to be mandatory by theInstitute of Chartered Accountants of India and the relevant provisions of the CompaniesAct, 1956, except for Insurance claims and Interest on delayed payments received fromcustomers which are accounted for on cash basis.
(b) Fixed AssetsFixed Assets are stated at the cost of acquisition, inclusive of duties, taxes, incidentalexpenses, erection/commissioning expenses and interest upto the date the asset is readyfor intended use.
(c) Depreciation(i) The classification of Plant & Machinery into continuous and non-continuous process
is done as per technical certification and depreciation thereon is provided accordingly.(ii) Depreciation is provided under straight line method at the rates prescribed in Schedule
XIV of the Companies Act, 1956.(iii) Depreciation on Fixed Assets added/disposed off during the year is provided on pro-
rata basis, with reference to the date of addition/disposal.(d) Inventories
Inventories of Stores and Spare parts are valued at weighted average cost.(e) Foreign Currency Transactions
(i) Foreign currency transactions are recorded on the basis of exchange rates prevailingon the date of their occurrence.
(ii) Foreign Currency Assets and Liabilities (other than those covered by Forward Contracts)as on the Balance Sheet date are revalued in the accounts on the basis of exchangerates prevailing at the close of the year and exchange difference arising therefrom isadjusted to the cost of Fixed Assets or charged to the Profit & Loss Account, as thecase may be.
(f) Retirement BenefitsLiability for Leave encashment and Gratuity is provided for on the basis of actuarial valuation.
(g) Research & DevelopmentResearch & Development Expenditure of revenue nature are charged to Profit & LossAccount, while such expenditure of capital nature are added to the cost of Fixed Assets inthe year in which these are incurred.
(h) Miscellaneous ExpenditurePreliminary expenses are carried forward to be amortised over a period of 5 years from thedate of commencement of commercial operations.Expenditure incurred prior to Commercial Operation date, not directly connected with thesetting up of the Company’s plant at Haldia, is carried forward under Deferred RevenueExpenditure to be amortised over a period of 5 years from the date of commencement ofcommercial operations.
(i) ContingenciesMaterial Potential Liabilities whose future outcome cannot be ascertained with reasonablecertainty, are treated as contingent and disclosed by way of notes to the accounts.
(j) Taxes on IncomeTax on income for the current period is determined on the basis of taxable income and taxcredits computed in accordance with the provisions of the Income Tax Act 1961, and basedon expected outcome of assessments / appeals.
Deferred tax is recognised on timing differences between the accounting income and thetaxable income for the year and quantified using the tax rates and laws enacted orsubstantively enacted as on the Balance Sheet date.Deferred tax assets are recognised and carried forward to the extent that there is a reasonablecertainty that sufficient future taxable income will be available against which such deferredtax assets can be realised.
(k) Borrowing CostBorrowing Costs that are not eligible for capitalisation under Accounting Policy I (b) arerecognised as an expense in the period in which they are incurred.
(l) Segment ReportingThe Company is engaged in generation of Power & Steam for the captive consumption ofHaldia Petrochemicals Limited which is the only reportable segment.
II Notes forming Part of Accounts1. Contingent Liability not provided for :
(a) Claims against the Company not acknowledged as debts –(i) Subjudice claims against Customs Duty, with full Rs.257,049,919
recourse to Haldia Petrochemicals Limited in the (previous yearevent of any eventual payment. Rs. 257,049,919)
(ii) The Company has received certain claims from Haldia Petrochemicals Limited(HPL) arising on account of delays in completion of the captive power plant.The claims are being discussed between HPL, Larsen & Toubro Limited andthe Company for a settlement. Based on contractual documents, the Companydoes not expect to incur any significant liability on account of such claims. Themaximum liquidated damages that can be claimed as per the Contract is limitedto Rs.36.90 crores.
(b) Outstanding Bank Guarantee is Rs. 50,000 (Rs. 50,000).2. Leasehold land represents 16.29 acres given on lease by Haldia Petrochemicals
Limited for twenty years at lease premium of Rs.1.3. Exchange rate gain during the year of Rs. 39,450,665 (previous year loss of Rs.76,426,334)
on the foreign currency Term Loan liability, incurred for financing the Fixed asset has beenadjusted against related Fixed Assets.
4. Miscellaneous Expenses shown in Schedule K includes payment to auditors (exclusive ofService Tax) as follows:
2002-2003 2001-2002(Rs.) (Rs.)
Audit Fees 170,000 130,000Tax Audit Fees 40,000 30,000Certification Work 110,000 28,000Expenses Reimbursed 25,000 13,750
Total 345,000 201,750
5. Expenditure in foreign currency (considered on payment basis):2002-2003 2001-2002
(Rs.) (Rs.)
Technical Fees (Gross) 24,211,015 39,922,168Tax Deducted at source 4,870,718 7,921,101
6. Details of Power and Steam generated, consumed and delivered:Units 2002-2003 2001-2002
Quantity Quantity(a) Total number of units generated
during the year.Steam Tons 1606868 1605031Power Kwhr 454972200 412270000
(b) Total number of units consumedin Generating Stations.Steam Tons 781990 695445Power Kwhr 24341000 23011000
(c) Total number of units deliveredto the system.Steam Tons 824878 909586Power Kwhr 446467000 430146000
(d) Total number of units importedfrom the GridPower Kwhr 15835800 40887000
7. The installed capacity of the Generating stations of the Company (as per certification oftechnical expert) is 116 MW (Previous year 116 MW). The Company has received approvalu/s 18A of Electricity Supply Act, 1948 from Government of West Bengal, Department ofPower to operate at 116 MW.
8. Managerial Remuneration :Professional charges for reimbursement of emoluments paid to Manager by Larsen &Toubro Limited – Rs.753,871 (previous year Rs.667,825).
9. The net Deferred Tax Liability amounting to Rs. 248,873,669 for the year has been chargedto Profit & Loss Account.The Break-up of Deferred Tax Liability (net) as at 31.03.2003 is as follows:Deferred Tax Liability: (Rs.)Timing Difference in depreciable assets 1,087,689,376Total Deferred Tax Liability (A) 1,087,689,376Deferred Tax Asset:Timing Difference on account of Disallowances u/s 40(a)(i) 7,033,452Unabsorbed Depreciation 383,077,667Total Deferred Tax Asset (B) 390,111,119Deferred Tax Liability(net)[A-B] 697,578,257The recognition of unabsorbed depreciation as Deferred Tax Asset is duly supported byProjected Profit & Loss Account and Tax computation statements.
Telephone 474,219 683,888Gift Articles 52,432 34,970Stationery & Printing 189,688 155,074Insurance 21,306,744 19,460,689Bank Charges 140,566 41,375Repairs & Maintenance 5,121,509 1,403,478Miscellaneous Expenses
Auditor Expenses 345,000 201,750Research & DevelopmentExpenses - -Entertainment Expenses 18,135 124,612Professional Fees 9,018,195 7,568,171Security Charges 1,023,733 974,568Safety Expenses 207,070 45,911Inspection & Licence Fees 405,555 309,902Miscellaneous expenditurewritten off 799,791 815,749Sundries:Books & Periodicals 9,841 31,839Computer Hire Charges 17,350 17,300Others 1,832,383 13,677,053 1,164,800 11,254,602
43,927,004 36,456,178
Schedule L - InterestTerm Loans 346,757,309 433,002,202Others 2,839,206 349,596,515 2,391,940 435,394,142Less: (1)Received on Inter-Corporate
deposits, customers & others(tax deducted at sourceRs.12,254,536. Previous yearRs.15,777,237) 61,319,585 78,350,104
288,276,930 357,044,038
2002-2003 2001-2002Rupees Rupees Rupees Rupees
Schedule K - Contd.
HPL COGENERATION LIMITED
S-77
10.A. Related Party relationships/transactions, warranting disclosures under AS-18 issued by The Institute of Chartered Accountants of India are as follows:
Nature of Holding Company Subsidiaries/Associates Promoter TotalTransaction of Holding Co.
Transaction Outstanding Transaction Outstanding Transaction Outstanding Transaction OutstandingValue Balance Value Balance Value Balance Value Balance
Purchase of spares 4,824,090 5,908,997 — — — — 4,824,090 5,908,997(Previous Year (Previous year (Previous Year (Previous year64,252,427) 3,590,250) 64,252,427) 3,590,250)
Interest Paid 28,39,206 Nil — — — — 28,39,206 Nil(Previous Year (Previous Year (Previous Year (Previous Year2,337,728) 727,280) 2,337,728) 727,280)
Interest received on Inter 18,756,000 Nil 349,94,771 652,055 — — 53,750,771 652,055Corporate Deposits (Previous Year (Previous Year (Previous Year (Previous Year (Previous Year (Previous Year
40,120,892) 108,041) 208,219) 208,219) 40,329,111) 316,260)
Equity Share Holding — 312,120,000 — — — 299,880,000 — 612,000,000(Previous Year (Previous Year (Previous Year312,120,000) 299,880,000) 612,000,000)
Preference Share holding — 205,120,000 — — — 299,880,000 — 505,000,000(Previous Year (Previous Year (Previous Year205,120,000) 299,880,000) 505,000,000)
Purchase of Fixed Asset Nil — — — — — Nil —(Previous Year (Previous Year17,159,044) 17,159,044)
Inter Corporate Deposits — 354,800,000 — 400,000,000 — — — 754,800,000(Previous Year (Previous Year (Previous Year262,900,000) 400,000,000) 662,900,000)
Sundry Creditors — 1,396,396 — — — — — 1,396,396(Previous Year (Previous Year61,320,698) 61,320,698)
Dividend – Equity Shares 157,182,000 — — — — — 157,182,000 —(Previous Year (Previous Year49,939,200) 49,939,200)
Dividend - Preference 30,768,000 — — — — — 30,768,000 —Shares (Previous Year (Previous Year
30,768,000) 30,768,000)
Loans & Advances 806,877 — — — — — 806,877 —(Previous Year (Previous YearNil ) Nil )
Manpower Deployment 3,826,867 — — — — — 3,826,867 —(Previous Year (Previous Year1,959,416 ) 1,959,416 )
Earnings from Facilitation — — — — 1,431,452,983 — 1,431,452,983 —charges (Previous year (Previous year
1,509,680,577) 1,509,680,577)
Interest received — — — — Nil — Nil —(Previous Year (Previous Year17,799,368) 17,799,368)
Dividend –Equity Shares — — — — 151,018,000 — 151,018,000 —(Previous Year (Previous Year47,980,800) 47,980,800)
Dividend – Preference — — — — 44,982,000 — 44,982,000 —Shares (Previous Year (Previous Year
44,982,000) 44,982,000)
Creditors — 1,396,396 — 49,744 — 660,250 — 2,106,390(Previous Year (Previous Year (Previous Year (Previous Year61,320,698) 1731) Nil ) 61,322,429)
Debtors — — — — — 46,515,257 — 46,515,257(Previous Year (Previous Year154,476,627) 154,476,627)
Lease Rent — — 318,164 — — — 318,164 —(Previous Year (Previous Year121,547) 121,547)
Purchase of Office — — Nil — — — Nil —Equipments (Previous Year (Previous Year
79,495) 79,495)
Software Development — — 829,000 829,000 — — 829,000 829,000Expenses (Previous Year (Previous Year (Previous Year (Previous Year
Nil) Nil) Nil) Nil)
10.B. Related Party Disclosures :Nature of Relationship Name
(i) Holding Company Larsen & Toubro Limited(ii) Promoter Haldia Petrochemicals Limited(iii) Subsidiaries of Holding Company L&T Finance Limited, Larsen & Toubro Infotech Limited(iv) Associates of Holding Company L&T-Sargent & Lundy Limited
Sharp Business Systems (India) Limited(v) Enterprises owned by Key Management Personnel Nil
HPL COGENERATION LIMITED
S-78
11. Inter-Corporate Deposits including Accrued Interest thereon (Refer Schedule – E) includesRs. 755,452,055(Rs. 762,900,000) held for debt servicing requirements of the lenders.Bank balances includes Rs.Nil ( Rs.542,458) in designated accounts for the same purpose.
12. The Company’s operation involves generating of power and steam for the captiveconsumption of Haldia Petrochemicals Limited. All other activities of the company revolvearound this main business. As such, there are no separate reportable segments, as definedby AS 17 (Segmental Reporting) issued by the Institute of Chartered Accountants of India.
13. Earnings Per Share (EPS)2002-03 2001-02
Profit as per Profit & Loss Account 404,127,954 366,548,595Weighted Average Number of Equity Shares 61,200,000 61,200,000Basic & Diluted Earning Per Share (Rs.) 5.10 4.34Nominal Value of Shares (Rs.) 10.00 10.00
14. Previous year’s figures have been regrouped/rearranged wherever necessary.
Balance Sheet Abstract and Company’s General Business Profile
IV. Performance of the Company (Amount in Rupees)
1 5 9
Turnover(including other income)
4 3 9 7 8 6 3 3 8
Total Expenditure
7 3 0 4 8 61
8 8 2
Profit/Loss Before Tax
7 0 1 3 0 4 1 2
Profit/Loss After Tax
4 0 7 9 5
Earning per Share in Rs.
1 0 0
Dividend Rate %
5
0 4
5 .
I. Registration Details
2 1 - 8 3 4 3 4
2 1State Code
Balance Sheet Date 3 1 - 0 3 - 2 0 0 3
II. Capital Raised during the year (Amount in Rupees)
N I L
Date Month Year
Public Issue
N I L
Bonus Issue
Rights Issue
N I L
Private Placement
III. Position of Mobilisation and Deployment of funds (Amount in Rupees)
0 2 9
Total Liabilities
2 5 9 7 7 35
Total Assets
0 0 0
Paid up Capital
2 2 4 0 0 01
Reserves & SurplusSources of Funds
Secured Loans Unsecured Loans
9 7 0
Net Fixed Assets
4 4 1 3 6 9
Investments
N I L
Application of Funds
Net Current Assets
9 9 7
Misc. Expenditure
9 2
7
8 5 28 3 6 2 8
Accumulated Losses
N I L
8 8 31 4 1 1 5
5 5 61 9 8 0 13 0 N I L
4 7
Registration No.
N I L
5
0 2 92 5 9 7 7 35
Director
As per our report attached of even dateS.R. BATLIBOI & CO.Chartered Accountants S.M. SHAMIM EQBALBy the hand of ManagerRAHUL ROY P.R. LILAOONWALAPartner Secretary
Kolkata, Kolkata,Date : 12th May, 2003 Date : 23rd April, 2003
K. VENKATARAMANAN
N. SIVARAMAN }Cash Flow Statement for the year ended 31 st March, 2003
Rs. Rs.2002-2003 2001-2002
A. Cash Flow from Operating activitiesNet Profit before Taxation and extraordinary item 708,821,300 662,709,671Adjustments for:Depreciation 271,673,981 276,973,937Interest 288,276,930 357,044,038Miscellaneous Expenditure written off 799,791 815,749
Operating Profit before Working Capital changes 1,269,572,002 1,297,543,395Adjustments for:(Increase)/Decrease in Trade and Other Receivables 76,947,465 247,907,484(Increase)/Decrease in Inventories 2,844,807 (28,611,436)Increase/(Decrease) in Payables (37,199,852) (94,858,313)
Cash generated from operations 1,312,164,422 1,421,981,130
Direct Taxes paid 15,493,396 8,833,000
Net Cash from Operating activities 1,296,671,026 1,413,148,130B. Cash Flow from Investing ActivitiesPurchase of Fixed Assets (792,058) (19,001,395)Puchase of Investments 8,100,000 (399,900,000)Interest received 61,319,585 78,350,104
Net Cash (used in)/ from Investing activities 68,627,527 (340,551,291)C. Cash Flow from Financing ActivitiesRepayment of Short Term Borrowings - -Proceeds from Long Term Borrowings - -Repayment of Long Term Borrowings (537,327,999) (267,697,167)Repayment of Loan from promoters - -Dividend paid (400,000,000) (489,767,671)Additional Tax on Dividend (19,351,440) (30,604,862)Interest paid (349,596,515) (435,394,142)Net Cash (used in)/from Financing Activities (1,306,275,954) (1,223,463,842)Net(decrease)/Increase in cash & cash equivalents (A+B+C) 59,022,599 (150,867,003)Cash & cash equivalents at the beginning of the year 39,421,134 190,288,137Cash & cash equivalents at the end of the year 98,443,733 39,421,134Notes:1. Cash Flow Statement has been prepared under the Indirect Method as set out in the Accounting
Standard - 3 issued by the Institute of Chartered Accountants of India.2. Cash and cash equivalents represent balances in the current accounts and Fixed Deposit
accounts with the bank.
Director
As per our report attached of even dateS.R. BATLIBOI & CO.Chartered Accountants S.M. SHAMIM EQBALBy the hand of ManagerRAHUL ROY P.R. LILAOONWALAPartner Secretary
Kolkata, Kolkata,Date : 12th May, 2003 Date : 23rd April, 2003
K. VENKATARAMANAN
N. SIVARAMAN }
V. Generic Names of Three Principal Products/Services of the Company(as per monetary terms)
N I LItem Code No.(ITC Code)
ProductDescription P O W E R & S T E A M
Director
As per our report attached of even dateS.R. BATLIBOI & CO.Chartered Accountants S.M. SHAMIM EQBALBy the hand of ManagerRAHUL ROY P.R. LILAOONWALAPartner Secretary
Kolkata, Kolkata,Date : 12th May, 2003 Date : 23rd April, 2003
K. VENKATARAMANAN
N. SIVARAMAN }
TRACTOR ENGINEERS LIMITED
S-79
The Directors have pleasure in presenting their Report and Audited Accounts for the year ended31st March 2003.1. FINANCIAL RESULTS
2002-03 2001-02Rupees Rupees
Profit Before Depreciation & Tax 31,701,674 18,244,481Less: Depreciation on Fixed Assets 9,340,218 44,002,045Profit Before Tax 22,361,456 (25,757,564)Provision for Current tax 9,183,842 847,000Provision for Deferred tax (563,474) (11,444,649)(Write back)/Provision of/for prior years (987,357) (223,478)Profit After Tax 14,728,445 (14,936,437)Add: Balance brought forward from previous year (1,096,337) 13,840,100Leaving a balance available for disposal ofwhich the Directors appropriate as follows: 13,632,108 (1,096,337)Balance carried to Balance Sheet 13,632,108 (1,096,337)
2. DIVIDENDIn view of inadequate profits no dividend is recommended for the current financial year.
3. YEAR IN RETROSPECT/ PERFORMANCE OF THE COMPANYSales and other income for the financial year under review were Rs. 3403 lakhs as against Rs.2839 lakhs for the previous financial year. Due to increase in the domestic demand forundercarriage products there was increase in sales to OEMs. The Profit before tax (afterinterest & depreciation) was Rs.224 Lakhs against loss before tax of Rs.258 Lakhs for theprevious financial year.In the year under review three new Undercarriage models (7T, 35T, 60T) were introduced andserial production commenced on these from August, 2002.Two new applications forUndercarriage (Road Pavers and Surface Miners) were also introduced.In the Defence area sample Track sections for MBT Arjun were invoiced. Orders for theT72Tracks as also for the MBT Arjun Portal Plates (armour steel) were clinched.The Company has discontinued its operations at Navi Mumbai Plant , consequently some ofthe fixed assets located at Navi Mumbai were transferred to Powai plant / disposed off. Theremaining fixed assets have been retired from active use and are being held for sale.During the year Company made two strategic investments in Larsen &Toubro LLC, Delaware,USA and Narmada Infrastructure Construction Enterprise Limited.
4. CAPITAL EXPENDITUREAs at 31st March 2003, the gross fixed assets stood at Rs.1572 lakhs and the net fixed assetsat Rs. 488 lakhs (after excluding assets at Navi Mumbai plant). Assets at Navi Mumbai arebeing held for disposal and are valued at Rs. 378 lakhs as on 31st March, 2003. Additions duringthe year amounted to Rs.14 lakhs.
5. DEPOSITS35 deposits totalling Rs.3.44 Lakhs due for payment on or before 31st March, 2003 remainedunclaimed. As on the date of this report, deposits aggregating Rs 0.63 Lakhs thereof have beenclaimed and paid.
6. AUDITORS’ REPORTThe Auditors’ Report to the Shareholders does not contain any qualifications.
7. DISCLOSURE OF PARTICULARSInformation as per the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 relating to conservation of energy, technology absorption, foreignexchange earnings and outgo are given in Annexure ‘A’ forming part of this report.
8. PERSONNELThe Board of Directors wishes to express its appreciation to all the employees of the Company
for their contribution to the operations of the Company during the year. There are no employeescoming within the purview of Section 217(2A) of the Companies Act,1956 as amended byCompanies (Particulars of Employees) Rules, 1975.
9. Directors’ Responsibility StatementThe Board of Directors of the Company confirms:i. that in the preparation of the annual accounts, the applicable accounting standards have
been followed and there has been no material departure;ii. that the selected accounting policies were applied consistently except as mentioned in
Schedule Q, Item No.10(ii) and the directors made judgements and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March, 2003 and of the profit of the Company for the year ended onthat date;
iii. that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the companies Act, 1956 for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern basis.10. DIRECTORS
At the meeting held on 31st October, 2002, Mr. S.V. Subramanian was appointed as anAdditional Director. Mr. S.V. Subramanian will hold the office of Director upto the date of theensuing Annual General Meeting and is eligible for re-appointment.Mr. J.P. Nayak, who was appointed a Director in the casual vacancy caused by the resignationof Mr. S.D. Kulkarni, will hold office upto the date of ensuing General Meeting whenMr. S.D. Kulkarni would have retired by rotation, and is eligible for re-appointment.The Company has received a notice from a member under the provisions of Section 257 of theCompanies Act, 1956 proposing the candidature of Mr. J.P. Nayak & Mr. S.V. Subramanian forthe office of a Director.Mr. T.S. Sundaresan retires by rotation and being eligible offers himself for re-appointment.
11. AUDIT COMMITTEEThe Audit Committee consists of three non executive and independent directors. The presentmembers of the Committee are Mr. J.P.Nayak, Mr. M.S. Krishnamoorthy andMr. T.S. Sundaresan. Mr. J.P. Nayak is the Chairman of Audit Committee.The role, terms of reference, the authority and power of Chairman are in conformity with therequirements of the Companies Act, 1956.The financial statements have been audited by M/s. Sharp & Tannan, Chartered Accountants,and have been discussed with the Audit Committee.
12. AUDITORSThe Auditors, M/s. Sharp & Tannan, Chartered Accountants hold office until the conclusion ofthe ensuing Annual General Meeting and are recommended for re-appointment. Certificatefrom the auditors has been received to the effect that their re-appointment, if made, would bewithin the limits prescribed under Section 224(1B) of the Companies Act, 1956.
13. ACKNOWLEDGEMENTSThe Directors acknowledge the invaluable support extended to the Company by the FinancialInstitutions, Bankers, vendors and customers. The Directors are pleased to place on recordtheir appreciation for the valuable contribution made by the employees of the Company.
For and on behalf of the Board
J.P. NAYAKM.S. KRISHNAMOORTHYS.V. SUBRAMANIANT.S. SUNDARESAN
Mumbai, 25th April, 2003
TRACTOR ENGINEERS LIMITEDDIRECTORS’ REPORT
A. CONSERVATION OF ENERGYa) Energy conservation measures taken:
Certain models of track roller groups, carrier roller groups, track shoes, front idler as wellas bull gear of apron feeder have been redesigned to reduce weights of components;consequently, there is a substantial reduction in the input weights of steel. This reducedconsumption of steel will result, indirectly, in conserving energy.
b) Proposals:To convert three pusher furnaces that are currently electrically heated to the gas firedfurnaces using piped natural gas. This would enable switching over to a cheaper form ofenergy.
c) Impact of above:Measures taken will result in reduction in consumption of energy.
d) Total energy consumption and energy consumption per unit of production as perForm - A in respect of Industries specified in the Schedule.- Not applicable.
B. TECHNOLOGY ABSORPTIONe) Efforts made in technology absorption as per Form B
FORM B(Disclosure of particulars with respect to Technology Absorption)
RESEARCH AND DEVELOPMENT (R&D)1. Specific areas in which R&D carried out by the Company
n Development of new products/ designs/ processes/ methods/ material / tools, improvementof systems in existing products/ processes in related manufacturing areas of undercarriagecomponents, oil field equipments and apron conveyors.
2. Benefits derived as a result of the above R&D● Improved product service life.● Reducing manufacturing / delivery time● Improved product quality.● Cost reduction / Improved utilisation of material & energy.
3. Future plan of action● Continuation of the present work in R&D for introduction of new products and processes,
improvement in existing products and processes in various areas in which the Companyis operating.
● Faster introduction of new products and processes.● Actively associating with the Defence Ministry (indigenisation plans) for parts for Combat
Crawler Equipments, Design work for products used by various Defence forces.4. Expenditure on R&D (Rs. in lakhs)
2002-03 2001-02i) Capital — —ii) Recurring 28.58 30.55iii) Total 28.58 30.55iv) Total R&D Expenditure as a 1% 1%
percentage of total turnoverTECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION1. Efforts, in brief, made towards technology absorption, adaptation and innovation:
● Product and process technology developed through in-house R&D i.e. for design andmanufacture of undercarriage for excavators has been absorbed and several modelsupgraded to new designs.
2. Benefits derived as a result of the above efforts e.g. product improvement, costreduction, product development, import substitution, etc.:● Improvement in existing processes and product quality, performance, safety and
serviceability.● Import substitution and reduced dependence on technology.● Introduction of new products with indigenous know-how.
3. Information regarding technology imported during the last five yearsThe Company has not imported any technology in the last five years
C) FOREIGN EXCHANGE EARNINGS AND OUTGO:f) Activities relating to exports, initiatives taken to increase exports, development of new
export markets for products and services and export plans:● Working to promote export of our products directly to other countries.
g) Total foreign exchange earned and used (Rs. in lakhs)2002-2003 2001-2002
Foreign exchange earned 126.12 365.82Foreign exchange used 384.02 273.57
ANNEXURE A TO THE DIRECTORS’ REPORT(Additional information given in terms of notification issued by the Department of Company Affairs)
Directors}
AUDITORS’ REPORT TO THE SHAREHOLDERS OF TRACTOR ENGINEERS LIMITEDWe have audited the attached Balance Sheet of Tractor Engineers Limited as at 31st March, 2003,and the annexed Profit & Loss Account of the Company for the year ended on that date. Thesefinancial statements are the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in India.ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatements. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made bymanagement ,as well as evaluating the overall financial statements preparation. We believe that ouraudit provides a reasonable basis for our opinion.
In accordance with the provisions of Section 227 of the Companies Act, 1956, we report as under:1. we have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit;2. in our opinion, proper books of account as required by law, have been kept by the Company,
so far as appears from our examination of those books;3. the said Balance Sheet and the Profit & Loss Account are in agreement with the books of
account;4. in our opinion, the said Balance Sheet and the Profit & Loss Account comply with the
accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956;
5. on the basis of the written representations received from the directors of the Company and
TRACTOR ENGINEERS LIMITED
S-80
taken on record by the Board of Directors, we report that no director is disqualified as on 31St
March 2003 from being appointed as a director in terms of clause (g) of sub-section (1) ofsection 274 of the Companies Act, 1956.
6. in our opinion and to the best of our information and according to the explanations given to us,the said accounts read together with the significant accounting policies in Schedule Q and thenotes in Schedule R give the information required by the Companies Act, 1956 in the mannerso required and give a true and fair view in conformity with the accounting principles generallyaccepted in India:(i) in the case of the Balance Sheet, of the state of the Company’s affairs as at 31st March,
2003, and(ii) in the case of the Profit & Loss Account, of the profit for the year ended on that date.
As required by the Manufacturing and Other Companies (Auditor’s Report) Order 1988 , issued bythe Central Government of India under Section 227 (4A) of the Companies Act, 1956, we report asunder:1) The Company is maintaining proper records to show full particulars including quantitative
details and situation of fixed assets. We are informed that these fixed assets have beenphysically verified by the management at reasonable intervals during the year and no materialdiscrepancies were noticed on such verification.
2) None of the fixed assets have been revalued during the year.3) As explained to us, stocks of finished goods, trading goods, stores, spare parts and raw
materials of the Company have been physically verified by the management at reasonableintervals during the year.
4) The procedures of physical verification of stocks followed by the Management as per theinformation given to us, are reasonable and adequate in relation to the size of the Companyand the nature of its business.
5) No material discrepancies were noticed on physical verification of stocks as compared to bookrecords.
6) On the basis of our examination of stock records, we are of the opinion that the valuation ofstocks is fair and proper in accordance with the normally accepted accounting principles andis on the same basis as in the preceding year.
7) The Company has not taken any loans, secured or unsecured, from companies, firms or otherparties listed in the register maintained under section 301 of the Companies Act, 1956 and/orfrom companies under the same management as defined under Sub-section (1B) of Section370 of the Companies Act, 1956.
8) The Company has not granted any loans, secured or unsecured, to companies, firms or otherparties listed in the register maintained under section 301 of the Companies Act, 1956 and/orto companies under the same management as defined under Sub-section (1B) of Section 370of the Companies Act, 1956.
9) The parties to whom loans or advances in the nature of loans have been given are repayingthe principal amounts as stipulated and are also regular in payment of interest whereapplicable.
10) In our opinion and according to the information and explanations given to us, there areadequate internal control procedures commensurate with the size of the Company and thenature of its business for the purchase of stores, raw materials including components, plant& machinery, equipment and other assets and for the sale of goods.
11) According to the information and explanations given to us, no purchases of goods andmaterials, and sale of goods, materials and services, in pursuance of contracts or arrangementsentered in the register maintained under section 301 of the Companies Act, 1956 andaggregating during the year to Rs.50,000 or more in respect of each party, were made duringthe year .
12) As explained to us, unserviceable or damaged trading goods, finished goods, stores and rawmaterials were determined by the Company and adequate provision for loss has been madein the accounts.
13) The Company has accepted deposits from the public and in our opinion and according to theinformation and explanations given to us, the directives issued by the Reserve Bank of Indiaand the provisions of Section 58A of the Companies Act, 1956 and the rules framed thereunder,wherever applicable, have been complied with.
14) In our opinion, the Company is maintaining reasonable records for sale and disposal of scrap.We are informed that the Company has no realisable by-products.
15) In our opinion, the Company has an internal audit system commensurate with its size and thenature of its business.
16) The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for any of the products of the Company.
17) The Company has regularly deposited during the year, Provident Fund and Employees StateInsurance dues with the appropriate authorities.
18) According to the information and explanations given to us, there were no undisputed amountspayable as at 31st March, 2003 in respect of income- tax, wealth-tax, sales tax, customs dutyand excise duty which were outstanding for a period of more than six months from the date theybecame payable.
19) According to the information and explanations given to us and the records of the Companyexamined by us, no personal expenses have been charged to revenue account other thanthose payable under contractual obligations or in accordance with the generally acceptedbusiness practices.
20) The Company is not a sick industrial company within the meaning of clause (o) of sub-section(1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.
21) In respect of its service activities, the Company has a reasonable system for allocation of manhours consumed to the relative jobs commensurate with its size and the nature of its business.In our opinion, there is a reasonable system of authorisation at proper levels and adequatesystem of internal control commensurate with the size of the Company and the nature of itsbusiness allocation of labour to jobs. As no raw materials and stores have been purchased orconsumed, the question of commenting on the system of recording receipts, issues andconsumption of such items, authorisation, control on the issues and allocation to jobs does notarise.
SHARP & TANNANChartered Accountants
by the hand of
A. B. CHOPRAMumbai, 25th April, 2003 Partner
BALANCE SHEET AS AT 31 st MARCH, 2003As at As at
Sche- 31.3.2003 31.3.2002dule Rs. Rs. Rs. Rs.
SOURCES OF FUNDS :Shareholders’ Funds:
Share capital A 68,000,000 68,000,000Reserves and surplus B 190,719,539 175,991,094
258,719,539 243,991,094Loan Funds :
Secured loans C 10,855,714 24,427,656Unsecured loans D 33,034,000 26,717,000
43,889,714 51,144,656
TOTAL 302,609,253 295,135,750APPLICATION OF FUNDS :Fixed assets : E
Gross block 157,244,622 153,070,222Less : Depreciation 108,470,459 98,235,786Net Block 48,774,163 54,834,436Add:Capital Work-inProgress 300,000 49,074,163 - 54,834,436
Fixed Assets held for sale 37,798,973 45,000,000(see note no.6 - Schedule R)Investments F 72,345,630 38,515,353Current assets, loans andadvances : G
Inventories 113,668,410 96,810,305Sundry debtors 89,101,756 64,478,477Cash and bank balances 315,778 1,781,622Loans and advances 32,373,683 70,327,050
235,459,627 233,397,454Less : Current liabilities andprovisions : H
Liabilities 68,260,054 57,415,875Provisions 13,539,212 8,666,037
81,799,266 66,081,912Net current assets 153,660,361 167,315,542Deferred Tax Liabilities (Net) R (14,300,950) (14,864,424)Miscellaneous expenditure I 4,031,076 4,334,843(To the extent not written off oradjusted)TOTAL 302,609,253 295,135,750CONTINGENT LIABILITIES JSignificant Accounting Policies QNotes Forming Part of Accounts R
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 st MARCH, 2003Sche- 2002-2003 2001-2002dule Rs. Rs. Rs. Rs.
INCOME :Sales and Services K 389,167,848 316,156,772Less:Excise duty 53,547,980 335,619,868 40,717,770 275,439,002Other Income L 4,678,340 8,487,996
340,298,208 283,926,998EXPENDITURE :Materials, manufacturing and
operating expenses M 217,438,106 172,721,418Staff expenses N 58,728,932 61,622,037Sales, administration andother expenses O 32,153,728 27,346,845Interest & Brokerage P 275,768 3,992,217Depreciation andobsolescence 9,340,218 44,002,045
317,936,752 309,684,562
PROFIT/(LOSS) BEFORE TAX 22,361,456 (25,757,564)Provision for Tax- Current tax - including
Wealth Tax 9,183,842 847,000Rs.40,000(previous year Rs.82,000 )
- Deferred Tax (563,474) (11,444,649)- (Write Back)/Provision of/
for tax pertaining to prioryears(including WealthTax of Rs Nil, (987,357) (223,478)previous year Rs.3,000) 7,633,011 (10,821,127)
PROFIT/(LOSS) AFTER TAX 14,728,445 (14,936,437)Add:Balance brought forwardfrom previous year (1,096,337) 13,840,100
Balance carried to Balance Sheet 13,632,108 (1,096,337)Basic and Diluted EarningsPer Share (Rs.) R 216.59 (219.66)
SIGNIFICANT ACCOUNTINGPOLICIES QNotes forming part of Accounts R
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand ofA.B. CHOPRA D.D. UPPONIPartner Manager
Place : MumbaiDate : 25th April, 2003 Mumbai, 25th April, 2003
J.P. NAYAKM.S. KRISHNAMOORTHYS.V. SUBRAMANIANT.S. SUNDARESAN
Directors}As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand ofA.B. CHOPRA D.D. UPPONIPartner Manager
Place : MumbaiDate : 25th April, 2003 Mumbai, 25th April, 2003
J.P. NAYAKM.S. KRISHNAMOORTHYS.V. SUBRAMANIANT.S. SUNDARESAN
Directors}
TRACTOR ENGINEERS LIMITED
S-81
SCHEDULES FORMING PART OF ACCOUNTSAs at As at
31.3.2003 31.3.2002Rupees Rupees
SCHEDULE AShare Capital :Authorised :
70,000 Equity shares of Rs.1,000 each. 70,000,000 70,000,000Issued & subscribed :68,000 Equity shares of Rs.1,000 each 68,000,000 68,000,000fully paid
SCHEDULE BReserves & Surplus :General Reserve :
As per last Balance Sheet 177,087,431 203,396,504Less: Adjustment of Deferred taxliabilities (net) - 26,309,073as on 31st March, 2001
177,087,431 177,087,431Profit & Loss Account 13,632,108 (1,096,337)
190,719,539 175,991,094
As at As at31.3.2003 31.3.2002
Rupees RupeesSCHEDULE CSecured Loans :From Banks :
Cash Credits 10,849,039 24,410,340Interest accrued and due 6,675 17,316
10,855,714 24,427,656
SCHEDULE DUnsecured Loans :Fixed Deposits :
Due for not more than one year 13,365,000 9,753,000
Other deposits 3,669,000 17,034,000
16,964,000 26,717,000Inter Corporate Deposits 16,000,000 -
33,034,000 26,717,000
SCHEDULE E Rupees
COST DEPRECIATION Book Book
FIXED ASSETS Value ValueAs at Additions Deduc- As at As at For the On dedu- As at as at as at
1.4.2002 tions 31.3.2003 1.4.2002 year ctions 31.3.2003 31.3.2003 31.3.2002
Buildings 20,870,753 - - 20,870,753 10,258,311 534,512 - 10,792,823 10,077,930 10,612,442
Plant & Machinery 126,761,881 1,350,031 229,330 127,882,582 84,346,719 8,446,916 218,012 92,575,623 35,306,959 42,415,162
Furniture &
Fixtures 8,090,262 70,185 15,450 8,144,997 4,680,872 309,825 2,936 4,987,761 3,157,236 3,409,390
Vehicles 346,290 - - 346,290 65,287 48,965 - 114,252 232,038 281,003
156,069,186 1,420,216 244,780 157,244,622 99,351,189 9,340,218 220,948 108,470,459 48,774,163
(b) (c)
Previous Year 159,344,708 289,714 6,564,200 153,070,222 95,181,089 9,471,965 6,417,268 98,235,786 54,834,436
(b) (c) ( b & c)
Add:Capital work-in-progress ( including advance of Rs 300,000 (previous year Rs NIL) ) 300,000 -
49,074,163 54,834,436
Notes:a) Fixed Assets schedule does not include assets located at Navi Mumbai Plant which are held for sale.b) Original Cost of fixed assets as at 01.04.02 includes assets of Rs.2,998,964 transferred from Navi
Mumbai plant during 2002-03.c) Opening accumulated depreciation as at 01.04.02 includes accumulated depreciation of
Rs. 1,115,403 on assets transferred from Navi Mumbai plant during 2002-03.
As at 31.3.2003 As at 31.3.2002Rupees Rupees
SCHEDULE FInvestments :(Non trade)Long TermUnquoted at costUnit Trust of India(331,930 units of Rs.10 each) - 4,129,193Less:Provision for diminution in value - 809,893
- 3,319,300(Trade)Long TermUnquoted at costNarmada Infrastructure ConstructionEnterprise Limited(see note No.13(a) -Schedule R)(2,822,750 shares of Rs. 10 eachpurchased during the year) 53,900,411 -Larsen & Toubro LLC(2,500 shares of USD 1 eachallotted during the year) 119,475 -
54,019,886 -CurrentUnquoted at costUnit Trust of India (see note No.13(b)- Schedule R) 3,319,300 -(331,930 units of Rs.10 each)Grindlays Dynamic Bond Fund-Growth (466,035 unitsof Rs 10 each)(subscribed duringthe year) 5,000,000 -
As at 31.3.2003 As at 31.3.2002Rupees Rupees
SCHEDULE F (Cont'd)Grindlays Cash Fund-Growth option(896,659 units of Rs 10 eachsubscribed during the year) 10,006,444 -(948,641 units of Rs 10 each soldduring the year) - 10,000,000Kotak Mahindra Liquid Scheme“Growth” (890,773 unitsof Rs 10 each)( sold during the year) - 10,082,309Zurich India High Interest Fund“ Reg Growth” (539,400 unitsof Rs 10 each) ( sold during the year) - 10,113,744Grindlays Supersaver Income Fund“Short Term Dividend”(496,426 units of Rs 10 each)(sold during the year) - 5,000,000
18,325,744 35,196,05372,345,630 38,515,353
Details of Investments purchased and sold during the yearFace Value Nos. CostRs.per unit Rupees
Mutual FundsGrindlays Supersaver Income Fund -Investment Plan - Growth option 10 776,641 10,065,266K Bond Unit Scheme 99 (Wholesale Plan) - Growth 10 719,545 10,151,344HDFC Income Fund - Growth 10 1,119,670 15,000,000Reliance Vision Fund - Dividend Plan 10 177,305 5,000,000Money Market Mutual FundsGrindlays Cash Fund - Growth option 10 447,463 4,993,557Kotak Mahindra Liquid Scheme - Growth 10 957,478 11,451,634HDFC Liquid Fund - Growth 10 1,361,069 16,211,147Zurich India LiquidityFund - Savings Plan - Growth 10 933,118 11,562,733
TRACTOR ENGINEERS LIMITED
S-82
SCHEDULES FORMING PART OF ACCOUNTSAs at 31.3.2003 As at 31.3.2002
Rupees Rupees
SCHEDULE GCurrent Assets, Loans and Advances :Inventories : At lower of cost ornet realisable value
Loose tools 885,375 649,024Consumables stores &spare parts 432,155 520,965Raw materials 73,667,910 48,978,698Finished goods 27,486,179 38,322,222Work-in-progress 11,196,791 8,339,396
113,668,410 96,810,305Sundry Debtors :
Unsecured, considered good :Outstanding for more thansix months 620,680 158,321Other debts 88,481,076 64,320,156
89,101,756 64,478,477Cash and bank balances
Cash on hand 228,924 183,105Balances with scheduledbanks on current accounts 86,854 1,598,517
315,778 1,781,622Loans and Advances :
Secured, Considered good :Loans against mortgage of houseproperty 3,480,791 3,014,441Unsecured, Considered good :Inter Corporate Deposits(including interest accruedthereon) - 25,183,699Advances recoverable in cashor in kind 28,891,892 42,127,910Deposit with IndustrialDevelopment Bank of India 1,000 1,000
32,373,683 70,327,050235,459,627 233,397,454
SCHEDULE HCurrent Liabilities and Provisions :Current Liabilities :Sundry Creditors
Due to Small Scale IndustrialUndertakings 1,858,127 1,867,698Others 62,714,710 49,693,124
64,572,837 51,560,822Interest accrued, but not dueon loans 962,381 1,520,210Pension payable underVoluntary retirement cumpension scheme(Payable within one year Rs.990,250 2,724,836 68,260,054 4,334,843 57,415,875Previous year Rs.1,610,007 )
Provisions for :Leave encashment 10,012,000 8,363,000Taxes (net) 3,527,212 303,037
13,539,212 8,666,037
81,799,266 66,081,912
SCHEDULE IMiscellaneous expenditure(To the extent not written offor adjusted)Voluntary retirement pensionscheme 4,031,076 4,334,843
4,031,076 4,334,843SCHEDULE JContingent LiabilitiesFor Income tax matters(including interest) in appeal. - 25,196,680(Certain issues under appealhave been decided inCompany’s favour in the past).For Excise matters in appeal 787,745 787,745Customers’ Bills Discounted - 18,355,836
SCHEDULE K2002-03 2001-02Rupees Rupees
Sales & ServiceManufacturing & Trading activity 370,152,910 316,147,022Servicing 19,014,938 9,750
389,167,848 316,156,772
2002-03 2001-02Rupees Rupees
SCHEDULE LOther Income :Income from long term investments - 336,930Income from other investments 561,701 5,050,855
(Tax deducted at source Rs.55,851,previous year Rs.NIL )
Profit on sale of current investments 3,729,517 -Profit on sale of fixed assets - 1,368,379Miscellaneous income 387,122 1,731,832
4,678,340 8,487,996
SCHEDULE MMaterials, Manufacturing andOperating expenses :Raw material consumed :
Opening stock 48,978,698 54,077,294Add : Purchases 207,550,559 132,084,222
256,529,257 186,161,516Less : Closing stock 73,667,910 48,978,698
182,861,347 137,182,818
Add : Purchase of tradinggoods - 1,160,782Decrease in manufacturingand trading stocksClosing stocks :Finished goods 27,486,179 38,322,222Work-in-progress 11,196,791 8,339,396
38,682,970 46,661,618Less :Opening stocks :Finished goods 38,322,222 45,475,930Work-in-progress 8,339,396 12,286,103
46,661,618 57,762,0337,978,648 11,100,415
190,839,995 149,444,015
Less : Scrap sales 1,370,730 509,177
189,469,265 148,934,838Stores, spares and tools 5,576,630 4,231,275Excise duty (938,680) (704,779)Power and fuel 16,694,080 14,439,745Hire Charges - Plant & Machineryand others 469,880 335,150Repairs to plant and machinery 4,861,635 4,069,094Repairs to buildings 1,305,296 1,416,095
217,438,106 172,721,418
SCHEDULE NStaff Expenses :Salaries, wages and bonus 41,834,341 48,264,679Contribution to :
Provident funds andpension fund 3,342,027 3,324,870Superannuation fund 715,857 671,598Gratuity funds 2,114,842 286,569
6,172,726 4,283,037Provision for leave encashment 1,649,000 445,000Welfare and other expenses 9,072,865 8,629,321
58,728,932 61,622,037SCHEDULE OSales, Administration & Other Expenses :Rent (including lease rentalsRs.750,889 1,080,209 1,143,344previous year Rs.854,902)Rates and taxes 1,780,615 1,317,531Travelling and conveyance 5,312,389 4,375,541Directors’ fees 28,000 36,000Telephone Postage & Telegram 895,318 978,730Advertising and sales promotion 219,607 217,886Stationery & Printing 595,030 513,107Insurance 1,117,541 1,286,093Commission 3,428,417 815,422Bank Charges 851,758 692,099General Repairs & maintenance 187,891 144,246Miscellaneous expenses 11,201,807 10,681,176Loss on sale of fixed assets (net) 1,318 -Loss on Sale of Long Term investments (net) - 21,000Loss on Sale of current investments (net) - 175,376Provision for diminution in value of Investments - 809,893Packing and forwarding 5,453,828 4,139,401
32,153,728 27,346,845SCHEDULE PInterest & BrokerageFixed Deposits & Loans 2,430,703 3,331,567Others 1,774,409 4,205,112 2,214,170 5,545,737Less:
Interest from Inter CorporateDeposits and others 3,929,344 1,553,520(Tax deducted at sourceRs.425,942,previous year Rs.4,470 )
275,768 3,992,217
TRACTOR ENGINEERS LIMITED
S-83
SCHEDULES FORMING PART OF ACCOUNTSSCHEDULE QSIGNIFICANT ACCOUNTING POLICIES1. BASIS OF ACCOUNTING - The Company maintains its accounts on accrual basis
following the historical cost convention in accordance with generally acceptedaccounting principles [“GAAP”] and in compliance with the Accounting Standardsreferred to in Section 211(3C) and other requirements of the Companies Act, 1956.The preparation of financial statements in conformity with GAAP requires that themanagement of the Company makes estimates and assumptions that affect thereported amounts of income and expenses of the period, the reported balances ofassets and liabilities and the disclosures relating to contingent liabilities as of the dateof the financial statements. Examples of such estimates include useful lives of fixedassets, provision for doubtful debts/advances, future obligations in respect of retirementbenefit plans etc. Actual results could differ from these estimates.
2. FIXED ASSETS are stated at cost less depreciation.Interest on borrowings for fixed assets acquisition and revenue expenses incurred atproject site for the period prior to commencement of commercial production arecapitalised as part of asset cost. Fluctuations in exchange rates are adjusted to thecost of the fixed assets.Depreciation on fixed assets is provided at the rates prescribed from time to time underSchedule XIV of the Companies Act, 1956, on the written down value method on allexisting assets upto 30th September, 1987 and on straight line method on assetsacquired from 1st October, 1987 except in the case of vehicles which are depreciatedat 14.14% .Depreciation on additions/deductions is calculated pro rata from/to themonth of additions/ deductions. The value of leasehold land is amortised over theperiod of the lease.
3. BORROWING COSTS that are attributable to the acquisition, construction or productionof qualifying assets are capitalised as part of cost of such assets. A qualifying assetis an asset that necessarily requires a substantial period of time to get ready for itsintended use or sale. All other borrowing costs are recognised as expense in the periodin which they are incurred.
4. INVESTMENTS -i) Long Term investments are carried at cost.ii) Current investments are carried at lower of cost or market value.
5. INVENTORIES are valued at lower of cost or net realisable value as under afterproviding for obsolescence:Loose Tools Weighted average cost method.Raw material, and stores & spare parts Weighted average cost method.Work in progress & Finished Goods Weighted average cost method
The cost include costs directly related toproduction and a systematic allocation offixed and variable production overheadsFinished Goods Inventory is inclusive ofexcise duty paid/payable.
6. FOREIGN CURRENCY transactions are accounted for at the rates prevailing on thedates of the transactions. Foreign Currency assets and liabilities are converted atcontracted/year end rates as applicable.The exchange difference on settlement /conversion are adjusted to:i) Cost of Fixed Assets, if the foreign currency liability relates to Fixed Assets.ii) Profit and Loss Account in other cases. Wherever forward contracts are entered
into, the exchange difference are dealt with in the Profit and Loss Account over theperiod of the contracts.
7. RETIREMENT BENEFITS - Contributions are made to the Provident Funds and Super-annuation Fund on actual liability basis and to the Gratuity Funds on actuarial valuationbasis. Provision for Leave Encashment on retirement is made on actuarial valuationbasis.
8. Revenue expenditure on RESEARCH & DEVELOPMENT is charged to the Profit &Loss Account under respective heads of accounts. Capital expenditure on researchand development is shown as additions to fixed assets.
9. PRIOR PERIOD AND EXTRAORDINARY ITEMS - Income and expenditure pertainingto prior period as well as extraordinary items, where material, are disclosed separately.
10. DEFERRED REVENUE EXPENDITURE -i) Specialised software is amortised over a period of three years.ii) Future pensions under Voluntary Retirement cum Pension scheme are amortised
over the period for which such pensions are payable. Lump sum compensation paidunder Voluntary Retirement Scheme launched in the current year is amortised overa period of five years. Lump sum payments made under the earlier schemes werewritten off in the same financial year.
11. TAXES ON INCOME -Tax on Income for the current period is determined on the basis of taxable income andtax credits computed in accordance with the provisions of the Income Tax Act,1961,and based on expected outcome of the assessments /appeals.Deferred tax is recognised on timing difference between the accounting income andtaxable income for the year and quantified using the tax rates and laws enacted orsubstantively enacted as on the Balance Sheet date.Deferred tax assets are recognised and carried forward to the extent that there is areasonable certainty that sufficient future taxable income will be available againstwhich such deferred tax assets can be realised.
SCHEDULE RNOTES FORMING PART OF ACCOUNTS1. Of the total shares issued, 67,994 Equity shares (Previous year 67,994 Equity shares)
are held by the Holding Company – Larsen & Toubro Limited.2. Of the total shares issued, 62,000 Equity shares were issued as bonus shares by way
of capitalisation of General Reserve of Rs.62,000,000.3. Sundry creditors include interest of Rs.Nil ( previous year Rs.Nil ) on overdue amounts
payable to Small Scale and Ancillary Industrial Undertakings.4. In pursuance of Sec.441A of the Companies Act,1956 as inserted by the Companies
(Second Amendment) Act,2003 provision is required to be made for payment of Cesstowards a fund to be established for rehabilitation and revival of sick industrial units.However no provision has been made in the books of account in the absence of
notification specifying the effective date and the applicable rate for the Company forcalculation of Cess for the financial year 2002-03.
5. Estimated amount of contracts remaining to be executed on capital account (net ofadvances) Rs.1,440,000 (previous year Rs. Nil).
6. The Company had discontinued its operations at Navi Mumbai Plant, consequently,fixed assets located at the Navi Mumbai plant have been retired from active use andare being held for disposal. Accordingly, the Company, as on 31st March 2003, hasvalued fixed assets located at the Navi Mumbai plant based on estimated realisablevalue (as per Valuation Report) or book value, whichever is less.
7. Cash credit facilities from banks are secured by hypothecation of stocks, stores andbook-debts.
8. Expenditure on research and development activities, as certified by the ManagementRs.2,858,232 (previous year Rs.3,054,642) including Capital expenditure of Rs.Nil(previous year Rs. Nil)
9. The Company has taken on lease certain assets costing Rs.3,195,395 (previous yearRs.3,456,227), the future lease obligation against which is Rs.932,349 as at 31stMarch, 2003.(previous year Rs.1,858,461 Lakhs)
10. Loans and advances include: As at 31.3.2003 As at 31.3.2002Rupees Rupees
Due from an Officer of the Company(Maximum amount outstanding at anytime during the year Rs.1,065,156)(previous year Rs.1,085,513) 1,027,788 1,038,026
11 The Company owes a sum which is outstanding for more than 30 days to the followingsmall scale industrial undertakings:1. Shakthi Industries2. Gala Springs Private Limited3. Rehal Engineering Works4. Star Enterprises5. Seema Industries6. Dashmesh Engineering Works7. S.K.Corporation8. Srinivas Engineering9. S J Iron & Steels Private Limited10. Kohinoor Mech. & Engg.Works11. Union Engineering Works
12. Preciturn Systems13. Ronomats (India)14. Accurate Equipment
Manufacturers Private Limited15. Sonak Industries16. Electroscope Systems17. Vako seals18. Alucast Industries
The above information and that given in schedule H – Current liabilities regarding smallscale industrial undertakings has been determined to the extent such parties havebeen identified on the basis of information available with the Company. This has beenrelied on by the Auditors.
12. The exchange loss (net) arising on Foreign Currency transactions amounting toRs.625,573 has been provided for in the respective revenue accounts (previous yearloss (net) Rs.44,103)
13 (a) 2,822,750 shares of Narmada Infrastructure Construction Enterprise Limitedpurchased during 2002-03 are pending transfer in the name of the Company asat 31st March 2003.
13 (b) Current Investments comprising of 331,930 units of Units Scheme 1964 arecarried at Rs.10 per unit, being the minimum repurchase price guaranteed by UnitTrust of India at which the Company has offered the units for redemption/conversion.
14. The Company has during the year, in accordance with Accounting Standard (AS-22),”Accounting for Taxes on Income” issued by the Institute of Chartered Accountantsof India, recognised in the Profit & Loss Account, the difference of Rs.563,474 betweennet deferred tax liabilities of Rs14,300,950 as at 31st March 2003 and net deferred taxliabilities of Rs 14,864,424 as at 31st March 2002 .Deferred Tax Assets and Liabilities are on account ofThe following timing differences: 2002-03 2001-02
Rupees RupeesDeferred Tax LiabilitiesDepreciation 14,162,807 15,594,743Expenditure claimed on Payment basisfor tax purposes 768,419 -Voluntary Retirement Pension Scheme 818,787 1,377,554Total 15,750,013 16,972,297Deferred Tax AssetsUnabsorbed Long term Capital Loss 20,330 63,352Unabsorbed Short term Capital Loss - 101,466Voluntary Retirement Scheme 1,262,705 1,772,977Provision for Diminution in Value of Investments 166,028 170,078Total 1,449,063 2,107,873Deferred Tax Liabilities (Net) 14,300,950 14,864,424
15. The Manager’s salary & perquisitescharged to accounts 2002-03 2001-02
Rupees Rupees
Salaries 754,916 650,728Perquisites 257,776 260,543Retirement Benefits 197,976 217,646
1,210,668 1,128,91716. Auditors’ Remuneration
(excluding service tax) :Audit fees 175,000 175,000Taxation matters — 4,000Certification work 42,750 —Tax audit fees 40,000 40,000Other services — 18,600Expenses reimbursed 19,023 3,567
276,773 241,167
TRACTOR ENGINEERS LIMITED
S-84
17. Details of licensed capacity, installed capacity, production and turnover:Product Licensed capacity *Installed capacity
(i) Crawler Tractor parts For replacement For replacementneeded for 2,000 needed for 2,000( two thousand ) ( two thousand )
track type tractors track type tractors(2,000) (2,000)
* As certified by a Director, on which certificate the auditors have placed reliance.
(ii) Actual production and opening/closing stocks:Production Opening stock Closing stock
Qty. Qty. Value Qty. ValueNos. Nos. Rupees Nos. Rupees
Form of sets 17070 1410 14,899,516 1326 10,156,566(9946) (2287) (22,463,000) (1410) (14,899,516)
Loose parts 45975 46700 22,966,741 51650 17,226,363(109605) (51654) (22,403,694) (46700) (22,966,741)
Trading goods NA — 455,965 — 103,250(NA) ( — ) (609,236) ( — ) (455,965)
Figures in brackets are in respect of previous year.
(iii) Turnover: 2002-03 2001-02Qty. Value Qty. ValueNos. Rupees Nos. Rupees
(net of excise) (net of excise)
Form of sets 17154 255,374,755 10823 203,851,982Loose parts — 61,230,175 — 69,374,586Trading goods — — — 2,202,684
316,604,930 275,429,252
18. Raw materials consumed:2002-03 2001-02
Qty. Value Qty. ValueM.Tons Rupees M.Tons Rupees
Special steels 3278 83,633,455 2443 61,371,004Iron & Steel castings 207 8,595,680 75 2,781,752Bronze castings 15 3,318,829 10 2,259,101Others 87,313,383 70,770,961
182,861,347 137,182,818
19. Purchases: 2002-03 2001-02Qty. Value Qty. Value
Rupees RupeesTrading goods — — — 1,160,782
20. Value of imported and indigenous materials consumed and percentage thereof:Raw Materials Stores & Spare parts
% Value % ValueRupees Rupees
Imported 24 44,743,896 0 0.00(26) (35,094,524) (0) (0.00)
Indigenous 76 138,117,451 100 5,576,630(74) (102,088,294) (100) (4,231,275)
100 182,861,347 100 5,576,630(100) (137,182,818) (100) (4,231,275)
Figures in brackets are in respect of previous year.
21 Value of imports (on C.I.F. basis): 2002-03 2001-02Rupees Rupees
Raw materials 38,201,272 26,339,213Parts for sale — 742,093Others — 138,018
38,201,272 27,219,324
22. Expenditure in foreign currency:Other matters 200,808 137,589
23. Earnings in foreign exchange:Export of goods on F.O.B. basis 12,611,630 35,208,838Tooling Costs — 1,373,330
24 Earnings Per Share:1. Basic Earnings Per Share (Rs.) 216.59 -219.662. Diluted Earnings Per Share (Rs.) 216.59 -219.663. Profit/(Loss) After Tax as per Profit & Loss
Account (Rs.) 14,728,445 (14,936,437)4. Weighted average number of equity shares
outstanding 68000 680005. Nominal Value per Equity Share Rs.1000 Rs.1000
25. Figures for the previous year have been regrouped/reclassified wherever necessary.
26. BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILEI. REGISTRATION DETAILS
Registration No.
State Code0 8 8 9 3 1 1
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities (including Paid-up capital)
Secured Loans
Net Current Assets
Misc. Expenditure
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Deferred Tax Liabilities (Net)
Profit /Loss After Tax
3 1 - 0 3 - 2 0 0 3
N I L
N I L N I L
3 0 2 6 0 9
6 8 0 0 0
1 0 8 5 6
1 9 1 4 5 9
3 3 0 3 4
II. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)
Sources of FundPaid-up Capital
Application of FundsNet Fixed Assets
7 2 3 4 6
Balance Sheet Date
N I L
3 0 2 6 0 9
1 9 0 7 1 9
Signatures to Schedules A to R
V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF THECOMPANY
Item Code No. (ITC Code)
Product Description
Turnover (Including other income)
Profit/Loss Before Tax
Total Expenditure
3 4 0 2 9 8 3 1 7 9 3 7
1 4 7 2 8
Earning Per Share in Rs.
N I L
IV. PERFORMANCE OF COMPANY (Amount in Rs. Thousands)
Dividend Rate %
2 2 3 6 1
4 9 0 7 4
4 0 3 1
1 4 3 0 1–
Accumulated Losses
–
2 1 6 . 5 9
8 4 . 3 1
P A R T S O F E A R T H M O V I N G M A C H I N E R Y
M A T E R I A L H A N D L I N G E Q U I P M E N T S
O I L F I E L D E Q U I P M E N T S
As per our report attached For and on behalf of the BoardSHARP & TANNANChartered AccountantsBy the hand ofA.B. CHOPRA D.D. UPPONIPartner Manager
Place : MumbaiDate : 25th April, 2003 Mumbai, 25th April, 2003
J.P. NAYAKM.S. KRISHNAMOORTHYS.V. SUBRAMANIANT.S. SUNDARESAN
Directors}
LARSEN & TOUBRO LLC
S-85
LARSEN & TOUBRO LLCDIRECTORS’ REPORT
The Directors have pleasure in presenting their Annual report and Accounts for the year ended31st December 2002.
FINANCIAL RESULTS
Year ended 31.12.2002 2 nd Jan 2001 to 31 st Dec 2001
US $ INR US $ INR
Gross Profit / (Loss) ( 22708) (1090062) (15767) (759668)
Less: Depreciation on fixed assets 14905 714844 7601 366216
Profit / (Loss) before taxes (37613) (1804906) (23368) (1125884)
Provision for taxes - - - -
Provision for deferred taxes ( 9100) (437437) - -
Profit / (Loss) after taxes (28513) (1367469) (23368) (1125884)
SALES & OTHER INCOME
Income from sales and other sources amounted to US$ 807,091 for the year ended 31st
December 2002 as against US$ 2,44,443 in the previous year.
REVIEW OF OPERATIONS
During the year, through sustained efforts, sales increased substantially. However, due tosluggish market conditions and intense competition there was pressure on prices andmargins. As a result even though sales had increased substantially, the company is yet tobreakeven.
FUTURE OUTLOOK
Based on the experience over the last two years, the inventory is being re-organised to addressspecial requirements in industry which offer better prices. A number of projects are alsoplanned in the Oil & Gas segment which offers good growth potential.
K SURENDRADirector
Dated : 12th May, 2003
Place : Chennai
Balance Sheet As at 31.12.2002 As at 31.12.2001US $ Rs Rs. L US $ Rs Rs. L
AssetsCurrent assetsChecking / SavingsCash - Operating 73385.00 3519544.60 35.20 17262.31 831698.00 8.32
Total checking / Saving 73385.00 3519544.60 35.20 17262.31 831698.00 8.32Accounts receivableAccounts Receivable - Affiliates 45171.00 2166401.16 21.66 46653.00 2247742.00 22.48Accounts Receivable 192736.00 9243618.56 92.44 26171.90 1260962.00 12.61
Total accounts receivable 237907.00 11410019.72 114.10 72824.90 3508704.00 35.09Other Current AssetsInventory Asset 381740.00 18308250.40 183.08 283478.04 13657972.00 136.58Prepaid Insurance 4014.02 192512.40 1.93 0.00
Total other current assets 697046.02 33430327.12 334.30 373565.25 17998374.00 179.98Fixed AssetsTotal Fixed assets 37612.00 1803871.52 18.04 26434.66 1273622.00 12.74Other AssetsSecurity Deposit 550.00 26378.00 0.26 550.00 26499.00 0.26Utilities Deposit 670.00 32133.20 0.32 670.00 32281.00 0.32
1220.00 58511.20 0.59 1220.00 58780.00 0.59Deferred Tax Asset 9100.00 436436.00 4.36 0.00 0.00 0.00
TOTAL ASSETS 744978.02 35729145.84 357.29 401219.91 19330776.00 193.31LIABILITIES & EQUITYLiabilitiesAccounts payable 11304.00 542139.84 5.42 374588.20 18047659.00 180.48Accounts payable - Affiliates 726482.00 34842076.72 348.42 0.00 0.00 0.00Advances 0.00 0.00 0.00 0.00 0.00Current Note Payable 9073.00 435141.08 4.35 0.00 0.00 0.00
Total accounts payable 746859.00 35819357.64 358.19 374588.20 18047659.00 180.48
Total current liabilities 746859.00 35819357.64 358.19 374588.20 18047659.00 180.48
LONG-TERM PAYABLEEquityCapital stock (Par Value) 50000.00 2398000.00 23.98 50000.00 2409000.00 24.09Paid in capital 0.00 0.00 0.00 0.00 0.00 0.00Retained earnings -23368.29 -1120743.19 -11.21 0.00 0.00 0.00Profit & Loss account -28512.69 -1367468.61 -13.67 -23368.29 -1125884.00 -11.26
-1880.98 -90211.80 -0.90 26631.71 1283116.00 12.83
744978.02 35729145.84 357.29 401219.91 19330775.00 193.31
Chennai, K SURENDRADate : 12th May, 2003 Director
(See Independent Auditor's Report. The accompanying notes are an integral part of the financial statements.)
Profit & Loss Account01-Jan-2002 31-Dec-2002 02-Jan-2001 31-Dec-2001
US $ Rs US $ RsIncome
Resale Income 753745.35 36232538.97 197789.75 9529510.00Other Income 53345.39 2558444.90 46653.00 2247742.00
Total Income 807090.74 38790983.88 244442.75 11777252.00
Cost of goods sold 639679.27 30749382.51 168585.16 8122433.00Total cost of goods sold 639679.27 30749382.51 168585.16 8122433.00
Gross profit 167411.47 8041601.37 75857.59 3654819.00Expenses
Automobile Expenses 822.22 39524.12 2816.95 135721.00Maintenance Contract 699.87 33720.00Warehouse supplies 1647.48 79194.36 1665.95 80265.00Comission Expenses 29249.63 1406029.71 4845.76 233469.00Office Expenses 142.16 6833.63 915.00 44085.00Books & Manuals 1289.77 62141.00Bank service Charges 405.00 19468.35 304.56 14674.00Building & Grounds maintenance 1856.06 89220.80 2244.84 108156.00Building Lease 53240.78 2559284.29 29730.00 1432391.00Computer Expenses 331.74 15946.74 234.24 11286.00Depreciation Expense 14905.00 714843.80 7601.00 366216.00Equipment Lease - Forklift 4812.57 231870.00Equipment Rental 5177.79 248896.37 1275.22 61440.00Freight & Delivery 45420.72 2183374.01 12783.61 615914.00Insurance Auto 1859.00 89362.13 2537.00 122233.00Office Supplies 1263.74 60747.98 2854.05 137508.00Professional Fees 3776.00 181512.32 838.95 40421.00Repairs & maintenance 7676.47 369007.91 1762.44 84914.00Telephone 18765.83 902073.45 17020.25 820035.00Travel & Ent 469.37 22562.62 100.00 4818.00Utilities 4177.66 200820.12 2823.01 136013.00Promotion 853.76 41040.24Customs bond Expenes 550.00 26438.50Car lease expenses 516.27 24817.10Interest expenses - Auto 1407.92 67678.71Rates & Taxes 9594.58 461211.46Deferred credit -9100.00 -437437.00Exchange difference on translation -7364.84Others 914.98 43983.09 70.84 3413.00
Total expenses 195924.16 9409069.98 99225.88 4780703.00
Net ordinary income -28512.69 -1367468.61 -23368.29 -1125884.00
Chennai, K SURENDRADate : 12th May, 2003 Director(See Independent Auditor's Report. The accompanying notes are an integral part of the financial statements.)
ABERCROMBIE, REVIA, DEGEYTER& Associates, PLLC
Certified Public Accountants and Consultants
INDEPENDENT AUDITORS’ REPORT
May 5, 2003
To the Stockholder ofLarsen & Toubro LLCHouston, Texas
We have audited the accompanying Balance Sheet of Larsen & Toubro LLC (a DelawareLimited Liability Company) as of 31st December, 2002, and the related statements ofoperations, members’ equity, cash flows, and general and administrative expenses for theyear then ended. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statementsbased on our audit.
We conducted our audit in accordance with audit standards generally accepted in theUnited States of America. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit providesa reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all materialrespects, the financial position of Larsen & Toubro LLC as of 31st December, 2002 and theresults of its operations and its cash flows for the year then ended in conformity withaccounting principles generally accepted in the United States of America.
Sd/-Abercrombie, Revia, Degeyter & Associates, PLLCCertified Public Accountants
LARSEN & TOUBRO LLC
S-86
Notes to Financial Statements 31 st December, 2002(1) GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company began operations in 2001. Since its inception, Larsen & Toubro LLC hasprimarily sold and stocked Gate, Globe & Check Valves manufactured by Audco India Limited,a related party. The Company is organized as a Delaware limited liability company.
A summary of the significant accounting policies utilized by the Company in preparing itsfinancial statements follows:
Cash and Equivalents
For purposes of the statement of cash flows, cash equivalents include time deposits, certificatesof deposit, and all highly liquid debt instruments with original maturities of three months orless.
Property and Equipment
Property and equipment are recorded at cost. Maintenance and minor repairs and replacementsare charged directly to expense as incurred; major renewals and betterments are charged tothe respective property and equipment account. When property and equipment is sold orotherwise disposed of, the asset accounts and related accumulated depreciation accounts arerelieved and any gain or loss is included in operations.
Assets are being depreciated under the 200 percent declining balance method over theirestimated useful lives.
The useful lives of property and equipment, for the purposes of computing depreciation, are:
Years
Leasehold improvements 39
Machinery and equipment 5 - 7Furniture and fixtures 5 - 7Trucks and autos 5
Use of Estimates
The preparation of financial statements in conformity with the United States generally acceptedaccounting principles requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilitiesat the date of the financial statements and reported amounts of revenues and expenses duringthe reporting period. Actual results could differ from those estimates.
Inventoried Costs
Inventories are stated primarily at the lower of average cost or market and consists of finishedgoods.
Federal Income Taxes
The limited liability corporation has elected to be taxed as a C-Corporation for federal taxes.Amounts provided for federal income taxes are based on the earnings reported for financialstatement purposes, adjusted for permanent differences between reported financial and taxableincome. Deferred federal income taxes relate to items of revenue and expense, which arereported in different periods for federal income tax and financial statement purposes. Suchdifferences result primarily from differences caused by the utilization of the Company’s netoperating losses.
(2) ALLOWANCE FOR DOUBTFUL ACCOUNTS
Management currently believes that all receivables are collectible. Therefore, no allowance fordoubtful accounts has been reflected at 31st December, 2002.
(3) NOTES PAYABLE
A summary of notes payable is as follows:
Note Payable to a Leasing Company, due in 24 monthly instalments
of $516.27, including interest at 5.18%, through April 14, 2004,
secured by an automobile. Paid off in 2003. $ 9,073
(4) INCOME TAXES
The provision for income taxes from continuing operations consists of the following components:
Current federal and state provision
Deferred tax expense (benefit) (due to NOL carryover) (9,100)
Net income tax expense (benefit) $ (9,100)
(5) CONCENTRATION OF RISK
The Company holds cash and time deposit(s) with a local bank that during the year exceededthe Federal Depository Insurance Corporation (FDIC) limit.
The Company concentrates its sale activity primarily with two customers who accounted foreighty-nine percent (89%) of the Company’s revenues and $176,311 of outstanding receivablesat 31st December, 2002.
(6) RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Company has raw material supply arrangements witha joint venture of L&T and the Flowserve Group (USA), Audco India Limited. Purchases during2002 totaled $726,482. The Company has amounts owed at31st December, 2002 from sale of products to its affiliates in the amount of $45,171 and owesits affiliate $726,482 for inventory purchases.
(7) PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment consist of the following:
Asset Depreciation
Beginning Additions Ending Beginning Depreciation EndingBalance Balance Balance Balance
Automobile $ 12,766 $ 12,827 $ 25,593 $ 1,277 $ 8,197 $ 9,474
WarehouseEquipment 13,160 13,160 4,943 2,347 7,290
OfficeEquipment 3,911 1,902 5,814 782 1,711 2,493
Furniture &Fixtures 4,199 1,689 5,888 599 1,269 1,868
Telephone 9,663 9,663 1,381 1,381
$ 34,036 $ 26,082 $ 60,118 $ 7,601 $ 14,905 $ 22,506
Chennai, K SURENDRADate : 12th May, 2003 Director
(See Independent Auditor's Report. The accompanying notes are an integral part of the financial statements.)
LTM LIMITEDLTM LIMITEDThe Directors have pleasure in submitting their Annual Report and Audited Accounts for the yearended 31st March, 2003.FINANCIAL RESULTS
2002-2003 2001-2002Rs. Lakhs Rs. Lakhs
Income 21.01 23.58Profit before taxes 4.98 4.88Provision for taxes 2.00 2.50Profit after taxes 2.98 2.38Amount available for disposal (carried forward) 2.98 2.38DIVIDENDSThe Directors do not recommend payment of any dividend for the year.YEAR IN RETROSPECTREVENUEAs the Company had no manufacturing or sales activities during the year consequent upon transferof its businesses in 2000/01, income was only Rs.21.01 lakhs as against Rs.23.58 lakhs in theprevious year.CAPITAL EXPENDITUREThe Company did not incur any Capital Expenditure during the year.DEPOSITS13 deposits amounting to Rs.0.64 lakhs due for repayment on or before 31st March, 2003 remainedunclaimed on that date. As on the date of this report, Rs. 0.10 lakhs thereof has been transferredto the Investor Education and Protection Fund under Section 205 C of the Companies Act, 1956.AUDITORS’ REPORTThe Auditors’ Report to the Shareholders does not contain any qualifications.DISCLOSURE OF PARTICULARSAs the Company had no manufacturing or sales activity during the year, there are no particulars tobe disclosed under The Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1988.PERSONNELThere are no employees covered by the provisions of the Section 217(2A) of the Companies Act,1956 read with the Companies (Particulars of Employees) Rules,1975.DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirm:i) that in the preparation of the annual accounts, the applicable accounting standards have been
DIRECTORS' REPORT
followed and there has been no material departure;ii) that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March, 2003 and of the profit of the Companyfor the year ended on that date;
iii) that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the annual accounts have been prepared on a going concern basis.DIRECTORSMr. A.M. Naik resigned as a director of the Company with effect from 24th March, 2003. He was adirector of the Company since 26th September, 1991. The Directors place on record the valuableservices extended by Mr. Naik as a Director of the Company.Mr. J.P. Nayak resigned as a director of the Company with effect from 24th March, 2003. He was adirector of the Company since 12thJune, 1999. The Directors place on record the valuable servicesextended by Mr. Nayak as a Director of the Company.Mr. M.S. Krishnamoorthy was appointed as a Director in the vacancy caused by the resignation ofMr. A.M. Naik.Mr. T.S. Sundaresan was appointed as a Director in the vacancy caused by the resignation of Mr.J.P. Nayak.AUDIT COMMITTEEThe Audit Committee consists of three non executive directors. The present members of theCommittee are Mr. P.M. Mehta, Mr. M.S. Krishnamoorthy and Mr. T.S. Sundaresan.The role, terms of reference, the authority and power of Chairman are in conformity with therequirements of the Companies Act, 1956.The Committee met periodically during the year and had discussions with the auditors on internalcontrol systems and internal audit report.AUDITORSThe Auditors, M/s A.F. Ferguson & Company, Chartered Accountants hold office until the conclusionof the ensuing Annual General Meeting and are recommended for re-appointment. Certificate fromthe auditors has been received to the effect that their re-appointment, if made, would be within thelimits prescribed under Section 224(1B) of the Companies Act, 1956.
P.M. MEHTA
Mumbai, 28th April, 2003 M.S. KRISHNAMOORTHY } Directors
LTM LIMITED
S-87
We have audited the attached Balance Sheet of LTM Limited, as at 31st March, 2003 andalso the Profit and Loss Account for the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company’s management. Our responsibilityis to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatements. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosure in thefinancial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis for ouropinion.As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988issued by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Companies Act, 1956, we enclose in the Annexure a statement on the matters specifiedin paragraph 4 and 5 of the said Order.Further to our comments in the Annexure referred to above, we report that:(i) we have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit;(ii) in our opinion, proper books of account as required by law have been kept by the
company so far as appears from our examination of the books;
AUDITORS' REPORT TO THE SHAREHOLDERS OF LTM LIMITED
(iii) the Balance Sheet and Profit and Loss Account dealt with by this report are inagreement with the books of account;
(iv) in our opinion, the Balance Sheet and Profit and Loss Account dealt with by this reportcomply with the accounting standards referred to in sub-section (3C) of section 211of the Companies Act, 1956;
(v) on the basis of written representations received from the directors, as on 31st March,2003, and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on 31st March, 2003 from being appointed as a director interms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) in our opinion and to the best of our information and according to the explanationsgiven 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 conformity with theaccounting principles generally accepted in India:(a) in the case of the Balance Sheet, of the state of affairs of the company as at
31st March, 2003; and(b) in the case of the Profit and Loss Account, of the profit for the year ended on that
date.For A.F.FERGUSON & CO
Chartered Accountants
Place : Bangalore H.L.SHAHDate : 19th May, 2003 Partner
ANNEXURE TO THE AUDITORS' REPORT(Refered to in paragraph 1 of our report of even date)
Annexure to the auditors’ report to the shareholders of LTM Limited
(Referred to in paragraph 3 of our report of even date)
1. The Company has not taken any loans, secured or unsecured, from companies, firms,or other parties listed in the register maintained under Section 301 of the CompaniesAct, 1956 or from companies under the same management as defined in Section 370(1-B) of the Companies Act, 1956.
2. The Company has not granted any loans, secured or unsecured, to companies, firmsor other parties listed in the register maintained under Section 301 of the CompaniesAct, 1956 or from companies under the same management as defined in Section 370(1-B) of the Companies Act, 1956.
3. The internal audit of the Company is handled by a central internal audit departmentof the holding company. In our opinion, the internal audit system of the Company iscommensurate with its size and the nature of its business.
4. According to the information and explanations given to us and the records of theCompany examined by us, no personal expenses have been charged to revenueaccount, other than those payable under contractual obligations or in accordance withgenerally accepted business practice.
5. According to the information and explanations given to us, there are no undisputedamounts payable in respect of income-tax, wealth tax, sales tax, customs duty andexcise duty which are outstanding as on 31st March, 2003 for a period of more thansix months from the date they become payable.
6. Other clauses of the Order are not applicable for the current year.
For A.F.FERGUSON & COChartered Accountants
Place : Bangalore H.L.SHAHDate : 19th May, 2003 Partner
BALANCE SHEET AS AT 31 st MARCH, 2003Sche- AS AT 31.03.2003 AS AT 31.03.2002dules Rs. lakhs Rs. lakhs Rs. lakhs Rs. lakhs
SOURCES OF FUNDS:
Shareholders’ Funds
Share Capital A 669.15 669.15
Reserves and surplus B 1313.23 1310.25
1982.38 1979.40
TOTAL 1982.38 1979.40
APPLICATION OF FUNDS:
Investments C 1964.98 3740.14
Current Assets, Loans andAdvances D
Cash and bank balances 32.55 36.67
Loans and advances 40.79 84.60
73.34 121.27
Less: Current liabilities andprovisions E
Liabilities 40.71 1882.01
Provisions 15.23 -
55.94 1882.01
Net Current Assets / (Liabilities) 17.40 (1760.74)
TOTAL 1982.38 1979.40
(For Notes forming part of Accounts,see Schedule I)
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 st MARCH, 2003Sche- 2002-2003 2001-2002dules Rs. lakhs Rs. lakhs Rs. lakhs Rs. lakhs
INCOME:
Other income F 21.01 23.58
21.01 23.58
EXPENDITURE
Staff expenses G - 0.55
Sales and administrationexpenses H 16.03 18.15
16.03 18.70
Profit before taxes 4.98 4.88
Provision for taxation:
For current year 5.40 6.30
For prior years (3.40) (3.80)
2.00 2.50
Profit after taxes 2.98 2.38
Add: Balance broughtforward from previous year 533.60 531.22
Profit available forappropriation 536.58 533.60
Balance carried forward 536.58 533.60
Basic and diluted earningsper Equity Share (Rupees) 0.45 0.36
(For Notes forming part ofAccounts, see Schedule I)
Place : BangaloreDate : 19th May, 2003
Per our report attached
For A.F. FERGUSON & CO.Chartered Accountants
H.L. SHAHPartner
Place : MumbaiDate : 28th April, 2003
For and on behalf of the Board
DirectorsP. M. MEHTA
M.S. KRISHNAMOORTHYE. S. KUMARManager
}Place : BangaloreDate : 19th May, 2003
Per our report attached
For A.F. FERGUSON & CO.Chartered Accountants
H.L. SHAHPartner
Place : MumbaiDate : 28th April, 2003
For and on behalf of the Board
DirectorsP. M. MEHTA
M.S. KRISHNAMOORTHYE. S. KUMARManager
}
LTM LIMITED
S-88
SCHEDULES FORMING PART OF ACCOUNTSAs at As at
SCHEDULE A 31.3.2003 31.3.2002Rs.lakhs Rs.lakhs
Share Capital:Authorised:800,000 Equity Shares of Rs.100 each 800.00 800.00Issued and subscribed:751,400 Equity Shares of Rs.100 eachfully paid up [refer note (a) below] 751.40 751.40Less: 82,250 equity shares acquiredunder Buy Back Rules during 1999-2000 82.25 82.25669,150 Equity Shares of Rs.100 eachfully paid up [refer note (b) below] 669.15 669.15(a) Since inception of the Company, 621,400 Equity shares
were issued as bonus shares by capitalisation ofGeneral Reserve to the extent of Rs.621.40 lakhs.
(b) 669,150 shares are held by Larsen & Toubro Limited(the holding company) and its nominees
SCHEDULE BReserves and Surplus:General Reserve 694.40 694.40Capital Redemption Reserve Account 82.25 82.25Profit and Loss Account 536.58 533.60
1313.23 1310.25SCHEDULE CInvestments:Current Investments - UnquotedNon-trade investment (at lower of cost or repurchase price)Unit Trust of India - 80,574 Units of Rs.10 each 8.06 8.06[Repurchase value Rs.8.06 lakhs: Previous yearRs.8.06 lakhs]Trade Investments:Fully paid equity shares:L&T Transporation Infrastructure Limited1,02,50,000 shares of Rs.10 each 1236.15 1236.15Narmada Infrastructure Construction Enterprise Limited22,03,575 (Previous year 1,15,00,000) shares of Rs. 10 each 420.77 2195.93(92,96,425 shares of Rs.10 each sold during the year)L&T- Demag Plastics Machinery Private Limited30,00,000 shares of Rs.10 each 300.00 300.00
1964.98 3740.14SCHEDULE DCurrent Assets, Loans and Advances:Cash and bank balances:Balances with scheduled banks:On Current accounts 8.05 14.98On Margin accounts 24.50 32.55 21.69 36.67Loans and advances:Unsecured and considered good:Advances recoverable in cash or in kind or for valueto be received 40.79 33.58Income tax payments (net of provision) - 50.60Interest accrued but not due - 0.42
40.79 84.6073.34 121.27
SCHEDULE ELiabilities:Sundry Creditors:- Total outstanding dues to small scale industrial
undertakings - -- Others 40.17 1882.01Investor Education and Protection Fund:- Unpaid Matured Deposits 0.54 -
40.71 1882.01Provisions:- Income tax (net ) 15.23 -
55.94 1882.01
2002-03 2001-2002Rs. lakhs Rs. lakhs
SCHEDULE FOther Income:Income from units of Unit Trust of India - 0.81Interest on bank and other accounts 18.30 8.54[ Tax deducted at source Rs.0.35 lakh(Previous year Rs.0.34 lakh)]Provision no longer required written back - 6.90Duty drawback 2.42 3.18Customer advances written back - 2.30Profit on redemption of investments - 1.43Miscellaneous 0.29 0.42
21.01 23.58SCHEDULE GStaff Expenses:Salaries, wages and bonus - 0.48Gratuity paid - 0.07
- 0.55SCHEDULE HSales and Administration Expenses:Rates and taxes 2.61 0.04Travelling and conveyance 0.19 0.10Diminution in value of investments - 2.50Advertisement 3.15 3.22Subscription 0.05 0.12Bank charges 0.18 0.67Professional charges 3.90 1.97Bad debts written off - 7.38Miscellaneous 5.95 2.15
16.03 18.15
SCHEDULE INotes forming part of Accounts for the year ending 31st March, 20031. Contingent liabilities not provided for:
In respect of taxation matters(i) Demands against the Company in respect
of which the Company is in appeal 9.94 12.14(ii) Items in respect of which the Company
has succeeded in appeal but theIncome-tax Department is pursuing thematters in appeals/reference 24.79 44.56
2. Auditors’ remuneration(included in miscellaneous expenses)Audit fees 0.40 0.40Company Law matters 0.05 0.05Taxation matters - 0.60Out-of-pocket expenses including service tax 0.02 0.16
3. The names of the small scale industrial undertakings to whom the Company owes any sumtogether with interest for more than 30 days are Nil.
4. SIGNIFICANT ACCOUNTING POLICIES:A. INVESTMENTS are valued are cost.
Provision for permanent diminution in value, if any, is made wherever required.B. CONTINGENT LIABILITIES are quantified based on available information and disclosed
in the notes to the accounts.5. Earnings per share
2002-2003 2001-2002Rs. lakhs Rs. lakhs
Net profit as per Profit and Loss Account 2.98 2.38Weighted average number of Equity Shares No. 6,69,150 6,69,150Basic and diluted earnings per share Rs. 0.45 0.38
6. Previous year’s figures have been regrouped/recast, wherever necessary, to conform toclassifications of the current year.
7. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details:
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Paid-up Capital
Net Current Assets
Total Assets
Reserves & Surplus
Investments
Unsecured Loans
Miscellaneous Expenditure
1 5 6 7 1
3 1 0 3 2 0 0 3
1 1
N I L
N I L
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
Secured Loans
N I L
N I L
1 9 8 2 3 8
Net Fixed Assets
Registration No.
Balance Sheet Date
Accumulated Losses
Turnover (incl. other income) Total Expenditure (prior year Adj.)IV. Performance of Company (Amount in Rs. Thousands)
Profit/(Loss) Before Tax Profit/(Loss) After Tax
Dividend Rate %Earnings per share in Rs.
4 9 8 2 9 8
0 . 4 5
1 9 8 2 3 8
6 6 9 1 5 1 3 1 3 2 3
N I LN I L
N I L 1 9 6 4 9 8
1 7 4 0 N I L
2 1 0 1 1 6 0 3
+ +
V. Generic Names of three Principal Products / Services of Company (as per
monetary terms)Item Code No. (ITC Code)
Product Description
N O T A P P L I C A B L E
Signatures to Schedules A to I
N I L
N I L+
N O T A P P L I C A B L E
+
Place : BangaloreDate : 19th May, 2003
Per our report attached
For A.F. FERGUSON & CO.Chartered Accountants
H.L. SHAHPartner
Place : MumbaiDate : 28th April, 2003
For and on behalf of the Board
DirectorsP. M. MEHTAM.S. KRISHNAMOORTHYE. S. KUMAR
Manager
}
BHILAI POWER SUPPLY COMPANY LIMITED
S-89
BHILAI POWER SUPPLY COMPANY LIMITED
AUDITOR’S REPORT TO THE MEMBERS OFBHILAI POWER SUPPLY COMPANY LIMITEDWe have audited the attached Balance Sheet of Bhilai Power Supply Company Limited as at31st March 2003. No profit and loss account has been prepared for the year ended 31st March2003 for the reason referred to in Note No.1 on Schedule E to the accounts. These financialstatements are the responsibility of the Company’s Management. Our responsibility is to expressan opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material mis-statement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.
As required by the Manufacturing and Other Companies (Auditors’ Report) Order, 1988 issuedby the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we give inthe Annexure hereto a statement on the matters specified in paragraph 4 & 5 of the said order.
Further to our comments in the Annexure referred to above, we report that :
a) We have obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account, as required by law have been kept by the Company,so far as appears from our examination of those books.
c) The Balance Sheet referred to in this report is in agreement with the books of account.
d) In our opinion the Balance Sheet complies with the accounting standards referred to insection 211(3C) of the Companies Act 1956.
e) On the basis of the written representations received from the Directors on 31st March,2003, and taken on record by the Board of Directors, we report that none of the Directors isdisqualified as on 31st March, 2003, from being appointed as a Director in terms of clause(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
f) Subject to the above, in our opinion and to the best of our information and according to theexplanations given to us, the said Balance Sheet read together with the significant accountingpolicies in Schedule D, note 4 regarding termination notice received from SAIL, note 5 withrespect to the interest on security deposit with MPEB and the other notes appearing inSchedule E, give the information required by the Companies Act, 1956 in the manner sorequired and give a true and fair view of the state of affairs of the company as at 31stMarch, 2003.
SHARP & TANNANChartered Accountants
by the hand of
Delhi N.C. SRIVASTAVADated : 9th May, 2003 Partner
Annexure to the Auditors’ ReportAs required by the Manufacturing and other Companies (Auditor’s report) Order, 1988 dated 7thSeptember, 1988, issued by the Central Government of India under Section 227 (4A) of theCompanies Act, 1956, we report as under :
1. The Company has not taken any loans, secured or unsecured, from Companies, firms orother parties listed in the register maintained under section 301 of the Companies Act,1956 or from companies under the same management, defined under sub-section (1B) ofsection 370 of the Companies Act, 1956.
2. The Company has not granted any loans, secured or unsecured, to Companies, firms orother parties listed in the register maintained under section 301 of the Companies Act,1956 or to companies under the same management, defined under sub-section (1B) ofsection 370 of the Companies Act 1956.
3. The company has not given any Loans or advances in the nature of loans to any parties.
4. The Company has not accepted any deposits from the public.
5. According to the information and explanations given to us there were no undisputed amountspayable as at 31st March, 2003 in respect of Income-Tax, Wealth-Tax, Sales-Tax, CustomsDuty and Excise Duty which were outstanding for a period of more than six months fromthe date they became payable.
6. In our opinion and according to the information given to us, no personal expenses havebeen charged to revenue account other than those payable under contractual obligation orin accordance with generally accepted business practices.
7. The Company is not a sick industrial company within the meaning of Clause (o) Sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.
8. The Company has not started commercial production as on 31st March, 2003. The followingparagraph of the aforesaid order are not applicable during the year:
Paras: 4(a) (i), (ii), (iii), (iv), (v), (vi), (xi),
(xii), (xiv), (xv), (xvi) & (xvii)
SHARP & TANNANChartered Accountants
by the hand of
Delhi N.C. SRIVASTAVADated : 9th May, 2003 Partner
DIRECTORS’ REPORTThe Directors have pleasure in presenting the Eighth Annual Report along with the Accounts forthe year ended 31st March, 2003.
FINANCE
During the period under review, the Company did not carry out any commercial activities andaccordingly no Profit and Loss Account has been prepared.
During the year under review, the Company made a rights offer of 49,900 equity shares of Rs.10each fully paid up to the existing members in the ratio of their present shareholding, the subscriptionmoney for which was appropriated against the current liabilities due to the members from theCompany.
Larsen & Toubro Limited (L&T) subscribed to the rights offered including those of its nominees,totalling 24,950 shares.
Steel Authority of India Limited expressed their unwillingness to subscribe to their share of 2,495shares and as per the Letter of Offer, the same was offered to and was subscribed by L&T.
PSEG Bhilai Energy Company Limited (PSEG) could not subscribe since permission under FEMAwas not granted. Their rights offer of 22,455 shares was therefore taken up by L&T.
Accordingly, L&T was allotted 49,900 shares and your company became a 99.9% subsidiary ofL&T.
OPERATIONS
The Company had filed an application for the refund of the security deposit with Madhya PradeshElectricity Board (MPEB) in the Hon’ble Supreme Court as the project for which the deposit wasgiven would no longer be implemented in Madhya Pradesh.
The Supreme Court, by its order dated 21st January 2003, directed MPEB to refund the depositalong with Interest to the Company in 12 equal monthly installments starting from 1st March 2003.Subsequently, MPEB filed a petition in the Supreme Court seeking extension of time for makingpayment. The Court has, vide an Order dt.28th March 2003, ordered “As a last chance”, extensionof time to MPEB for making payment till end May 2003. Thus, the first installment of payment isscheduled to commence from 1.6.2003.
CAPITAL EXPENDITURE
During the period under review, the Company did not incur any capital expenditure.
FIXED DEPOSITS
During the year under review, the Company did not accept any deposits from the public.
AUDITORS’ REPORT
The notes to the accounts referred to in the Auditors’ Report are self explanatory and therefore donot call for any further comments of Directors.
DISCLOSURE OF PARTICULARS
As the Company has not yet started commercial operations, there are no particulars to be disclosedas per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
PARTICULARS OF EMPLOYEES
There are no employees covered by the provisions of Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) Rules, 1975.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable accounting standards have beenfollowed and there has been no material departure;
ii. that the selected accounting policies were applied consistently and the Directors madejudgements and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31
st March, 2003;
iii. that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern basis.
DIRECTORS
Mr. P.B.Vanchi resigned from the Board of Directors of the Company with effect from 30th September2002, pursuant to the withdrawal of his nomination by PSEG Bhilai Energy Company Limited. TheDirectors record their appreciation of the valuable services rendered by Mr.Vanchi.
Mr.Krishna Kumar was appointed as a Director in the vacancy caused by the resignation ofMr.Vanchi at the Board Meeting held on 25th November 2002.
Mr.Krishna Kumar, Mr.M.J.Thomson, Mr.Andrew S.Kumar and Mr.C.M.Raman have resigned fromthe Board of Directors of the Company with effect from 30th April 2003, pursuant to the withdrawalof their nomination by PSEG Bhilai Energy Company Limited. The Directors record their appreciationof the valuable services rendered by Mr.Krishna Kumar, Mr.M.J.Thomson, Mr.Andrew S.Kumarand Mr.C.M.Raman.
Mr.K.Venkataramanan and Mr.K.Venkataraman will retire by rotation at the ensuing Annual GeneralMeeting and are eligible for re-appointment.
AUDITORS
The Auditors, M/s. Sharp and Tannan, Chartered Accountants retire at the ensuing Annual GeneralMeeting and are eligible for re-appointment.
Place : MumbaiDated : 8th May 2003
For and on behalf of the Board
A. M. NAIK
K. VENKATARAMANANDirectors}
BHILAI POWER SUPPLY COMPANY LIMITED
S-90
BALANCE SHEET AS AT 31 st MARCH, 2003 As at 31-3-03 As at 31-3-02
SOURCES OF FUNDS Schedules (Rupees) (Rupees)SHAREHOLDERS FUNDS
Share Capital A 5,00,000 1,000LOAN FUNDS
Unsecured Loans B 78,44,76,010 73,59,78,355TOTAL 78,49,76,010 73,59,79,355
APPLICATION OF FUNDSCURRENT ASSETS, LOANS AND ADVANCES :
Cash at Bank 1,01,000 1,01,000Security Deposit with MPEB 77,97,75,990 73,05,74,108Interest accrued but not due on Securitydeposit with MPEB 47,00,020 54,04,247TOTAL 78,45,77,010 73,60,79,355
Less : CURRENT LIABILITIES AND PROVISIONS Larsen and Toubro Limited 12,10,66,154 11,95,28,875PSEG Bhilai Energy Co.Ltd. 11,84,58,461 11,84,58,461Steel Authority of India Limited 11,96,014 11,96,014Mott MacDonald 4,51,522 4,26,739TDS on Interest 96,75,282 99,99,967Audit Fee 20,000 20,000
25,08,67,433 24,96,30,056Net Current Assets 53,37,09,577 48,64,49,299
MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) Preliminary expenses and Pre-operative Expenses pending capitalisation C 25,12,66,433 24,95,30,056
TOTAL 78,49,76,010 73,59,79,355Significant Accounting Policies DNotes forming part of accounts E
SCHEDULES FORMING PART OF ACCOUNTSSCHEDULE - ENotes forming part of accounts1. As there were no commercial activities during the year, no profit and loss account has been
prepared. All the expenditure incurred by the company have been carried forward as pre-operative expenses pending allocation.
2. Expenditure in foreign currency :- NIL3. Auditors’ Remuneration and expenses charged to the accounts includes:-
Audit Fee Rs.20,000Tax Audit Fee Rs. 5,000Other Services Rs.35,900Reimbursement of expenses Rs.13,620
4. The Board of Directors of the company in their meeting held on the 29th June 2000, has notaccepted the notice of termination of 25th May 2000 given to them by Steel Authority of IndiaLtd. The treatment in the accounts for SAIL’s share as a continuing partner for the year endedon 31st March 2003 is given accordingly as in past.
5. No confirmation has been received from MPEB for the Security Deposit including interestthereon kept by the Company with them as on 31st March 2003. However the interest onSecurity Deposit has been computed in the accounts as per the rates given by SBI on sixmonthly rest basis.The Hon’ble Supreme Court has directed M.P. Electricity Board to pay a sum of Rs.55.32crores to the company along with interest at the rate charged by the bank for fixed deposits in12 equal monthly instalments commencing from 1st June 2003.
6. Previous year’s figures have been regrouped wherever necessary to conform to figures of thecurrent year.
SCHEDULES FORMING PART OF ACCOUNTSAs at 31-3-03 As at 31-3-02
(Rupees) (Rupees)SCHEDULE - ASHARE CAPITALAuthorised50,00,000 Equity shares of Rs. 10/- each and100 preference shares of Rs. 10 each. 5,00,01,000 5,00,01,000Issued, Subscribed and Paid up50,000 Equity shares of Rs. 10/- each 5,00,000 1,000
SCHEDULE - BUNSECURED LOANS(a) Larsen & Toubro Limited :
i) Principal Amount 52,55,40,000 52,55,40,000ii) Interest accrued 21,52,47,191 16,85,05,402iii) Interest accrued but not due 44,65,019 51,34,035
Sub-Total 74,52,52,210 69,91,79,437(b) Steel Authority of India Limited
i) Principal Amount 2,76,60,000 2,76,60,000ii) Interest accrued 1,13,28,799 88,68,706iii) Interest accrued but not due 2,35,001 2,70,212
Sub-Total 3,92,23,800 3,67,98,918TOTAL of (a) + (b) 78,44,76,010 73,59,78,355
Upto 31-3-02 2002-03 As at 31-3-03(Rupees) (Rupees) (Rupees)
SCHEDULE - CPRELIMINARY AND PRE-OPERATIVE EXPENSESPRELIMINARY EXPENSESStamp Duty for MOA/AOA 120 Nil 120Registration Charges 1,58,580 Nil 1,58,580Miscellaneous 1,750 Nil 1,750
Total 1,60,450 Nil 1,60,450PRE-OPERATIVE EXPENSES PENDINGCAPITALISATION(Project Development Expenses)Travelling and Conveyance 1,60,96,369 Nil 1,60,96,369Printing and Stationery 4,63,723 Nil 4,63,723Telephone and Telex 11,80,091 Nil 11,80,091Advertisement and Business Promotion 17,38,247 Nil 17,38,247Entertainment 12,66,158 Nil 12,66,158Professional Fees 19,89,27,581 16,06,252 20,05,33,833Commitment Charges 2,41,08,700 Nil 2,41,08,700Rent, Rates and Taxes 11,86,727 29,000 12,15,727Repairs and Maintenance 23,36,467 Nil 23,36,467Auditors’ Remuneration 2,06,990 74,520 2,81,510Sundry Expenses 18,58,553 26,605 18,85,158
Total 24,93,69,606 17,36,377 25,11,05,983GRAND TOTAL 24,95,30,056 17,36,377 25,12,66,433
A. M. NAIK
K. VENKATARAMANAN
As per our report attachedSHARP AND TANNANChartered AccountantsBy the hand ofN.C.SRIVASTAVAPartner
Delhi, 9th May, 2003
Directors
Mumbai, 8th May, 2003
}
SCHEDULE - DSignificant Accounting Policies1. Method of Accounting
The company maintains its accounts on accrual basis.2. Foreign Currencies
Actual foreign currency expenditure is booked at the exchange rate prevailing on the date ofthe transaction. Outstanding foreign currency liabilities are translated at exchange rate prevailingat the year end. The exchange variations, if any, arising out of such transactions is adjusted inpre-operative expenditure pending capitalisation.
A. M. NAIK
K. VENKATARAMANAN
As per our report attachedSHARP AND TANNANChartered AccountantsBy the hand ofN.C.SRIVASTAVAPartner
Delhi, 9th May, 2003
Directors
Mumbai, 8th May, 2003
}
A. M. NAIK
K. VENKATARAMANAN
As per our report attachedSHARP AND TANNANChartered AccountantsBy the hand ofN.C.SRIVASTAVAPartner
Delhi, 9th May, 2003
Directors
Mumbai, 8th May, 2003
}
Balance Sheet Abstract and Company’s General Business ProfileI. Registration Details
5 5State Code
Balance Sheet Date 3 1 - 0 3 - 2 0 0 3
II. Capital Raised during the year (Amount in Rs. Thousands)
N I L
Date Month Year
Public Issue
N I L
Bonus Issue
Rights Issue
N I L
Private Placement
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
Paid up Capital Reserves & SurplusSources of Funds
Secured Loans Unsecured Loans
Net Fixed Assets Investments
N I L
Application of Funds
Net Current Assets Misc. Expenses
Accumulated Losses
N I L
N I L
Registration No.
4 9 9
IV. Performance of the Company (Amount in Rs. Thousands)
Turnover(including other income)
Total Expenditure
+ - Profit/Loss Before Tax + - Profit/Loss After Tax
Earning per Share in Rs.
A
Dividend Rate %
N
V. Generic Names of Three Principal Products/Services of the Company(as per monetary terms)
5 5 0 7 0 7 0 4
7 8 4 9 7 6 7 8 4 9 7 6
5 0 0
7 8 4 4 7 6N I L
N I L
5 3 3 7 1 0 2 5 1 2 6 6
N I L N I L
N I L
AN
No Activities during the year
N I L
L&T POWER INVESTMENTS PRIVATE LIMITED
S-91
L&T POWER INVESTMENTS PRIVATE LIMITEDDIRECTORS’ REPORTYour Directors present the Annual Report and Balance Sheet for the year ended 31st March 2003.FINANCIAL RESULTSDuring the year under review, the Company did not carry on any business activities and accordinglyno Profit and Loss Account has been prepared.FINANCEDuring the year under review, the Company raised funds to the extent of Rs.5,99,980 by issuing59,998 equity shares of Rs.10 each in the Capital of the Company.CAPITAL EXPENDITUREDuring the period under review, the Company did not incur any capital expenditure.SUBSIDIARYDuring the period, the Company subscribed and acquired 50,000 Equity Shares of Rs. 10/- each,fully paid-up of Raykal Aluminium Company Private Limited, Bhubaneshwar. Raykal AluminiumCompany Private Limited has thus become a wholly owned subsidiary of the Company.As required by Section 212 of the Companies Act, 1956, the Audited statement of Accounts, theReports of the Board of Directors and Auditors of Raykal Aluminium Company Private Limited areannexed.AUDITORS’ REPORTThe notes to the accounts referred to in the Auditors’ Report are self explanatory and therefore donot call for any further comments of Directors.DISCLOSURE OF PARTICULARSThe Company did not carry on business activities and hence there are no particulars to be disclosedas per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.PARTICULARS OF EMPLOYEESThere are no employees covered by the provisions of Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) Rules, 1975.DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors of the Company confirms:I. that in the preparation of the annual accounts, the accounting standards have been followed
to the extent applicable and there has been no material departure;II. that the selected accounting policies were applied consistently and the directors made
judgements and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31, 2003;
III. that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
IV. that the annual accounts have been prepared on a going concern basis.DIRECTORSMr. S.V.Subramanian is liable to retire by rotation and is eligible for re-appointment.AUDITORSThe Auditors, M/s. Sharp & Tannan, Chartered Accountants, retire at the Annual General Meetingand are eligible for re-appointment.
Statement pursuant to Section 212 of the Companies Act, 1956 relating to SubsidiaryCompaniesName of the subsidiary company Raykal Aluminium Company Private LimitedFinancial of the subsidiary ended on 31st March, 2003Number of shares of the Subsidiary Company 50,000held by L&T Power Investments Private Limitedand/or its nominee at the above date.The net aggregate of profits/ (losses), of the SubsidiaryCompany so far as it concerns the members of L&T PowerInvestments Private Limited:(i) Dealt with in the accounts of L&T Power Investments
Private Limited amounted to:a) for the subsidiary’s financial year ended 31/3/2003 Nilb) for the previous financial years of the subsidiary
since it became subsidiary of L&T PowerInvestments Private Limited Not Applicable
(ii) Not dealt with in the accounts of L&T Power InvestmentsPrivate Limited amounted to:a) for the subsidiary’s financial year ended 31/3/2003 Nilb) for the previous financial years of the subsidiary
since it became subsidiary of L&T PowerInvestments Private Limited Not Applicable
as well as evaluating the overall financial statement presentation. We believe that our audit providesa reasonable basis for our opinion.In accordance with the provisions of Section 227 of the Companies Act, 1956, we report that:1. As the Company has carried out no activities, the requirements of the Manufacturing and
Other Companies (Auditor’s Report) Order, 1988, issued by the Central Government of Indiaunder Section 227 (4A) of the Companies Act, 1956, are not applicable.
2. Further to our comments in paragraph 1 above, we report as under:(a) we have obtained all the information and explanations which to the best of our knowledge
and belief, were necessary for the purposes of our audit;(b) in our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;(c) the said Balance sheet dealt with by the report is in agreement with the books of account;(d) in our opinion, the Balance sheet comply with the accounting standards referred to in
Section 211 (3C) of the Companies Act, 1956, to the extent applicable;(e) on the basis of written representations received from the Directors as on 31st March,
2003 and taken on record by the Board of Directors, none of the Directors is disqualifiedfrom being appointed as a Director of the Company under Section 274 (1) (g) of theCompanies Act, 1956; and
(f) in our opinion and to the best of our information and according to the explanations givento us, the said Balance sheet read together with the significant accounting policies inSchedule ‘A’ and other notes appearing thereon in Schedule ‘B’ give the informationrequired by the Companies Act, 1956, in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India, of the stateof the Company’s affairs as at 31st March, 2003.
SHARP & TANNANChartered Accountants
by the hand ofR.D. KARE
Date : Mumbai, 6th May, 2003 Partner
BALANCE SHEET AS AT 31 ST MARCH 2003As at 31.03.2003 As at 31.03.2002
Schedule Rupees Rupees Rupees RupeesSOURCES OF FUNDS:Shareholders’ Funds:Share Capital A 6,00,000 20Total 6,00,000 20APPLICATION OF FUNDS:Investments B 5,00,000 -Current Assets, loans and advances C 99,800 20Less: Current liabilities and provisions D 20,031 17181
Net current assets 79,769 (17,161)Miscellaneous expenditure E 20,231 17,181(to the extent not written-off or adjusted)
Total 60,00,00 20Significant Accounting Policies FNotes forming part of Accounts G
For and on behalf of the Board
S. V. SUBRAMANIAN
N. SIVARAMANDate : Mumbai, 6th May, 2003
} Directors
For and on behalf of the Board
S. V. SUBRAMANIAN
N. SIVARAMANDate : Mumbai, 6th May, 2003
} Directors
As per our report attached For and on behalf of the Board
SHARP & TANNAN S. V. SUBRAMANIANChartered AccountantsBy the hand of N. SIVARAMAN
R.D. KAREPartnerMumbai
Date : Mumbai, 6th May, 2003
} Directors
AUDITORS' REPORTTO THE SHAREHOLDERS OFL&T POWER INVESTMENTS PRIVATE LIMITEDWe have audited the attached Balance Sheet of L&T Power Investments Private Limited as at 31st
March, 2003. No Profit and Loss Account has been prepared, as the Company has not carried outany activities. 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.We conducted our audit in accordance with auditing standards generally accepted in India. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management,
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH 2003
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULE ‘A’SHARE CAPITALAuthorised:100,000 Equity shares of Rs.10 each 10,00,000 10,00,000Issued and Subscribed:60,000 Equity shares of Rs. 10 each fully paid 6,00,000 20(Previous year - 2 Equity shares of Rs. 10/- eachfully paid)(All the shares are held by Larsen & Toubro Limited,the holding Company and its nominees)
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULE ‘B’INVESTMENTS (at cost, unquoted)Long Term Investments:Fully paid equity shares of Subsidiary company:Raykal Aluminium Company Private Limited50,000 shares of Rs. 10/- each 5,00,000 -(49,998 shares of Rs.10/- each subscribed during the year;2 shares of Rs.10/- each purchased during the year)
L&T POWER INVESTMENTS PRIVATE LIMITED
S-92
SCHEDULES FORMING PART OF ACCOUNTS AS AT 31 ST MARCH 2003 (contd...)
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULE ‘C’CURRENT ASSETS, LOANS AND PROVISIONSCash and Bank balances:Cash in hand - 20Balances with scheduled banks:On current account with Bank of India 95,800 -Loans and advances:Unsecured:Considered good:Advances recoverable in cash or in kind or for valueto be received:Subsidiary company 4,000 -
99,800 20
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULE ‘D’CURRENT LIABILITIES AND PROVISIONSLiabilities:Sundry Creditors- Larsen & Toubro Limited 17,931 16,131- Others 2,100 1,050
20,031 17,181Provisions 0 0
20,031 17,181
As at 31.03.2003 As at 31.03.2002Rupees Rupees Rupees Rupees
SCHEDULE ‘E’MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)Filing fees, Stamp duty, Registration charges 14,681 12,881Printing charges 2,200 2,200Audit fees (including service tax) 3,150 2,100Bank charges 200 -
20,231 17,181SCHEDULE ‘F’SIGNIFICANT ACCOUNTING POLICIES1) Basis of Presentation
The Accounts, have been prepared using historical cost convention and on going concern basis,in accordance with the Generally Accepted Accounting Principles(GAAP) and are in compliancewith the Accounting Standards referred to in Section 211(3C) and other requirements ofCompanies Act, 1956, to the extent applicable.
2) Miscellaneous Expenditure (To the extent not written off or adjusted)Expenditure incurred under this head is being amortised over a period of ten years, commencingfrom the year in which the Company has commenced its operations.
SCHEDULE ‘G’
NOTES TO ACCOUNTS1) Contingent liabilities not povided for Rs. NIL.2) No Profit and Loss Account has been prepared, as the Company did not carry any activity during
the year.3) Previous year’s figures have been regrouped wherever necessary.4) Additional Information required to be disclosed under Part II to Schedule VI of the Companies Act,
1956, is not presently applicable to the Company.
State Code
Rights Issue
Private Placement
Public Issue
Bonus Issue
Total Liabilities
Net Current Assets
Total Assets
Investments
Unsecured Loans
Miscellaneous Expenditure
Profit Before Tax Profit After Tax
1 1
II. Capital raised during the year (Amount in Rs. Thousands)
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Application of Funds
IV. Performance of Company (Amount in Rs. Thousands)Turnover
5) BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
I. Registration Details
Secured Loans
Net Fixed Assets
Total Expenditure
Registration No.
N I L
N I L
N I L
Balance Sheet Date
N I L
6 0 0 6 0 0
N I L
N I L 5 0 0
8 0 2 0
N I L N I L
N I L N I L
6 0 0
Dividend Rate %Earnings Per Share in Rs.
N I L N I L
3 1 - 0 3 - 2 0 0 3
10 Figures for the previous year have not been provided since this is the first accountsof the company
Reserves and SurplusPaid up Capital
6 0 0 N I L
Item Code No. N A
Product Description
N O A C T I V I T I E S
D U R I N G T H E Y E A R
1 1 - 1 2 5 6 5 2
Accumulated Losses
N I L
As per our report attached For and on behalf of the Board
SHARP & TANNAN S. V. SUBRAMANIANChartered AccountantsBy the hand of N. SIVARAMAN
R.D. KAREPartnerMumbaiDate : Mumbai, 6th May, 2003
} Directors
RAYKAL ALUMINIUM COMPANY PRIVATE LIMITED
S-93
RAYKAL ALUMINIUM COMPANY PRIVATE LIMITEDYour Directors present the Annual Report and Balance Sheet for the year ended 31st March 2003.
FINANCIAL RESULTS
During the year under review, the Company did not carry on any business activities and accordinglyno Profit and Loss Account has been prepared.
FINANCE
During the year under review, the Company raised funds to the extent of Rs.4,99,960 by issuing49,996 equity shares of Rs.10/- each in the Capital of the Company.
CAPITAL EXPENDITURE
During the period under review, the Company did not incur any capital expenditure.
AUDITORS’ REPORT
The notes to the accounts referred to in the Auditors’ Report are self explanatory and therefore donot call for any further comments of Directors.
DISCLOSURE OF PARTICULARS
The Company did not carry on business activities and hence there are no particulars to be disclosedas per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
PARTICULARS OF EMPLOYEES
There are no employees covered by the provisions of Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) Rules, 1975.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms :-
I. that in the preparation of the annual accounts, the accounting standards have been followedto the extent applicable and there has been no material departure;
II. that the selected accounting policies were applied consistently and the directors madejudgements and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2003;
III. that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
IV. that the annual accounts have been prepared on a going concern basis.
DIRECTORS
In the Board Meeting of the Company held on 1st November 2002, Mr.A.M.Naik &Mr.K.Venkataramanan resigned as Directors of the Company.
The Directors record their appreciation of the valuable services rendered by Mr.A.M.Naik &Mr.K.Venkataramanan.
AUDITORS
The Auditor, Mr. Sandeep S.Shrikhande, Chartered Accountant holds office until the ensuing AnnualGeneral Meeting. The Directors recommend that M/s Sharp & Tannan, Chartered Accountants beappointed as the Statutory Auditors of the Company at the forthcoming Annual General Meeting ofthe Company to hold office till the conclusion of the tenth Annual General Meeting of the Company.
For and on behalf of the Board
Place : Mumbai V.K. MAGAPU
Date : 8th May, 2003 A.K. CHHATWANI
DIRECTORS' REPORT
Directors}REPORT OF THE AUDITORS TO THE MEMBERSWe have audited the attached Balance Sheet of Raykal Aluminium Company Private Limited as at31st March, 2003. This financial statement is the responsibility of the company’s management. Ourresponsibility is to express an opinion on this financial statement based on our audit.
We have conducted our audit in accordance with the auditing standards generally accepted inIndia. We also state that the audit was planned and performed to obtain reasonable assuranceabout whether the financial statements are free of material misstatements. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimatesmade by the management, as well as evaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for our opinion. Further to our comments in theManufacturing and Other Companies (Auditor’s Report) Order, 1988 given hereunder we reportthat:-
1. As required by the Manufacturing & Other Companies (Auditor’s Report) Order, 1988 issuedby the Central Government of India, we enclose in the Annexure a statement on the matterspecified in paragraphs 4 & 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph (1) above , we state that:-
a) We have obtained all the information & explanation which to the best of our knowledge &belief were necessary for the purpose of audit.
b) In our opinion, proper books of account as required by law have been kept by theCompany so far as it appears from our examination of books.
c) The Balance Sheet referred to in the report are in agreement with the books of accounts.
d) In our opinion, the Balance Sheet complies with the accounting standards referred to insub-section (3C) of section 211 of the Companies Act, 1956.
e) In our opinion & to the best of our knowledge & information & according to the explanationsgiven to us, the said Balance Sheet read together with the notes thereon, give theinformation required by the Companies Act, 1956, in the manner so required & give a true& fair view:-
i) In so far as it relates to the Balance Sheet of the state of affairs of the Company asat 31st March, 2003.
f) On the basis of written representations received from directors, and taken on record bythe board of directors as on 31st March 2003, we report that none of the directors is
disqualified as on 31st March 2003, from being appointed as a director in terms of clause(g)of sub section (1) of Section 274 of the Companies Act,1956.
Place : Mumbai SANDEEP SURESH SHRIKHANDE
Date : 8th May 2003 Chartered Accountant
ANNEXURE
ATTACHED TO & FORMING PART OF THE REPORT FOR THE YEAR ENDED 31 ST MARCH 2003.
1. Since the Company does not have any fixed assets this clause is not applicable.
2. Since the Company does not have any fixed assets this clause is not applicable.
3. Since the Company does not have any stock of stores, spare parts & raw material etc. thisclause is not applicable.
4. Since the Company does not have any stock of stores, spare parts & raw material etc. theprocedure of physical verification of stocks followed by the management is not applicable.
5. Since the Company does not have any stock of stores, spare parts & raw material etc., theMaterial discrepancies clause is not applicable.
6. Since the Company does not have any stock of spares, spare parts and raw material etc. thisclause is not applicable.
7. Since no loans are obtained from companies, firms & other parties except directors this clauseis not applicable.
8. The Company has not given any loan to companies, firms or other parties listed in the registermaintained under Sec.301 of the Companies Act, 1956.
9. There are no loans & advances in the nature of loans given by the Company to its employees& others.
10. In our opinion & according to the information & explanation given to us, there are adequateinternal control procedures commensurate with the size of the Company.
11. There are no purchase of stores, raw materials & components from & sale of goods , materials& services to parties listed in the Register maintained under Sec.301 of the Companies Act ,1956 exceeding Rs.50000 during the year.
12. Since the Company do not have any stock of unserviceable or damaged stores this clause isnot applicable.
13. Since the Company has not accepted or renewed deposits from public during the year theprovisions of Sec.58A of the Companies Act, 1956 are not applicable.
14. In our opinion reasonable records have been maintained by the Company for the sale &disposal of realisable byproducts & scrap.
15. The Company is not required to have an internal audit system as its paid up Share Capital isless than Rs.2 crores.
16. The Central Govt. has not prescribed the maintenance of cost records in terms of section 209(1) (d) of the Companies Act, 1956.
17. As explained to us, the Provident Fund Act & Employees State Insurance Act are not applicableto the Company.
18. According to the information & explanations given to us, there are no undisputed amountspayable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty & Excise Duty as at31st March 2003 for a period of more than six months from the date they became payable.
19. According to the information & explanations given to us, no personal expenses of employeesor Directors have been charged to Revenue Accounts other than those payable undercontractual obligations or in accordance with the generally accepted business practices.
20. There was no trading activity of the Company during the year.
21. The Company is not a sick industrial Company within the meaning of clause (O) of SubSection (1) of Sec 3 of Sick Industrial Companies (Special Provisions) Act, 1985.
Place : Mumbai SANDEEP SURESH SHRIKHANDE
Date : 8th May 2003 Chartered Accountant
BALANCE SHEET AS AT 31 ST MARCH 2003As at 31.03.2003 As at 31.03.2002
Rupees Rupees Rupees RupeesSOURCES OF FUNDSShareholders’ FundsShare Capital
Authorised1,00,000 Equity Shares of Rs.10 each 10,00,000 10,00,000Issued, Subscribed & Paid up50,000 Equity Shares of Rs.10 eachfully paid-up 5,00,000 40
Unsecured LoanLoan from Directors 28,800 21,300
Total 5,28,800 21,340APPLICATION OF FUNDSCurrent Assets, loans and advances
Cash Balance - 290Balances with Scheduled BankIn Current Account 4,99,800 -
Less : Current LiabilitiesL&T Power Investments Private Limited 4,000 -Audit Fees Payable 2,000 6,000 4,000 4,000
Net Current Assets 4,93,800 (3,710)Miscellaneous ExpenditurePreliminary & Pre-Operative Expenses 35,000 25,050
Total 5,28,800 21,340
In terms of our Report of even dateattached herewithSANDEEP SURESH SHRIKHANDE V.K. MAGAPUChartered Accountant A.K. CHHATWANIPlace : Mumbai Place : MumbaiDate : 8th May 2003 Date : 8th May 2003
} Directors
RAYKAL ALUMINIUM COMPANY PRIVATE LIMITED
S-94
NOTES TO ACCOUNTS1. The Company maintains its accounts on accrual basis following the historical cost convention
in accordance with the Generally Accepted Accounting Principles ("GAAP") and in compliancewith the accounting standards referred to in Sec 211 (3C) and other requirements of theCompanies Act, 1956.
2. As the Company has not yet started commercial operation no Profit & Loss Account has beenprepared.
3. Previous year figures have been regrouped wherever considered necessary.4. Preliminary & Pre-operative expenses include:
Preliminary expenses 13,320Profit & Loss Account (op. Debit balance) 11,730Add : Expenses during the year:
ROC Fees 7,500Audit fees 2,000Other expenses 450 9,950
TOTAL 35,000
In terms of our Report of even dateattached herewithSANDEEP SURESH SHRIKHANDE V.K. MAGAPUChartered Accountant A.K. CHHATWANIPlace : Mumbai Place : MumbaiDate : 8th May 2003 Date : 8th May 2003
} Directors
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I. Registration Details:
State Code
Date Month Year
Rights Issue
Private Placement
Public Issue
Bonus Issue
1 5 - 0 5 6 7 3
3 1 0 3 2 0 0 3
1 5
N I L
5 0 0
II. Capital raised during the year (Amount in Rs. Thousands)
N I L
N I L
Registration No.
Balance Sheet Date
Net Current Assets
Investments
Miscellaneous Expenditure
Application of FundsNet Fixed Assets
Turnover (including other income) Total Expenditure
IV. Performance of Company (Amount in Rs. Thousands)
Profit/Loss Before Tax Profit /Loss After Tax
Dividend Rate %Earnings per share in Rs.
N I L N I L
N A
N I L
4 9 4
N I L N I L
N I L
3 5
Accumulated Losses
N I L
N A
Please tick appropriate box + for Profit, - for Loss
V. Generic Names of Three Principal Products/Services of the Company (as permonetary items)
No Activities during the year
+ - + -
In terms of our Report of even dateattached herewith
SANDEEP SURESH SHRIKHANDE V.K. MAGAPUChartered Accountant A.K. CHHATWANI
Place : Mumbai Place : MumbaiDate : 8th May 2003 Date : 8th May 2003
} Directors
Total Liabilities
Paid-up Capital
Total Assets
Reserves & Surplus
Unsecured Loans
III. Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands)
Sources of Funds
Secured Loans
5 2 9 5 2 9
5 0 0 N I L
N I L2 9