MIRA INFORM REPORT

Report Date :

28.10.2006

IDENTIFICATION DETAILS

Name :	LARSEN AND TOUBRO LIMITED
Registered Office :	L&T House, Ballard Estate, Mumbai – 400 001, India
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	07.02.1946
Com. Reg. No.:	11-4768
CIN No.: [Company Identification No.]	L99999MH1946PLC004768
TAN No.: [Tax Deduction & Collection Account No.]	MUML04455D
PAN No.: [Permanent Account No.]	AAACL0140P
Legal Form :	A public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturers and Sellers of earthmoving machinery including bulldozers, dumpers, scrappers, loaders, shovels, vibratory compactors and drag lines.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 185000000
Status :	Excellent
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established, diversified and highly respectable company. It is a professionally managed company having fine track. Fundamentals of the company are very strong. Trade relations are fair. Financial position is healthy and comfortable. The company is progressing well. The company's payments are always correct and as per commitments. The company can be considered for any normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office / Head Office :	L&T House, Ballard Estate, Mumbai – 400 001, INDIA
Tel. No.:	91-22-22618181, 22618182, 22685656
Fax No.:	91-22-22620223, 22617480, 22685893, 67525858
E-Mail :	sdk@lth.ltindia.com
Website :	http://www.larsentoubro.com
Regional Office :	Ø Mount Poohamallee Road, Chennai - 600 089, Tamilnadu Tel. No. 91-44-2232 6348 Fax No. 91-44-2234 2317 E-mail itcg@giasmd01.vsnl.net.in Ø NCL Bandra Premises, Plot No. C/6, Bandra – Kurla Complex, P. O. Box No. 8119, Bandra (East), Mumbai - 400 051, Maharashtra, India Ø 2, Saki Vihar Road, P. O. Box No. 8901, Mumbai – 400 072, Maharashtra, India · 1/FL, Laxminarayan Complex, 10/1, Palace Road, P. O. Box 122, Bangalore – 560 002, Karnataka, India Also located at New Delhi, Lucknow, Kolkata, Vadodara, Ahmedabad, Arakkonam Pune and Hyderabad
Overseas Office :	· Japan · Nepal · Sultanate of Oman · Bangladesh · Malaysia · Sweden · Russia · UK · USA · UAE
Factory :	Faridabad, Kandla, Vadodara, Ankleshwar, Hazira, Jafrabad, Kovayya, Nashik, Pune, Ahmednagar, Ratnagiri, Tadipatri, Bangalore, Mysore, Pondicherry, Awarpur, Jharsuguda, Kansbahal and Haldia
Branches :	· L & T Limited, Kanak Building, 41 Jawaharlal Nehru Road, Kolkata – 700 071, West Bengal, India Tel. No. 91-33-2282 8406/8413/8439 Also located at Jaipur, Bhopal, Nagpur, Durgapur, Jamshedpur, Guwahati, Bhubaneswar, Vishakhapatnam, Coimbatore, Kochi, Madurai and Surat

DIRECTORS

Name :	Mr. A. M. Naik
Designation :	Chairman & Managing Director
Name :	Mr. Jagadish Pandurang Nayak
Designation :	Whole-time Director & President – Operations
Name :	Mr. Y. M. Deosthalee
Designation :	Whole-time Director & Chief Financial Officer
Name :	Mr. K. Venkataramanan
Designation :	Whole-time Director & President – Operations
Name :	Mr. R. N. Mukhija
Designation :	Whole-time Director & Senior Vice President – Operations
Name :	Mr. K V Rangaswami
Designation :	Director
Name :	Mr. S Rajgopal
Designation :	Nominee (UTI)
Name :	Mr. B. P. Deshmukh
Designation :	Nominee (GIC)
Name :	Ms. Kranti Sinha
Designation :	Nominee (LIC)
Name :	Mr. S N Talwar
Designation :	Nominee (LIC)
Name :	Mr. M M Chitale
Designation :	Director
Name :	Mr. M M Chitale
Designation :	Director
Name :	Mr. A B Saharya
Designation :	Director
Name :	Mr. Surinder Nath
Designation :	Director
Name :	Mr. U Sundararajan
Designation :	Director
Name :	Mr. V. K. Magapu
Designation :	Executive Director
Name :	Mr. A K Shukla
Designation :	Director
Other Personal :
Name :	N Hariharan
Designation :	Company Secretary

KEY EXECUTIVES

Name	Mr. H Holck – Larsen
Designation	Chairman Emeritus
Age	93 years
Qualification	Master’s Degree in Chemical Engineering
Date of Joining	30^th December, 1989

Name	Mr. A M Naik
Designation	Managing Director & Chief Executive Officer
Age	60 years
Qualification	B E Mechanical
Experience	37 years
Date of Joining	15^th March, 1965
Previous Employment	Engineer in Charge-Fab Shop, Nestler Boiler Private Limited

Name	Mr. Jagadish Pandurang Nayak
Designation	Senior Vice President
Age	58 years
Qualification	B E Mechanical and Post Graduate Diploma in Production Engineering
Experience	37 years
Date of Joining	1^st October, 1975
Previous Employment	Production Manager in L&T Drilling Equipment Limited
Other Directorship	Ø LTM Limited Ø Narmada Cement Company Limited Ø L&T Finance Limited Ø L&T Information Technology Limited Ø L&T Equipment Leasing Company Limited Ø L&T Cement Limited Ø Tractor Engineers Limited Ø Audco India Limited Ø Ewac Alloys Limited Ø Gujarat Leather Industries Limited Ø L&T –Komatsu Limited Ø L&T –John Deere Limited Ø L&T –Case Equipment Limited Ø L&T –Demag Plastics Machinery Private Limited
Name	Mr. Yeshwant Moreshwar Deosthalee
Designation	Senior Vice President
Age	55 years
Qualification	B.Com, LLB, ACA
Experience	32 years
Date of Joining	4^th February, 1974
Previous Employment	Junior Officer in Crompton Greaves
Other Directorship	Ø Narmda Cement Company Limited Ø L&T Finance Limited Ø L&T Information Technology Limited Ø L&T Infocity Limited Ø L&T Capital Company Limited Ø L&T Trade.Com Limited Ø L&T Cement Limited Ø Bhilai Power Supply Company Limited Ø L&T –Komatsu Limited Ø L&T –John Deere Limited Ø Dhamra Port Company Limited Ø L&T –Case Equipment Limited Ø L&T Communications Limited Ø International Seaports Pte Limited Ø Larsen & Toubro Ceylinco (Private) Limited

Institutional Investors	Mr. D V Kapur
Mutual Funds and UTI	Director
Banks Financial Institutions and Insurance	73 years
FII’s	B E Electrical
Sub Total	Ø Reliance Industries Limited Ø Reliance Power Limited Ø Reliance Salgaocar Power Company Limited Ø Reliance Utilities & Power Limited Ø Jacobs H&G Limited Ø GKN Driveshafts (India) Limited Ø Tata Chemicals Limited Ø Honda Seil Power Products Limited Ø Zenith Limited Ø DLF Power Limited Ø DCM Hyundai Limited Ø Drivetech Accessories Limited

Name	Mr. S S Marathe
Designation	Director
Age	79 years
Qualification	M A Economics
Other Directorship	Ø Sandvik Asia Limited Ø Automotive Axles Limited Ø Bajaj Tempo Limited Ø Bharat Forge Limited Ø Deepak Fertilisers & Chemicals Limited Ø Finolex Industries Limited Ø Glaxo India Limited Ø Indian Organic Chemicals Limited Ø Kinetic Motors Limited Ø Kirloskar Brothers Limited Ø Kirloskar Electric Limited Ø Mandovi Pellets Limited Ø Tata Assets Management Company Limited Ø P P Holding Private Limited Ø Accord Solutions Private Limited Ø GDA Trust Management Private Limited Ø Pan Gulf Group Limited

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Financial Institutions	34696667	25.25
Nationalised Insurance Companies	8448720	6.15
Foreign Institutional Investors	26285578	19.13
Shares underlying GDRs	7141298	5.20
Mutual Funds	6631402	4.83
Bodies Corporate	3630534	2.64
Directors & Relatives	1174851	0.86
L&T Employees Welfare Foundation	18598068	13.54
General Public	30778659	22.40
TOTAL	137385777	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and Sellers of earthmoving machinery including bulldozers, dumpers, scrappers, loaders, shovels, vibratory compactors and drag lines.

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Scrapper, bulldozer, ripper and loader attachments	Nos.	250	250	--
Road Rollers, hot mix plants and other road construction and bridge construction machinery	Nos.	150	150	--
Dairy machinery and equipment – various items in aggregate	Nos.	35584	35584	--
Chemical plant and machinery including pharmaceutical, dyestuff, distillery, brewery and solvent extraction plants, evaporators and crystalliser plants and pollution control equipment in aggregate	Tonnes	6067	6567	5052
Equipment for food processing industry	Tonnes	65	65	--
Complete cement making machinery including rotary kilns and fluxo packers in aggregate	Nos.	2	2	--
Sugarcane and beet diffusion, beet preparation and beet pulp dehydration plants	Nos.	2	2	--
Nuclear purpose equipment, deaerators, ultra high pressure vessels including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate	Tonnes	5000	3950	110
Plant and equipment and modules for nuclear power projects, heavy water projects, nuclear and space research and allied projects including items for chemical, oil and gas, etc., industries	Tonnes	10000	10000	10877
Complete high speed bottling plants	Nos.	6	6	--
Pulp and paper making plants	Nos.	2000	800	--
Suspended particles drying plants	Nos.	6	6	--
Containers for liquefied gases and chemicals	Nos.	Not Applicable	1000 tonnes carrying capacity	--
Steel plant valves	Nos.	40	40	--
Ship auxiliaries and components of mechanised sailing vessels	Tonnes	1000	1000	--
Rubber Processing Machinery	Nos.	109	109	211
Switchgear, all types	Nos.	2678500	3174750	3666597
Miscellaneous electrical items	Nos.	1049100	1039100	--
Petrol dispensing and metering pumps	Nos.	4800	4800	6906
Press tools, jigs, fixtures, dies for pressure, castings, moulds for plastic injection and bakelite	Rs./Nos.	22.00 millions	29.50 millions	47.100 Nos.
Glass bottles and jars	Nos. in Million	Not Applicable	400	107.9
Portland Cement	Tonnes	2.218 millions	15.00 millions	11.741 millions
Industrial Machinery	Tonnes	12000	12000	10585
Industrial Electronic Control Panels	Nos.	2500	2500	459
Electronic Devices	Nos.	30000	30000	936
Electro surgical unit and accessories	Nos.	Not Applicable	1250	556
Ultrasound equipment and accessories	Nos.	1000	900	715
Patient monitoring system and accessories	Nos.	5500	5500	4704
Relays	Nos.	Not Applicable	55000	48583
Control & relay panels	Nos.	Not Applicable	100	--
Electricity meters	Nos.	Not Applicable	480000	412741
Transmission line tower	Tonnes	54000	54000	65333
Steel structural fabrication	Tonnes	18000	18000	32277
Steel re-rolling	Tonnes	40000	40000	25584
Ready mix concrete	M3	660400	3128000	2017662

GENERAL INFORMATION

No. of Employees :

22,922

Bankers :

˜ State Bank of India, Mumbai, Maharashtra, India

˜ Bank of India, Mumbai, Maharashtra, India

˜ Central Bank of India, Mumbai, Maharashtra, India

and several other banks.

Facilities :

Secured Loans	31.03.2006
Secured Redeemable Non-convertible Debentures:
Fixed Rate Debentures	750.000
Loans from banks:
Cash credits / Working Capital Demand Loans	1201.100
Other loans	475.700
Interest accrued and due	0.300
Loans from others	2230.800
Total	4657.900
Unsecured Loans:
1.25% Foreign Currency Convertible Bonds	969.500
Zero coupon Foreign Currency Convertible Bonds	4387.000
Fixed deposits	40.500
Loans from subsidiary companies
Short term loans and advances:
From banks	1724.600
Lease finance	32.500
Sales tax deferment loan	51.000
Other loans and advances:
From banks	1156.000
Sales tax deferment loan	1482.400
Lease finance	13.300
Total	9877.800

Banking Relations :	Good
Auditors :	˜ Sharp & Tannan Chartered Accountants
Associates:	˜ Ewac Alloys Limited ˜ Audco India Limited ˜ L&T Niro Limited ˜ L&T Chiyoda Limited ˜ L&T Sargent & Lundy Limited ˜ L&T Komatsu Limited ˜ International Seaports Pte. Limited ˜ L&T John Deere Private Limited ˜ L&T Ramboll Consulting Engineers Limited ˜ Larsen & Toubro (Saudi Arabia) LLC ˜ L&T Crossroads Private Limited ˜ L&T Case Equipment Private Limited ˜ Sharp Business Systems (India) Limited ˜ L&T Infocity-Ascendas Private Limited ˜ The Dhamra Port Company Limited ˜ Voith Paper Technology India Limited ˜ Larsen & Toubro (Oman) LLC (upto 25.01.2003) ˜ Desbuild – L&T Joint Venture ˜ Larsen & Toubro Limited – Shapoorji Pallonji & Co. Limited Joint Venture ˜ L&T Hochtief Seabird Joint Venture ˜ HCC-L&T Purulia Joint Venture ˜ L&T Demag Plastics Machinery Private Limited ˜ L&T HCC Joint Venture ˜ Bauer-L&T Diaphragm Wall JV ˜ International Metro Civil Contractors ˜ L&T Joshi Technologies Inc. Joint Venture
Subsidiaries :	˜ Tractor Engineers Limited ˜ L&T Finance Limited ˜ L&T Capital Company Limited ˜ L&T Trade.com Limited ˜ Larsen & Toubro Infotech Limited ˜ Larsen & Toubro Infotech GmbH, Germany ˜ LTM Limited ˜ L&T Transportation Infrastructure Limited ˜ HPL Cogeneration Limited ˜ Narmada Cement Company Limited ˜ Narmada Infrastructure Construction Enterprise lt ˜ L&T Western Indai Tollbridge Limited ˜ L&T Equipment Leasing Company Limited ˜ India Infrastructure Developers Limited ˜ L&T Netcom LIMITED ˜ Larsen and Toubro Ceylinco (Private) Limited ˜ L&T Cement Limited ˜ Dakshin Cements Limited ˜ Larsen & Toubro LLC, USA ˜ Larsen & Toubro International FZE, Sharjah ˜ L&T Holdings Limited ˜ L&T Infocity Limited ˜ Hyderabad International Trade Expositions Limited ˜ Andhra Pradesh Expositions Private Limited ˜ L&T ECC Construction (M) SDN BHD, Malaysia ˜ Bhilai Power Supply Company Limited ˜ L&T Power Investments Private Limited ˜ Cyberpark Development & Construction Limited
Membership :	Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
325,000,000	Equity Shares	Rs.10/- each	Rs.3250.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
	Issued Capital :
137385777	Equity Shares	Rs.10/- each	Rs. 274.800 millions
	Subscribed & Paid-up Capital :
137385777	Equity Shares	Rs.10/- each	Rs. 274.800 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		274.800	259.800	248.800
3] Reserves & Surplus		46126.900	33431.500	27501.600
NETWORTH		46401.700	33691.300	27750.400
LOAN FUNDS
1] Secured Loans		4657.900	7937.200	10452.500
2] Unsecured Loans		9877.800	10653.400	2791.000
TOTAL BORROWING		14535.700	18590.600	13243.500
DEFERRED TAX LIABILITIES		2097.900	0.000	0.000
TOTAL		63035.300	52281.900	40993.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		13207.300	10172.400	9901.800
Capital work-in-progress		2838.900	658.200	262.300
INVESTMENT		19195.200	9609.300	9658.800
DEFERREX TAX ASSETS		1325.100	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	22102.700	23108.400	18123.000
	Sundry Debtors	48141.600	39636.000	33145.800
	Cash & Bank Balances	5832.000	8280.200	3752.700
	Other Current Assets	172.600	0.000	0.000
	Loans & Advances	19116.300	18597.200	14216.800
Total Current Assets		95365.200	89621.800	69238.300
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	58962.500	50232.300	41726.600
	Provisions	10153.700	7946.400	6802.800
Total Current Liabilities		69116.200	58178.700	48529.400
Net Current Assets		26249.000	31443.100	20708.900
MISCELLANEOUS EXPENSES		219.800	398.900	462.100
TOTAL		63035.300	52281.900	140993.900

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	151986.300	141015.300	107401.400
Profit/(Loss) Before Tax	13136.500	12853.900	7681.300
Provision for Taxation	3015.100	3015.400	2353.800
Profit/(Loss) After Tax	10121.400	9838.500	5327.500
Export Value	31779.900	26673.700	NA
Import Value	14597.600	14813.700	NA
Total Expenditure	138849.782	126001.900	97679.200

Quarterly

PARTICULARS	30.06.2006 (1^st Quarter)
Sales Turnover	34769.000
Other Income	474.300
Total Income	35243.300
Total Expenditure	32328.600
Operating Profit	2914.700
Interest	157.700
Gross Profit	2757.000
Depreciation	308.900
Tax	884.200
Reported PAT	1571.3000

200606 Quarter 1 - Gross Sales Includes Gross Sales / Revenues from Operations Rs 35238.300 million Other Operational Income Rs 80.000 million Expenditure Includes (Increase)/Decrease in stock in Trade Rs 59.600 million Consumption of Raw Material (incl. WIP) Rs 7455.000 million Sub contracting charges Rs 7892.100 million Construction materials Rs 7874.700 million Purchase of trading goods Rs 2257.200 million Other manufacturing / Operating Expenses Rs 1115.000 million Staff expenses Rs 2493.700 million Sales, administration & Other expenses Rs 3181.300 million Tax Includes Provision for Current Tax (Including for wealth Tax) Rs 848.300 million Deferred Tax Rs (7.400) million Fringe Benefit Tax Rs 35.900 million EPS is Basic Status of Investor Complaints for the quarter ended 30.06.2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 22 Complaints disposed off during the quarter 22 Complaints unresolved at the end of the quarter Nil 1. The Company, during the quarter, has reviewed and changed the accounting estimates / policy for recognizing employee benefits, pursuant to the mandated adoption of Accounting Standard [AS]15 (Revised), Employee Benefits, issued by the Institute of Chartered Accountants of India. Consequently. Staff expenses for the current quarter are higher by Rs 157.000 million. Further, in accordance with the transitional provisions prescribed under the aforesaid AS 15 Rs 76.900 million has been charged to the General Reserve as at 01.04.2006. 2. In line with the revised internal reporting norms of the Company, segment reporting has been reconstituted during the quarter. Consequently, segment figures for the periods of the previous year have been regrouped. 3. The Company during the quarter ended 30.06.2006 has: a. allotted 1.229 Millions shares of Rs 2 each, fully paid up, on exercise of stock options by employees, in accordance with the Company's stock option schemes. b. allotted 0.525 Millions shares of Rs 2 each, fully paid up, on exercise of conversion option by some holders of the foreign currency convertible bonds issued by the Company. 4. Figures for the previous period have been re-grouped / re-classified to conform to the figures of the current period. 5. The results for the quarter ended 30.06.2006 have been subjected to Limited Review by the Statutory Auditors, reviewed by the Audit Committee and approved by the Board of Directors at its meeting on 21.07.2006

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.42	0.52	0.72
Long Term Debt-Equity Ratio	0.31	0.35	0.51
Current Ratio	1.35	1.35	1.20
TURNOVER RATIOS
Fixed Assets	6.90	6.64	2.44
Inventory	6.71	6.48	5.94
Debtors	3.39	3.67	3.11
Interest Cover Ratio	7.85	7.79	7.10
Operating Profit Margin(%)	9.74	8.33	9.84
Profit Before Interest And Tax Margin(%)	9.02	7.67	9.04
Cash Profit Margin(%)	6.48	5.82	6.19
Adjusted Net Profit Margin(%)	5.76	5.16	5.39
Return On Capital Employed(%)	24.16	22.34	16.77
Return On Net Worth(%)	21.74	22.69	16.99

STOCK PRICES

Face Value	Rs. 10.00/-
High	Rs. 1277.00/-
Low	Rs. 1258.00/-

LOCAL AGENCY FURTHER INFORMATION

History

Subject was incorporated on 7^th February 1946 as a private limited company to take over the partnership business of `Larsen & Toubro'. It was converted into a public limited liability company in 1950.

The company was founded in 1938 by two Danish engineers, Henning Holk Larsen and Soren Kristian Toubro, as a partnership firm, Larsen & Toubro became a private limited company in 1946 and a public limited one in 1950. It manufactures a wide range of engineering products like earthmoving, industrial and chemical machinery, switchgears, valves, welding alloys and cement machinery, L & T diversified into shipping, acquiring two bulk carriers from Japan in 1981-82. In 1983-84, it commenced operations at its 1-mtpa cement plant at Awarpur, Maharashtra.

The company is one of the largest engineering conglomerates in South East Asia. It is a major player in the cement and engineering, procurement and construction industries and is perhaps the only one in India that has the capacity to compete with global giants.

The company has four major divisions – Engineering and Construction (59 % of FY 2000-01 sales), Cement (28 %), Electricals and diversified products (9 %). It also has a 100 % subsidiary – L & T Information Technology Services (to be renamed L & T Infotech)

The company has promoted a 50:50 venture with Komatsu Asia and Pacific, Singapore, of the Komatsu group of Japan, a global leader in earthmoving and construction equipment. It has sold and transferred its Bangalore-based construction equipment manufacturing division to this new joint venture called L & T – Komatsu Limited. The company has tied up with FORE Systems Inc. of the USA to provide state-of-the-art ATM (asynchronous transfer mode) technology for communication networks.

In 1999-2000, the company acquired the Chowgule-promoted Narmada Cement Company at a cost of Rs. 2430 millions. Today it is the India’s largest cement company with a capacity of 12 million tonnes.

With the completion of the cement grinding unit of 1 million tonne capacity at Durgapur in the second half of FY 2001-02, the company's cement capacity was 16 million tonnes. In November, 2001 Grasim Industries, which is the third largest player in the Indian cement industry, acquired a strategic 10% equity stake in L & T from Reliance Industries. In January, 2002 the company has brought over the share holding of Caterpillar, USA in its 50:50 joint venture Tractor Engineers (TENGL). Subsequently TENGL has become a wholly -owned subsidiary of the company. 

In June 2001, name of L & T Information Technology Limited was changed to Larsen & Toubro Infotech Limited, subsequently the equity shares of LTIL were sub divided into fully paid up equity shares of Rs. 5/- each.  

During 2001-02, the Construction division has executed major projects viz. a) Coal Handling Plant (4400 MTPA) for Paradip Port Trust b) 21 MW Power projects at Mithapur for Tata Chemicals.

Much awaited, extensively deliberated demerger of Cement business to Ultra Tech Cemco has been effective from 1^st April, 2003 and now Larsen and Toubro is purely a EPC contractor with interests in electrical and electronics, ready mix concrete and power (through subsidiary).

The Cement division of the L & T has been demerged and transferred to Ultra Tech effective from 1^st April, 2003. Accordingly, for every 10 shares of Rs. 10/- each held in Larsen and Toubro (before demerger), the shareholders will get (a) 5 shares of Rs. 2 each of demerged L and T (residual entity) and 4 shares of Rs. 10 each of Ultra Tech.

Before demerger, L and T has a paid up capital of Rs. 2487.100 millions, which has been reduced to Rs. 248.800 millions. The company feels this is necessary as it is no longer represented by assets. Such reduction is being effected by reducing the face value of the equity shares of the company from Rs. 10 per equity share to Re. 1 per equity share. Subsequently, the company will consolidate 248.800 millions equity shares of L & T of the reduced value of Rs. 1 into 124.400 millions equity shares of Rs. 2 each fully paid up. Simply put, for every 10 shares of Rs. 10 each of L & T, the shareholders will get 5 shares of Rs. 2 each in the residual entity.

L & T holds 20% stake in Ultra Tech as of 31^st March, 2004. However, as per the scheme of arragement, subject will divest 8.5% stake in Ultra Tech to Grasim Industries. The demerger of cement division into Ultra Tech has become effective from 14^th May, 2004. The shares of Ultras Tech will be listed in bourses within 40 days from the above effective date. Meanwhile, Grasim has made an open offer to shareholders of Ultra Tech to acquire 30% stake amounting to 3,73,19,587 equity shares of Rs. 10 each of Ultra Tech for Rs. 342.60 per share.

Grasim has already deposited the entire open offer consideration in an escrow account. The open offer opened on 7^th June, 2004 and closed on 21^st June, 2004.

Some of the initiatives to demerge are:

˜ A Subsidiary company, L & T Cement Limited to be formed.

˜ L & T shareholders to receive about 25 % stake in LTCL.

˜ Narmada Cement company to be merged with LTCL.

˜ L & T would invite a strategic financial partner in LTCL.

˜ The strategic partner would have the same level of shareholding with L & T through a combination of secondary purchases and infusion of capital in LTCL over a period of time.

Generic Names of the Principal Products / Services of Company (as per monetary terms) are as under:

Item Code No. (ITC Code)	Product Description
N.A.	Construction and Project related activity
252329.01	Portland Cement
847989.02	Plant and equipment and modules for nuclear power projects, heavy water projects, nuclear and space research and allied projects including items for chemicals, oil and gas, etc. Industries

It is in trade terms with:-

˜ A S Enterprises

˜ Dipti corrugating Industries Private Limited

˜ Dyna Hitech Power Systems Limited

˜ Apollo Soyuz Electricals Private Limited

˜ Adhithiya Gears Private Limited

˜ Afmc Lubrication Private Limited

˜ Ambattur Heat Treaters Private Limited

˜ Are Vee Engineering Works

˜ Acumac Machine Tools Private Limited

˜ Adithya Castings Private Limited

˜ D C Metal Corporation

˜ Chennai Hydro-Maatics Private Limited

˜ D’Souza Metal Cutting Private Limited

˜ Dwarkesh Engineering Works Private Limited

˜ Excellent Products of India

˜ Industrial Controls & Drives (India) Private Limited

˜ J & J Biotech and Speciality Chemical (Private) Limited

˜ Empee Engineers (Private) Limited

˜ Tamilnadu Heat Treatment and Fetting

˜ Sargam Metals Private Limited

˜ Kabra Engineers

˜ Ujwal Plastic Industries Private Limited

˜ Victory Timber & Plywood

˜ Venus Technical Services

˜ Vita Technology Private Limited

˜ Wadhwa Brothers Engineering

˜ Yashvin Filters

˜ Young (India) Computers Private Limited

˜ Yojana Udyog Private Limited

˜ Swastik Heavy Structural Private Limited

˜ Shree Jalaram Wood Works

˜ Setwel Industries

˜ Union Abrasives

˜ Toughedge Industrial Tools Private Limited

˜ Vanjax Sales Private Limited

Technical Tie-ups with Overseas Companies

˜ BTR Plc, UK

˜ Caterpillar Inc, USA

˜ Chiyoda Corporation, Japan

˜ E & C, Switzerland

˜ Niro A/S, Denmark

˜ Precious Shipping Public Company Limited, Thailand

˜ Sargent & Lundy, USA

˜ SSA International Inc., USA

˜ Zubair Enterprises LLC, Sultanate of Oman

The company's fixed assets of important value include goodwill, freehold and leasehold land, mining lease, ships, buildings, railway sidings, plant & machinery, furniture & fixtures, vehicles, aircraft and Jetties

Year in Retrospect 

 The gross sales and other income for the financial year under review were Rs.154290.000 Millions as against Rs.139530.000 Millions for the previous financial year registering an increase of 11%. The Profit before tax and extraordinary items (after interest and depreciation charges) was Rs.13140.000 Millions and the Profit after tax (before extraordinary items) was Rs.9420.000 Millions for the financial year under review as against Rs.12860.000 Millions and Rs.9840.000 Millions respectively for the previous financial year. 

Dividend 

 The Directors recommend payment of dividend of Rs.22/- per equity share of Rs.2/- each. Equity Shares that may be allotted on exercise of options granted under the Employee Stock Option Schemes as also on conversion of outstanding Foreign Currency Convertible Bonds before the Book Closure for payment of dividend will be entitled to receive full dividend. 

Capital & Finance 

 During the year under review, the Company allotted 22,86,496 equity shares of Rs.2/- each upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes. 

 The Company also allotted 51,75,099 underlying equity shares in respect of Global Depository Receipts issued upon conversion of US $ 128,270,000 Bonds out of US $ 150 mn - 1.25% Foreign Currency Convertible Bonds (due 2009) issued in November 2004. 

 During the year, the Company raised funds aggregating Rs.10210.000 Millions through privately placed debentures and redeemed debentures including those allotted earlier, aggregating Rs.11480.000 Millions. 

 The Company issued at par, Zero Coupon Foreign Currency Convertible Bonds aggregating to JPY 11.57 bn (US $ 100 mn equivalent), comprising 1157 Bonds of JPY 10,000,000 each (INR value: Rs.4353.800 Millions) to finance ongoing capital expenditure and acquisitions. The Bonds have a tenor of 5 years and will be redeemed at 103.30% of the principal amount on Maturity Date. The Bonds are convertible into Global Depository Shares, at the option of Bondholders at an initial conversion price of Rs.2498.45 per equity share. 

 The above Bonds are listed on the Singapore Exchange Securities Trading Limited. 

Management Discussion and Analysis 

Review of Economy 

 The Indian GDP grew at 8.4% in 2005-2006, surpassing the high of 7.5% achieved in 2004-2005. On the back of healthy monsoon, Agriculture bounced back with a growth of 3.9% as compared to 0.7% in 2004-2005. In the last few years, both the industry and services have acted as the twin engines propelling the growth of the economy, contributing about 20% and 61% of the GDP respectively. Industry achieved a growth of 7.6% (7.4 in 2004-2005) while Services grew by 10.3% (10.2% in2004-2005). Substantial progress was witnessed in attracting private investment in several sectors including infrastructure sectors like roads, ports and airports. 

 During the year 2005-2006, the Fiscal deficit was at 4.1% of GDP on account of containment of the revenue deficit at 2.6% of GDP. The spurts in oil and gas prices were effectively countered with significant increase in forex inflows, thereby not allowing the deficit to adversely impact the floating rupee. Inflation has been maintained at 5% despite the hike in crude oil and commodity prices. As per the latest study of FDI confidence index survey, India is amongst the top 10 countries behind China, followed by Mexico, Poland, Brazil and Russia, in attracting the foreign direct investment into the country. 

 There was a renewed activity in the Gulf and South East Asian economies. The hardening of oil prices has had a two fold impact; one on the oil rich economies with a boom in construction and infrastructure sectors, another on the developing economies to bring efficiencies in the oil and gas mid stream and down stream activities, besides pursuing oil exploration with renewed vigour and urgency. It is heartening to note that during 2005-2006, the trade amongst the Asian countries surpassed the amount of trade Asian countries had with the rest of the world. This augurs well for the Indian industry in general and the Company in particular, in the years ahead. 

Company Performance

 The booming Indian economy has had a distinctive and favourable impact on the business of the Company for the year 2005-2006. Development activities in the Company's core sectors of operation such as transportation infrastructure, hydrocarbon upstream, power and industrial equipments & utilities have endowed the Company with excellent opportunities. Right moves toward capitalising these opportunities have enabled the Company's encouraging performance during the year under review. 

 The Company's businesses have bees classified into 6 Operating Divisions, vi; (i) Engineering Construction & Contract; Division (ECCD) (ii) Engineering & Construction Projects Division (E&C. Projects) (iii) Heavy Engineering Division (HED) (iv) Electrical & Electronics Division (EBG) (v) Machinery & Industrial Products Division (MIPD) and (vi) Technology Services Division. 

 All the major businesses of the Company reported improved performance during 2005-2006. Most of the Subsidiary & Associate companies, operating in varied sectors, directly or indirectly related to the parent Company's core businesses, had performed well during the year under review. The performance highlights of some of the key Subsidiary & Associate companies are covered in the later part of this report. 

 The Company has launched Programme Lakshya, a five year strategic plan for charting its growth path. It aims at enhancing shareholder value by achieving profitable growth in scalable high end businesses, expanding international operations, achieving operational excellence and through effective talent management. 

 Critical initiatives of this programme include (i) achieving cost efficiencies, (ii) thrust on engineering and IT services, (iii) risk management, (iv) supply chain management, (v) shared services, (vi) exploring the inorganic route for bridging competency gaps, achieving scale, etc. 

 All the Operating Divisions have launched implementation programmes to monitor the Programme Lakshya initiatives. 

 During the year 2005-2006, the Company has divested its stake in two of its Associate companies, namely, L&T-John Deere Private Limited and L&T-Niro Limited. The Company also exited the Dairy & Milk Processing equipment business forming a part of the Engineering & Construction Projects Division and Glass container business forming part of the Machinery & Industrial Products Division during the year under review. 

 These initiatives are a part of the regular review of business portfolio of the Company, which is focused on profitable growth of its core and scalable businesses. 

 The management of Larsen & Toubro Limited presents the analysis of Divisionwise performance of the Company for the year 2005-2006 and its outlook for the future. This outlook is based on assessment of the current business environment. It may vary due to future economic and other developments, both in India and abroad. 

Outlook 

 On the domestic front, progressive policies impacting the Infrastructure, Manufacturing and core sectors of the economy have opened up a large vista of opportunities for the Division. The continuing resilience and buoyancy in the Oil producing countries augurs well for the Division's penetration in the Middle East. The outlook for most of the core sector businesses appear to be positive. 

 IPU Sector: The booming market has seen new players entering the markets. However the capability of providing turnkey solutions for EPC projects, timely completion and the excellent performance of L&T supplied equipment have provided the competitive edge to the Company's business in this sector. The growth envisaged in Power & Port sectors, should provide attractive opportunities to the Bulk Material Handling business. 

 With the successful awarding of an industrial water project through the PPP route in the state of Andhra Pradesh, the sector now looks forward to repeat opportunities for such projects in other states. Since water supply projects are a point of focus for almost all State Governments due to the enormous demand supply gap, large value orders involving Water Treatment process will be the order of the day Investments in Steel plants by private players will continue to be buoyant. 

 HC&P Sector: Major expansion plans by the refineries and petrochemical industry from public and private sectors provide good opportunities for the Division. Opportunities such as (i) development of total five Thermal Power Plants with a planned investment outlay of Rs. 800000.000 Millions, (ii) expected BOOT projects in the transmission lines and (iii) investments by the State Electricity Boards are expected to provide the much needed fillip to the power sector. Continuing inflow of funds to the Power Grid for establishing 765 kV and 400 kV Switchyards enhance the business prospects of HC&P sector. Continued thrust on Hydropower development by the government for generation of 050000 MW Hydroelectric Power' will create business opportunities for the sector. The Government's clearance for implementation of four Nuclear Power Projects in the near future and the recent Indo-US agreement on Nuclear Energy co-operation is expected to expedite growth of Nuclear Energy. The above opportunities portend well for the sector as a whole in the coming years. 

 B&F Sector: The growth potential of the business under this sector is expected to improve with rapid urbanisation of tier-II cities, and increased awareness about health and recreation. There is a huge scope for modernization of airport terminal buildings and other related developments. India is gearing up for a major boom in the manufacturing sector; for instance 7000 TPD glass production, 0.5 million cars, 50 mtpa capacity enhancement in Cement industry, etc. The Division is extremely optimistic about the plethora of opportunities for this sector. 

 TI Sector: The renewed focus of the Government on Infrastructure will result in more opportunities during 2006-2007 in Roads, Airports, Bridges and Ports. Six expressways are identified to be developed through an international competitive bidding process. Major allocations have been planned for urban infrastructure projects, including Mumbai and Bangalore metro rail projects and other projects in Maharashtra, Madhya Pradesh and Gujarat. On this backdrop, the sector expects to perform well in the years ahead. 

 Global Engineering Solutions (GES), recently established as an arm of ECCD's Engineering Design Research Centre, has made good forays into the international markets of Engineering & Design consultancy, expecting to emulate the success of Indian software companies. 

 Thus, with the accelerated growth in the economy, backed by the initiatives of the various business sectors, the Division is optimistic about its growth prospects over the next few years. 

Year 2005-2006 at a Glance

v New Order Inflow Rs.223050.000 Million (Previous Year Rs. 149420.000 Million) - Growth 49%

v Order Backlog Rs.246460.000 Millions (Previous Year Rs. 177280.000 Millions) - Growth 39%

v Gross Sales Rs.148840.000 Million (Previous Year Rs. 132550.000 Million) - Growth 12%

v Export Sales Rs.26420.000 Million constituting 18% of Total Sales.

v Segment-wise composition of revenue:

Engineering & Construction Segment 82.3%

Electrical & Electronics Segment 10.4%

Others" Segment 7.3%

v PBDIT Rs.15730.000 Millions (Previous Year Rs. 14340.000 Million) - Growth 9.7%

v PAT Rs.10120.000 Million (Previous Year Rs.9840.000 Million) - Growth 2.8%

v Debt Equity ratio of 0.32:1 (Previous Year 0.56:1)

AS PER WEBSITE

Press Release:

L&T fabricates 8,000-t platform for ONGC

Hazira , Nov. 4

A 1400-TONNE structure, part of the 8,000-tonne mega process platform for Oil and Natural Gas Corporation, has already been loaded on a floating deck on the Tapti shore of Larsen & Toubro's Hazira facility, the finishing touches being given to it.

"This is the largest process platform that has ever been constructed in India," says Mr V.N. Desai, Senior Deputy General Manager of the Modular Fabrication Yard of L&T, who is part of the project team for the platform. The entire facility will be handed over to ONGC by January 31, 2004.

The other sections of the mega platform are also almost ready. The 1665-tonne East deck, which will complement the 1400-tonne west deck which has been already loaded, is also ready for transfer to the floating deck. This will be done by means of hydraulic cranes and ramps, a moving event indeed for the project team and the workers who had worked on the platforms for over a year now. Both the decks will then be towed down the river Tapti and out its mouth into the Arabian sea and taken to the ONGC site for installation.

There are the other sections too - the 1200-tonne living quarter deck, topped by a helideck, which will accommodate 50 persons who would be working on the offshore well nearly 200 km off the coast, the 1500-t turbo generator module which will generate 30 MW of electricity and a 1100-tonne process gas compressor module. Then there are desalination units as well.

All these will be installed on an 8-legged support structure - the jacket - which sits on the seabed, with the modules installed one after the other using a derrick barge with a lifting capacity of 2,400 tonnes. L&T has outsourced this work to J Ray McDermott Eastern Hemisphere Limited.

One of the platform's main functions is to draw seawater at a depth of 30 metres below sea level, filter, deoxygenate and raise the pressure so as to be suitable for injection whose pressure will force out the crude from Bombay High North (BHN) wells. (The project is part of ONCG's redevelopment facility to enhance output of oil and gas from Bombay High.) The water will be transported to the BHN platform through a pipeline over a bridge which is also constructed by L&T. In fact, the entire platform will be connected to the existing BHN platform in mid-sea.

The extracted natural gas received from the BHN platform will be received by the newly installed deck and compressed and sent back to BHN for dehydration and later, transportation to the onshore terminal.

Almost 3,000 workers each working 12 hours a day for 30 days a month have been employed on the project, says Mr. Desai. The size of the project has called for varying labour requirements, a lot of which has been outsourced to certified labour contractors, he says. ONGC had awarded the contract to Engineers India Limited as Rs 8210.000 Million which in turn subcontracted the platform construction and commissioning to L&T at Rs 6060.000 Millions .

Construction boom lifts L&T net 68% to Rs 71

Buoyed by robust performance from its engineering and construction business, Larsen & Toubro, the diversified engineering and cement major, has reported a 68% rise in net profit for the second quarter ended September 30, '03 to Rs 710.000 Millions , up from Rs 422.000 Millions during the corresponding period last year.

Net sales during the three-month period surged to Rs 24978.000 Millions up from Rs 19181.000 Millions, while other income more than doubled to Rs 1246.000 Millions during the period. Profit before tax shot up from Rs 453.000 Millions to Rs 906.000 Millions.

For the first half of the fiscal, L&T clocked a 73% rise in net profit to Rs 1503.000 Millions up from Rs 868.000 Millions in the same period last year. Net sales rose from Rs 3864 Millinos to Rs 46336.000 Millions , while other income shot up from Rs 952.000 Millions to Rs 1961.000 Millions during the period. "Other income has shown a steady rise during the last quarter, mainly due to receipts from integrated joint ventures, exchange gains and treasury operations," L&T's CFO, YM Deostalee, said.

For L&T, the E&C segment, which reported a 44% growth in revenues during the three-month period, has been the main driver. Although operating margins were lower, gross revenues from the segment jumped to Rs 17260.000 Millions . Domestic order booking in this business surged by 49% to Rs 2131 Millions, while export orders more than doubled to Rs 1,082 Millions during the period. The total order backlog position has risen 32% to Rs 15697 Millions

The L&T scrip shot up 3.5% to close at Rs 406.8 on the Bombay Stock Exchange, ahead of the announcement of quarterly results. The cement business, which is in the process of being hived off with the Aditya Birla group in the driver's seat, has reported a modest 5% rise in revenues during the last quarter to Rs 629 Millions. With average realisation down by 3.8%, the division's operating margin fell from 12.7% to 10.9% during the period.

On the contrary, the company's electrical and electronics business shored up revenues by 26% to Rs 254 Millions during the quarter, driven by a pick-up in sales of switchgear standard products, switchboards and petrol dispensing pumps. However, operating margins declined from 14.5% to 11.4% following wage settlement at the Powai works.

"The E&C business maintained the growth momentum in order booking and revenues for the quarter. While domestic order booking reflects the leadership position of the company, the export orders booked increasingly underscore the company's ability to secure orders against stiff international competition," L&T said.

L&T-Demag's New Manufacturing Facility In Chennai

Chennai, October 1, 2005: The new manufacturing facility of plastics machinery major L&T-Demag Plastics Machinery Limited, located at Chembarambakkam in Chennai, will be inaugurated jointly by Mr. A. M. Naik, Chairman & Managing Director of Larsen & Toubro Limited (L&T), and Mr. Pepyn René Dinandt, Chairman of Mannesmann Plastics Machinery Group, on

October 2, 2005

Established in 2001, L&T-Demag is a 50:50 joint venture of L&T and Demag Ergotech GmbH (a part of Mannesmann Plastics Machinery Group), Germany. The company earlier had its manufacturing facilities at Manapakkam in Chennai. L&T-Demag is a leading manufacturer of plastics injection moulding machines with the latest technology for domestic and export markets.

The new factory was set up at an investment of around Rs. 25 Millions. It is equipped with advanced technology for design, manufacture and testing of plastics injection moulding machines. Its 600 machines per year capacity will be soon expanded to 1000 machines in the near future. A significant portion of the expected revenue of around Rs. 300 Millions will be earned from exports.

&T Group Company Bags Rs. 165 Millions Order From Oman

Mumbai, September 26, 2005: Larsen & Toubro Electromech LLC (LTEM), Oman, an associate company of L&T, has secured a contract from Petroleum Development Oman LLC (PDO), Oman. This contract is for revamping and upgradation of the transmission lines and substations in its existing oil fields in Central Oman as part of a major infrastructure development undertaken by PDO.

The order is valued at Rs. 165 Millions (US $37.15 million) and has been bagged against stiff competition from local and international players. The scope of work involves construction of 293 km of 132 kV overhead transmission lines interconnecting various existing substations, construction of new transmission lines and additional substations in the oil fields of interior Oman to expand the existing electrical network. The work is scheduled to be completed by February 2007.

LTEM, formerly known as Zubair Kilpatrik LLC, is a recent acquisition of L&T as part of its efforts to accelerate business in the Middle East. The Company was a unit of Zubair Corporation, L&T's JV partners in Larsen & Toubro (Oman) LLC (LTO), which has been operating successfully for over a decade in Oman.

LTEM, where L&T has a shareholding of 65%, is operating with four key Business Units, viz., MEP Services, Electrical and Instrumentation for Oil and Gas, Engineering and Maintenance Contracts for Electrical and Instrumentation, and Facilities Management. It will also complement and supplement LTO in projects involving facilities management and building utility works.

L&T Wins Rs. 4300.000 Million Orders
For Export Of Process Plant Equipment

Mumbai, September 21, 2005: Continuing its thrust on high-tech engineering exports, Larsen & Toubro Limited has recently bagged a slew of orders valued over Rs. 430 Millions for plant and equipment to countries ranging from France to Australia. The contracts for critical equipment such as ammonia plants, petrochemical plants, Liquefied Natural Gas plant and gas development projects have been secured from leading EPC contractors like Kellogg Brown & Root, Bechtel, Foster Wheeler and Mitsubishi Heavy Industries based in USA, UK and Japan.

L&T will engineer, fabricate and supply stainless steel heat exchangers and pressure vessels for an LNG plant in Australia under a contract from Foster Wheeler, UK. For the Air Liquide H2 Plant in France, L&T will supply a waste heat boiler package. Critical equipment for petrochemical plant - Ethylene Oxide reactors - will be supplied to China as well as filter vessels for downstream gasifiers. For a gas-to-liquid plant in Nigeria, L&T will supply waste heat boiler packages and auto thermal reformers. L&T has also received critical equipment orders for a petrochemical complex in Malaysia.

In an export breakthrough to Egypt, L&T will supply critical equipment for an Ammonia Plant, including the ammonia converter, unitized chiller and the secondary reformer. This order was secured from the reputed process consultants Kellogg Brown & Root, USA.

The Gulf continues to be a major market for L&T's engineering and construction expertise. L&T won orders for Heat Exchangers in Stainless Steel and Incoloy through Bechtel, UK, to the UAE. The Company also secured a repeat order for supply of Catofin Reactors and a Product Splitter to a Petrochemical Plant in Saudi Arabia. For Oman, L&T will supply Urea Reactors and a Waste Heat Boiler package.

Mr. M.V. Kotwal, Member of the Board and Senior Vice President in charge of Heavy Engineering Division, said "the orders from international EPC contractors affirmed L&T's status as a significant global player in the fabricated process plant equipment market. L&T will continue to strengthen its engineering capabilities with a view to maintaining its competitive edge in the international market, while simultaneously enhancing its quality and manufacturing technologies."

L&T Consortium To Restore
Bombay High Output

Mumbai, September 19, 2005: Acting swiftly to restore the output lost due to the recent fire at Bombay High North (BHN) Platform, the Oil & Natural Gas Corporation (ONGC) has entrusted a fast-track job of installation of diversionary pipelines and associated platform modifications to a consortium led by Larsen & Toubro Limited (L&T) with Global Industries Offshore LLC, USA.

L&T will engineer, supply and commission offshore facilities worth around
Rs.325 Millions, in addition to the main order of Rs.930 Millions for pipeline replacement including platform modifications received earlier this year. The additional scope involves 12 new submarine pipelines and 24 platforms to be modified, with ambitious completion target of pre-monsoon 2006.

While the loss of BHN platform had reduced output by about 0.120 Millions barrels of oil and about 4.4 million cubic metres of gas a day, ONGC plans to recover a major part of this by diverting the production through alternative routes. The installation of these additional pipelines and platform modifications by the L&T Consortium will help to achieve this in the shortest possible time.

Mr. K. Venkataramanan, President (Engineering & Construction Projects) and Member of the Board, L&T, said, "this repeat order is a demonstration of L&T's heightened response to client needs to meet emergency requirements, using their well established global project delivery network".

L&T and SapuraCrest Petroleum In USD100 Million Joint Venture

Mumbai, June 8, 2006: Leading regional offshore oil and gas services providers Larsen & Toubro Limited (L&T) and SapuraCrest Petroleum Berhad (SapuraCrest) today announced the formation of a joint venture to build, own and operate a derrick cum pipelaying barge valued at USD100 million.

The 270-person vessel, to be completed in the fourth quarter of 2008, will allow the companies to better address the growing global demand for oil and gas engineering, procurement, installation, construction and services. The 130-metre conventional vessel is capable of lifting heavy loads of up to 1600 tonnes revolving, and 2400 tonnes in fixed mode. It will provide offshore installation services including sub-sea pipelaying, platform installation opportunities across India , the Middle East , South East Asia, Australia and the Sakhalin region.

“Quality and delivery in their work has always been SapuraCrest's key focus in ensuring that they continually grow their shareholder's value and enhance their competitive advantage while delivering their primary focus – customer satisfaction,” said Datuk Shahril Shamsuddin, Executive Vice-Chairman, SapuraCrest Petroleum Berhad. “This joint venture is the latest in a line of similarly strategic efforts that they have undertaken over the last two years to ensure that they possess the right technology, infrastructure, reach and human capital to address the needs of their clients from India to Australia . L&T is a leader in its field and this joint venture will be mutually beneficial to both companies.”

L&T is a technology-driven engineering and construction organisation, and one of the largest companies in India 's private sector. It has additional interests in manufacturing, services and Information Technology along with its interests in the oil and gas industry where it is already acknowledged as a leader in fabrication and engineering, construction services including turnkey projects.

“Today's partnership further strengthens their ability to meet the needs of their customers in EPC projects and services for the oil and gas industry. SapuraCrest is an acknowledged regional leader in its field and their partnership strengthens both their companies while allowing their customers greater satisfaction and their shareholders greater returns,” said Mr. A. M. Naik, Chairman and Managing Director, L&T. “To L&T's existing capabilities of EPC, this new company will add a vital new dimension – the power of I – Installation,” he added.

SapuraCrest will own 40 per cent of the yet to be named joint venture company with 60% being held by L&T.

L&T Declares 1:1 Bonus

Mumbai, June 7, 2006: L&T has declared a 1:1 bonus issue to its existing shareholders. The last issue of bonus shares in the ratio of 3:5 was declared in 1986.

The present 1:1 Bonus Issue, i.e., one additional equity share for every one existing equity share held by the members, being issued by capitalising a part of the reserves, is being declared in deference to a longstanding shareholder expectation. It will increase L&T's capital base to a level that will better reflect its current scale of operations. The issue will add depth and eventually create a larger market float in terms of the number of L&T shares, and will thus increase liquidity and turnover of L&T shares on the Stock Market.

The bonus issue is subject to the approval of the Shareholders in the Annual General Meeting.

L&T's first issue of bonus shares was in 1973, when one bonus share was issued for every three shares. Subsequently, bonus issues were made in 1977 (1:2), 1982 (3:5) and 1986 (3:5).

The presence of the company in almost all the core sectors of the economy has made investment in the L&T stock a surrogate investment in the growing infrastructure sector in India .

It also stands to gain substantially from the capex plans of companies setting up capacities to meet growing demand in sectors such as petroleum exploration and refining, steel, cement, power, petrochemicals, etc. It is also playing an increasing role in supply of equipment to the defence and aerospace sectors.

L &T and Toyo Consortium Wins IOCL Naphtha Cracker Contract

Mumbai, May 30, 2006: The consortium of Larsen & Toubro Limited ( L&T) – India's leading engineering and construction organization – and Toyo Engineering Corporation (Toyo), Japan, has won a large scale turnkey contract valued over Rs. 2600 crore from Indian Oil Corporation Limited (IOCL). This contract is for project management, engineering, procurement and construction of naphtha cracker and associated units at IOCL's Panipat petrochemical complex in Haryana.

Toyo, the leader of the consortium, would undertake work for the cracker plant section on EPC basis and overall project management, while L&T would undertake work for the cracker heaters and associated units, namely C4 hydrogenation, pyrolysis gasoline hydrogenation, and benzene extraction units, also on EPC basis. The share of L&T's Petrochemical Business Unit in the contract is Rs. 9000.000 Millions.

Once operational, this naphtha cracker would be one of the largest and world-scale capacity plants in India . IOCL would process naphtha from its Panipat, Mathura and Gujarat refineries to produce ethylene, propylene and benzene at this naphtha cracker.

The technology for the cracker is licensed by IOCL from ABB Lummus of USA.

L&T: Performance for the year ended March 31, 2006

• PAT for the year up at Rs. 1012 crore
• 40% increase in PAT for the quarter ended March 31, 2006
• Group profits for the year up by 25%
• Dividend declared at Rs. 22.00 per equity share

Mumbai, May 25, 2006: Larsen & Toubro Limited (L&T) reported a 12% increase in Gross Revenues from operations of Rs. 14884 crore for the financial year ended March 31, 2006 as against Rs. 132550.000 Million for the previous year. The share of revenues from international operations constituted 18% of the total gross revenues.

Inclusive of extraordinary items and gains from divestments, Profit after Tax ["PAT"] for the quarter and year ended March 31,2006 has increased to Rs. 4670.000 Million and Rs. 10120.000 Million respectively.

PAT, excluding extraordinary items and gains from divestments at Rs. 8630.000 Million for the year ended March 31, 2006 increased by 37% over the previous year. Similarly, the PAT for the quarter ended March 31, 2006, excluding extraordinary items and gains from divestments has increased by 37 % over the corresponding quarter of the previous year.

The provision for current tax is higher at Rs. 3650.000 Million as compared to the previous year's provision of Rs. 3210.000 Million, the increase attributed to increase in share of taxable earnings from business operations.

The Board of Directors has recommended a dividend of Rs. 22.00 per equity share.

Engineering & Construction (E&C) Segment

For the year ended March 31,2006, E&C Segment recorded a substantial growth of 51% in order booking at Rs. 196090.000 Million. International orders at Rs. 37860.000 Million constituted 19% of the total value of orders.

A major share of orders booked relate to the hydrocarbon and infrastructure sectors. The significant increase in order booking reflects the company's superior execution skills and resource mobilizing capability to successfully complete orders of large value and technical complexities.

The details of the major orders secured during the year ended March 31,2006 are given in

Annexure I below.

The segment recorded revenues of Rs. 125700.000 Million during the year ended March 31, 2006, representing an increase of 10% over previous year. Export sales for the year at Rs. 24600.000 Million, constituted 20% of the total segment revenue. The segment result ["Segment PBIT"] for the year ended March 31,2006 at Rs. 9490.000 Million posted an impressive increase of around 24% over the previous year.

The order backlog as at March 31, 2006 is healthy at Rs. 241690.000 Million. Capacity augmentation by way of expansion of the heavy engineering fabrication facility at Hazira and proposed new facilities at Coimbatore and Middle East are some of the key initiatives being taken up to address the growth prospects.

Electrical & Electronics Segment

The segment revenues for the year ended March 31,2006 at Rs. 15820.000 Million showed a 30% growth over the previous year, reflecting the underlying buoyancy in the various businesses and re-affirming the segment's dominant status as a market leader in many of its product ranges in the country. The share of export revenues during the year ended March 31, 2006 increased to 11 % as compared to 8% in the previous year. The Segment PBIT for the year ended March 31, 2006 at Rs. 232 crore, posted a smart growth of 60% over the previous year.

Several internal initiatives like procurement optimization, lean manufacturing, contemporary product range etc., and supported by a healthy market demand have had a visible and favorable impact on the performance of the segment. The segment is augmenting capacity at Ahmednagar and Coimbatore for meeting the growing domestic demand and is also setting up manufacturing facilities in China & Saudi Arabia to enlarge its presence overseas.

Other Diversified Businesses

Total revenues from the Company's other businesses for the year ended March 31, 2006 was Rs. 1111 crore, posting a healthy increase of 33% over the previous year. Large investments in the domestic infrastructure and construction sectors have benefited the businesses with higher sales growth witnessed in ready mix concrete, construction equipment and welding systems/products.

Consolidated Financials

The consolidated Gross Revenues for the year ended March 31, 2006 of the Group amounted to Rs. 166660.000 Million, registering a growth of 14% over the previous year. The net profit accruing to the Group, excluding extraordinary items and gains from divestitures at Rs. 10510.000 Million, posted an impressive growth of 51% over the previous year comparative of Rs. 6960.000 Million.

Most of the entities comprising the Group have reported good performances, both in terms of revenue growth and profitability, leading to an improved consolidated financial position for 2005-2006.

Outlook

Sound economic fundamentals and capacity creation prospects across all core sectors are positive factors facilitating the Company's growth potential in the near term. The Company's ability to optimize its resources and utilize the conducive business environment would be a key determinant to its growth and profitability.

Given the substantial order backlog, the Company expects to sustain its good performance and meet investor expectations in the medium term.

Annexure I

Major Orders Secured During the Year Ended March 31, 2006
(April 05-March 06)

Domestic	Rs. millions
Booster compressor platform and modification of existing platforms in the Bassein Gas Field, north west of Mumbai for Oil and Natural Gas Corporation Limited	13000
Modification of existing facilities, testing, pre-commissioning, and commissioning of entire facilities (wherever applicable) for Mumbai High North and Bassein Field for Oil and Natural Gas Corporation Limited	10000
Engineering, procurement, onshore fabrication and transportation of the critical booster and high pressure compression modules approximately 80 km west, north west of Mumbai for ONGC (Vasai East Development Project) in consortium with Samsung Heavy Industries Limited., Korea	7760
Construction of Blast Furnace "H" of 2.5 MTPA capacity and electrification works at Jamshedpur, Jharkhand for Tata Steel Limited	7140
Construction of buildings, utilities and electrification, airside and landside work of Hyderabad Airport for Hyderabad International Airports Limited	4950
Construction of Krishnagiri - Thoppur road in Tamil Nadu for L&T Krishnagiri Thopur Toll Road Private Limited	4500
Execution of Parbati hydro electric project stage III, on the river Sainj, Himachal Pradesh, in consortium with Patel Engineering Limited	4280
Development of port facilities at Gangavaram : breakwater (package I) and marine-onshore civil works (package 3) for Gangavaram Port Limited	4080

Overseas	Rs. millions
Engineering, procurement and commissioning of Vaccum Distillation Unit (VDU) , off-sites and utilities for Petronas Melaka Group 3 (9MG3) lube base oil plant, Malaysia for Petronas, Malaysia	5930
Engineering, procurement, construction and commissioning of facilities for New Depot project at Safat, Kuwait for Kuwait Aviation Fuel Company	5800
Manufacture and supply of Column, Regenerator, Reactor and HP Heat Exchangers for Reliance Industries Limited (Special Economic Zone - Jamnagar)	3840
Construction of residential buildings at Mogul Gardens in Dubai for Nakheel, UAE	3280

Larsen & Toubro Limited

Performance for the quarter ended 30.09.2006

PAT for the quarter, up by 41%

Mumbai, 19.10.2006: Larsen & Toubro Limited (L&T) reported Gross Sales from operations at Rs 38040.000 Million for the quarter ended 30.09.2006 as against Rs. 33820.000 Million for the corresponding quarter of the previous year. The share of revenues from international operations constituted 19% of the gross revenues reported for the quarter. The Company reported a 41 % growth in Profit after Tax [“PAT”] at Rs. 2010.000 Million for the quarter ended 30.09.2006 as compared to the PAT of Rs. 1430.000 Million for the corresponding quarter of the previous year. PAT for the current quarter at Rs. 1830.000 Million, excluding extra ordinary and other non-recurring items shows an impressive growth of 53%, when compared to the similar PAT of Rs. 1200.000 Million, recorded during the corresponding quarter of the previous year.

Engineering & Construction [“E&C”] Segment

The segment recorded a 15% growth in order booking at Rs. 46310.000 Million during the current quarter, when compared to the same for the corresponding quarter of the previous year. The cumulative order booking during the year till date at Rs. 109550.000 Million, however, shows a healthy growth of 59% over the same period of the previous year and reflects the Company’s superior contracting and execution strengths across all industry segments, most notable being in the infrastructure, hydrocarbon and power sectors. Segment revenues at Rs. 27490.000 Million for the current quarter posted an increase of 9%, when compared to revenues for the corresponding quarter of the previous year. Export sales for the current quarter constituted 20% of the total segment revenue.

Segment profits [“PBIT”] for the current quarter at Rs. 2150.000 Million showed an improvement of 54% over the corresponding quarter of the previous year, mainly due to better selection of jobs, close monitoring and control of contract execution costs and a more uniform spread-out of jobs crossing the threshold levels for margin recognition. The order backlog as at 30.09.2006 is healthy at Rs. 292700.000 Million.

Electrical & Electronics Segment

The segment recorded a 23% growth in revenue at Rs. 4670.000 Million for the current quarter, with higher sales seen in almost all product categories. Sustained productivity improvement initiatives coupled with higher volumes also resulted in a 32% growth in segment profits at Rs 740.000 Million, accrued during the quarter under review.

Machinery & Industrial Products Segment

Segment revenues for the current quarter at Rs. 4350.000 Million shows an impressive growth of 24% when compared to the corresponding quarter of the previous year. The increase in revenues was witnessed across the entire business portfolio comprising both, manufactured and traded products. Increased volumes, higher price differentials and improved manufacturing efficiency contributed to a 49% increase in segment profit at Rs. 630.000 Million during the quarter.

Un-audited Group Financials for the six months ended September 30,2006

The total income of the Group for the six months ended 30.09.2006 amounted to Rs. 89380.000 Million, registering a growth of 20% over the corresponding period of the previous year. The net profit accruing to the Group during the six months period ended 30.09.2006 stood at Rs. 9250.000 Million which includes net gain of Rs. 3260.000 Million on dilution / divestments of stakes in group companies. The net profit for the current period is higher by 83%, when compared to Rs. 5050.000 Million, being the profit for the corresponding period of the previous year, which included Rs. 1880.000 Millions, being the profit on divestitures. Most of the entities comprising the Group have reported good performances, both in terms of revenue growth and profitability.

Outlook

The prevailing conducive business climate across all sectors in the domestic market and large investment allocations proposed in the hydrocarbons sector in the Gulf region present an encouraging array of opportunities for the various business segments of the Company. Given the comfortable order backlog position, the Company envisages a higher sales growth in the second half of the current fiscal as well as in the medium term.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 44.84
UK Pound	1	Rs. 85.55
Euro	1	Rs. 57.28

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	10
PAID-UP CAPITAL	1~10	10
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	10
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	10
--LEVERAGE	1~10	9
--RESERVES	1~10	10
--CREDIT LINES	1~10	9
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		86

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions