MIRA INFORM REPORT

Report Date :

27.04.2011

IDENTIFICATION DETAILS

Name :	LARSEN AND TOUBRO LIMITED
Registered Office :	L and T House, Ballard Estate, P O Box 278, Mumbai – 400001, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	07.02.1946
Com. Reg. No.:	11-004768
CIN No.: [Company Identification No.]	L99999MH1946PLC004768
TAN No.: [Tax Deduction & Collection Account No.]	RTKL00699G
Legal Form :	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 (71)

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 720000000
Status :	Excellent
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established diversified and a highly respectable company. Financial position of the company is good. Fundamentals are strong and healthy. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	L and T House, Ballard Estate, P O Box 278, Mumbai – 400001, Maharashtra
Tel. No.:	91-22-22618181 / 22618182 / 22685656 / 67525656
Fax No.:	91-22-22620223 / 22617480 / 22685893 / 67525858 / 67525893/ 55525858
E-Mail :	sdk@lth.ltindia.com nh-sec@lth.ltindia.com akshay.shah@hed.itindia.com ss-sec@lthindia.com
Website :	http://www.larsentoubro.com
Corporate Office 1:	C Block, Gate No. 1, L and T Powai Campus, Saki Vihar Road, Powai, Mumbai – 400072, Maharashtra, India
Tel. No.:	91-22-67052589 / 67052930
Fax No.:	91-22-67051832
Corporate Office 2:	Kiadb Industrial Area, Hebbal Hootagalli, Mysore – 570018, Andhra Pradesh, India
Tel No.:	91-821-2405331
Corporate Office 3:	Off Andheri Kurla Road, Mumbai – 400093, Maharashtra, India
Headquarter/ Holck-Larsen and Engineering Design and Research Centre- Chennai :	Mount Poohamallee Road, Manapakkam, P. B. No. 979, Chennai - 600089, Tamilnadu, India
Tel No.:	91-44-2232 6348 / 22526000 / 22528000 / 22528080
Fax No.:	91-44-2234 2317/ 22493317 / 22526065 / 22493888
E mail:	itcg@giasmd01.vsnl.net.in hhl-centre@lntecc.com skanappan@lntecc.com ksn@lntecc.com nkpi@lntecc.com droy@lntecc.com kn@lntecc.com dmaheswaran@lntecc.com
EDRC Centre :	Kanak Building, 41, Jawaharlal Nehru Road, Kolkata 700 071, West Bengal, India
Tel No.:	91-33-22882601
Fax No.:	91-33-22881225
E mail:	indranil_r@lntecc.com
EDRC – Kolkata:	DLF IT Park, Premises # 08, Block – AF, 2nd Floor, Tower-C, Newton, Rajarhat, Kolkata-700156, West Bengal, India
Tel No.:	91-33-44008700
Fax No.:	91-33-44005385
Division :	ECC Division, Mial Project Office – North Block II, 6th Floor, Gate No. 1, Powai – 400072, Maharashtra, India
Factory 1 :	TLT Works, Plot No. 158-B, Sector III, Pithampur, Dhar District, Madhya Pradesh 454 774, India
Tel. No.:	91-7292-256317/ 256431
Fax No.:	91-7292-256316
E-Mail :	sg-pith@lntecc.com
Factory 2 :	TLT Works, Mailam Road, Sedarapet, Pondicherry 605 111, India
Tel. No.:	91-413-2672500
Fax No.:	91-413-2677727
E-Mail :	asa@lntecc.com
Factory 3 :	167, Neervalur Village, Kancheepuram 631 502, India
Tel. No.:	91-4112-27248383, 93 and 94
Fax No.:	91-4112-27248383 and 290
E-Mail :	kasokkumar@lntecc.com
Factory :	Also located at : · Faridabad · Kandla · Vadodara · Ankleshwar · Hazira · Jafrabad · Kovayya · Nashik · Pune · Ahmednagar · Ratnagiri · Tadipatri · Bangalore · Mysore · Awarpur · Jharsuguda · Kansbahal · Ranoli (Baroda) · Visakhapatnam · Haldia
Regional Offices :	· NCL Bandra Premises, Plot No. C/6, Bandra – Kurla Complex, P. O. Box No. 8119, Bandra (East), Mumbai - 400051, Maharashtra, India · 2, Saki Vihar Road, P. O. Box No. 8901, Mumbai – 400072, Maharashtra, India · 1/FL, Laxminarayan Complex, 10/1, Palace Road, P. O. Box 122, Bangalore – 560002, Karnataka, India Also located at: · New Delhi · Lucknow · Kolkata · Vadodara · Ahmedabad · Arakkonam Pune · Hyderabad · Chennai · Bangalore
Overseas Offices :	Located at: · Japan · Nepal · Sultanate of Oman · Bangladesh · Malaysia · Sweden · Russia · UK · USA · Dubai · Abu Dhabi · Sharjah · Saudi Arabia · Bahrain · Qatar · Oman · Kuwait · Kenya · Bhutan · West Indies · Jordan · Kazakhstan · Sri Lanka
Area Offices :	Located at: · Ahmedabad · Bangalore · Chandigarh · Chennai · New Delhi · Kolkata · Lucknow · Pune · Hyderabad · Nagpur
Branches :	Located at : · Jaipur · West Bengal · Guwahati · Bhopal · Vadodara · Lucknow · Nagpur · Durgapur · Jamshedpur · Guwahati · Bhubaneswar · Vishakhapatnam · Coimbatore · Kochi · Madurai · Surat
Railway Business Unit:	12/4, Delhi Mathura Road, Near Sarai Khawaja Chowk, Faridabad – 121 003, Haryana, India
Tel No.:	91-129-4291000 / 4291651 / 4291766
Fax No.:	91-129-4291650 / 4291303
Email:	rbu-bd@larsentoubro.com

DIRECTORS

AS ON 31.03.2010

Name :	Mr. A. M. Naik
Designation :	Chairman and Managing Director
Name :	Mr. J. P. Nayak
Designation :	Whole-time Director and President (Machinery and Industrial Products)
Name :	Mr. Y. M. Deosthalee
Designation :	Whole-time Director and Chief Financial Officer
Name :	Mr. K. Venkataramanan
Designation :	Whole-time Director and President (Engineering and Construction Projects)
Name :	Mr. R. N. Mukhija
Designation :	Whole-time Director and President (Electrical and Electronics)
Name :	Mr. K. V. Rangaswami
Designation :	Whole-time Director and President (Construction)
Name :	Mr. V. K. Magapu
Designation :	Whole-time Director and Senior Executive Vice President (IT and Technology Services)
Name :	Mr. M. V. Kotwal
Designation :	Whole-time Director and Senior Executive Vice President (Heavy Engineering)
Name :	Mr. S. Rajgopal
Designation :	Non Executive Director
Name :	Mr. S. N. Talwar
Designation :	Non Executive Director
Name :	Mr. M. M. Chitale
Designation :	Non Executive Director
Name :	Mr. Thomas Mathew T.
Designation :	Nominee (LIC)
Name :	Mr. N. Mohan Raj
Designation :	Nominee (LIC)
Name :	Mr. Subhodh Bhargava
Designation :	Non Executive Director
Name :	Mrs. Bhagyam Ramani
Designation :	Nominee (GIC)
Name :	Mr. A. K. Jain
Designation :	Nominee (SUUTI)
Name :	Mr. J. S. Bindra
Designation :	Non Executive Director

KEY EXECUTIVES

Name :	Mr. N. Hariharan
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.03.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	78524454	13.37
Financial Institutions / Banks	118948485	20.26
Insurance Companies	30860449	5.26
Foreign Institutional Investors	92407708	15.74
Any Others (Specify)	0
Foreign Bank	17241	--
Sub Total	320758337	54.62
(2) Non-Institutions
Bodies Corporate	41754375	7.11
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	133722286	22.77
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	6259271	1.07
Any Others (Specify)	84711798	14.43
Foreign Nationals	258888	0.04
Non Resident Indians	4944110	0.84
Trusts	74404116	12.67
Directors & their Relatives & Friends	5100566	0.87
Foreign Corporate Bodies	4118	--
Sub Total	266447730	45.38
Total Public shareholding (B)	587206067	100.00
Total (A)+(B)	587206067	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and Sellers of Earthmoving Machinery including Bulldozers, Dumpers, Scrappers, Loaders, Shovels, Vibratory Compactors and Drag Lines.

Products :

· Chemicals

· Petrochemical

· Refinery

· Fertilizer

ITC Code No	Production Description
N.A.	Construction and Project related activity
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
847989.02	Chemical plant and machinery, including pharmaceutical, dyestuff, distillery, brewery and solvent extraction plants, evaporator and crystallizer plants and pollution control equipment in aggregate.

PRODUCTION STATUS

(As on 31.03.2010)

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	--
Chemical plant and machinery including pharmaceutical, dyestuff, distillery, brewery and solvent extraction plants, evaporator and crystalliser plants and pollution control equipment in aggregate	Tonnes	6067	6067	13347
Equipment for food processing industry	Tonnes	65	65	--
Complete cement making machinery including rotary kilns and fluxo packers in aggregate	Nos.	2	2	Parts for 3 plants
Sugarcane and beet diffusion, beet preparation and beet pulp dehydration plants	Nos.	2	2	--
Nuclear purpose equipment, de-aerators, ultra high pressure vessels including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate	Tonnes	5000	3950	146
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	19936 #
Complete high speed bottling plants	Nos.	6	6	--
Pulp and paper making plants	Tonnes	2000	800	--
Suspended particles drying plants	Nos.	6	6	--
Containers for liquefied gases and chemicals	Nos.	Not Applicable *	1000 tones carrying capacity	--
Steel plant valves	Nos.	40	40	--
Ship auxiliaries and components of mechanised sailing vessels	Tones	1000	1000	117
Rubber Processing Machinery	Nos.	109	400	334
Switchgear, all types	Nos.	4952750 $	4952750	8604157
Miscellaneous electrical items	Nos.	1049100	1039100	--
Petrol dispensing and metering pumps	Nos.	34800	10800	1819
Press tools, jigs, fixtures, dies for pressure, castings, moulds for plastic injection and bakelite	Rs. Millions/ Nos.	73.000 millions	73.000 millions	490 nos.
Industrial Machinery	Tonnes	12000	12000	13940
Industrial Electronic Control Panels	Nos.	2500	2500	1412
Electro surgical unit and accessories	Nos.	Not Applicable *	2500	648
Ultrasound equipment and accessories	Nos.	Not Applicable *	1000	220
Patient monitoring system and accessories	Nos.	Not Applicable *	10000	10298
Relays	Nos.	Not Applicable *	30000	30909
Electricity meters	Nos.	Not Applicable *	2640000	2038391
Transmission line tower	Tonnes	95000	95000	97723
Steel structural fabrication	Metric Tonnes	12000	12000	28528
Steel re-rolling	Tonnes	40000	40000	45589
Defence equipment, all types	Nos.	3971	3971	1658 parts thereof
Parts for aircraft and other metal products	Nos.	100000	100000	5
Parts and accessories for prime movers, boilers, steam generating plants and nuclear reactor	Nos.	25000	25000	--
Commercial Ships	Nos.	--	2	1

Notes

* Licensing not applicable. Installed capacity is based on one of the following:

a) Entrepreneur’s memoranda filed with Government of India, Ministry of Industry, New Delhi

b) Registration with the Directorate General of Technical Development

c) Approval obtained from the Government of India, Ministry of Industry, New Delhi

d) Agreement with Government of India, Ministry of Petroleum and Natural Gas.

@ excludes Rs.20.000 millions in respect of memoranda Nos.924/SUA/IMP/92 dated 27.03.1992 of which capacity of Rs. 7.500 millions was been installed.

$ Excludes 696250 nos. in respect of memoranda nos. 924/SIA/IMO/91 and 922/SIA/IMO/91 dated 11.9.1991 of which capacity of 496250 nos. has been installed.

# includes production from external sources.

## Ready mix concrete business is divested during the previous year.

GENERAL INFORMATION

No. of Employees :

22922 (Approximately)

Bankers :

· State Bank of India, Mumbai, Maharashtra, India

· Bank of India, Mumbai, Maharashtra, India

· Central Bank of India, Mumbai, Maharashtra, India

Facilities :

Particulars	As on 31.03.2010 (Rs. In Millions)	As on 31.03.2009 (Rs. In Millions)
Secured Loans
Redeemable non-convertible fixed rate debentures	9000.000	9000.000
Loans from Banks
Cash Credits / Working Capital Demand Loans	498.300	2023.800
Other Loan	59.000	0.000
Total	9557.300	11023.800

Particulars	As on 31.03.2010 (Rs. In Millions)	As on 31.03.2009 (Rs. In Millions)
Unsecured Loans
Redeemable non-convertible fixed rate debentures	2500.000	2500.000
3.50% Foreign Currency convertible bonds	8980.000	0.000
Loans from subsidiary companies	244.000	44.000
Short term loans and advances
From banks	6391.400	8644.200
Lease finance	243.400	209.000
Sales tax deferment loan	272.300	188.900
From Others	250.000	0.000
Other loans and advances
From banks	37890.200	39835.400
Lease finance	1010.600	1253.600
Sales tax deferment loan	669.100	1011.400
From Others	0.000	850.000
Total	58451.000	54536.500

Banking Relations :	--
Auditors :
Name :	Sharp and Tannan Chartered Accountants
Memberships :	Confederation of Indian Industry
Subsidiaries :	· Cyber Park Development and Construction Limited · Larsen and Toubro (Wuxi) Electric Company Limited · L and T Capital Company Limited · L and T Finance Limited · L and T Infrastructure Development Projects Limited · L and T Krishnagiri Thopur Toll Road Limited · L and T Panipat Elevated Corridor Limited · L and T Tech Park Limited · L and T T Urban Infrastructure Limited · L and T Western Andhra Tollways Limited · Larsen and Toubro (Oman) LLC · Larsen and Toubra Information Technology Canada Limited · Larsen and Toubro Infotech Limited · Narmada Infrastructure Construction Enterprise Limited · Larsen and Toubro Saudi Arabia LLC · L and T Modular Fabrication Yard LLC, Oman · L and T Electrical Saudi Arabia Company Limited, LLC · L and T Uttaranchal Hydropower Limited · Larsen and Toubro (East Asia) SON. BHD. · India Infrastructure Developers Limited · L and T -Sargent and Lundy Limited · L and T Engserve Private Limited · L and T Infocity Limited · L and T Interstate Road Corridor Limited · L and T Awn Excello Commercial Projects Private Limited · L and T Chennai-Tada Tollway Limited · L and T Vadodara Bharuch raIlway Limited · L and T Western India Tolibridge Limited · Larsen and Toubro Infotech GmbH · Larsen and Toubro International FZE · RaykalAluminum Company Private Limited · Tractor Engineers Limited · L and T Southcity Projects Limited · L and T (Qingdao) Rubber Machinery Company Limited · L and T Infrastructure Finance Company Limited · L and T Power Limited · Nabria Power Limited · L and T Bangalore Airport Hotel Limited · Spectrum Infotech Private Limited · Larsen and Toubro Qatar LLC · Larsen and Toubro LLC · L and T -Valdel Engineering Limited · Offshore International FZC · L and T Infrastructure Development Projects (Lanka) · Private Limited · Qingdao Larsen and Toubro Trading Company Limited · L and T Hitech City Limited · L and T Vision Ventures Limited · L and T Rajkot-Vadinar To[lway Private Limited · Tamco Switch gear (Malaysia) SDN, BHD, · L and T Realty Private Limited · L and T Transco Private Limited · L and T Halol-Shamlaji Tollway Private Limited · Larsen and Toubro Kuwait Construction General Contracting · Company WLL · L and T Arun Excello IT SEZ Private Limited · L and T Electrical and Automation FZE · L and T Transportation Infrastructure Limited · L and T Overseas Projects Nigeria Limited · L and T Infra and Property Development Private Limited · L and T Strategic Management Limited · L and T Capital Holdings Limited · Chennai Vision Developers Limited · Larsen and Toubro lnfotech LLC · International Seaports Pte. Limited · L and T Technologies Limited · Larsen and Toubro Electromech LLC · L and T Seawoods Private Limited · Hyderabad International Trade Expositions Limited · L and T -MHI Boilers Private Limited · Larsen and Toubro Readymix Concrete Industries LLC · Larsen and Toubro (Jiangsu) Valve Company Limited · CSJ Infrastructure Private Limited · L and T Trustee Company Private Limited · L and T Gulf Private Limited · L and T Natural Resources Limited · L and T Power Development Limited · L and T Shipbuilding Limited · L and T Ahmedabad-Maliya Tollway Private Limited · GDA Technologies Limited · Larsen and Taubro ATCO Saudia LLC · L and T Heavy Engineering LLC · L and T -Plastics Machinery Limited · PNG Taliway Private Limited · L and T -MH1 Turbine Generators Private Limited · L and T Concrete Private Limited · Hitech Rock Products and Aggregates Limited · L and T Aviation Services Private Limited · L and T Special Steels and Heavy Forgings Private Limited · L and T General Insurance Company Limited · International Seaports (India) Private Limited · L and T EmSyS Private Limited
Associates :	· Audco India Limited · EWAC Alloys Limited · L and T-Chiyoda Limited · L and T-Komatsu Limited · L and T Ramboll Consulting Engineers Limited · L and T-Case Equipment Private Limited · Voith Paper Technology (India) Limited # · Salzer Electronics Limited · International Seaport (Haldia) Private Limited · Feedback Ventures Limited · L and T Arun Excello Realty Private Limited · International Seaport Dredging Limited*
Joint Ventures :	· International Metro Civil Contractors Joint Venture · Bauer- L and T Diaphragm Wall Joint Venture · The Dhamra Port Company Limited · L and T -Eastern Joint Venture · Metro Tunneling Group · L and T Hochtief Seabird Joint Venture · Desbuild- L and T Joint Venture · L and T -Shanghai Urban Corporation Group Joint Venture · L and T -AM Tapovan Joint Venture · HCC-L and T Purulia Joint Venture

NOTE

# Investment sold during the year.

* Associate company w.e.f. May 21, 2009

CAPITAL STRUCTURE

AS ON 26.08.2010

Authorised Capital : Rs.3250.000 millions

Issued , Subscribed & Paid-up Capital : Rs. 1215.704 Millions

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
1625000000	Equity Shares	Rs.2/- Each	Rs.3250.000 millions

Issued , Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
602195408	Equity Shares	Rs.2/- Each	Rs.1204.400 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		1204.400	1171.400	584.700
2] Share Application Money		250.900	0.000	0.000
3] Reserves & Surplus		178822.200	121068.900	93822.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		180277.500	122240.300	94406.900
LOAN FUNDS
1] Secured Loans		9557.300	11023.800	3085.300
2] Unsecured Loans		58451.000	54536.500	32754.600
TOTAL BORROWING		68008.300	65560.300	35839.900
DEFERRED TAX LIABILITIES		3892.700	4351.600	2443.300
Employee Stock options Outstanding		2838.900	2356.600	1143.900
TOTAL		255017.400	194508.800	133834.000
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		53654.200	40127.900	28544.300
Capital work-in-progress		8576.600	10409.900	6990.000
INVESTMENT		137053.500	82637.200	69222.600
DEFERREX TAX ASSETS		3118.800	3866.900	1829.600
INTANGIBLE ASSETS		1426.800	1408.200	920.100
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	14153.700	14705.100	43059.100
	Sundry Debtors	111637.000	99031.300	73650.100
	Cash & Bank Balances	14318.700	7752.900	9644.600
	Other Current Assets	63532.200	43561.000	143.200
	Loans & Advances	59974.500	58193.600	36638.200
Total Current Assets		263616.100	223243.900	163135.200
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	95080.300	68277.400
	Other Current Liabilities	95464.700	79484.100	116484.200
	Provisions	21883.600	19426.300	20354.200
Total Current Liabilities		212428.600	167187.800	136838.400
Net Current Assets		51187.500	56056.100	26296.800
MISCELLANEOUS EXPENSES		0.000	2.600	30.600
TOTAL		255017.400	194508.800	133834.000

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	366751.500	336465.700	248547.000
		Other Operational Income	3596.500	2919.700	231.500
		Other Income	20249.600	7397.800	6519.500
		TOTAL (A)	390597.600	346783.200	255298.000
Less	EXPENSES
		Manufacturing construction and operating expenses	284535.500	262716.200	191170.100
		Staff expenses	23791.400	19744.600	15354.400
		Sale, administration and other expenses	14627.400	17947.600	13855.900
		Overheads charged to fixed assets	(362.500)	(244.800)	0.000
		Transfer from revaluation reserve	(13.000)	(13.100)	0.000
		Extraordinary Item	(1357.200)	(7724.600)	0.000
		TOTAL (B)	321221.600	292425.900	220380.400
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		69376.000	54357.300	34917.600
Less	FINANCIAL EXPENSES (D)		5053.100	4155.600	1226.600
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		64322.900	50201.700	3369.100
Less/ Add	DEPRECIATION/ AMORTISATION (F)		4159.000	3073.000	2136.300
	PROFIT BEFORE TAX (E-F) (G)		60163.900	47128.700	31554.700
Less	TAX (H)		16408.700	12312.100	9820.500
	PROFIT AFTER TAX (G-I) (I)		43755.200	34816.600	21734.200
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1005.000	1043.100	NA
Less	APPROPRIATIONS
		Transfer to General Reserve	34600.000	27250.000
		Transfer to Debenture Redemption Reserve	433.400	433.400
	BALANCE CARRIED TO THE B/S		1072.900	1005.000	1043.100
	EARNINGS IN FOREIGN CURRENCY		5101.400	16513.200	14467.200
	IMPORTS
		Raw Materials	10538.800	12088.000	6247.500
		Components & Spare Pats	31352.100	21456.500	14303.900
		Spare Parts for Sale	2291.500	3981.300	2535.200
		Capital Goods	4791.300	6172.300	1984.700
	TOTAL IMPORTS		48973.700	43698.100	25071.300
	Earnings Per Share (Rs.)		73.77	59.50	74.35

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010	31.12.2010
	Unaudited	Unaudited	Unaudited
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Net Sales	78853.100	93307.600	114130.800
Total Expenditure	68782.500	83250.800	101751.900
PBIDT (Excl OI)	10070.600	10056.800	12378.900
Other Income	2267.600	3821.900	2471.800
Operating Profit	12338.200	13878.700	14850.700
Interest	1423.400	1931.500	1757.100
Exceptional Items	0.000	0.000	353.000
PBDT	10914.800	11947.200	13446.600
Depreciation	1141.600	1212.100	1280.900
Profit Before Tax	9773.200	10735.100	12165.700
Tax	3111.600	3793.700	3760.400
Profit After Tax	6661.700	6941.400	8405.300
Prior Period Expenses	0.000	708.400	0.000
Net Profit	6661.700	7649.800	8405.300

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	11.20	10.04	8.51
Net Profit Margin (PBT/Sales)	(%)	16.40	14.07	12.70
Return on Total Assets (PBT/Total Assets}	(%)	18.96	17.89	16.46
Return on Investment (ROI) (PBT/Networth)		0.33	0.39	0.33
Debt Equity Ratio (Total Liability/Networth)		1.56	1.90	1.83
Current Ratio (Current Asset/Current Liability)		1.24	1.34	1.19

LOCAL AGENCY FURTHER INFORMATION

The Details of sundry creditors:

Rs. In Millions

Particulars	31.03.2010	31.03.2009	31.03.2008
Due to subsidiary companies	2042.700	2097.600	NA
Due to Micro and Small Enterprises	220.700	111.200	NA
Due to Others	92816.900	66068.600	NA
Total	95080.300	68277.400	NA

HISTORY
 
The birth of subject was happened in the year of 1946 as a private Limited company. Earlier it was a partnership firm founded by Mr. Henning Holk Larsen with Mr. Soren Kristian Toubro. Subject turned on to a public limited company in the year of 1950. Company focused in the areas of Engineering and Construction, Electrical and Electronics, Machinery and Industrial Products and in IT and Technological Services. Subject came across in Shipping and Cement industry also. During the year 1981-82 company acquired 2 bulk shipping carriers from Japan and in the year 1983-84 started one cement plant with capacity of 1 MTPA at Maharashtra. In the year 1997 a joint venture company was formed with Deere Private Limited to manufacture agricultural tractors namely L and T-John Deere Private Limited. In April 1st 2003 company transferred its Cement business to Ultra Tech Cement company. Subject received a host of awards, medals and trophies for its continuous efforts. Environmental Excellence Gold award from Greentech Foundation in 2003-04 and 2004-05. Engineering Export Promotion Council (EEPC) offered a trophy for high exports. During the financial year of 2004-05 Business world's survey on India's Most Respected Companies, ranked subject the First in Infrastructure Sector. The Ministry of Power conferred the first prize in National Energy Conservation for the year 2005. In July 2005 the company approved the divestment of its stake in L and T-John Deere Private Limited. In August 2005 the company has entered into a Memorandum of Understanding with DatarSwitchgear Limited (DSL) to merger the company with L and T. As on October 2005 company has totally exited from the packaging business by sale of its Glass Containers Business to ACE Glass. In the year 2006 company amalgamated two of its own folds, the L and T Power Investments Private Limited (LTPL) amalgamated with India Infrastructure Developers Limited (IIDL). A Wall Street Journal survey featured subject among Asia's "Most Admired Companies" and ranked the company No.1 for quality of products and for overall reputation during the year 2006-07. In April 2007 subject and its associate Audco India Limited (AIL) invested Rs.350 millions in the Coimbatore (TN) switchboard and valve unit and plans to investment Rs.600 millions over the coming few years. Subject joining hands with Japan's Toshiba Corporation and Mitsubishi Heavy Industries for setting up manufacturing facilities for super-critical turbines and boilers used in coal-fired power generation plants. The two joint ventures will have an aggregate capital outlay of about Rs.6000 millions. The company is well positioned to exploit the opportunities that will come from hydrocarbon, infrastructure, power, minerals and metals and other industrial sectors. The Public Private Partnership model is going to be the way forwarded for infrastructure projects in the country, Subject has already committed as like that and looking ahead. Subject T has commenced shipbuilding at its Hazira Works and also scouting for a suitable site in India to set up a world-class facility for shipbuilding and repair the same. Company also concentrate on the Defence, Nuclear Power and Aerospace sectors which show the potential and promises and subject plans to expand its presence in the sector of construction and electrification for the railways and subject investing Rs.25000 millions for expansion in Shipbuilding, Manpower constraints and others. Subject have super-critical power plants, ranging between 500 MW-1000 MW, the foundation made on March 2008 to add 4000 MW per annum capacity for super-critical boilers and steam turbine generators.

YEAR IN RETROSPECT

The gross sales and other income for the financial year were Rs. 393810.000 millions as against Rs. 350770 millions for the previous financial year registering an increase of 12%. The Profit before tax and extraordinary items (after interest and depreciation charges) of Rs. 58810 millions and the Profit after tax (before extraordinary items) of Rs.42400 millions for the financial year as against Rs.39400 millions and Rs.27090 millions respectively for the previous financial year, improved by 49% and 57% respectively.

DEPOSITORY SYSTEM

As the members are aware, the Company’s shares are compulsorily tradable in electronic form. As on March 31, 2010, 96.58% of the Company’s total paid-up Capital representing 58,16,17,239 shares are in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

CAPITAL and FINANCE

During the year, the Company allotted 52,20,861 equity shares upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes. During the year, the Company raised Rs.18730 millions in India through the Qualified Institutions Placement route for general corporate purposes. The Company also issued unsecured Foreign Currency Convertible Bonds (FCCBs) of USD 200 million to international investors. The FCCBs are convertible into equity shares of the Company, and if not converted, are repayable at the end of 5 years. The FCCBs were issued to finance capital expenditure, investment in overseas subsidiaries and overseas acquisitions. For the same purposes, the Company also raised a 3 year foreign currency loan of JPY 1.809 billion (USD 20 million). During the year, the Company repaid a long term Rupee loan of Rs.850 millions.

SUBSIDIARY COMPANIES

During the year, the Company subscribed to / acquired equity shares in various subsidiary companies. These subsidiaries are substantially either SPVs executing projects secured through BOT route, or holding companies making investments in companies such as power and financial services. The investment in Larsen and Toubro International FZE is mainly for onward investment in international ventures. The details of investments in subsidiary companies made during the year are as under:

· 137 equity shares of Dhs. 550,500 each in Larsen and Toubro International FZE for Rs. 975.800 millions at par.

· 10,21,91,000 equity shares of Rs. 10 each in L and T Power Limited at par.

· 9,50,00,000 equity shares of 10 each in L and T Power Development Limited at par.

· 12,50,005 equity shares of Rs. 10 each in L and T -Gulf Private Limited at par.

· 2,19,80,400 equity shares of Rs. 10 each in PNG Tollway Private Limited at par.

· 10,000 equity shares of Rs. 10 each in L and T EmSyS Private Limited for a consideration of Re. 1.

· 50,000 equity shares of Rs. 10 each in L and T Technologies Limited at par.

· 135,15,41,591 equity shares of Rs. 10 each in L and T Capital Holdings Limited at par.

· 11,10,00,000 equity shares of Rs. 10 each in L and T Special Steels and Heavy Forgings Private Limited at par.

· 6,42,55,100 equity shares of Rs. 10 each in L and T Halol-Shamlaji Tollway Private Limited at par.

· 5,40,05,100 equity shares of Rs. 10 each in L and T Rajkot-Vadinar Tollway Private Limited at par.

· 6,20,05,100 equity shares of Rs. 10 each in L and T Ahmedabad-Maliya Tollway Private Limited at par.

· 10,000 equity shares of Rs. 10 each in L and T Aviation Services Private Limited at par.

· 2,90,00,000 equity shares of Rs. 10 each in L and T General Insurance Company Limited at par.

· 2,600 equity shares of Rs. 10 each in L and T Samakhiali Gandhidham Tollway Company Private Limited at par.

· 1,12,50,000 equity shares of Rs. 10 each in L and T Infrastructure Development Projects Limited for a consideration of Rs.2450.000 millions purchased from IDF.

· Further contribution of Rs. 1.25 per share and premium of Rs. 131.25 per share on 22,50,000 partly paid-up equity shares in Larsen and Toubro Infotech Limited amounting to Rs. 298.100 millions. With this contribution, these shares have become fully paid-up with paid-up value Rs. 5/- and premium of Rs. 524.995 per share.

During the year, International Seaport Dredging Limited issued to the Company 9,420 equity shares of Rs. 10,000 each in in lieu of the 9,420 preference shares of Rs. 10,000 each and 10,000 equity shares of Rs. 10,000 each in lieu of an ICD of Rs.100 millions.

The Company subsequently sold 10,298 equity shares of Rs. 10,000 each in International Seaport Dredging Limited for a consideration of Rs.103.000 millions.

The Company sold 15,00,000 shares representing 50% stake in Voith Paper Technology (India) Limited on September 30, 2009 for a consideration of Euro 10 million (Rs. 695.600 millions). The Company sold 10,000 equity shares of Rs. 10 each in L and T Aviation Services Private Limited at par to L and T Capital Holdings Limited.

The Company’s subsidiary International Seaports Pte. Limited, Singapore has been liquidated during the year. During the year, the Company also accepted the buyback offers of the following companies:

· 65,500 equity shares of Rs. 10 each in L and T-Valdel Engineering Limited for Rs. 21.000 millions. L and T-Valdel Engineering Limited has now become a wholly owned subsidiary of the Company.

· 1,18,370 equity shares of Rs. 100 each in AUDCO India Limited for Rs. 272.200 millions

The Company has applied for exemption from annexing the Audited Statement of Accounts, the Reports of the Board of Directors and Auditors of the Subsidiary companies as required under Section 212(8) of the Companies Act, 1956 and the same is awaited.

[A] CONSERVATION OF ENERGY:

(a) Energy Conservation measures taken:

1 Improving energy effectiveness / efficiency of equipment and systems

· Replacement of GLS incandescent / conventional FTL lamps with Compact Fluorescent Lamps (CFL) and metal halide lamps in various offices, workshops and plants.

· Use of Solar power in various offices for water heaters, installation of water heating system for canteen cooking / washing, use of portable electrical ovens modified with digital temperature controller, green power generation through roof installed grid connect solar power plant.

· Replacement of high rating induction motors with low rating motors to conserve energy.

· Energy savings by installing real time clocks to control operation of centralized A/C plant compressors.

· Use of Variable Frequency Drive (VFD) for various applications such as welding positioned, tank rotators, EOT cranes, etc. to improve the motor efficiency and enhance energy saving.

· Use of solar powered street lights, installing timers, applying reduced voltage to street lights during night time, etc. saving energy.

· Use of energy saving devices like human sensors, presence sensors, time switches, zone controlled AC, auto hibernation for PC’s, low emission films on glass doors and windows etc. to reduce energy consumption.

· Stopping air leakages, installing new air solenoid valves in air line to control air combustion, etc.

· Replacement of Chuck drives with the latest energy efficient drives, procurement of new high efficiency welding inverter based welding machines.

· Replacement of Air Circulator with the latest energy efficient Almonard make Air Circulator.

· Replacement of preheating burners with new designed

· ST5 burners resulting in reduction of Gas consumption. _ Conversion of Electrical Furnace / LSR / ISR with energy efficient PNG Gas Fired Furnace.

· Procurement of energy efficient Fronious welding machine and Pre-heat and Post heat panels for PNG gas control.

· Modification of portable electrical ovens with digital temperature controller to reduce power consumption.

· Implementation of ‘Powerman’ software for online energy monitoring of energy parameters.

· Consumer wise monitoring of consumption on pro-rata basis against performance indicators.

· Monitoring system to track excess consumption and other related parameters.

· Conducting Energy Audit of ESP and ESE business as well as Faridabad and Baroda campus through Bureau of Energy Efficiency (BEE) certified external agency for possible suggestions on optimizing energy consumption.

· Installations of Auto-operations (Timer control) for Forced Draft Ventilation System and A/c plant.

· Efficiency enhancement programme for Forced Draft Ventilation plants- regular filter cleaning, scheduled preventive maintenance, optimum damper setting, etc.

· Installation of ‘desuperheaters’ in Chillers.

· Thermo conductive booster for improvement in split and package AC performance.

· Close monitoring of AC plants- setting optimum temperatures, controlled usage etc.

· Operating computers in Power saver mode.

· Creating awareness on global warming by showing a Documentary film “An Inconvenient Truth” and Energy awareness rally.

· Celebration of “Earth Hour” to create awareness of climate change.

· Initiation of carbon footprint mapping at Hazira, Faridabad, Baroda and Powai. The action plan for reducing GHG is under preparation.

· Replacement of DG sets (with GSEB power) from MFF Jetty operations, resulting in optimization of costs.

· Replacement of capacitors with high frequency electronic ballast at MFF tower lights.

· Installation of APFC (automatic power factor controller) panels in the power circuit at MFF thus improving its power factor and enabling MFF to claim rebate in energy bills.

· Reducing weld groove angle throughout pile fabrication work for MHN project resulting in direct cost and energy saving.

· Replacement of older ACs with energy efficient star rated ACs.

· Use of wind power in offices in Chennai, wheeled from remote wind farms in Tamilnadu.

· Use of solar power packs in construction sites o offset diesel consumption.

· Use of VFD’s in operating large winches

· Introduction of VVVF Drives in the place of conventional type starter panels in new cranes and Transfer trolleys installed in new galvanizing plant. (VVVF Drives present in Long travel and hoist operation in all 5 EOT cranes and in all the four motorised transfer trolley)

· Conversion of Slip ring Motor - Rotor resistance starter system to squirrel cage induction motor with VVVF drive system in two areas in existing crane.

· Replacement of old Motors used in Long travel applications in Raw material yard EOT Cranes to Energy efficient type motors (Siemens make).

· Fixing transparent sheets in between AC sheet in Roof of shop floor to improve indoor illumination as well as reducing indoor lights ‘ON’ time.

· Implementation of Lighting Circuit Energy Savers for Main Lighting Distribution Board.

· Achieving Power Factor of 0.99 (by adding APFC panel) and maintained the Demand at optimum level in spite of raise in loads.

· Enhancement of Capacitor Bank capacity to improve power factor. _ Various initiatives taken to reduce the fuel consumption include:

· Special Additives added in Fuel for Complete Combustion.

· Improved Preheating of Fuel.

· Frequent Cleaning and Monitoring of Burners, Valves, Nozzles and Strainers.

· Increased throughput (Production Enhancement).

· Solar Lighting at Canteen and Security Building.

· Conversion of Pin-Bush type coupling with Tyre coupling which lead to reduced failures and reduced Motor’s initial power consumption.

· Conversion of dual insulator type current collectors of EOT Cranes into single insulator type, and modification of current collectors thus reducing total weight and enhancing life of bus bar.

· Replacing conventional Diaphragm operated timer (BCH make) in EOT Cranes to Electronic timer (Telemechanique make), keeping control operation accurate and low power consuming.

2 Improving energy effectiveness / efficiency of Manufacturing Processes

· Fitment of VFD’s for EOT cranes.

· Optimization of the operation of higher cfm compressors resulting in energy saving.

· Use of Dual track Induction melting process for optimum sharing of power between two furnace crucibles resulting in energy saving and higher productivity.

· Automatic switch off facility for dust extraction systems and connected equipment when idle for more than 10 minutes.

· Centralized on / off control for compressors which will operate the compressors based on air consumption.

· Installation of furnaces with capture hood to avoid heat loss resulting in energy saving.

· Installation of mechanical reclamation system for furan sand recovery.

· Use of Turbo ventilators to extract heat in the non air conditioned areas of factory / office buildings.

· Electrode in vacuum sealed packing to eliminate baking.

· Design and Development of 200 MT and 300 MT Tank Rotator with Anti drift Mechanism.

· Use of energy efficient Robotic weld overlay for Filter Vessel and Spud welding machine.

· Implementation of Data Logger for Welding Equipment for capturing the actual welding parameters.

· Use of energy efficient internal fi ring arrangement for SR Furnace and Ceramic blanket on ground for LEMF furnaces.

· Use of energy efficient Local Stress Relieve (LSR) technique for 300 mm thick Cr-Mo-V Reactors, Tandem (two wire) SAW PQR using Lincoln AC/DC Power Wave Machine and 150 wide ESSC Strip overlay on thick walled CrMoV reactors.

· Design and development of Portable Flame cutting machine for Nozzle Cutout.

· Development and implementation of energy efficient Twin-Torch GMAW for stiffener rings to shell joint in Torpedo Weapon Complex, Square butt SAW process for dissimilar base metal thickness (14 mm # 30 mm) and GMAW-P process for Square-Butt joint type in Project P-26.

· Development of energy efficient hydraulic tube expansion process for thickness tube sheet and portable pipe beveling machine.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

· Replacement of shop floor overhead light with Metal halide light fittings.

· Replacement of existing conventional centralized AC Plant with split air-conditioner units.

· Fitment of VFD’s for EOT cranes.

· Thermal reclamation system implementation work in progress to achieve 98% furan sand recovery.

· LPG Bullet and distribution system installation in progress to replace usage of diesel with LPG for ladle pre-heating.

· Procurement of Natural Gas based Converter Kit for Diesel Fired 1250 KVA Generators.

· Preparation of Wind Power Proposal for Maharashtra, Tamilnadu and Gujarat.

· Use of Sky shade Solar Light Pipe Fittings for Receiving Store and other Areas.

· Procurement of Energy Efficient Flux Baking Ovens.

· SR Furnace Revamping / Modification to improve Combustion Efficiency.

· Use of LED Light Fittings in place of MH Light Fittings.

· Development of SS Electrodes in Vacuum Sealed Pack by EWAC.

· Use of lighting energy saver.

· Procurement of additional Inverter based welding machines instead of rectifiers for shops.

· Use of interlock flux recovery units with welding machines.

· Modification in Autoclave machine cooling system.

· Bio gas generation plant from canteen waste at Ranoli Works.

· Use of turbo ventilators in shops.

· Use of timer in welding m/c to avoid continuous idle Running

Future Plan of Action:

· Plans on anvil for development of new / upgraded products in Surface Miner product line.

· Plans to develop certain specific new products / upgrade existing products for Rubber Processing with focus on energy / cost savings and development of Hydro- Mechanical Presses for Truck and Bus Radial segment as the trend is towards radialisation in these segments by all Tyre majors.

· Plans to work on expanding product range in Wheel Loaders and All- Electric Plastic Injection Moulding Machine.

· Creating and implementing Test protocol and field testing for Mobile construction / mining Equipment to simulate functional requirement / field conditions.

· Development of new / upgraded products in defence equipments.

· Complete the product offerings in Medium Voltage range by introducing more products.

· Increase the product range in protection systems and solutions.

· Development of Cement Automation Package.

· Development of Electronic Tolling System.

· Development of Tank Farm Management System.

· Local assembly of Medium Voltage Inverters.

· Process technology for coal gasification.

· Design / simulation of Hydrogen, Ammonia processes and Pre Reformer and Auto Thermal Reformers.

· Design / Simulation of On-shore oil and gas processing techniques.

· Study of Synfuels Technology.

· Applications of Nano Technology, development of nanomaterials and coatings.

· Application of electrochemical noise method for characterization of stress corrosion cracking (SCC).

· Carbon-fibre from polymeric fibres.

· Technology Analysis of Super Critical Boilers Design and analysis of critical machinery in Jack-up Drilling Rigs.

· Study on sealing technology for turbo-machinery.

· Application of Reliability, Availability and Maintainability (RAM) studies in process plants.

· Design / analysis of FPSO Topsides.

· Design / Analysis of Jack-up Rigs and Semi-submersible Drilling Rigs.

· Design and analysis of Jacket and Deck Installation.

· Design and Analysis of Sub-sea pipeline installation.

· Capability development for Pile Drivability analysis.

· Capability development for motion response analysis of offshore vessels.

· Recycle, Reuse and Zero-discharge Technologies.

· Dynamic Simulation of Gas Compressors.

· Solar Thermal Power Plants.

· Development of high early strength concrete for faster construction.

· Development of Sandwich Panel Construction.

· Development of Cold Mix Design.

· Improvements in mass housing.

· Piled raft foundation.

· Foundations with geo cells.

· Quick assessment of geotechnical details.

· Mechanised construction of Industrial Flooring systems.

· Bench Marking of site labs to NABL Standards.

· Improvement of bored cast -in-situ piles.

· IT enablement in construction projects.

· Development of EHV transmission line tower using tubular and cold formed section.

· Development of techniques for improving current carrying capacity of transmission line using high capacity conductor.

· Development of software for design and optimization of transmission tower foundation.

· Development and performance study of solar power collector structure.

· Design, analysis and optimization of solar power plant based on CSP technologies.

· Development of tracking system for CSP structure.

· Design and development of control and monitoring system for solar farms

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Activities relating to exports, initiatives taken to increase exports; development of new export markets for products and services; and export plans.

OVERVIEW:

The Company has a diversified range of products. Each business division of the Company has dedicated cells for giving impetus to exports. The Company has offices abroad and agents in various countries to boost exports. The Company is intensifying efforts in selected countries and exploring new markets. The Company is expanding reach of new products through synergy with existing products and, International Engineering, Procurement and Construction (EPC) projects. Export of heavy engineering equipment has been identified as thrust area. The Company regularly participates in prestigious international exhibitions and conducts market surveys and direct mail campaigns. The Company has an international presence, with a global spread of offices and joint ventures with world leaders. Its large technology base and pool of experienced personnel enable it to offer integrated services in world markets.

Engineering and Construction Division (E and C):

EandC (Projects) Division’s track record in International market stretches from Isthmus of Malaysia to the endless dunes of the Middle East and Africa. Looking at the enormous business potential in the Middle East region, the Headquarter for Gulf operations is set up in Sharjah, the third largest emirate of the United Arab Emirates. The Division is well established in GCC Countries and is “Qualified” by major Oil and Gas Clients.

It has executed various projects for key clients including Saudi Aramco, Saudi Kayan / SABIC, Petronas, KNPC, KOC, KAFCO, Qatar Petroleum, Pearl GTL Qatar, ADNOC Group of Companies, Maersk Oil Qatar, Oman Gas Company, Emirates National Oil Company etc. Over the last few years E and C (Projects) Division bagged a number of prestigious orders in the Gulf. E and C (Projects) Division has actively contributed towards clean environment through execution of Clean Fuel projects such as Motor Spirit Quality Upgradation, Diesel Hydro Treating, Hydrogen and Sulphur Block Projects. The cost of oil production by OPEC is far lower than what is produced elsewhere and thus has an advantage over other producers such as Canada and Brazil. GCC countries are seeking to develop gas fields due to rising demand from the power and water (desalinated) sectors. Iran and Qatar have major gas deposits. Substantial business prospects in the Hydrocarbon segment, estimated to be in excess of USD 85 billion, exist in GCC Countries. The Division is widening its network of overseas marketing partners in the GCC as well as other countries in the Middle East and Far East. The Division is looking forward to other opportunities in the MENA region (Middle East and North Africa) and CIS countries. As far as Engineering Construction and Contracts Division (ECC) is concerned, the Electrical and Gulf Projects Operating Company (E and GP OC) continues to focus on GCC Countries for Construction business. The year 2009-2010 was an extremely challenging year. Inordinate delay / deferment of projects by clients affected the order inflow. However, L and T’s Global Foot Print coupled with project execution capabilities helped the E and GP OC in securing certain prestigious orders in Qatar, UAE and Oman in the Power Transmission and Distribution Sector. The E and GP OC emerged as a market leader for the Power Transmission and Distribution (PTD) business in Oman and substantially improved its market share in UAE and Qatar. PTD business reported significant increase in both revenue and profitability. The PTD Business has gained momentum and notice inviting tenders for lot of new projects are being announced.

The Construction Industry continues to witness slowdown and was very sluggish during the last financial year. The property market in Dubai was very badly affected by the economic meltdown. Even the Dubai Government could not bail out the property developers and faced a severe liquidity crisis and had to finally seek the support of neighboring country, Abudhabi to bail them out. The Abudhabi Government, though flushed with funds, is adopting a cautious approach which can be seen by the delayed announcement of new projects due to adverse

market trend.

The economic recession coupled with severe liquidity crisis has dented the growth of the Construction Sector in the Financial Year 2009-2010. The unprecedented volatility in commodity prices is forcing the client to defer launching of new projects to take advantage of falling prices. However, even under difficult period the E and GP OC has fared better than most of its competitors mainly due to its exposure to diverse client profile and geographies. The reinforced thrust to re-enter Saudi, Kuwait and geographical expansion to South Africa is expected to yield good results in the years to come. Focusing their attention on PTD Business and penetration into the Middle East market is expected to provide lots of opportunities to sustain the growth momentum.

Heavy Engineering Division (HED):

HED continues to take a number of initiatives to enhance export growth. In the last financial year, exports accounted for 60% of total sales in HED. South America in general and Brazil in particular is emerging as a major market for process plant equipment. The Division has booked orders for the supply of Reactors and Coke Drums for North East Refinery project of Petroleo Brasileiro S.A - Petrobras, Brazil. Middle East and North Africa continues to be focus market for HED. Orders for supply of critical equipment to fertilizer projects were received from Oman and Algeria. China remains to be a major market for HED products. Orders for supply of Shell Gasifi ers have been bagged in Vietnam and Australia. Almost all the materials (except for Titanium and high thickness tube-sheets) for the feed heating equipment for Super Critical Power Plants are being sourced locally. A new territory was opened in Vietnam for Urea Plant and Australia for Ammonia Plant equipment. HED has been exploring opportunities for export of Defence, Nuclear Power and Aerospace equipment as well. Orders have been received from Israeli Aerospace Industries as key Offset Partner in the areas of Weapon Systems, Radars and Aerospace. The Defence Business is also interacting with major international players in the defence industry for technology tie ups and indigenous manufacturing. Impressed with their performance on Indian order, Lurgi SA has shown great interest in taking quotes from us for other gasification projects. Their initiative for boosting of exports includes the following:

· Offering valued added services like site work for Chinese projects

· Participation in international seminar

· Building on the success of Power Plant equipment with overseas customers\

· Offering value added services like maintenance-friendly design features for High Pressure Heat Exchangers at customer’s plants.

· Establishment of Representative Offices in major overseas markets.

Electrical and Electronics Business Division (EBG):

Electrical Standard Products (ESP) has bagged orders to supply to Alfanar and Iskara in Gulf Co-operation Council (GCC). ESP has also supplied products to other premium projects in GCC such as Pinancle Towers and Hotel Novotel in Dubai. However, much slower than expected recovery of GCC remains a concern for this business. For Electrical Systems and Equipment (ESE) business, projects in Saudi Arabia are being delayed. However, definite signs of revival are seen. Large-size oil and gas projects are showing positive signs of recovery. Investments in Power Distribution, Water management continue and ESE expects good business from these sectors. The Control and Automation Business Unit (C and A) operates as a Turnkey Automation System Integrator in India, the Middle East and North Africa market in Cement, Metal, Oil and Gas, Utility, and Infrastructure verticals. This business unit exports engineered control and automation solutions to the Middle East countries etc. Metering and Protection Systems (MPS) has participated in tenders in Bangladesh. This business will also explore the business opportunities in Indonesia in the near future. EBG filed 128 patents in 2009-10. This is third consecutive financial year of achieving 100+ patents filing.

Manufacturing and Industrial Products Division (MIPD):

The economic slow-down greatly impacted Valve Business in 2009-10 as the investment plans of many projects were either deferred or dropped. Valves Business Unit (VBU) plans to increase the market reach to leverage the approvals from Oil majors and forge the alliances in new markets such as South America, South Korea, Iran, North Africa, etc. The thrust on upstream market through value added product offerings is expected to yield results in the coming years. VBU is also focusing on Power sector including overseas nuclear plants to offer high pressure and custom built valves. With the new manufacturing plant at Coimbatore gearing up for N and NPT stamps from ASME, the Unit is well placed for growth in this sector.

During 2009-10, there was a drop in Industrial machinery exports from Kansbahal primarily due to effect of economic downturn and cautious approach of international customers. However, there was a significant increase in Deemed exports through supply of Multi Layer Packaging Coated Board Machine to Century Pulp and Paper. The year also saw increased inflow of orders from the international market for Kansbahal. Geographies such as GCC countries, Africa, SEAsean nations offer good opportunities in the coming years for the Crusher business. Kansbahal has opportunities to provide Pulp and Paper equipment to Voith as supplies for its global requirements. Rubber Machinery Business Unit (LTM BU) has been continuously working on development of new market in exports. During the year, the Unit has been successful in obtaining a significant order from a new customer in Japan for supply of Tyre Curing Press. The following initiatives have been taken by the Company

· Efforts for strategic alliances with Process Licensors / Technology Providers and reputed international EPC players are underway to ndertake high value projects in international markets.

· Widening new geographical areas for augmenting its exports.

· Exploring inorganic growth opportunities for the acquisition of specialized engineering outfits abroad.

· Membership of global forums like Engineering and Construction Risk Institute (ECRI) and participating in international seminars.

· Implementation of Project KIRAN towards operational excellence and creating a lean high performance organization.

· Implementation of Knowledge Management System

· “KnowNet” for capturing tacit knowledge in the form of learnings and experiences and disseminating the same across the organization.

· Bringing in high caliber resources in the areas of frontend marketing, engineering, project management, risk management, contract administration, etc., to strengthen the overseas operations.

· Customized Talent Management programs including flagship Capability and Leadership Development (CALD) programs for catering to the training and development needs of employees.

MACRO-ECONOMIC OVERVIEW:
 
Despite the global slowdown, the Indian economy expanded by 7.4% during 2009-2010, as against 6.7% during 2008-2009, supported by the Government's stimulus package. The revival in consumption boosted the industry and services sectors in the economy. The Index of Industrial Production (IIP) continued its upward trend since June 2009, growing by 10.4% in 2009-2010 (4.1% in 2008-2009). The manufacturing sector and capital goods industry made a significant contribution to the growth of the economy.
 
The world economy currently is emerging from the clutches of a wide spread slowdown, triggered by the excesses in the global financial market. While the developed economies are recovering albeit slowly, aided by the liberal stimulus packages, they are grappling with many challenges such as high unemployment, weak and volatile financial markets and impending trade barriers. The lower expectations of growth of these economies could impact the rate of growth in developing countries over the next 3 to 5 years. In the Indian context, egative signs are visible in the sluggish export growth and  subdued direct capital flows into the economy. The amount of foreign direct equity investment in the country during 2009-2010 remained sluggish at USD 25.9 Billion.
 
The challenge from an adverse external environment has been recently accentuated with the turmoil in the EU, followed by Portugal, Ireland, Italy, Greece and Spain (PUGS) as also Hungary. Unsustainable macro economic conditions such as high debt levels, low taxes and rigid labour 
markets
 
have led to a situation of sovereign default in Greece, raising the risk of contagion in the EU. A collapse has been currently avoided with the European Union, ECB and the IMF putting together a rescue package of almost $1 Trillion. The impact on an already nervous financial system was seen in the rise in Credit Default Swap rates and weakening of Euro. The global economic recovery is likely to take longer on account of the crisis.
 
Along with the current global challenges, the Indian economy also needs to contend with the rising spectra of inflation and tight monetary conditions. There is a eed for a second green revolution in the agricultural sector, as otherwise the rising food prices may continue to dominate inflationary conditions. Needless to add, higher economic growth would also require a significant addition to infrastructure as well as increase in across the board productivity levels. The challenges as they know are many, yet, the Indian economy has inherent strengths to rise above these challenges and move towards accelerated growth in the medium to long term.
 
CONSTRUCTION AND PROJECT RELATED BUSINESS SCENARIO:
 
The Infrastructure and Construction sectors in India experienced a relatively 
lower growth during the year. The effect of the low growth of the industrial sector at the beginning of the year adversely impacted the infrastructure sector output. The core infrastructure industries grew by 5.5% in 2009-2010. However, many important initiatives were taken during the year in order to step up the investment in core infrastructure. During the current fiscal year, the transport sector's funding earmarked for the national highways development program increased by 23% compared with the previous year, while funding for railways increased by close to 45%. In the power sector, allocations for the power development program increased by 160%. The investment climate is expected to further improve in 2010-2011 even as the other sectors of the economy pick up the growth momentum.
 
Infrastructure has been the focal point of the Government's budget proposals. A combination of higher government funding and public private partnerships (PPPs) will drive new investments in infrastructure projects. The liberal allocation for infrastructure has been complemented by improved liquidity conditions in the market, which will boost mega-projects in power, highways and railways. In addition, a blue print will be created in 2010-2011 for natural gas pipeline corridors project.AII the above initiatives taken by the Government are expected to give a fillip to an all round economic growth in the short to medium term.
 
The crude prices have strengthened during the year thereby reviving the investment opportunities in the Hydrocarbon sector. However, the domestic upstream sector could still experience somewhat sluggish growth in the short term due to unattractive returns and low capital flows. The Hydrocarbon Mid and Downstream sector, may however, attract healthy investment in the current year in its bid to augment capacity and improve 
product quality.
 
The Middle East countries continue to reel under the impact of global financial crisis experienced in 2008. The current hardening of oil prices is largely due to supply constraints rather than due to hike in global demand. The investment climate is expected to remain subdued in the short term. The bursting of real estate bubble in some Gulf countries is also expected to keep the investors at bay for some time at least in the real estate sector.

Performance at a Glance

L and T

· Order Inflow at Rs.6S,5720 millions in 2009-2010 as against Rs.516.210 millions in 2008-2009 - 35% growth y-on-y

· Order Book as at March 31, 2010 Rs. 1002390.000 millions as against Rs.703.190 millions as at March 31. 2009-43% growth y-on-y

· Gross Sales at Rs.369960.000 millions in 2009-2010 as against Rs.340.450 millions in 2008-2009 - 9% growth over 2008-2009

· PAT at Rs.437.600 millions in 2009-2010 as against Rs.34.820 millions in 2008-2009 - growth of 26% over 2008-2009

· Gross Debt Equity ratio of 0,37:1 (previous year 0.53:1)

L and T Group

· Gross Sales at Rs.438540.000 millions in 2009-2010 as against Rs.406080.000 millions in 2008-2009 - 8% growth over 2008-2009

· PAT at Rs.54.510 millions in 2009-2010 as against Rs.37890 millions in 2008-2009 - growth of 44% over 2008-2009

ENGINEERING, CONSTRUCTION AND CONTRACTS DIVISION:
 
OVERVIEW:
 
Engineering, Construction and Contracts Division (ECCD) undertakes engineering design and construction of infrastructure, buildings, factories, water supply and metallurgical and material handling projects covering civil, mechanical, electrical and instrumentation engineering disciplines. With many of the country's prized landmark constructions to its credit, ECCD, India's largest construction organisation, uses state-of-the-art design tools and project management techniques. Supported by a track record of over sixty-five years, covering all buildings, industrial sectors and infrastructure development, the Division also undertakes lump-sum turnkey construction with single-source responsibility. The Division takes pride in announcing that it has secured the 35m rank amongst all the Construction companies across the globe [source: Engineering News Record (ENR)]. The current year performance of the Division reiterates the Company's global stature in construction.
 
ECCD consists of Buildings and Factories Operating Company (B and F OC), Infrastructure Operating Company (Infra OC), Rail Infrastructure business, Metallurgical Material Handling and Water (MMHW OC) and Electrical and Gulf Projects Operating Company (E and GP OC).

OUTLOOK:
 
All Business Units are engaged in developing the Strategic Plan for the next 5 years with clear focus on increasing the market share, improving the competitiveness and expanding beyond presently operating geographies. Countries such as South Africa, Saudi Arabia, Qatar and Vietnam offer a plenty of opportunities for many of the Division's businesses and therefore, the concerned business units are carefully monitoring the developments in these countries and will pitch in at an appropriate time.
 
OVERALL, THE OUTLOOK FOR THE ENGINEERING:
 
Construction business remains good owing to robust order book and diversified business portfolio. The Government's commitment to revitalise the economic scenario through investment in infrastructure, provides 
immense scope and opportunities to the business units.
 
ENGINEERING AND CONSTRUCTION (PROJECTS) DIVISION:
 
OVERVIEW:
 
Engineering and Construction (Projects) Division delivers 'design to build' world-class EPC solutions in the Oil and Gas, Petrochemicals, Fertilizer, Power and Water Technology sectors. In-house expertise and experience, synergised with strategic partnerships enables it to deliver single point solution for every phase of a project - right from the front end design through engineering, fabrication, project management, construction and installation up to commissioning. The key aspects of their business philosophy are on-time delivery, cost competitiveness, high quality standards with focus on best in class HSE practices. Integrated strengths coupled with experienced highly-skilled engineers and workmen, are the key enablers in delivering critical and complex projects in India and in select countries overseas. Over the years, it has garnered a reputation for 
executing multiple projects in parallel.
 
Significant strengths that have enhanced the Division's reputation in market and contributed towards growth are:
 

* Design and Engineering Services: The Engineering arm is equipped with qualified and experienced engineering talent, in-house engineering centers with latest technology, softwares, world class office facilities and robust IT infrastructure. Services are further complemented by specialised support from engineering partners like L and T-Valdel Engineering Limited, L and T-Chiyoda Limited, L and T-Gulf Private Limited. Engineering teams are located at various strategic locations - Mumbai, Faridabad, Vadodara, Bangalore, Chennai and Sharjah.

* Fabrication Capability: Modular fabrication facility in India over the years has provided cost competitive advantage. Located at Hazira, it is one of the largest of its kind in South Asia. Hazira Modular Fabrication Facility meets international quality standards and is capable of meeting compressed delivery schedules. A new Modular Fabrication Yard at Oman is an all-weather yard augmenting capability to fabricate and supply a range of large size complex modules. The Yard has facilities for heavy fabrication, sophisticated equipment for testing and load-out facility.

* Installation Capability: To cater to offshore requirement, a state-of-the-art heavy lift-cum-pipe lay vessel (HLPV), referred to as 'LTS - 3000' has been developed in Joint Venture with Sapura Crest Petroleum Berhad

(Sapura Crest) of Malaysia. It has capability of lifting 3000 ST and laying 6'-60' of sub-sea Pipelines. This service is expected to offer cost competitive advantage to the business.

* International Business Development: The Division has consolidated its presence in international market, establishing as an emerging player in Middle East and South East Asia. It has set up manufacturing and project execution capabilities in select geographies and offices in UAE (Abu Dhabi and Sharjah) and Qatar (Doha). JV Companies have been set up with reputed local partners in Oman, Kuwait and Saudi Arabia to tap opportunities available in these countries. Branch offices have also been registered in Libya and Brazil to further strengthen the range of services across the international market.

In addition to the above advantages, which are critical to the success and provide competitive advantage, the Division is able to deliver sustainable and successful services on account of its ability in:

* Attracting and retaining high quality professionals.

* Having Multi-locational engineering, technology and innovation centers.

* Adopting stringent quality control parameters designed to minimise cost, ensure adherence to pre determined project parameters and reduced defvery time.

* Compliance to highest standards of health, safety, environment and information security.

* Usage of web enabled technology in the complete cycle of execution of EPC projects.

* Capitalising on knowledge management system for providing solutions

* Providing professional project management for accelerating delivery time of large projects.

To drive an accelerated growth and lay closer focus. Hydrocarbon Upstream Operating Company, Hydrocarbon Mid and Downstream vertical and Power Development and Construction vertical have been created.

OUTLOOK:
 
Domestic economy has regained momentum and has shown positive signs of recovery in  terms of industrial growth. India is emerging as a global refining hub owing to cost competencies over other countries. Gas demand in India is dominated by the power and fertilizer sectors, which are on the rise. This coupled with the Government's conducive policy and regulatory framework has made investments in energy sector attractive.
 
E and C Projects Division will be focusing on opportunities in key growth areas such as oil and gas extraction, floating systems in deepwater, subsea field  development, gas processing, fertilizer, and petrochemical and onshore pipeline business. The Division is looking forward to building capabilities in an accelerated manner to harness the upcoming business opportunities on the East coast of India, which has large potential for oil and gas production. It is also building comprehensive high-end FEED detailed engineering capabilities for these emerging areas by exploring various options including inorganic growth and entering into joint ventures. The 
Division also plans to enter into new geographies, establishing new clientele and entering into strategic alliances.
 
Clearly drawn out pre-bid strategies, intense marketing efforts and enhanced execution capabilities will drive the performance in the coming year. Considering positive business environment, strategic positioning and initiatives taken by the Division coupled with a healthy order book at the end of the March 2010, the Division expects to perform well in the year 2010-2011.
 
EPC POWER DIVISION
 
OVERVIEW:
 
EPC Power division has been organised as a separate Operating Company with effect from April 1, 2009. Financial year 2009-2010 has been the first year of operations in pursuit of the Company's mega vision to become 'the most preferred provider of equipment, services and turnkey solutions for fossil fuel-based power plants and a leading contributor to the nation's power generation capacity'.
 
EPC Power division's offerings comprise Supercritical Steam Generators, Steam Turbine Generators and Balance of Plant. The business organisation which includes the Joint Venture Companies with Mitsubishi Heavy Industries, Japan, is geared to address the opportunities tendered by the customers. The customer profile comprises State Utilities, Private Sector IPPs and large corporates seeking to build captive generation capacity.
 
The Company has strong engineering, procurement, construction and project execution capabilities built over past few decades, which underpin the foray into EPC for thermal power plants, especially coal-based generation projects.
 
The engineering capabilities are housed in L and T-Sargent and Lundy Limited, a joint venture company. The fast upcoming manufacturing facilities at Hazira Complex will establish the capacities to build Steam Turbine Generators, Boiler pressure parts and Pulverisers based on MHI technology in a phased manner over the next 18-24 months. In addition, the Operating Company will also manufacture Critical piping, Electro-static precipitators, Air-preheaters and Axial fans. This would give the Operating Company comprehensive capabilities to offer world class thermal power plant solutions.
 
PERFORMANCE HIGHLIGHTS:
 
EPC Power Division secured new orders of Rs.13,7970 millions New orders, which spanned the entire range of offerings, were received from the prestigious customers such as GMR Group, Maharashtra State Power Generation, Madhya Pradesh Power Generation, Jayaprakash Group, who are setting up mega power plants.
 
During the year, the Division progressed with the execution of its projects for Indian Oil Corporation Limited at Panipat, Andhra Pradesh Power Development Company Limited at Krishnapatnam and GMT Rajamundhry Energy Ltd at Vemagiri.

OUTLOOK:
 
The Division expects the policy regime to decisively discourage sub-critical technology and support supercritical technology in coal-based power generation. PSU-utilities already require establishment of local 
manufacturing capacities of power generation equipment. This is in the national interest and should augur well for the Division. With robust demand for power and resultant opportunities for power generation equipment 
infrastructure, EPC Power Division is confident of growing into a major business for the Company.
 
HEAVY ENGINEERING DIVISION
 
OVERVIEW:
 
Heavy Engineering Division (HED) manufactures and supplies custom designed and engineered critical equipment and systems to the core sector industries like Fertilizer, Refinery, Petrochemical, Chemical, Oil and Gas, Thermal and Nuclear Power, Aerospace and Equipment and Systems for Defence applications. The Division's Ship Building business is engaged in construction of commercial ships as well as warships for the navy and the coast guard.
 
The Division has manufacturing and fabrication facilities at Mumbai in Maharashtra, Hazira and Baroda in Gujarat and Visakhapatnam in Andhra Pradesh. A Strategic Systems Complex for integration and testing of Weapon systems, Sensors and engineering systems is located at Talegaon in Maharashtra. A Precision Manufacturing Facility has been  set up at Coimbatore in Tamilnadu to cater to needs of precision machined/ manufactured components and assemblies.
 
Defence Electronics Systems design and engineering is supported through a dedicated Strategic Electronic Center at Bangalore in Karnataka. Dedicated engineering centers support manufacturing at all locations. Three 'Technology Development Centers' operate from Powai - for new product development in process plant equipment and for defence/nuclear equipment as well as one focused on electronics systems/sub-systems.
 
Presently the Division has its Ship Building facility at Hazira in Gujarat. Construction of a new modern Shipyard is in progress at Kattupalli in Tamilnadu. The new facility will mainly concentrate on construction/refits - repairs of naval ships and submarines and repair of commercial vessels.
 
A heavy fabrication facility set up as a joint venture in Oman was inaugurated during 2009-2010. The facility will manufacture a range of equipment for the hydrocarbon and power sector - mainly for the GCC 
countries.
 
Heavy Engineering Division's operations are managed through two Operating Companies viz. Heavy Equipment and Systems Operating Company and Shipbuilding Operating Company.
 
OUTLOOK:
 
Many of the projects deferred due to the global economic crisis have started moving forward. Middle East, Iran and South America offer good prospects in the short to medium term. The Division expects good prospects 
from overseas Refinery and Gas/LNG projects. Fertilizer sector in India gets preferential allotment of gas. This will attract investment in new grassroots projects as well as expansion projects of existing players. There are prospects from Iran as well as Brazil for Fertilizer projects. There are prospects for coal gasification projects from China as well as 
Australia.
 
India is in the process of getting inducted in a global civilian nuclear commercial trade after NSG clearance, signing  of India specific IAEA safeguards and Indo -US nuclear deal. The Division has signed Memorandums 
of Understanding with major technology providers like Westing house, GE Hitachi, Atomstroy export, Atomic Energy of Canada Limited and Rolls Royce, which will offer business opportunities in the medium to long term.
 
Though the international commercial shipbuilding sector has been badly affected by the economic crisis, the heavy lift multipurpose cargo carriers segment is relatively less affected by the global downturn. The Division envisions itself to be a total solutions provider for specialised ships giving services from designing to building and repairing of ships in about 3-5 years. The Division has a strong presence in naval vessels business where it is currently executing Hull fabrication, Outfitting, Weapon Launchers and Marine Equipment on standalone basis. The next step is to offer the complete platforms to Indian Navy. The Division sees good prospects in the naval vessels business in the medium to long term.
 
Overall, the Division envisages good market opportunities in the medium to lonq term.
 
ELECTRICAL AND ELECTRONICS DIVISION
 
OVERVIEW:
 
Electrical and Electronics Division comprises of Electrical and Automation Operating Company (EAOC) and business unit Medical Equipment and Systems (MED). Petroleum Dispensing Pump and Systems (PDP) was divested to Gilbarco Inc. during the year and the business transfer got concluded in March 2010.
 
The four Strategic Business Units under Electrical and Automation Operating Company are: Electrical Standard Products (ESP), Electrical Systems and Equipment (ESE), Control and Automation (CandA) and Metering and Protection Systems (MPS).
 
Electrical Standard Products business has manufacturing facilities at Powai and Ahmednagar in Maharashtra. Electrical Systems and Equipment has manufacturing facilities at Powai, Ahmednagar and at Coimbatore in 
Tamilnadu. Control and Automation business operates from its 'Automation Campus' at Navi Mumbai. Metering and Protection Systems business is based at Mysore in Karnataka while Medical Equipment Business operates from newly constructed manufacturing facility in Mysore, Karnataka.
 
At L and T group level, Electrical and Electronics Division has four subsidiary companies. L and T Electricals Saudi Arabia (LTESA), with manufacturing facility at Dammam- Saudi Arabia; L and T Electrical Automation Free Zone Enterprise (LTEAFZE), with manufacturing facility at JebelAli- UAE; L and TWuxi (LTW), atWuxi in China and TAMCO with manufacturing facilities in Malaysia, Indonesia, Australia and China.

OUTLOOK:
 
Indian industrial manufacturing is showing recovery and it is led by investments in infrastructure and power. On international business front, the Gulf market continues to be sluggish; however, the outlook for markets like Abu Dhabi and Qatar is positive. Various Oil and Gas sector projects in Saudi Arabia are showing revival and utility industries are coming up with new projects. Even though Dubai was adversely affected by the credit crunch, it is expected to show signs of recovery in 2010-2011. In 2010-2011, the Division expects about 31% of business including that of group companies from international market.
 
The growth in Energy, Infrastructure and Building segments will be favorable. Development in energy management and smart grid will open opportunities for the Division. In 2010-2011, all the businesses will add 
new geographies to their existing portfolios.
 
With regard to Medical business, the medical sector in India is experiencing growth due to increased government expenditure under the National Rural Health Mission. Also there is growth seen in corporate 
hospitals chains driven by increased health insurance coverage and increase in medical tourism.
 
In summary, the Division's budget theme aim at expanding its products and services offerings in the domestic market, enhancing its capability to serve power sector and focusing on new geographies outside India.
 
MACHINERY AND INDUSTRIAL PRODUCTS DIVISION
 
OVERVIEW:
 
Machinery and Industrial Products Division (MIPD) consists of Industrial Products and Machinery Operating Company (IPM OC) and Construction Machinery Business Sector (CMBS).
 
Industrial Products and Machinery (IPM OC):
 
IPM OC has two distinct business streams - Industrial Products and Industrial Machinery. Industrial Products comprises Industrial Valves, Welding Products and Cutting Tools while Industrial Machinery consists of Machinery for Paper and Pulp, Crushing, Mining. Mineral processing, Steel and Rubber and Plastic Processing Industries. IPM OC consists of the following Strategic Business Units and Joint Venture Units.
 
Industrial Products Valves Business Unit (VBU):
 
VBU markets Industrial Valves and allied products manufactured by Valves Manufacturing Unit (VMU), Audco India Limited (AIL) and Larsen and Toubro (Jiangsu) Valve Company Limited, China, besides a few Indian and overseas manufacturers. VBU is one of the few select suppliers of Valves for global oil majors.
 
AIL is a 50:50 JV with Flowserve Corporation USA and manufactures a wide range of Industrial valves at its 3 factories in southern India. Larsen and Toubro (Jiangsu) Valve Company Limited is a 100% owned subsidiary of LTIFZE set up in Yancheng in Jiangsu province, China, for manufacture of certain ranges of Industrial Valves for global markets.
 
VMU has set up a plant at Coimbatore to manufacture Valves for Power Sector and also offers Valves supplied through contract manufacturing in ranges not fully supported by AIL, besides providing the technology support for new product development of Valves.
 
Welding Products Business (WPB):
 
WPB markets products manufactured by EWAC Alloys Limited. It also markets Inverter based welding machines from Fronius, Austria, and Oxy-Fuel Equipment such as Industrial Gas Regulators and Gas Torches from Messer, Germany. WPB also markets indigenously developed MIG Welding Machines and Inverter Welding Machines. In addition, WPB provides comprehensive solutions to its major clients towards Repair and Maintenance of  critical Industrial Components.
 
EWAC Alloys Limited (EWAC) is a 50:50 JV between Larsen and Toubro Limited and Messer Eutectic + Castolin Group of Germany. EWAC is a market leader in the business of maintenance and repairs welding and welding solutions.
 
Industrial Cutting Tools Business (INP):
 
INP provides metal cutting solutions to the domestic manufacturing industry covering Automobile, Engineering and Machine Tool segments through marketing of Industrial Cutting Tools manufactured by ISCAR Limited, Israel.
 
Foundry Business:
 
L and T has set up a state-of-the-art Casting Manufacturing Unit at Coimbatore having an annual capacity of 30,000 tonnes to manufacture large sized SG Iron and Special Iron Castings for Wind Power and other Engineering Sectors. The Foundry can produce castings in the weight range of 3T to 28T.
 
In addition, this Business Unit also has a Foundry operating at Kansbahal Works, Odisha (Rourkela Campus) manufacturing Steel, Alloy Iron, SG Iron and Grey Iron castings and also addresses requirement of large Wear and Abrasion resistant castings for Power and Cement sectors.
 
Industrial Machinery Rourkela Campus (KBL):
 
Rourkela Campus, which includes Kansbahal Plant, is involved in design, manufacturing and marketing of Mineral Crushing Solutions (Limestone, Coal and other minerals), Surface Miners and Specialised Equipment for Steel Plants (such as Torpedo Ladle Cars) and Machinery for Paper and Pulp.
 
LTM Business Unit (LTM BU):
 
LTM BU manufactures and markets Rubber Processing Machinery for the Tyre Industry across the globe. Currently, the unit has manufacturing facilities at Manapakkam, Chennai and Kancheepuram near Chennai.
 
L and T Plastics Machinery Limited (LTPML):
 
LTPML manufactures and markets Injection Moulding Machines and Auxiliary Units for the plastics industry and its products find applications in diverse industries like Automobiles, Electrical Goods, Packaging, Personal 
Care Products, Writing Instruments and White Goods.
 
Product Development Center (PDC):
 
PDC based at Coimbatore renders engineering and product development support to all the businesses across MIPD.
 
Construction Machinery Business Sector (CMBS):
 
CMBS markets and renders support for Construction and Mining Equipment. The Sector comprises;
 

* Construction and Mining Business Unit (CMB) which markets equipment manufactured by L and T-Komatsu Limited, India and the entire range of equipment available from Komatsu worldwide. It also markets Mining Tipper Trucks available from Scania.

* L and T-Komatsu Limited (LTK) is a 50:50 JV with Komatsu that manufactures Hydraulic Excavators and Hydraulic Components, all of which are distributed in India by CMB.

* L and T-Case Equipment Private Limited (LTCEPL) is a 50:50 JV with CNH Global N.V., which manufactures and markets Loader Backhoes and Vibratory Compactors.

* Tractor Engineers Limited (TEIMGL) is a wholly-owned subsidiary, which manufactures and markets Undercarriage Systems for Excavators and Material Handling Systems like Apron Conveyors etc.

OUTLOOK:
 

The Indian economy has shown consistent growth and remarkable resilience after the slump in 2008-2009 and early part of 2009-2010. Power and Infrastructure sectors in India are set to witness strong growth in the

coming year with the boost from policy measures and budgetary allocations.

India is likely to emerge as the 'Refining Hub' of the world with capacity additions planned.

Government's focus on exploration and production to meet the growing energy requirement of the country through NELP, the Natural Gas discoveries in the

East Coast and Oil discovery in Rajasthan and Gulf of Cambay, plan for cross-country pipelines provide promising business prospects to valves business in the medium term.

Demand for machinery from Mineral processing Industries are expected to grow in 2010-2011 backed by huge infrastructure requirements.

The outlook for Wind Mill Castings is positive driven by good demand and backed by readiness of world class foundry facility in Coimbatore.

The Global tyre manufacturing facilities are moving more towards Asia due to lower manufacturing costs.

The market demand for Construction Equipment is expected to improve on account of the increase in spending in the urban infrastructure, general construction sectors and spending by the Government on various infrastructure projects. Gap between coal demand and supply continues to provide a growing opportunity for Mining Equipment. CMBS is well placed to take advantage of these opportunities through supply of large size construction and mining equipments.

Overall, the Division envisages improvement in Industrial trends in the coming year and a return to better growth trends around second half of the year.

 
INTEGRATED ENGINEERING SERVICES
 
OVERVIEW:
 

Integrated Engineering Services (IES) headquarter is at Vadodara, Gujarat and its design centers span the cities of Bangalore, Chennai, Mysore, and Mumbai. It has about 2,700 employees delivering high-quality engineering and design solutions. The end-to-end services are product design, analysis, prototyping and testing, embedded system design, production engineering, plant engineering, buildings and factories design, asset information management and sourcing support using cutting-edge CAD/CAM/CAE technology in the engineering domains of Automotive, Aerospace, Marine, Off-highway Machinery, Railway, Industrial Products, Consumer Electronics, Medical Devices, Consumer Packaged Goods, Pharmaceuticals, Minerals and Metals, Oil and Gas and Utilities.

OUTLOOK:
 

The economic recession, along with the tightening of outsourcing norms, has dented the growth of all sectors in the current year. However, even in such a difficult environment, IES has managed to hold its own.

With the winds of economic recession yet to die down completely and the competition in the outsourced engineering services market being stiffer than ever, the year promises to be challenging one. However, IES with its new look is confident of taking on the challenges and deliver excellent results on the back of the initiatives described above.

Power Development Group (Thermal)

 
OVERVIEW:
 

Power Development Group has been formed with the objective of developing, investing, operating and maintaining grid linked Independent Power Plants, Cogeneration and Captive Power Plants on Build-Own-Operate (BOO), Build-Own-Operate-Maintain (BOOM) and Build-Lease-Operate (BLO) basis.

Some of the key activities of the Power Development group include:

* Identification of new opportunities for grid-connected and captive power plants

* Evaluation of risks and strategies for mitigation of these risks.

* Ensuring various statutory clearances for the development of power project.

* Evaluation of various financing structures and arranging the requisite financial package for investment.

* Setting up joint ventures with government undertakings and PSUs with equity participation.

Power Development Group has a good track record of development and construction of power plants. Some of the projects developed by the Group, which are working successfully, are:

* 116 MW Naptha-fired combined Cycle Co-generation Power Plant on BOO basis to deliver 116 MW of Power and 120 TPH Steam for Haldia Petrochemicals Limited, Haldia, West Bengal.

* 90 MW Naptha/Natural gas-fired Co-generation Power Plant on BLO basis to deliver 90 MW of Power and 240 TPH of process steam for Indian Petrochemicals Corporation Limited, Gandhar, Gujarat.

Power Development group is currently developing a 1400 MW (2x700 MW) supercritical coal-fired power plant in Punjab.

The Power Development Group is organised into two teams:

* Business Development

* Fuel Sourcing

All projects implemented by the Group would be through Special Purpose Vehicles (SPV). These SPVs will be financed through non-recourse project financing. This strategy will help in de-risking or ring fencing the business of parent company and at the same time help in leveraging the project. This strategy also helps the Company to endeavour large size projects with lower equity investment.

FINANCIAL REVIEW 2009-2010 L AND T STANDALONE
 
I. LAYING A STRONG FOUNDATION FOR LONG TERM GROWTH:
 

On the back of the Indian economy emerging stronger from the global meltdown, the Company consolidated its leadership position in the Engineering and Construction business during 2009-2010. Alongside newer business opportunities being explored in the Nuclear and Railways sectors, the Company has succeeded in bagging a slew of prestigious orders in the Power, Hydrocarbon, Fertiliser, Infrastructure and Defence sectors during the year.

The Company, during 2009-2010 secured fresh orders totaling to Rs.695720 millions recording a healthy growth of 35% over the previous year. Large project orders over Rs.3000 millions constituted over 60% of the total Order

Inflow.

 
  (Rs. In millions)

	2005-2006	2006-2007	2007-2008	2008-2009	2009-2010
Order Inflow	223700	306110	420190	516210	695720

The Company closed the year 2009-2010 with a record Order Book of Rs.1002390 millions. The composition of projects in its Order Book involves a longer average execution period of 27 months, largely due to increased share of power sector orders, in its Order Book. Over the past 5 years, the compound growth rate of Order Inflow is 33% and of Order Book is 42%.

Sales and Service Income:
 

Gross Sales and Service income at Rs.369960 millions grew by 10.6% over 2008-2009 on like to like basis (after excluding the Ready Mix Concrete sales from the previous year). The tightening of credit on the aftermath of

global financial crisis impacted certain clients' preparedness to proceed on projects, thereby adversely affecting project execution in the first half of the year. The moderate sales growth was also due to drop in demand for Industrial Machinery and Products during a major part of the year.

 
  (Rs. In millions)

	2005-2006	2006-2007	2007-2008	2008-2009	2009-2010
Gross Sales	149660	179010	251870	340450	369960

 
The Company registered a compound growth of 25% in its revenues over the last 5 years, underlining its premier position in the industry.
 
Operating Cost and Margin Analysis:
 

Manufacturing, Construction and Operating expenses for the year 2009-2010 amounted to Rs.284540.000 millions, translating to 75.0% of the Total Income of Rs.379450 millions excluding exceptional/extraordinary items. As compared to the previous year, the costs reduced by 80 basis points due to a combination of favorable factors, such as improved product mix, favourable input prices, improved productivity and operational excellence initiatives.

The Company continued its strategy of inducting fresh talent into its existing and new ventures. There was a net addition of 1,428 employees during the year, taking its strength to 38,785 as at March 31, 2010. The Staff Expenses for the year 2009-2010 at Rs.23790 millions increased by 20% as compared to the previous year, which as a percentage of Total Income excluding exceptional/extraordinary items, increased by 60 basis points.

Excluding exceptional/extraordinary items, Sales, Administration and Other expenses for 2009-2010 at Rs.13870 millions represented 3.6% of Total Income. There was a reduction by 150 basis points in the expenses during 2009-2010 over that of previous year. Over the past two years, concerted efforts were made to reduce the administrative and marketing overheads so as to improve the Company's operating margin. During 2009-2010, the provisions towards defect liabilities, foreign exchange variations and doubtful customer receivables were lower than the previous year.

Profit before Depreciation, Interest and Tax (PBDIT), excluding exceptional/extraordinary items for the year 2009-2010 at Rs.57260 millions increased by 23% over the previous year. PBDIT at 15.1% of Total Income

excluding exceptional/extraordinary items improved by 170 basis points over the previous year. The Company took adequate risk mitigation measures so as to safeguard the margins in the ongoing projects.

The improvement in margins seen in the recent years reflects the Company's ability to select, compete, win and execute turnkey and construction projects within the agreed cost and time lines consistently, year after year.

 
Other Income:
 

The Company disposed of some of its strategic investments at an exceptional gain of Rs.11150 millions. These investments consisted of the Company's holding in Ultra Tech Cement Limited (gain of Rs.10200 millions), holding in one of its associate companies (gain of Rs.680 millions, and buy back of the Company's part equity holding by one of its associate companies (gain of Rs.270 millions). Net of tax exceptional gain works out to Rs. 10950 millions.

Other gains on sale of investments included a gain of Rs.860 millions made on sale of part investment in the equity shares of Satyam Computer Services Limited.

Dividend income from long term investments during the year 2009-2010 at Rs.1090 millions mainly comprised dividend from Group companies. Temporary surplus funds, invested judiciously in low risk short term investments, also earned a dividend income of Rs.2780 millions

Finance Cost:

The Company mobilised additional average borrowings of Rs. 16080 millions during 2009-2010 to finance its capital expenditure and working capital requirements resulting in increased interest expense at Rs.5050 millions. The weighted average interest cost on borrowings at 7.2% for the year was still low, though marginally higher as compared to the previous year. Major part of the foreign currency borrowings were hedged against currency and interest rate risks.

Profit Growth:
 

The overall Profit after Tax, inclusive of exceptional and extraordinary items, at Rs.43760 millions registered a growth of 26% over the previous year. Despite infusion of additional equity capital, the Earnings per Share (EPS) at Rs.73.77 showed a growth of 24% over the previous year.

The Company made a net exceptional gain of Rs.10750 millions during the year 2009-2010 comprising (a) an exceptional gain of Rs.11150 millions (net of tax Rs. 10950 millions) from sale of its strategic investments as elaborated under 'Other Income' above and (b) an exceptional provision of Rs.400 millions towards diminution in the carrying value of investment in an associate company.

The extraordinary gain of Rs.1360 millions made by the Company during the year comprised (i) Rs.730 millions from disposal of Petroleum Dispensing Pumps and Systems business, as a part of the Company's strategy to exit non-core businesses and (ii) Rs.630 millions from reversal of proportionate provision made in respect of investment in Satyam Computer Services Limited, pursuant to the part sale of the said investment in 2009-2010.

Excluding the exceptional and extraordinary items, PAT stood at Rs.3185 millions. Over a period of 5 years, PAT excluding exceptional and extraordinary items registered a compound growth of 38% and EPS multiplied

by almost 4 times from Rs.19.02 in 2005-2006 to Rs.73.77 in 2009-2010, reflecting the uninterrupted track record of healthy performance of the Company.

Funds Employed and Returns:
 

As a % of sales, gross working capital fortheyearended March 31, 2010 at Rs.26,3620 millions has increased by 5,7 percentage points due to higher work in progress, customer receivables and increased advances towards equity, given to subsidiary companies pursuing growth initiatives. Net customer receivables as at the end of the year stood at Rs.11,1640 millions, representing 110 Days of Sales. Concerted efforts are being initiated to expedite the collections.

Net working capital at Rs.5,1190 millions was marginally lower due to better inflow of customer advances and improved credit terms from suppliers.

While the funds employed for 2009-2010 declined by nearly 6% over the previous year at the operating segment level, allocation of capital for new ventures as part of growth initiatives neutralised this reduction at the

Company level.

The Company incurred Rs.16040 millions towards capital expenditure during the year. While Project businesses invested in creating additional fabrication facilities and adding construction equipment, the Product businesses expanded the existing production facilities at Coimbatore, Ahmednagar and Talegaon.

At the Company level, investments and loans to subsidiary and associate companies increased by Rs.2,5710 millions. Major investments were made in Power Development, Ship Building, Infrastructure Development and Financial Services ventures. Proceeds from capital raised during 2009-2010 were temporarily deployed in current investments. The increase in current investment portfolio was Rs.30850 millions during 2009-2010. Accordingly, the overall Funds Employed by the Company at Rs.251900 millions as at March 31, 2010 increased by Rs.61260 millions as compared to the previous year end position.

Both the Return on Net Worth and Return on Capital Employed have declined in 2009-2010. The Return on Net Worth for the year 2009-2010 at 20.7% and the Return on Capital Employed (ROCE) at 15.9% showed reduction by 400 and 260 basis points respectively, as compared to the previous year. The relative reduction in the returns is attributable to the investment in the growth needs of emerging businesses and expansion of facilities that are yet to generate returns. Economic Value Added from normal operations correspondingly reduced to Rs.5900.000 millions, pulled down by the additional capital charge due to the increased strategic investments.

 
Liquidity and Gearing:
 

Cash accruals from the operations significantly increased by Rs.4,0040 millions as compared to the previous year lending a strong support to the Company's capital expenditure and investment plans. The divestment proceeds of Rs. 1,5760 millions further supplemented the operational cash accruals. The Company successfully mobilised additional capital of Rs.1,8730 millions by way of Qualified Institutional Placement and also issued Foreign Currency Convertible Bonds to the tune of Rs.9290 millions. The response which the resource raising programmes commanded signified the investor confidence in the Company's long term growth prospects.

With a significant increase in Net Worth of the Company, the Gross Debt Equity ratio improved from 0.53:1 as at March 31, 2009 to 0.37:1 as at March 31, 2010. The creditable performance of the Corporate Treasury during

the difficult days of global financial crisis earned laurels and awards for the Company in domestic and international forums. The strong financial position of the Company will support its ambition for long term growth and higher shareholder value creation.

 
BUSINESS SEGMENT WISE PERFORMANCE 
 
ENGINEERING and CONSTRUCTION SEGMENT (E and C):
 
The performance of the EandC segment during 2009-2010 was good considering the depressed investment climate during the first half of the year arising out of global meltdown. Despite the reduced ordering from infrastructure sectors and Gulf region, the EandC segment was successful in bagging project orders worth Rs.63,8990 millions from the diverse sectors such as Power, Hydrocarbon Upstream and Midstream, Fertiliser and Industrial, Commercial and Residential buildings registering a growth of 41% over the previous year.
 
The gross revenue for the year at Rs.32,3160 millions grew by 12.6% over the previous year, driven by Construction and Heavy Equipment businesses. The revenue growth was impacted by the economic slowdown, delayed financial closures and clients' unpreparedness to proceed with the new projects already committed by them.
 
Good execution coupled with prudent risk mitigation measures enabled the Segment to report healthy improvement in EBITDA margins for 2009-2010 by 80 basis points over the previous year. With the liquidity position improving in the last two quarters, the Segment obtained project advances from its customers and also improved the vendor credit position enabling it to reduce the funds employed by Rs.1700 millions to Rs.6,2910 millions by the end of March 2010.
 
ELECTRICAL and ELECTRONICS SEGMENT (E and E):
 
Continued global downturn and uncertainties in the domestic industrial sectors impacted adversely the demand for Electrical Standard Products in the first half of 2009-2010. Though the segment recovered during the second half, its revenue for the year 2009-2010 at Rs.2,9870 millions could only grow moderately by 7%. The administered petroleum product pricing regime continued to depress the demand for Petroleum Dispensing Pumps and Systems through-out the year, until the eventual disposal of this business in March 2010.
 
Not-with-standing the subdued volume growth, the Segment achieved healthy improvement in margins by 180 basis points during 2009-2010 over the previous year. Increased margin at 14.5% was possible due to higher proportion of Standard Products sales and improved performance by Metering Protection and Systems business. With increase in manufacturing products sales by 9%, the capacity utilisation also improved. The segment closing Funds Employed at Rs.1,1320 millions reduced by 9% as compared to that of previous year, due to tighter control on working capital.
 
MACHINERY AND INDUSTRIAL PRODUCTS SEGMENT (MIP):
 
The segment performance was adversely affected during 2009-2010 due to depressed capital expenditure plan of the industrial sectors, both within and outside the country. Particularly the Industrial Valves business unit 
had to bear the brunt of global meltdown as its volumes shrunk significantly during the year. While other businesses of the segment recovered during the second half of the year, the overall segment revenue for 2009-2010 at Rs.2,2200 millions was lower by 10% as compared to the previous year.
 
The segment margins however, continued to show improvement during 2009-2010 largely due to improved performance of Rubber Processing Machinery business and Construction and Mining Equipment business. The Net Funds Employed in the segment at Rs.2240 millions showed a decrease of 46% as compared to the previous year, largely due to significant reduction in the year end working capital, aided by close monitoring of receivables and inventory.
 
'OTHERS' SEGMENT:
 
Performance of Integrated Engineering Services (IES) included as part of the 'Others' Segment, was adversely affected by lower outsourcing by US and European customers and stronger Indian rupee. The gross revenue of IES business for 2009-2010 at Rs.3300 millions was lower by 10% as compared to the previous year. The business, however, could improve the working capital to 22% of the revenue as against 36% for the previous year, through tighter control on Receivables.

I. INFORMATION TECHNOLOGY SERVICES
 
A. LARSEN and TOUBRO INFOTECH LIMITED (L and T INFOTECH):
 
SUBSIDIARY COMPANY 
 
OVERVIEW:-
 

L and T Infotech, a wholly owned subsidiary of L and T, is a global IT services and solutions provider to various industries, and helps its clients to maximise the value through IT spend. The Company offers comprehensive, end-to-end software solutions and services in industry verticals like banking and financial services, insurance, energy and petrochemicals, manufacturing and product engineering services, including telecom sector. The Company's key service areas are application maintenance and development, application outsourcing, legacy modernisation, package implementations in SAP/Oracle, infrastructure management services and specialised services like data warehousing and business intelligence. These have been augmented by newer offerings like testing services, consulting services, business analytics and system integration.

 
OPERATIONS and PERFORMANCE:
 
In the wake of global recessionary condition, some of the large clients have had to curtail their discretionary IT spend resulting in lower outsourcing orders, particularly during the first half of 2009-2010. With the clients' renegotiations on the pricing of on-going projects and rupee appreciating during the year, the profitability came under pressure. However, with increased focus on building better offsite ratio and taking adequate financial risk mitigation measures, L and T Infotech was able to improve the operating margin during 2009-2010.
 

* L and T Infotech has achieved total revenues of Rs.18120.000 millions during the year 2009-2010 compared to Rs.17990 millions (on a comparable basis excluding revenues from engineering services) achieved last year, registering an increase of 1%. On consolidated basis including subsidiaries in Canada, Germany and GDA Technologies Inc., the total income stood at Rs.19150 millions in 2009-2010.

* Profit after tax at Rs.2810 millions grew by 6% as compared to 2008-2009. With an increase in offshore development by 4%, the operating costs reduced by 9% as compared to the previous year, thereby improving the margin.

The export business continues to be predominantly USA based, the contribution being 65% for 2009-2010. Europe and Asia-Pacific contributed 17% and 10% respectively, while contribution of Middle East and Africa increased to 8%. Onsite services accounted for 49% of L and T Infotech exports.

 
OUTLOOK:
 

Business process outsourcing spend in 2010-2011 is expected to be increasingly driven by back-end processing in Finance and Accounts segment and procurement, followed by HR outsourcing. Significant opportunities exist in core vertical of Banking Financial services and Insurance (BFSI) as also in other vertical markets such as retail, healthcare and public sector. Business prospects exist in the core geographic segment viz. USA, and emerging geographies of Asia-Pacific (specially Japan, Singapore and Australia). During 2010-2011, discretionary spending specially in areas of application development is expected to rebound. Non-discretionary spending especially in application maintenance, where the Company has significant presence, remote infrastructure management and BPO are also expected to grow. With rapidly changing customer expectations, emergence of new offshore locations, along with new service providers delivering services

through the cloud, the IT industry is expected to undergo significant changes in the medium term.

To take advantage of emerging opportunities, L and T Infotech is focusing on internal efficiencies and cost reduction. Given the industry's resilience to withstand various challenges as demonstrated in the recent past, the Company is confident to sustain the growth momentum in the medium term.

 
B. LARSEN and TOUBRO INFOTECH GMBH (L and T INFOTECH GMBH);
 
SUBSIDIARY COMPANY:-
 
L and T Infotech GmbH, wholly owned subsidiary of L and T Infotech, provides software services in Banking and Finance, Insurance and Communication and Embedded technology businesses in Germany. During the year 2009-2010, L and T Infotech GmbH recorded total income of Rs.640 millions, registering a growth of 23% over 2008-2009.
 
C. LARSEN and TOUBRO INFORMATION TECHNOLOGY CANADA LIMITED (LTIT CANADA):
 
SUBSIDIARY COMPANY:-
 
LTIT Canada, wholly owned subsidiary of L and T Infotech, provides software services in financial, Insurance and Oil and Gas sectors in Canada. During the year 2009-2010, the total income of LTIT Canada amounted to Rs.170 millions as against Rs.260 millions in 2008-2009. The decrease was mainly on account of recessionary condition witnessed in the market and curtailment on discretionary IT spend by the major clients.
 
D. GDA TECHNOLOGIES INC. (GDA): 
 
SUBSIDIARY COMPANY:-
 
GDA,  a wholly owned subsidiary of L and T Infotech, was acquired in 2007 to strengthen IT outsourcing business in USA. Since then, GDA has been integrating its business development with L and T Infotech's foray into the outsourcing business.
 
The Company has been scaling up its revenues largely through the offshore design centres, besides its conventional segments of property and custom design and manufacturing services.
 
Despite the impact of global economic downturn, GDA clocked total income of Rs.660 millions for year ended March 31, 2010 ] >. against Rs.6000 millions in 2008-2009. Profit after tax was Rs.20 millions vis-a-vis loss of Rs.20 millions in 2008-2009.
 
II. FINANCIAL SERVICES
 
A. L AND T CAPITAL HOLDINGS LIMITED (Land TCHL): 
 
SUBSIDIARY COMPANY
 
OVERVIEW:
 
L and T CHL, a wholly owned subsidiary of L and T, was incorporated in 2008, with a view to consolidate L and T's investments in the financial services business and give a distinct identity to the business segment. L and T CHL is the holding company for L and T's investments in the non banking financial companies and mutual fund business and also a few other strategic investments in the sector. It is registered with the Reserve Bank of India as a non-banking financial company.
 
Operations and Performance:
 
The Company's investments in its subsidiaries and strategic investments increased from Rs.10760 millions as at March 31, 2009 to Rs.16290 millions as at March 31, 2010. During the year, the Company has reported dividend income of Rs.50 millions and profit after tax of Rs.30 millions.
 
B. L and T FINANCE LIMITED (LTF): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 

LTF, a wholly owned subsidiary of L and T Capital Holdings Limited, is a diversified non-banking financial company with product offerings catering to diverse segments of the corporate and retail sectors. LTF has a growing presence in microfinance and is also engaged in the distribution of various financial products.

LTF, with its pan India presence backed by a robust credit appraisal, operational and credit delivery model, is well equipped to cater to customers across the country.

Operations and Performance:

LTF recorded significantly improved performance during the financial year 2009-2010, in comparison to the preceding financial year. This was facilitated by the growth in India's economy, increased investment in

infrastructure and higher rural incomes. The positive environment for raising resources was also a contributor to the improved performance. The highlights of the Company's financial performance are as below:

* Total assets grew to Rs.75670 millions on March 31, 2010 from Rs.53270 millions on March 31, 2009;

* Total income grew to Rs.9660 millions in 2009-2010 vis-a-vis Rs.8300 millions in 2008-2009;

* Profit after tax grew to Rs.1560 millions in 2009-2010 vis-a-vis Rs.990 millions in 2008-2009.

 
OUTLOOK:
 

With India's economic growth likely to gain further momentum in financial year 2010-2011 and with the Government's continued thrust on infrastructure, credit growth off-take is expected to be robust. Growth of the agricultural sector will lead to higher disposable rural incomes which, in turn, would offer continued demand for rural credit. However, current inflationary pressures may lead to monetary tightening, leading to higher interest rates and pressure on net interest margin.

 
C. L and T INFRASTRUCTURE FINANCE COMPANY LIMITED (LTIFCL): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
LTIFCL, a wholly owned subsidiary of L and T Capital Holdings Limited is a non-banking finance company focused on financing of infrastructure projects, covering various sectors. LTIFCL leverages L nd T's domain knowledge in the engineering and construction fields to provide infrastructure financing solutions through a mix of debt, sub-debt, quasi-equity and equity participation. It also offers project advisory and loan syndication services.
 
OPERATIONS and PERFORMANCE:
 
LTIFCL recorded improved performance during 2009-2010, on the strength of the growth momentum of the Indian economy and investment flow into infrastructure projects, supported by a positive environment for resource raising. The highlights of its financial performance are as below:
 
- Total assets grew to Rs.42490 millions on March 31, 2010 from Rs.23980 millions on March 31, 2009.
 
- Total income grew to Rs.4500 millions in 2009-2010 from Rs.2960 millions in 2008-2009.
 
- Profit after tax grew to Rs.1110 millions in 2009-2010 from Rs.760 millions in 2008-2009.
 
OUTLOOK:
 
The increased focus on infrastructure investment through the public private partnership model on the back of strong economic fundamentals would provide the required growth impetus to LTIFCL. Notwithstanding the increasing competition, LTIFCL, with its ability to offer timely and appropriate solutions to the customer, is positive about its growth outlook. While inflationary trends may lead to tightening of credit and money supply, it 
is expected that the demand for infrastructure ;. and Government's focus on the sector would ;,? provide the required drivers for continued growth.
 
D. L and T CAPITAL COMPANY LIMITED (LTCCL): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
LTCCL, a fully owned subsidiary of L and T, is a portfolio manager registered with the Securities and Exchange Board of India, with over Rs.16500 millions under its fund management. It is also a mutual fund distributor/advisor. LTCCL holds and monitors a significant portion of the L and T Group's strategic investments.
 
OPERATIONS and PERFORMANCE:
 

Mutual fund markets were buoyant in 2009-2010. Major stock market indices and net asset values of most equity mutual funds improved. The improved capital market had its positive impact on LTCCL's income and profits.

During 2009-2010, the company's gross income clocked at Rs.200 millions, registering a jump of 215% over 2008-2009. The profit after tax was significantly higher at Rs.140 millions, an increase of 292% over 2008-2009. The company declared an interim dividend of Rs.4 per share during the year.

 
III. ENGINEERING and CONSTRUCTION SERVICES
 
DOMESTIC COMPANIES:
 
A. L and T-SARGENT and LUNDY LIMITED (LTSL): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
LTSL, a company where L and T has 50% stake, renders power plant engineering services to its customers in India and abroad. Besides being a major provider of integrated engineering solutions through 3 D modeling, LTSL has established itself as a global consultant backed by a competent engineering talent pool and technology support.
 
Operations and Performance:
 
LTSL received fresh orders aggregating to Rs.1440 millions during the year 2009-2010, reflecting a growth of 58% over 2008-2009. Besides orders received from L and T, LTSL bagged a number of orders from Sargent and Lundy LLC, third party international and domestic customers.
 
The sales and other income for 2009-2010 at Rs.670 millions registered a growth of 7%. Exports accounted for 44% of the total income. Profit after tax registered a 25% growth at Rs.130 millions for 2009-2010 as compared to 2008-2009 level of Rs.100 millions, aided by lower operating cost.
 
OUTLOOK:
 
LTSL will leverage the increased demand for power in the country supported by the 11th and the 12th plan capacity addition planned in India. LTSL also expects a few international projects to materialise this year by focusing on the Middle East market which is on the recovery path. Given the good opportunities both in India and abroad,
 
LTSL has bright prospects in the medium to long term.
 
B. L and T-CHIYODA LIMITED (LTC): 
 
ASSOCIATE COMPANY 
 
OVERVIEW:
 
LTC, a company where L and T has 50% stake, is an internationally reputed design and engineering consultancy company for hydrocarbon processing industry. LTC was set up in the year 1994 as a joint venture (JV) between Chiyoda Corporation of Japan and L and T with an equal stake. LTC offers total engineering solution to hydrocarbon sector and related industries including petroleum refineries, petrochemical units, oil and gas onshore processing facilities, LNG/LPG plants, fertilizer plants and chemical plants.
 
OPERATIONS AND PERFORMANCE:
 
With a healthy order book at the beginning of the year, the Company reported sales revenue of Rs.830 millions recording a growth of 8% over 2008-2009. However, the profitability was lower due to relatively higher sub contracting costs resulting in lower profit after tax at Rs.90 millions as compared to Rs.100 millions in 2008-2009.
 
C. L and T-VALDEL ENGINEERING LIMITED (LTV): 
 
SUBSIDIARY COMPANY
 
OVERVIEW:
 
LTV, a wholly owned subsidiary of L and T, provides complete engineering solutions for upstream oil and gas sector and offers design engineering services as well as project management services globally.
 
Operations and Performance:
 
The order book for the financial year 2009-2010 stood at Rs.900 millions. Sales revenue for the year was subdued at Rs.600 millions as compared to Rs.72 0 millions for 2008-2009. Profit after tax for 2009-2010 was lower at Rs.110 millions as compared to Rs. 160 millions in 2008-2009 due to decrease in capacity utilisation.
 
D. L AND T-RAMB0LL CONSULTING ENGINEERS LIMITED (LTR):
 
ASSOCIATE COMPANY 
 
OVERVIEW:
 
LTR, a consultancy firm where L and T has 50% stake, was established in 1998 by L and T and RAMBOLL A/S of Denmark. LTR provides engineering and project consultancy services for transportation infrastructure projects relating to Ports and Marine, Roads and Airports, Bridges and Metros and SEZ Planning and Environmental Engineering.
 
OPERATIONS AND PERFORMANCE:
 
The Company has consolidated its position in the domestic market as advisors and consultants to developers of projects. Backed by order inflow at Rs.500 millions, LTR registered a growth of 15% in total income for the year 2009-2010 to Rs.340 millions. The profit after tax at Rs.100 millions grew by 63% over 2008-2009.
 
E. SPECTRUM INFOTECH PRIVATE LIMITED (SIPL):
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
SIPL, a wholly owned subsidiary of L and T, provides capabilities in defence electronics and systems. SIPL concentrates largely on product development in embedded solutions, control and signal processing for defence sector. It has grown from designing and development of sub-systems to a full-fledged production organisation delivering sub-systems.
 
OPERATIONS and PERFORMANCE:
 

Sales revenues during the year 2009-2010 stood at Rs.90 millions, same as in 2008-2009. Profit after tax remained flat at Rs.20 millions for 2009-2010.

 
F. L AND T SHIP-BUILDING LIMITED (LTSB): 
 
SUBSIDIARY COMPANY
 
OVERVIEW:
 
LTSB, a wholly owned subsidiary of L and T, has been formed for setting up a Shipyard Cum Minor Port Complex at Kattupalli, near Chennai. L and T has identified shipbuilding as a major thrust area in the heavy engineering 
sector for growth. The port complex of LTSB is expected to meet this requirement and is planned to operate on a commercial basis with a capacity of 2 million TEUs per annum.
 
OPERATIONS AND PERFORMANCE:
 
LTSB has a Joint Venture agreement with TIDCO to set up the port and shipyard at Kattupalli, Tamil Nadu. LTSB has taken possession of 1143 acres of patta land at Kattupalli on 99 year lease basis.
 
The Company has commenced construction activities from October 2009 and has also received the formal SEZ approval from the Ministry of Commerce and industry. LTSB has entered into a Licence agreement with Tamilnadu Maritime Board (TNMB) for using 76.86 acres of coastal land at Kattupalli required by the project.
 
The Company has obtained environmental clearances from the Government. The Company has tied up entire equity and debt funds for meeting the project cost and achieved financial closure recently.
 
International Companies
 
G. LARSEN AND TOUBRO ELECTROMECH LLC (L and T ELECTROMECH):
 
SUBSIDIARY COMPANY
 
OVERVIEW:
 
L and T Electromech is a Joint Venture between L and T and The Zubair Corporation, Oman (TZC). L and T, through its wholly owned subsidiary L and T International FZE holds 65% in the Company.
 
The Company is a leading Civil, Mechanical and Electrical and Instrumentation Construction Company in Oman undertaking projects in Oil and Gas, Refineries, Petrochemicals, Power and Water Treatment sectors.
 
OPERATIONS AND PERFORMANCE:
 
During the year, the Company bagged orders worth Rs.3900 millions against Rs.2370 millions in 2008, thus registering a growth of 65%. However, as the award of these orders were delayed due to the global meltdown, sales for the year (Rs.2490 millions) fell by over 24% vis-a-vis 2008.
 
Not-with-standing the reduction in sales, profit after tax at Rs.340 millions grew by a healthy 55% over 2008. The improvement in profitability was largely attributed to risk mitigation measures and pre-bid tie-ups with vendors.
 
OUTLOOK:
 
The Company has established itself as one of the major construction companies providing composite construction service in Civil, Mechanical, Electrical and Instrumentation (CMEI) works in Oman. Considering its eminent 
position in the oil and gas sector of Oman, the current growth momentum is expected to continue in the medium term.
 
H. L AND T MODULAR FABRICATION YARD LLC, OMAN (LTMFYL): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
LTMFYL is a Joint Venture company between Zubair Corporation and L and T International FZE established in Sultanate of Oman. L and T, through its wholly owned subsidiary L and T International FZE holds 65% in the Company. The Company has developed core competencies in manufacture of high end equipment like Jack up Drill Rigs, Floating Production Storage and Offloading (FPSO) Vessels, Integrated Decks, Skid mounted equipment, in addition to fabrication of large size offshore platforms.
 
OPERATIONS AND PERFORMANCE:
 
During the year 2009, LTMFYL's sales revenue stood at Rs.1370 millions, registering a growth of 33% compared to 2008. Profit after tax for the year 2009 stood at Rs.20 millions vis-a-vis Rs.10 millions in 2008.
 
I. LARSEN AND TOUBRO ATCO SAUDIA COMPANY LLC (L and T ATCO): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
L and T ATCO is a strategic Joint Venture of L and T International FZE and Abdulrahman Ali Al -Turki Group of Companies (ATCO) Dammam, a renowned Saudi conglomerate. LandT-ATCO was incorporated as an In - Kingdom Company in 2007 to take advantage of the electro-mechanical construction opportunities arising in the areas of oil and gas, petrochemicals, power and water related projects in Saudi Arabia. L and T, through its wholly owned subsidiary L and T International FZE holds 49% in the company.
 
Operations and Performance:
 
During 2009 the Company's total income stood at Rs.70 millions against Rs.10 millions in 2008. The company has bagged a major order of Rs.740 millions from a leading Korean Company in Saudi Arabia, for mechanical erection works for SATORP in Jubail, Saudi Arabia. The Company registered a loss of Rs.40 millions in 2009 vis-a-vis a loss of Rs.30 millions in 2008.
 
OUTLOOK:
 
* Future looks encouraging with large projects on the cards in the field of hydrocarbon, power, water and oil and gas. Specific tie-ups with prominent EPC players who are aware of L and T's capability in refinery and petrochemical and demonstration of on-ground resources could open windows of opportunities for the Company.
 
J. OFFSHORE INTERNATIONAL FZC (OIFZC): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
Offshore International FZC (OIFZC) is a Joint Venture between  L and T International FZE and M/s Petro-Plus Sdn Bhd, Malaysia, a wholly owned subsidiary of SapuraCrest Petroleum Bhd, Malaysia for construction and operation of a Heavy Lift cum Pipe Lay Vessel (HLPV). L and T, through its wholly owned subsidiary L and T International FZE holds 60% in the Company.
 
An element of risk was always associated with dependence on external sub-contractors for installation part of the project for Oil and Gas industry. This risk is being mitigated in the form of having own in-house installation capability through this JV SapuraCrest Petroleum Berhad (SapuraCrest) is a leading company in Malaysia with diversified activities having expertise in offshore installation services including sub-sea pipe-laying, platform and related installations. The JV offers both the companies greater competitive advantages especially in the Indian and Malaysian markets - two of the fastest growing oil and gas services markets in the region.
 
The vessel will provide offshore installation services including sub-sea pipe laying, platform installation across India, the Middle East, South East Asia, Australia and the Sakhalin region. The vessel is available for commercial use in 2010.
 
K. LARSEN AND TOUBRO (OMAN) LLC (LTO): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
LTO, a Joint Venture with Zubair Corporation LLC, provides engineering, construction and contracting services for the last 15 years in Sultanate of Oman. Its track record in civil projects has been excellent and continues to enjoy customer preference in the country. L and T, through its wholly owned subsidiary L and T International FZE holds 65% in the company.
 
OPERATIONS AND PERFORMANCE:
 
Despite the slowdown in the economy due to global recessionary condition, LTO secured order inflows of Rs.15110 millions during the year. The revenue for 2009 stood at Rs.15490 millions as against Rs.14910 millions achieved during 2008. The profit after tax for the year 2009 grew by 74% to Rs.990 millions 
 
OUTLOOK:
 
After the global economic crisis witnessed in 2008 and first half of 2009, the economy of Oman has stabilised and is heading towards a phase of recovery. The Government of Oman is expected to increase allocation of 
funds to the urbanisation, infrastructure, health and development activities in 2010 which will augment the opportunity landscape for the Company in power transmission and distribution, infrastructure and the buildings and utilities sectors.
 
L. LARSEN AND TOUBRO KUWAIT CONSTRUCTION GENERAL CONTRACTING COMPANY 
WLL(LTKC):
 
SUBSIDIARY COMPANY
 
OVERVIEW:
 
LTKC is a strategic Joint Venture between M/s Bader Almulia and Brothers Company WLL, a Kuwaiti company and Larsen and Toubro International FZE. L and T, through its wholly owned subsidiary L and T International FZE, holds 49% in the Company. LTKC executes construction projects in Oil and Gas and Power sectors in the State of Kuwait.
 
OPERATIONS AND PERFORMANCE:
 
LTKC recorded sales revenue of Rs.560 millions and profit after tax of Rs.10 millions for year 2009. LTKC, however, could not bag any new orders during 2009 due to subdued market conditions in the country.
 
M. LARSEN AND TOUBRO READYMIX CONCRETE INDUSTRIES LLC (RMC LLC): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
RMC LLC is a Joint Venture between Mr. Majed Al Mehairi (51%), UAE and Larsen and Toubro International FZE (49%), a wholly owned subsidiary L and T.
 
Operations and Performance:
 
With the construction and real estate activity slowing down consequent to financial crisis, the demand for ready mix concrete reduced in 2009. Accordingly, the sales revenue at Rs. 1080 millions was lower by 17% as compared to 2008. Profit after tax at Rs.150 millions grew by 1% due to introduction of high value added products like coloured concrete and light weight concrete.
 
IV. POWER EQUIPMENT MANUFACTURING
 
A. L AND T-MHI TURBINE GENERATORS PRIVATE LIMITED:
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
L and T has entered into Joint Venture with Mitsubishi Heavy Industries, Japan (MHI) to manufacture super critical steam turbines and generators (STG package). L and T-MHI Turbine Generators Private Limited was formed in 2008 through L and T Power Limited (a wholly owned subsidiary of L and T) holding 51% share to leverage on the parent company's EPC capabilities in the emerging mega power sector. The JV's manufacturing facility at Hazira-Gujarat will produce STG equipment of capacity ranging from 500 MW to 1000 MW and is expected to be on stream during 2011.
 
OPERATIONS AND PERFORMANCE:
 
While the maiden order obtained during the previous year is being executed with 100% import from MHI, the orders received for 5 more STG package during the year 2009-2010 are expected to be manufactured from the new facility being constructed at Hazira. With order inflow worth Rs.21360 millions on hand, the Company is gearing up for efficient execution. The total capacity being installed is 4000 MW. The first order under execution has enabled the Company to report Sales revenue of Rs.4220 millions for 2009-2010. As the equipment package is being supplied by the JV partner, the Company is not likely to make any profits from this order.
 
B. L AND T-MHI BOILERS PRIVATE LIMITED: 
 
SUBSIDIARY COMPANY
 
OVERVIEW:
 
L and T and MHI have entered into another Joint Venture to manufacture and supply Supercritical Boilers for large coal based power utilities. L and T-MHI Boilers Private Limited has been formed with L and T holding the majority share 
of 51% of the equity, through its subsidiary L and T Power Limited.
 
The JV has envisaged manufacturing of equipment in the capacity range of 500 MW to 1000 MW for sale in India.
 
OPERATIONS AND PERFORMANCE:
 
The Company has secured orders of Rs.55500 millions. The Company is establishing a state-of-the-art manufacturing facility at Hazira, Gujarat. The Company proposes to commence operations with the manufacture of 2 Boiler packages in 2012-2013. The total capacity being installed is 4000 MW.
 
OUTLOOK:
 
The power sector presently provides a window of both an opportunity and challenge to manufacture high technology and complex power equipment with comprehensive range of services. The primary growth driver for the sector is the government's favorable policy to encourage super critical power projects and 'Power for all by 2012' programme, which is designed to develop substantial power generation capacity in the country. Both the companies viz. L and T-MHI Boilers Private Limited and L and T-MHI Turbine Generators Private Limited are confident of meeting the market requirements in super critical technology with focused efforts to manufacture/deliver the products and to become cost competitive in the coming years.
 
V. POWER DEVELOPMENT PROJECTS 
 
A. L AND T POWER DEVELOPMENT LIMITED (L and T PDL): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
L and T PDL, incorporated in September 2007, is a wholly owned subsidiary of L and T. The company has been formed as a power development arm of L and T with the objective of developing, investing, operating and maintaining power generation projects of all types namely thermal, hydel, nuclear and other renewable form of energy including captive and co-generation power plants.
 
OPERATIONS AND PERFORMANCE:
 
During the year 2009-2010, the Company has been awarded two projects under competitive bidding process; 1320 MW Rajpura thermal project in Punjab (being developed through a
 
wholly owned subsidiary, Nabha Power Limited) and 149 MW Sach-Khas hydro electric project in Himachal Pradesh.
 
In addition to this, the Company is developing a 60 MW Tagurshit hydro electric project in Arunachal Pradesh. Detailed project report is under preparation and survey and investigations work is being carried out.
 
The 99 MW Singoli-Bhatwari hydro electric project is also being developed by the Company through a wholly owned subsidiary, L and T Uttaranchal 
 
Hydropower Limited (L and T UHPL).
 
During the year 2009-2010, the Company has reported a total income of Rs.70 millions by way of project facilitation and advisory service fees. Profit after tax stood at Rs.30 millions.
 
OUTLOOK:
 
The Power Sector in India presents tremendous opportunities forprivate developers. Thecontinuing power deficits encourage private players to set up merchant power plants. Also, large hydel projects are being planned in the himalayan states of India. The Company has appropriately positioned itself to realise the emerging opportunities and is actively pursuing opportunities to develop thermal and hydro electric projects in India and 
abroad.
 
B. L AND T UTTARANCHAL HYDROPOWER LIMITED (L and T UHPL): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
L and T UHPL, is a wholly owned subsidiary of L and T PDL. The Company was formed to undertake the development, construction and operation of 99 MW Singoli Bhatwari Hydro Electric Project on Build-own-operate-transfer (BOOT) basis for a period of 45 years including the construction period. The Project is located in the Garhwal region of the state of Uttarakhand, District Rudraprayag, on Mandakini River, the right bank tributary of Alaknanda.
 
The Company signed the Implementation Agreement with Government of Uttarakhand in 2009 which enables it to commence full-fledged construction at the site. The project is in implementation phase and is expected to achieve financial closure in first half of FY 2010-2011. The total cost of the project is estimated to be Rs.10450 millions.
 
VI. INFRASTRUCTURE AND PROPERTY DEVELOPMENT
 
A. L AND T INFRASTRUCTURE DEVELOPMENT PROJECTS LIMITED (L andT IDPL): 
 
SUBSIDIARY COMPANY 
 
OVERVIEW:
 
L and TIDPL has been set up as an infrastructure development arm of the Group, where L and T has 84.27% stake. L and T IDPL, a holding company in this segment, works on a 'value creation' model so that the Special Purpose Vehicle (SPV) floated for each infrastructure project is nurtured till it reaches a stage of matured operation. The Company has, over a period of time, built up capabilities in identifying and developing infrastructure projects, operation and maintenance of these projects and providing advisory services relating to financing and engineering of the projects. Considering the large potential in the portfolio, the Company has decided to re-acquire the private equity investors' holding at a valuation.
 
L and TIDPL portfolio is well diversified with a mix of projects under development across various sectors such as roads and bridges, ports, and urban infrastructure. L and T Urban Infrastructure Limited, a subsidiary of L and T IDPL, houses the property development and urban infrastructure project development business.
 
OPERATIONS and PERFORMANCE:
 
L and T IDPL has reported a total income of Rs.6980 millions and a profit after tax of Rs.5120 millions . This includes exceptional gain of Rs.4620 millions arising from divestment of its stake in Bangalore International Airport Limited and Second Vivekananda Bridge Tollway Company Private Limited.

FIXED ASSETS

· Land – freehold

· Ships

· Buildings

· Railway Sidings

· Plant and Machinery

· Furniture and Fixtures

· Vehicles

· Aircraft

CONTINGENT LIABILITIES

(Rs. In millions)

Particulars	As on 31.03.2010
a) Claims against the company not acknowledged as debts	1582.100
b) Sales tax liabilities that may arise in respect of matters in appeal	1587.800
b) Excise duty / service tax liability that may arise in respect of matters in appeal / challenged by the company in writ	102.800
c) Income tax liability (including penalty) that may arise in respect of which the company is in appeal	84.500
c) Corporate guarantees given on behalf of subsidiary companies.	8053.800

Notes

1. The company does not expect any reimbursement in respect of the above contingent liabilities.
2. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration / appellate proceedings.
3. In respect of matters at (e), the cash outflow, if any, could generally occur during occur during the next three years, being the period over which the validity of the guarantees extends except in a few cases where the cash flows, if any, could occur any time during the subsistence of the borrowing to which the guarantee relate.

UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2010

Rs. in Millions

Particular	3 Months Ended	9 Months Ended
	31.12.2010	31.12.2010
Gross sales / revenues from operations	114182.600	286734.300
Less : Excise duty	965.900	2558.900
(a) Net Sales / Income from operations	113216.700	284175.400
(b) Other Operating Income	914.100	1999.900
Total Income	114130.800	286175.300
Expenditure
(Increase)/decrease in stock-in-trade and work-in-progress	(1583.700)	(5507.100)
Consumption of raw materials	30555.500	68367.600
Sub-contracting charges	28058.300	63371.100
Construction materials	20660.100	57797.900
Purchase of traded goods	4913.300	14440.600
Other manufacturing/operating expenses	7009.600	20601.700
Employee cost	6771.500	20692.200
Sales, administration and other expenses	5367.300	13749.100
Depreciation, amortisation and obsolescence	1280.900	3634.500
Total	103032.800	257147.600
Profit from operations before other income, interest and exceptional Items	11098.000	29027.700
Other income	2471.800	8405.300
Profit before interest and exceptional Items	13569.800	37433.000
Interest	1757.100	5112.000
Profit after Interest but before Exceptional Items	11812.700	32321.000
Exceptional Items	353.000	353.000
Profit (+)/Loss(-) from Ordinary Activities before tax	12165.700	32674.000
Provision for taxes:
Provision for current tax	3654.400	10469.600
Provision for deferred tax	106.000	196.000
Total provision for taxes	3760.400	10665.600
Profit after tax from ordinary activities	8405.300	22008.400
Extraordinary items [net of tax]	--	708.400
Profit after tax (	8405.300	22716.800
Paid up equity share capital (Face value of Rs.2/- per share)	--	1215.600
Reserves excluding revaluation reserves as per balance sheet of previous accounting year	--	--
Earning per share (EPS)
(a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	13.84	36.39
(a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	13.65	35.81
(a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	13.84	37.56
(a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	13.65	36.96
Public shareholding
Number of shares	--	584199
Percentage of shareholding	--	96.12
	--	Nil
Profit after tax from normal operations (i.e.excluding exceptional and extraordinary items)	8107.700	21710.800

Note:

• Exceptional items for the quarter ended December 31, 2010 represent gains on divestment of part-stake in subsidiary and associate companies.

• The Company, during the quarter ended December 31, 2010, has allotted 28,56,919 equity shares of Rs. 2 each, fully paid up, on exercise of stock options by employees, in accordance with the Company's stock option schemes.

• Figures for the previous periods have been re-grouped / re-classified to conform to the figures of the current periods.

• There were no pending investor complaints as on October 1, 2010. During the quarter ended December 31, 2010, 42 complaints were received and resolved.

• The promoter and promoter group shareholding is nil and accordingly the information on shares pledged / encumbered is not applicable.

• The results for the quarter ended December 31, 2010 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 held on January 17, 2011.

SEGMENT WISE REVENUE RESULTS AND CAPITAL EMPLOYED IN TERMS OF CLAUSE 41 OF THE LISTING AGREEMENT.

Rs. in Millions

Particular	3 Months Ended	9 Months Ended
	31.12.2010	31.12.2010
Gross Segment Revenue
Engineering and Construction	100041.100	246517.400
Electrical and Electronics	7950.000	22125.300
Machinery and Industrial Products	6806.600	19270.800
Others	1681.300	4493.700
Total	116479.000	292407.200
Less: Inter Segment Revenues	1382.300	3673.000
Net Segment Revenue	115096.700	288734.200
Segment Results (Profit before interest and tax)
Engineering and Construction	10646.900	27815.500
Electrical and Electronics	867.700	2473.500
Machinery and Industrial Products	1285.800	3571.600
Others	214.300	721.300
Total	13014.700	34581.900
Less: Segment margins on internal capitalization	98.000	118.900
Less: Interest expenses	1757.100	5112.000
Add: Unallocable corporate income net of expenditure	1006.100	3323.000
Profit before tax	12165.700	32674.000
Capital Employed
Segment Assets Less Segment Liabilities
Engineering and Construction	--	70293.400
Electrical and Electronics	--	12039.600
Machinery and Industrial Products	--	3278.200
Others	--	2100.400
Total	--	87711.600
Unallocable corporate assets less corporate liabilities	--	201887.800
Total capital employed	--	289599.400

Note:

i) Segments have been identified in accordance with Accounting Standard (AS) 17 on Segment Reporting, considering the risk/return profiles of the businesses, their organizational structure and the internal reporting systems.

ii) Segment definitions: Engineering and Construction comprises execution of engineering and construction projects to provide solutions in civil, mechanical, electrical and instrumentation engineering (on turnkey basis or otherwise) to core/infrastructure sectors including railways, shipbuilding and supply of complex plant and equipment to core sectors. Electrical and Electronics include manufacture and/or sale of low and medium voltage switchgear, custom built switchboards, control gear, electronic energy meters/protection (relays) systems, control and automation products and medical equipment. Machinery and Industrial Products comprise manufacture and sale of industrial machinery and equipment, marketing of industrial valves, construction equipment and welding/industrial products. Others include property development and integrated engineering services.

iii) Segment revenue comprises sales and operational income allocable specifically to a segment. Unallocable expenditure mainly includes expenses incurred on common services provided to segments and other corporate expenses. Unallocable income primarily includes interest income, dividends and profit on sale of investments. Corporate assets mainly comprise investments.

iv) In the Engineering and Construction segment, sales and margins do not accrue uniformly during the year. Hence the operational/financial performance of aforesaid segment can be discerned only on the basis of figures for the full year.

PRESS RELEASE:

MR. S. N. SUBRAHMANYAN TO BE ELEVATED TO L&T BOARD

Mumbai, April 11, 2011: The Board of Directors of Larsen & Toubro (L&T) approved the elevation of Mr. S.N. Subrahmanyan as a Whole-time Director, with effect from July 1, 2011. Mr. Subrahmanyan is currently Sr. Vice President and Head – Buildings & Factories and Infrastructure Independent Companies. This induction is a part of L&T’s succession plan.

The construction businesses of L&T are currently being headed by Mr. K.V. Rangaswami, Whole-time Director & President (Construction), who will retire from the Board of the Company in June 2011. Mr. S.N. Subrahmanyan, 51, is a civil engineer with post graduate qualifications in business management. He joined L&T in 1984 starting off as project planning engineer, and was soon handpicked for senior responsibilities. Mr. Subrahmanyan’s notable achievements include playing a pivotal role in securing and managing EPC contracts for construction of four major international airports in India at Bangalore, Hyderabad, Delhi and Mumbai. The Buildings & Factories business has grown rapidly under Mr. Subrahmanyan’s leadership, and has executed many prestigious jobs such as ICICI Bank, National Stock Exchange Buildings and Tidel Park.

L&T METRO RAIL (HYDERABAD) LIMITED ACHIEVES FINANCIAL CLOSURE FOR HYDERABAD METRO RAIL PROJECT THE LARGEST EVER FUND TIE-UP IN AN INDIAN PPP PROJECT

Hyderabad, April 05, 2011: L&T Metro Rail (Hyderabad) Limited, the SPV incorporated to implement the Hyderabad Metro Project, has achieved financial closure for the project. The financial closure has been achieved in a record time of 6 months and is the largest fund tie-up in India for a PPP (Public Private Partnership) project till date.

A consortium of banks led by State Bank of India has sanctioned the entire debt requirement of 11480 crore for the project. The equity component for the project, expected to be around 3440 crore, would be infused primarily by the L&T Group. The project will get a viability gap grant of 1458 crore from the Central Government through the Government of Andhra Pradesh.

A total of ten banks have participated in the funding for this prestigious project. Leading banks which will be associated with the project, in addition to State Bank of India, include Canara Bank, Indian Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and Syndicate Bank.

Project Background

The Hyderabad Metro Project was announced by the Government of Andhra Pradesh (GoAP) on PPP mode under the Design, Build, Finance, Operate and Transfer (DBFOT) basis and the bidding process was as per the guidelines specified by the Government of India (Ministry of Urban Development, Planning Commission and Ministry of Finance). L&T emerged the lowest bidder in the face of stiff competition (the bid winning criteria was Minimum Grant quoted by the bidder) and signed the Concession Agreement through its SPV, L&T Metro Rail (Hyderabad) Limited, with the Government of Andhra Pradesh on September 4, 2010.

L&T Metro Rail (Hyderabad) Limited has already submitted a Performance Guarantee for 360 crore to GoAP underlying its clear intent to execute the prestigious project in the stipulated time frame. As per the Provisions of Concession Agreement, construction will have to be completed in 5 years. The concession period for the project is 35 years (including 5 years of construction period) and is extendable by an additional 25 years.

Project Details

Hyderabad Metro Project is one of the most prestigious and the biggest PPP contract in the Metro Sector in the world involving the construction of 71.16 km of elevated metro rail in three corridors criss-crossing the city of Hyderabad. Eco-friendly elevated metro stations would be located along the route at roughly every 1 km distance with passenger access through staircases, escalators and lifts. The project will be well integrated with the exiting suburban railway network (MMTS) and bus stops so as to ensure seamless and comfortable travel for passengers. Adequate parking and circulation areas adjoining the stations will be provided at 25 locations along the corridor.

This project will use state-of-the-art technology which includes the latest metro cars, signaling & communication system leading to automatic train operations. The automatic fare collection system will provide a user-friendly facility to use and share the ticketing system with the other modes of transport over a period.

The project allows the right to develop 18.5 million sq.ft. of Transit Oriented Development. Once implemented, Hyderabad will probably be the first city in India with integrated urban planning with inter modal connectivity and convenient sky-walks making seamless commuting a reality.

Project Benefits

With the ever increasing population (population increased from 4.48 million in 1991 to 6.38 million in 2001 and is currently estimated to be around 9 million in the city) and the number of registered private vehicles (22.8 lakh in 2007 which increased to 28 lakh at present showing a growth of 7% per annum), commuting is becoming increasingly unsafe and time consuming. The metro system being planned for the city can carry the same amount of traffic as 7 lanes of bus traffic or 25 lanes of private motor cars and is more reliable, comfortable and safer than road-based systems. It will reduce journey time by anything between 50% to 75%. Since this project will help in reducing carbon emitting cars and public transport buses along the metro corridor by running electric trains, it will be environmentally friendly and provide the citizens with a world class commuting experience.

The project is also expected to trigger mammoth economic activity in and around the city and provide employment to about 50,000 people including 1200 to 1500 technical professionals during construction.

Current Status of Project

Pre-construction works for the project has already commenced. Soil testing and topographical surveys have been completed in most locations along the alignment and conceptual engineering is nearing completion. Conceptual engineering is being undertaken by AECOM-Feedback Venture consortium. AECOM, the lead member of the consortium, is the industry leader in design of Mass Rapid Transit Systems and is ranked as the No. 1 design firm in ‘The Top 500 Design Firms as per ENR (Engineering Review) 2010’.

The alignment of the corridors of the project is being finalised in a manner that the heritage structures of the city are least affected.

Louis Berger Consulting Pvt. Ltd., a major US-based consultancy company with wide experience in the metro rail sector, has been appointed by GoAP through Hyderabad Metro Rail Limited as the Independent Engineer for the project after a rigorous competitive bidding process. The Independent Engineer shall oversee design and execution of the project so that it meets the technical specifications, key performance indicators and safety standards as laid down by the concession agreement.

About the Developer

L&T Metro Rail (Hyderabad) Limited is a subsidiary of L&T Infrastructure Development Projects, an Infrastructure Development arm of L&T. L&T is a USD9.8 billion technology, engineering and construction company with global operations. It is one of the largest and most respected companies in the private sector, known for its project management and execution capabilities of large infrastructure projects in the domestic and international arena.

A strong customer-focused approach, the constant quest for top-class technology and quality, backed with a commitment to nation building have enabled L&T to attain and sustain a leadership position in its major lines of business over the past seven decades and become a premier institution in engineering and construction.

L&T DIVESTS STAKE IN L&T-CASE JV

Mumbai, March 31, 2011: Larsen & Toubro (L&T) has sold its stake in L&T-CASE Equipment Private Limited to it’s JV partner CNH Global NV, a global leader in the agricultural and construction equipment business. CNH has acquired full ownership of L&T – CASE, an unconsolidated joint venture established in 1999 to manufacture and sell construction equipment in India. The new company will take the name Case New Holland Construction Equipment India Private Limited.

The company, which employs more than 600 people, operates a production facility in Pithampur in Madhya Pradesh and a distribution network of 56 dealers and 144 outlets. The Pithampur facility currently builds backhoe loaders and vibratory compactors; the complex is spread over 40 acres and occupies over 28,000 sq.m. of covered area.

Commenting on the development, Mr. J P Nayak, Member of L&T Board and President, said, “Our decision to exit the JV is part of our ongoing portfolio review and streamlining process. We have an excellent relationship with our partner, and wish them all success in India”.

Mr. Harold Boyanovsky, President and CEO CNH Global NV said, “This is an important step in our long term commitment to consolidate our construction equipment business in India and in other export markets and to develop a manufacturing base in India fully integrated in the CNH worldwide industrial footprint. The Pithampur plant will be in a position to make the most of the opportunities for growth that the sector offers today and in the future”.

Back ground:

Larsen & Toubro is a USD 9.8 billion technology, engineering and construction group, with global operations. It is one of the largest and most respected companies in India’s private sector. A strong, customer –focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business over seven decades.

L&T BECOMES FIRST INDIAN VALVE MANUFACTURER TO SECURE ASME ‘N’ AND ‘NPT’ CERTIFICATION

Mumbai, February 23, 2011: Larsen & Toubro (L&T) became the first Indian manufacturer of industrial valves to receive the coveted ‘N’ and ‘NPT’ stamp from American Society of Mechanical Engineers (ASME). The valves facility in Coimbatore that focuses on high-end valves for nuclear and thermal power received the certificates of authorization from ASME on 18 January 2011. With this achievement L&T joins the exclusive group of manufacturers authorized to supply valves for nuclear power in the global arena.

L&T, a key supplier of industrial valves to the global majors in oil & gas and power, has a strong presence in the Indian nuclear power industry. Valves supplied by L&T are in operation in nuclear installations across the country as well as major thermal power plants.

The state-of-the-art valves plant is a part of L&T’s high-tech manufacturing hub in Coimbatore. The facility also houses a design office and R&D lab equipped to carry out functional qualification tests of nuclear valves.

The product range includes high-pressure valves in ASME class up to 4500. The plant boasts the latest in manufacturing technology and has in-house capability to carry out high-pressure high-temperature endurance tests.

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 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.44.59
UK Pound	1	Rs.73.43
Euro	1	Rs.64.81

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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		71

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 EXPLANATIONS

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	Capability to overcome financial difficulties seems comparatively below average.	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.