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S-622 LARSEN & TOUBRO INFOTECH LIMITED DIRECTORS’ REPORT The Directors have pleasure in presenting the Seventeenth Annual Report and Financial Statements of Larsen & Toubro Infotech Limited for the year ended March 31, 2013. FINANCIAL RESULTS v Lakhs. 2012-13 2011-12 Revenue from IT services 3,61,342 2,95,955 Other Income 1,674 900 Total Income 3,63,016 2,96,855 Operating Profit (PBIDT) 82,131 62,847 Less : Finance Cost 1,976 3,580 Less : Depreciation and amortization 6,225 5,658 Profit Before Tax (PBT) 73,929 53,608 Less: Provision for Tax 17,772 13,132 Profit After Tax (PAT) 56,157 40,476 Add : Balance brought forward from previous year 82,924 77,058 Balance available for disposal which Directors appropriate as follows : 1,39,081 1,17,534 Interim Dividend 30,315 25,478 Tax on Dividend 4,918 4,133 Transfer to General Reserve 6,000 5,000 Balance to be carried forward 97,848 82,924 PERFORMANCE OF THE COMPANY During the year, with a view to accelerate growth in IT services space, the Company has reorganized its business into three clusters, in form of Services Cluster (comprising Banking, Financial Services and Insurance, Media & Entertainment and Travel & Logistics) and Industrials Cluster comprising all manufacturing sectors, while Telecom relates to Product Engineering Services. The revenue contribution from North America dropped marginally from 67.6% in previous year to 65.3%, while contribution from Europe increased from 15.7% to 17.2%. The contribution from Asia Pacific was unchanged at 6.2% (previous year 6.2%), domestic business contributed 5.8% (previous year 5.9%) & and rest of the world contributed 5.5% (previous year 4.6%). During F.Y. 2012-13, the Company grew its revenue by 22.1% and PAT by 38.7%. In terms of Business Segments for F.Y. 2012-13, the contribution from Services was 43.1% (previous year 42.7%), while Industrials was 45.3% (previous year 45.3%) and Telecom 11.6% (previous year 12.0%). INDUSTRY SCENARIO AND BUSINESS OUTLOOK Outlook for FY’14 for IT Services Industry is positive. IT services spending in North America & Europe which was subdued in FY’ 13 is expected to pick up. IT market in Emerging geographies – EMEA and Asia Pacific – is also expected to grow at higher rate. These projections augur well for IT Services Industry in general. Technology trends show that Social Media, Mobility, Analytics and Cloud (SMAC) will continue to garner attention across all Verticals. According to Nasscom, IT exports from India are expected to grow at 12-14% during FY’14, faster than the revised 10.9% growth it predicted for FY’13. Since the base of the Indian IT sector is now almost twice the size it was five years ago, revenue growth would not be as high as it used to be. However, the Industry also faces key issues such as increasing protectionist measures by developed economies, exchange rate volatility, etc. PROPOSED TRANSFER OF PRODUCT ENGINEERING SERVICES BUSINESS UNIT Product Engineering Services Business Unit (‘PES BU’) of the Company has been serving the Telecom/Entertainment Original Equipment Manufacturer (OEM) and Semiconductor markets with several unique and cutting edge offerings. As the addressable market and the decision makers at customers’ end for the offerings of PES BU and Integrated Engineering Services (‘IES’), a Strategic Business Unit (‘SBU’) of the parent Company are same, to derive maximum synergies, the Board of Directors subject to the receipt of approvals, consents, permissions as may be necessary from the appropriate authorities including approval from the parent Company’s Board, have given their in principle approval for the transfer of the Company’s PES Business Unit by way of slump sale to L&T Technology Services Limited, a wholly owned subsidiary of Larsen & Toubro Limited.
Transcript

S-622

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

DIRECTORS’ REPORT

The Directors have pleasure in presenting the Seventeenth Annual Report and Financial Statements of Larsen & Toubro Infotech Limited for the year ended March 31, 2013.

FINANCIAL RESULTS v Lakhs.

2012-13 2011-12

Revenue from IT services 3,61,342 2,95,955

Other Income 1,674 900

Total Income 3,63,016 2,96,855

Operating Profit (PBIDT) 82,131 62,847

Less : Finance Cost 1,976 3,580

Less : Depreciation and amortization 6,225 5,658

Profit Before Tax (PBT) 73,929 53,608

Less: Provision for Tax 17,772 13,132

Profit After Tax (PAT) 56,157 40,476

Add : Balance brought forward from previous year 82,924 77,058

Balance available for disposal which Directors appropriate as follows : 1,39,081 1,17,534

Interim Dividend 30,315 25,478

Tax on Dividend 4,918 4,133

Transfer to General Reserve 6,000 5,000

Balance to be carried forward 97,848 82,924

PERFORMANCE OF THE COMPANYDuring the year, with a view to accelerate growth in IT services space, the Company has reorganized its business into three clusters, in form of Services Cluster (comprising Banking, Financial Services and Insurance, Media & Entertainment and Travel & Logistics) and Industrials Cluster comprising all manufacturing sectors, while Telecom relates to Product Engineering Services.

The revenue contribution from North America dropped marginally from 67.6% in previous year to 65.3%, while contribution from Europe increased from 15.7% to 17.2%. The contribution from Asia Pacific was unchanged at 6.2% (previous year 6.2%), domestic business contributed 5.8% (previous year 5.9%) & and rest of the world contributed 5.5% (previous year 4.6%).

During F.Y. 2012-13, the Company grew its revenue by 22.1% and PAT by 38.7%. In terms of Business Segments for F.Y. 2012-13, the contribution from Services was 43.1% (previous year 42.7%), while Industrials was 45.3% (previous year 45.3%) and Telecom 11.6% (previous year 12.0%).

INDUSTRY SCENARIO AND BUSINESS OUTLOOKOutlook for FY’14 for IT Services Industry is positive. IT services spending in North America & Europe which was subdued in FY’ 13 is expected to pick up. IT market in Emerging geographies – EMEA and Asia Pacific – is also expected to grow at higher rate. These projections augur well for IT Services Industry in general.

Technology trends show that Social Media, Mobility, Analytics and Cloud (SMAC) will continue to garner attention across all Verticals.

According to Nasscom, IT exports from India are expected to grow at 12-14% during FY’14, faster than the revised 10.9% growth it predicted for FY’13. Since the base of the Indian IT sector is now almost twice the size it was five years ago, revenue growth would not be as high as it used to be.

However, the Industry also faces key issues such as increasing protectionist measures by developed economies, exchange rate volatility, etc.

PROPOSED TRANSFER OF PRODUCT ENGINEERING SERVICES BUSINESS UNITProduct Engineering Services Business Unit (‘PES BU’) of the Company has been serving the Telecom/Entertainment Original Equipment Manufacturer (OEM) and Semiconductor markets with several unique and cutting edge offerings.

As the addressable market and the decision makers at customers’ end for the offerings of PES BU and Integrated Engineering Services (‘IES’), a Strategic Business Unit (‘SBU’) of the parent Company are same, to derive maximum synergies, the Board of Directors subject to the receipt of approvals, consents, permissions as may be necessary from the appropriate authorities including approval from the parent Company’s Board, have given their in principle approval for the transfer of the Company’s PES Business Unit by way of slump sale to L&T Technology Services Limited, a wholly owned subsidiary of Larsen & Toubro Limited.

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LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

CAPITAL EXPENDITUREAs at March 31, 2013, the gross fixed and intangible assets stood at v 65,662 Lakhs (previous year v 60,820 Lakhs) out of which assets amounting to v 7,460 Lakhs (previous year v 11,445 Lakhs) were added during the year.

SUBSIDIARY COMPANIESDuring the year under review, the Company with the purpose to expand its presence in South Africa and to market & leverage its existing business, has partnered with a local South African entity to form a Joint Venture (‘JV’) in the name of Larsen and Toubro Infotech South Africa Proprietary Limited with a shareholding ratio of 74.9%: 25.1% held by the Company and the local JV partner, respectively.

Besides the above stated Joint Venture, the Company has 6 subsidiaries as at March 31, 2013, namely, L&T Infotech Financial Services Technologies Inc., Larsen & Toubro Infotech Canada Limited, Larsen & Toubro Infotech GmbH, Larsen & Toubro Infotech LLC, GDA Technologies Inc. and GDA Technologies Limited, a step down subsidiary.

There has been no material change in the nature of the business of the subsidiaries.

As required under Section 212 of the Companies Act, 1956, the Audited Financial Statement, the Reports of the Board of Directors and Auditors of the subsidiaries are forming part of this Annual Report.

DIVIDENDDuring the year, the Directors have paid an interim dividend at the rate of v 94 per share (1880%) on 3,22,50,000 paid-up equity shares of v 5/- each. The dividend payment has resulted in an outflow of v 30,315 Lakhs towards dividend (previous year v 25,478 Lakhs) and v 4,918 Lakhs towards dividend distribution tax (previous year v 4,133 Lakhs) making a total outflow of v 35,233 Lakhs (previous year v 29,611 Lakhs).

The Directors do not recommend any final dividend.

TRANSFER TO RESERVESThe Company has transferred v 6,000 Lakhs out of the profits of the current year to General Reserve in accordance with the Companies (Transfer of Profit to Reserves) Rules, 1975.

PEOPLEOur focus on hiring, engaging and retaining key talent continued this year. We continue to align talent engagement, competency development, role and career progression, benchmarked compensation and benefits for our employees worldwide. This has helped the Company to attract and retain the best talent across the globe as well as build a pipeline of leaders to meet its future requirements.

The Company has been successful in building a performance oriented culture with high levels of engagement and empowerment in an environment of teamwork.

Our intent to make a difference in the lives of the less fortunate also bore fruit this year. Our Corporate Social Responsibility (CSR) initiative- “1Step” picked up momentum, with expansive CSR efforts at each location and partnerships with several Non-Government Organizations (NGOs) in an integrative framework.

Organizational values have always been pivotal to our growth and success. The Values Integration Program helped us relate our seven values to real life situations and strengthened our collective belief in them.

As being part of a high performance community worldwide, we place a high premium on an enhanced workplace leading to improved customer and community outcomes. As part of this, an organization wide Diversity and Inclusion initiative under the brand name: FUSION – Fostering Understanding, Sensitivity & InclusiON – was unveiled. FUSION aims to reinforce our values with diversity integrated into our business processes and is being driven with inspired goals.

INFRASTRUCTUREDuring the year, the Company has added 800 seats at various locations in India including a proximity development center at Hyderabad with 50 seats.

The Company also opened a development and training center with capacity of 90 seats at Johannesburg, South Africa, to impart IT skills to South African youth.

BRANDINGYour Company’s Brand has been growing steadily across the globe, riding on the continually increasing visibility of the Company in new geographies. Your Company’s efforts to contribute value to its global clients and making them more successful, more cost-effective and more agile, have also strengthened the ‘L&T Infotech’ Brand. The overall brand recall and brand experience amongst our stakeholders is being continuously enhanced. This is due to the fact that our clients commend us because we demonstrate passion to go the extra mile for them. They also perceive us as a ‘trusted partner’ rather than a mere supplier.

Your Company has recently adopted the following 3-pronged value proposition to take its engagements with clients to the next level and thereby infusing new energy in the Company Brand:

1. Business-to-IT Connect: One notion of how IT drives business value; IT solutions designed with an appreciation of the business domain.

2. Engage the Future: A Point of View around technologies that have the potential to disrupt traditional business and personal behavior. Articulation of IT Services based on such a Point of View.

3. Execution Excellence: Flawless, world-class and consistent execution.

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LARSEN & TOUBRO INFOTECH LIMITED

QUALITY INITIATIVESYour Company is working on a philosophy to make Quality as a differentiator in the market. Continuing the trend from previous years, this year too, the Company has made its presence felt in several prestigious Quality forums. Quality professionals from the Company have been invited for panel member discussion at QAI Global’s High Maturity Best Practices forum and also by ISRO for sharing their Quality enhancing best practices. One of the white papers written by the Quality Group was selected for presentation at QAI Global’s High Maturity Best Practices forum.

The Company has successfully undergone a combined external audit for four ISO standard certifications, namely ISO9001:2008, ISO27001:2005, ISO14001:2004 & ISO20000-1:2011 conducted by Bureau Veritas, ISO9001:2008 & ISO27001:2005 being recertification audits. The Company was the first to implement combined audits for the ISO suite of certifications and has now reached into its third successful year.

In another significant achievement, the Company successfully completed third party audit for ISAE 3402 standard for some clients of Insurance and BFS Business Units.

The Company has now embarked upon journey for the renewal of CMMI v1.3 DEV certification. The Company is also working on adopting practices of the CMMI SVC framework which addressees the IT Support and maintenance projects.

AWARDS/RECOGNITIONS1. Your Company was ranked 8th in NASSCOM’s IT service providers list for F.Y. 2011-12.

2. Your Company was featured for the fifth consecutive time by Gartner Inc., a leading analyst’s as ‘magic quadrant’ for SAP service providers in North America where your Company was positioned in the ‘Challengers’ quadrant. Your Company’s leading position in the Enterprise Resource Planning (ERP) space was also affirmed by another leading analyst (Forrester) who positioned your Company as a ‘leading expert in ERP.’

3. Your Company was ranked 48th by a leading analyst (IDC) in their FinTech 100 rankings for Banking, Financial Services & Insurance (BFSI) service providers. This is notable because a majority of service providers ranked in the list operate solely in the BFSI space. In another leading analyst’s (Everest Group) premium service provider ranking, the PEAK matrix, your Company was positioned as ‘Major Contenders’ in 3 key areas: Retail Banking, Capital Markets and Insurance. In the Retail Banking space, the same report ranks your Company as ‘Star Performer’ a distinction given to only 4 of the 22 service providers featured in the evaluation.

4. One of the leading thrust areas amongst IT Service providers worldwide is the SMAC suite of disruptive technologies covering Social, Mobile, Analytics and Cloud. Your Company’s SMAC capabilities have been recognized by NASSCOM in their research report on Cloud and by leading industry analyst, Mr. R ‘Ray’ Wang in his report on emerging business models. Mr. Wang specifically mentions BSocial, your Company’s Big data-based Social analytics platform and also favorably describes your Company’s Enterprise Mobility capabilities in the report.

5. Your Company was awarded as the 6th BEST Learning and Development Company in India in the World HRD & Education Congress’s CLO Awards for excellence in Learning & Development 2012. This is a clear outcome of supporting and strengthening learning and skill enhancement programs as well as core leadership development programs.

EMPLOYEE STOCK OPTION SCHEMES(I) Employee Stock Ownership Scheme (‘ESOS Plan’)

The Company had instituted the Employee Stock Ownership Scheme (ESOS) in April 2001. The total options outstanding under various series of the scheme as on March 31, 2013, amounted to 25,48,200. During the year no options were granted while 24,756 options lapsed.

(II) Employees Stock Ownership Scheme – 2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’)

The Company had instituted the Employees Stock Ownership Scheme –2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’) for the employees and Directors of its subsidiary, GDA Technologies Inc, USA. Under the said plan, options granted and outstanding as at the end of the year stood at 90,100 options. Under the said plan, options granted and outstanding as at the end of the year are 90,100 options, all vested.

DEPOSITSDuring the period under review, the Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

AUDITORS’ REPORTThe Auditors’ Report to the Shareholders does not contain any qualification. The notes to the accounts referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further comments of Directors.

DISCLOSURE OF PARTICULARSInformation as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given in Annexure A forming part of this report.

PERSONNELThe Board of Directors wishes to express its appreciation to all the employees of the Company for their outstanding contribution to the operations of the Company during the year.

In terms of provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended the names and other particulars of employees are set out in the Annexure B to this report and forms part of this report. None of the employees listed in the said Annexure is related to any Director of your Company.

The Ministry of Corporate Affairs has amended the Companies (Particulars of Employees) Rules, 1975 (“Rules”) on March 24, 2004, to the effect that the particulars of the employees of the Companies engaged in Information Technology Sector, posted and working outside India, not being

S-625

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

Directors or their relatives, need not be included in the statement. The Ministry of Company Affairs has further vide notification dated March 31, 2011,amended the Rules thereby enhancing the limits from v 24 lakh per year or v 2 lakh per month to v 60 lakh per year or v 5 lakh per month, respectively.

Accordingly, the statement included in this report does not contain the particulars of employees who are posted and working outside India and includes only those employees drawing the specified amended limits.

DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 (“Act”), the Directors hereby confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2013 and of the profit or loss of the Company for the year ended March 31, 2013;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts on a going concern basis; and

(v) that proper systems are in place to ensure compliance of all laws applicable to the Company.

DIRECTORSDuring the period under review, the following appointments were made on the Board:

1. Dr. Keshab Panda was appointed as a Non-Executive Director with effect from September 13, 2012.

2. Dr. Mukesh Aghi was appointed as Chief Executive (Services) and Whole time Director with effect from September 13, 2012 upto September 12, 2017.

3. Mr. Vivek Chopra as Chief Executive (Industrials) and Whole time Director with effect from September 13, 2012 upto September 12, 2017.

4. Mr. R. Shankar Raman was appointed as a Non-Executive Director with effect from May 3, 2013.

As the above Directors were appointed as additional Directors on the Board under Section 260 of the Companies Act, 1956, their term of office is till the date of the ensuing Annual General Meeting. The Company has received a notice under Section 257 of the Act, proposing the above said appointments.

During the year, Mr. V. K. Magapu’s term of office as Manager ceased on September 30, 2012 and he was appointed as Managing Director with effect from October 1, 2012, for a term of one year.

Mr. Y. M. Deosthalee and Mr. Samir Desai retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting of the Company.

The notice convening the Annual General Meeting includes the proposal for appointment/re-appointments.

STATUTORY AUDITORSM/s. Sharp & Tannan, Chartered Accountants, who are Statutory Auditors of the Company retire at the ensuing Annual General Meeting. A certificate from them has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. The Board recommends their re-appointment.

CORPORATE GOVERNANCE REPORTA report on Corporate Governance is separately annexed to this Report as Annexure C.

In addition to the applicable provisions of the Companies Act,1956, the Company is also complying with major clauses of the Corporate Governance Voluntary Guidelines. The Company has reported in Corporate Governance Report, the extent of compliance of the Corporate Governance Voluntary Guidelines.

ACKNOWLEDGEMENTSThe Directors thank the Company’s employees, customers, vendors and academic institutions for their support to the Company. The Directors also acknowledge the support and co-operation from the Government of India and the Governments of various countries, the concerned State Governments and other Government Departments and Governmental Agencies. The Directors appreciate and value the contributions made by every member of the L&T Infotech family globally.

For and on behalf of the Board

V. K. MAGAPU K. R. L. NARASIMHAM Managing Director Whole-time Director

Place : MumbaiDate: May 3, 2013

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LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

ANNEXURE – A

INFORMATION AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS’ REPORT FOR THE YEAR ENDED MARCH 31, 2013.

A. Conservation of energy The Company’s operations are not energy-intensive. However, measures have been taken to reduce energy consumption, such as installation of express feeder to ensure uninterrupted power supply and thereby avoiding need for use of DG sets, ensuring appropriate lower load during non-peak hours.

B. Technology absorption

Efforts made in technology absorption as per Form B of the Annexure

Details furnished in Form B.

C. Foreign exchange earnings and outgo

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

(b) Total foreign exchange earned and used

The Company exports IT professional services mainly to North America, Europe, South Africa, Middle East, Japan, Korea, Australia and Singapore.

(v Lakhs)

2012-13 2011-12Foreign Exchange Earned 340,375 278,925Foreign Exchange Used 149,492 119,520

FORM B

(Disclosure of particulars with respect to Technology Absorption)

Research and Development (R & D)

1. Specific areas in which R & D carried out by the Company

} Not Applicable

2. Benefits derived as a result of the above R & D

3. Future plan of action

4. Expenditure on R & D

a) Capital

b) Recurring

c) Total

d) Total R&D expenditure as a percentage of total turnover

Technology absorption, adaptation and innovation

1. Efforts in brief made towards technology absorption, adaptation and innovation

: The Company operates Centres of Excellence in respect of emerging and existing technologies which collate, disseminate and spread knowledge to all employees in the Company. Employees are trained using state of the art methodologies, which results in better productivity. The Company has created a software component library to ensure reusability of software and consistency in implementation. These find particular use in B2B marketplace implementations where adherence to standards and compatibility with different platforms is very important.

2. Benefits derived as a result of the above efforts : Repeat business, expansion into various new technology domains and productivity improvements through use of latest software tools.

For and on behalf of the Board

V. K. MAGAPU K. R. L. NARASIMHAM Managing Director Whole-time Director

Place : MumbaiDate: May 3, 2013

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LARSEN & TOUBRO INFOTECH LIMITED

ANNEXURE C

CORPORATE GOVERNANCE REPORT

Your Company derives its values from the rich legacy of fair and transparent governance and disclosure practices followed by the L&T group. In line with the group philosophy, the Company constantly endeavors to benchmark itself with the best practices in the IT-industry. By combining ethical values with business acumen, globalization with national interests and core business with emerging business, the Company aims to be amongst the largest and most respected global organizations. The Company will continue to focus its resources, strengths and strategies to achieve its vision of becoming a truly global leader in software services, while upholding the core values of excellence, integrity, responsibility, unity and understanding, which are fundamental to the L&T group.

BOARD OF DIRECTORSAs on March 31, 2013, the Board comprises of 10 Directors, of which, 4 Directors are Executive, 3 are Non-Executive and 3 are Independent Directors. The Board is chaired by Mr. A. M. Naik as Non-Executive Chairman. The Board meets at least, four times during the financial year, mostly at quarterly intervals inter-alia to review quarterly financial statements and other items on the agenda. Additional meetings are held, if deemed necessary to conduct the business.

During the financial year 2012-13, the Board met 5 times on April 26, 2012, July 21, 2012, September 13, 2012, October 20, 2012 & January 21, 2013. All meetings were well attended.

The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of directorships held by them in other companies is given herein below. Other directorships do not include alternate directorships, directorships of private limited companies, Section 25 companies and of companies incorporated outside India. The composition of the Board, the other directorships of the Board members and their attendance at the Board Meetings held during the year is as follows:

Name of Director Nature of Directorship Directorships in other Companies Attendance at Board MeetingsMr. A. M. Naik Non-Executive Chairman 3 5Mr. V. K. Magapu Managing Director 1 5Mr. Y. M. Deosthalee Non-Executive Director 9 3Mr. K. R. L. Narasimham Executive Director 1 4Mr. S T. Desai 1 Independent Director Nil 5Dr. S. R. Iyer Independent Director 5 5Mr. M. M. Chitale Independent Director 10 3Dr. Keshab Panda2 Non-Executive Director 2 2Dr. Mukesh Aghi2 Executive Director 1 2Mr. Vivek Chopra2 Executive Director Nil 2

1 In addition to attending 4 meetings in person, he participated in one meeting over teleconference.2 Dr. Keshab Panda, Dr. Mukesh Aghi and Mr. Vivek Chopra were appointed on the Board with effect from September 13, 2012.

BOARD COMMITTEESThe Board currently has 2 Committees: 1) Audit Committee, 2) Compensation and Nomination Committee. The Board is responsible for constituting, assigning and co-opting the members of the Committees.

AUDIT COMMITTEEAudit Committee comprises of Mr. Y. M. Deosthalee as its Chairman and Mr. M. M. Chitale and Mr. S. T. Desai as other committee members of which majority are Independent Directors of the Company. The role, terms of reference, the authority and power of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

The role of the Audit Committee inter-alia includes the following:

• Overseeing the Company’s financial reporting process and the disclosure of its financial information.

• Reviewing the Quarterly, Half yearly and the Annual financial statements before they are submitted to the Board of Directors.

• Recommending the appointment of the Statutory Auditors and fixation of their remuneration.

• Reviewing and discussing with the Statutory Auditors and the Internal Auditor about internal control systems.

• Reviewing the adequacy and independence of the Internal Audit function, and observations of the Internal Auditor.

• Reviewing major accounting policies and practices and adoption of applicable Accounting Standards.

• Reviewing major accounting entries, if any, involving exercise of judgment by the management.

During the year, the Audit committee met four times on April 26, 2012, July 21, 2012, October 20, 2012 & January 18, 2013 and in all meetings the necessary quorum was present.

COMPENSATION AND NOMINATION COMMITTEECompensation and Nomination Committee (“C&N Committee”) comprises of Mr. A. M. Naik, Mr. V. K. Magapu & Mr. Y. M. Deosthalee as Committee members, of which, majority are Non-Executive Directors of the Company. The terms of reference of C&N Committee are as follow:• to review, assess and recommend to the Board the appointment of Executive and Non-Executive Directors.• to review, assess and approve the appointment or promotion of senior managerial personnel and approve their compensation packages.• to consider and approve Employee Stock Option Schemes and to administer and supervise the same.

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REMUNERATION OF DIRECTORSThe remuneration policy of the Directors is decided by the Board on the recommendation of Compensation & Nomination Committee (“C&N Committee”) which takes into account the Company’s size, global presence, its economic and financial position, compensation paid by peer companies, the qualification of the appointee(s), his/their experience, past performance and other relevant factors.

Mr. V. K. Magapu, the Managing Director does not receive any remuneration.

Mr. K. R. L. Narasimham, an Executive Director, being an employee of L&T receives remuneration from the parent Company.

During the year, Dr. Mukesh Aghi and Mr. Vivek Chopra, were the only Executive Directors, who received remuneration and an appropriate disclosure of the same is mentioned under the Note no. AA (iv) of the Notes to the Accounts.

The Board of Directors has approved the payment of Commission for the F.Y. 2012-13 amounting to USD 50,000 per annum (including sitting fees) and v 8.25 lakhs per annum to Mr. S. T. Desai and Dr. S. Rama Iyer, respectively, the Independent Directors of the Company and the same is within the limit of 1% of the net profits for the year, calculated as per the provisions of the Companies Act, 1956 and as per shareholders resolution dated February 6, 2012.

The independent Directors are entitled to the sitting fees for attending the meetings of the Board and Committee meetings.

INFORMATION TO DIRECTORSSystems, procedures and resources are in place to ensure that every Director is supplied, in a timely manner, with precise and concise information in a form and of a quality appropriate to effectively enable/ discharge his/her duties. The Directors are given time to study the data and contribute effectively to the Board discussions. The Non-Executive Directors through their interactions and deliberations give suggestions for improving overall effectiveness of the Board and its Committees.

ANNUAL GENERAL MEETINGSThe details of last three Annual General Meetings of the Company are as under:

For the Financial Year Ended Venue of AGM Date

2011-12 L&T House, Ballard Estate, Mumbai – 400 001. August 23, 2012

2010-11 L&T House, Ballard Estate, Mumbai – 400 001. August 19, 2011

2009-10 L&T House, Ballard Estate, Mumbai – 400 001. August 26, 2010

COMPLIANCE MONITORING SYSTEMThe Company believes that statutory compliance has become a catalyst for Corporate Governance and that a good statutory compliance system has become vital for effective conduct of business operations. As a major portion of the Company’s business is conducted abroad, apart from ensuring compliance with Indian statutes, the Company also has to comply with the statutes of the countries where the Company has presence.

Keeping this in mind, the Company has voluntarily instituted a Compliance Monitoring System. Under this system, a certificate is presented to the Board every quarter, confirming that the Company has complied with all relevant provisions and requirements of various statutes as they are applicable to the business of the Company in India and abroad as well as with the contractual obligations binding on the Company. The certificate to the Board is based on back to back certificates received from various compliance owners representing Business Clusters, Overseas Branches, Subsidiary Companies and other support functions.

As regards to the services availed from the professional service providers engaged in various countries, the Company follows a practice of obtaining compliance certificates from them on quarterly basis.

The Compliance Monitoring system which was rolled out by the Company during financial year 2009-10 in form of the Compliance Portal is being extensively used by all the Compliance owners. The Compliance portal provides the users a web–based access with access controls based on a defined authorization matrix. Besides connecting all the compliance owners across time zones to a common platform, the portal is expected to serve as a repository of the compliance exercise yielding substantial saving in resources and efforts for tracking compliance going forward.

CONTROLS/RISK MANAGEMENTAn in-house internal audit department provides internal audit services to the Company for reviewing the internal control process at regular intervals.

Further with a view to enhance the operational efficiency, a separate cell named as “Contracts, Risk and Management Audit” has been established. This cell drives the risk management process across the Company.

SECRETARIAL AUDITThe Secretarial Audit, at regular intervals, is conducted by the Corporate Secretarial Department of Larsen & Toubro Limited, the parent Company, which has competent professionals to carry out such audit. The scope of the audit is to confirm the compliance of applicable provisions of the Companies Act, 1956 and all regulations and guidelines applicable to the Company.

For and on behalf of the Board

V. K. MAGAPU K. R. L. NARASIMHAMManaging Director Whole-time Director

Place: MumbaiDate: May 3, 2013

S-629

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF LARSEN & TOUBRO INFOTECH LIMITEDReport on the financial statements

We have audited the accompanying financial statements of LARSEN & TOUBRO INFOTECH LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2013 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure, statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; and

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the board of directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

SHARP & TANNAN Chartered Accountants

Firm’s registration no. 109982WBy the hand of

R. D. KAREPlace : Mumbai PartnerDate : May 3, 2013 Membership No. 08820

S-630

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

ANNEXTURE TO THE AUDITORS’ REPORT(Referred to in paragraph 1 of our report of even date)

1 (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets.

(b) We are informed that the Company has formulated a program of physical verification of all the fixed assets over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the physical verification of the fixed assets has been carried out by the management during the year and no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year are not substantial in relation to the Company and do not affect the going concern status of the Company.

2 The Company has no inventories and hence reporting under paragraphs 4(ii) (a), (b) and (c) is not applicable.

3 We are informed by management that there are no companies, firms or other parties that are required to be listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (b) to (g) of the Order are not applicable.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5 We are informed by management that there are no companies, firms or other parties that are required to be listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(v) (a) and (b) of the Order are not applicable.

6 The Company has not accepted any deposits in terms of provisions of Section 58A and 58AA of the Companies Act, 1956.

7 We are of the opinion that the Company has an Internal Audit System commensurate with the size and the nature of its business.

8 We are informed by management that the Company is not required to maintain cost accounts and records under Section 209(1) (d) of the Companies Act, 1956.

9 a) According to the information and explanations given to us and as per the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, custom duty and other material statutory dues as applicable with the appropriate authorities. According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, investor education and protection fund, income tax, sales tax, wealth tax, custom duty and other statutory dues outstanding as at March 31, 2013 for a period of more than six months from the date they became payable. We were informed by management that there is no dues payable under the Employees State Insurance Act.

(b) According to the information and explanations given to us and according to the records of the Company, there are no dues of sales tax, income tax, custom duty, wealth tax, and excise duty that have not been deposited with the appropriate authorities on account of any dispute except as follows:

Name of the statute Nature of the disputed dues

Amount (v)* Period to which the amount relates

Forum where disputes are pending

Central Sales Tax Act and Local Sales Tax Act

Sales tax on export sales, business rights, interest and penalty

11,664,192 2002-03 Deputy Commissioner (Appeals)

Income Tax Act, 1961 Penalty u/s 271(1)(c) 26,814,585 2002-03 Commissioner (Appeals)

*Net of pre-deposit paid in getting the stay/appeal admitted

10 The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current financial year or in the immediately preceding financial year.

11 According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holder as at the Balance Sheet date.

12 The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14 The Company is not dealing in shares, securities, debentures and other investments.

15 According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16 In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has applied term loans for the purpose for which the loans were obtained.

17 According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investments.

S-631

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

18 The Company has not made any preferential allotment of shares during the year.

19 The Company did not have any outstanding secured debentures during the year. Accordingly, no securities have been created.

20 The Company has not raised any money by public issue during the year.

21 During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by management.

SHARP & TANNAN Chartered Accountants

Firm’s registration no. 109982WBy the hand of

R. D. KAREPlace : Mumbai PartnerDate : May 3, 2013 Membership No. 08820

S-632

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

BALANCE SHEET AS ON MARCH 31, 2013 As at 31.03.2013 As at 31.03.2012

Note No. v v v v

EQUITY AND LIABILITIESShareholders’ funds Share capital B 161,250,000 161,250,000 Reserves and surplus C 12,184,561,468 10,116,055,789

Total Equity 12,345,811,468 10,277,305,789Non-current liabilities Long-term borrowings D 361,900,000 452,222,222 Other long term liabilities E(ii) 1,256,884,630 2,022,188,622

1,618,784,630 2,474,410,844Current liabilities Short-term borrowings D 1,703,565,619 2,033,365,278 Trade payables E(i) 1,899,199,296 1,735,109,198 Other current liabilities E(ii) 2,469,932,408 1,648,876,523 Short-term provisions F 1,877,116,200 1,655,938,743

7,949,813,523 7,073,289,742

TOTAL EQUITY AND LIABILITIES 21,914,409,621 19,825,006,375

ASSETSNon-current assetsFixed assets G Tangible assets 2,225,535,341 2,170,147,648 Intangible assets 316,138,072 301,468,677 Capital work-in-progress 462,057,582 74,327,116 Intangible assets under development 321,152,250 210,069,550

3,324,883,245 2,756,012,991Non-current investments H(i) 4,019,286,825 4,037,276,859Deferred tax assets (net) I 57,930,740 20,285,552Long-term loans and advances L 1,931,574,569 1,355,385,175

9,333,675,379 8,168,960,577Current assetsCurrent investments H(ii) 217,300,000 355,590,418Trade receivable J(i) 7,233,994,395 6,266,708,638Unbilled revenue J(ii) 1,014,018,472 821,660,321Cash and bank K 1,135,874,785 1,229,352,107Short-term loans and advances L 2,979,546,590 2,982,734,314

12,580,734,242 11,656,045,798

TOTAL ASSETS 21,914,409,621 19,825,006,375

COMMITMENTS (CAPITAL AND OTHERS) XCONTINGENT LIABILITIES RSIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A-AD

As per our report attached For and on behalf of the Board

SHARP & TANNANChartered Accountants Firm’s Registration No. 109982W by the hand of

R. D. KARE Partner ANGNA ARORA V. K. MAGAPU K. R. L. NARASIMHAMMembership No. 08820 Company Secretary Managing Director Whole-time Director

Place : Mumbai Place : MumbaiDate : May 3, 2013 Date : May 3, 2013

S-633

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2013

2012-13 2011-12Note No. v v v v

INCOME:

Revenue from operations M 36,134,206,296 29,595,545,449

Other income N 167,351,972 89,987,657

Total income 36,301,558,268 29,685,533,106

EXPENSES:

Employee benefit expenses O(i) 21,085,734,965 17,700,804,103

Operating expenses O(ii) 2,877,759,967 2,233,789,803

Sales, administration and other expenses O(iii) 4,124,997,264 3,466,224,349

Total expenses 28,088,492,196 23,400,818,255

Operating profit 8,213,066,072 6,284,714,851

Finance cost P 197,670,525 358,026,704

Depreciation on tangible assets G 452,766,201 408,070,472

Amortisation of intangible assets G 169,700,527 157,768,312

820,137,253 923,865,488

Profit before tax 7,392,928,819 5,360,849,363

Provision for taxation :

Current tax Q 1,814,873,487 1,276,009,184

Deferred tax I (37,645,188) 37,192,016

1,777,228,299 1,313,201,200

Profit after tax 5,615,700,520 4,047,648,163

Earning Per Equity Share Z

Basic 174.13 125.51

Diluted 167.06 120.42

Face value per equity share 5.00 5.00

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A-AD

As per our report attached For and on behalf of the Board

SHARP & TANNANChartered Accountants Firm’s Registration No. 109982W by the hand of

R. D. KARE Partner ANGNA ARORA V. K. MAGAPU K. R. L. NARASIMHAMMembership No. 08820 Company Secretary Managing Director Whole-time Director

Place : Mumbai Place : MumbaiDate : May 3, 2013 Date : May 3, 2013

S-634

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 20132012-13

v2011-12

v

A. Cash flow from operating activitiesNet profit before tax 7,392,928,819 5,360,849,363Adjustments for:Depreciation and amortisation 622,466,728 565,838,784Employees stock options amortised 7,381,895 19,205,550Interest (net) 15,228,232 29,670,060Unrealised foreign exchange loss (gain) (700,132,588) (362,694,543)(Profit)/loss on sale of current investments (84,470,690) (82,423,432)Miscellaneous expenditure amortised/(capitalised) (15,868,412) 11,623,033(Profit)/loss on sale of fixed assets (2,883,676) (3,391,739)

Operating profit before working capital changes 7,234,650,308 5,538,677,076Changes in working capital(Increase)/decrease in trade receivables (1,204,557,221) (1,197,834,123)(Increase)/decrease in other receivables 419,650,220 (219,165,826)Increase/(decrease) in trade & other payables 390,031,711 160,159,108

(Increase)/decrease in working capital (394,875,290) (1,256,840,841)

Cash generated from operations 6,839,775,018 4,281,836,235Direct taxes paid (2,040,880,648) (1,032,309,349)

Net cash from operating activities 4,798,894,370 3,249,526,886

B. Cash flow from investing activitiesPurchase of fixed assets (1,244,813,997) (1,232,166,638)Sale of fixed assets 56,360,691 27,047,749(Purchase)/sale of current investments 240,751,142 797,971,779Interest received 41,692,491 47,181,581

Net cash used in investing activities (906,009,673) (359,965,529)

C. Cash flow from financing activitiesProceeds from/(repayment) of borrowings (445,380,433) 64,283,382Interest paid (56,920,723) (76,851,641)Dividend paid (3,031,500,000) (2,547,750,000)Dividend tax (452,560,863) (412,640,040)

Net cash from financing activities (3,986,362,019) (2,972,958,299)

Net increase in cash and cash equivalents (93,477,322) (83,396,942)Cash and cash equivalents at the beginning of the year 1,229,352,107 1,312,749,049

Cash and cash equivalents at the end of the year 1,135,874,785 1,229,352,107

Notes:1 Cash flow has been prepared under the indirect method as set out in the Accounting Standard - 3 issued under the Companies (Accounting

Standards) Rules, 2006.2 Purchase of fixed assets includes movements of capital work-in-progress between the beginning and end of the year.3 Cash and cash equivalents represent cash and bank balances.4 Bank balances include revaluation gain of v 40,810,667 (Previous year gain v 86,908,745)

As per our report attached For and on behalf of the Board

SHARP & TANNANChartered Accountants Firm’s Registration No. 109982W by the hand of

R. D. KARE Partner ANGNA ARORA V. K. MAGAPU K. R. L. NARASIMHAMMembership No. 08820 Company Secretary Managing Director Whole-time Director

Place : Mumbai Place : MumbaiDate : May 3, 2013 Date : May 3, 2013

S-635

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTSA. SIGNIFICANT ACCOUNTING POLICIES 1. Basis of accounting

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles (“GAAP”) and in compliance with the Accounting Standards as specified in the Companies (Accounting Standard) Rules, 2006.

The preparation of financial statements in conformity with GAAP requires the management of the Company to make estimates and assumptions that affect the income and expense reported for the period and assets and liabilities reported as of the date of the financial statements. Examples of such estimates include the useful lives of the fixed assets, provision for doubtful debts, future obligations in respect of retirement benefit plans, etc. Actual results could vary from these estimates.

2. Revenue recognition

Revenue from contracts priced on time and material basis are recognized when services are rendered and related costs are incurred.

Revenue from services performed on “fixed-price” basis is recognized using the proportionate completion method.

Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.

3. Employee benefits

a) Short term employee benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences and performance incentives are recognized in the period in which the employee renders the related service.

b) Post-employment benefits

i) Defined contribution plan:

The Company’s superannuation fund and state governed provident fund scheme are classified as defined contribution plans. The contribution paid / payable under the schemes is recognized during the period in which the employee renders the related service.

ii) Defined benefit plans:

The provident fund scheme managed by trust, employees gratuity fund scheme managed by LIC and post-retirement medical benefit scheme are the Company’s defined benefit plans. Wherever applicable, the present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash-flows. The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on government bonds as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognized immediately in the Profit and Loss Account. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognize the obligation on net basis.

Gains or losses on the curtailment or settlement of any defined benefit plan are recognized when the curtailment or settlement occurs. Past service cost is recognized as expense on a straight-line basis over the average period until the benefits become vested.

(iii) Long term employee benefits:

The obligation for long term employee benefits like long term compensation absences is recognized in the similar manner as in the case of defined benefit plans as mentioned in (b) (ii) above.

4. Fixed assets Tangible Fixed assets are stated at cost less accumulated depreciation.

Intangible Computer software developed in-house is capitalized at cost.

5. Investments Long-term investments are stated at cost, less provision for other than temporary diminution in value, if any. Current investments are

stated at the lower of cost or market value, determined on the basis of specific identification.

6. Leases Finance lease Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases.

Such assets are capitalised at the inception of the lease at the lower of the fair value and the present value of minimum lease payments

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LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

Operating lease

Assets acquired under lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

7. Depreciation

Tangible - owned assets

Depreciation on all assets is calculated using straight line method at rates prescribed by Schedule XIV to the Companies Act, 1956, except for the following:

• Plant and machinery 4.75%-20%• Computers 25%-30%• Servers 25%• Furniture and fixtures 10%• Office equipments 20%-33.33%• Motor cars 14.14%

Tangible - leased assets

Assets acquired under finance leases are depreciated at the rates applicable to similar assets owned by the Company as there is reasonable certainty that the Company shall obtain ownership of the assets at the end of the lease term.

• Leasehold land Over the residual period of the lease

Intangible assets

The basis of amortization of intangible assets is as follows:

• Computer software 33.33%• Intellectual Property Rights (IPR) 33.33%• Business Rights Over a period of five years

Depreciation / amortization on additions / disposals are calculated pro-rata from / to the month of additions / disposals.

8. Employee stock ownership schemes

In respect of stock options granted pursuant to the Company’s stock option schemes, the excess of fair value of the share over the exercise price of the option is treated as discount and accounted as employee compensation cost over the vesting period.

9. Foreign currency transactions

a) Foreign currency transactions are initially recorded at the rates prevailing on the date of the transaction. At the Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction.

Translation of foreign currency transaction of overseas branches is as under:

• Revenue items at the average rate for the period;

• Fixed assets and investments at the rates prevailing on the date of the transaction; and

• Other assets and liabilities at year end rates

Exchange difference on settlement / year end conversion is adjusted to Profit and Loss Account.

b) Forward contracts other than those entered into to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium paid / received is accounted as expense / income over the period of the contract.

Profit or loss on such forward contracts is accounted as income or expense for the period.

c) All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on unexecuted firm commitments and highly probable forecast transactions are recognised in the financial statements at fair value as on the Balance Sheet date. In pursuance of the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008 on accounting of derivatives, the Company has adopted Accounting Standard 30 for applying the test of hedge effectiveness of the outstanding derivative contracts. Accordingly, the resultant gains or losses on fair valuation of such contracts are recognised in the Profit and Loss Account or Balance Sheet as the case may be.

10. Income tax

Provision for income tax for the current year is based on the taxable profits for the year after considering tax exemptions / allowances.

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LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.) Deferred tax is recognized on timing differences between the accounting income and taxable income for the year and quantified using

the tax rates and laws enacted or substantially enacted as on the Balance Sheet date. Deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

11. Provisions, contingent liabilities and contingent assets

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) the Company has a present obligation as a result of a past event;

b) a probable outflow of resources is expected to settle the obligation; and

c) the amount of the obligation can be reliably estimated

Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) a present obligation arising from a past event when it is not probable that an outflow of resources will be required to settle the obligation; or

b) a possible obligation unless the probability of outflow of resources is remote

Contingent assets are neither recognized nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

12. Segment accounting

Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting:

i. Segment revenue includes sales and other income directly identifiable with/allocable to the segment.

ii. Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. Expenditure which relate to the Company as a whole and not allocable to segments are included under “unallocable corporate expenditure”.

iii. Income which relates to the Company as a whole and not allocable to segments is included in “unallocable corporate income”.

iv. Fixed assets used and liabilities contracted for performing the Company’s business have not been identified to any of the above reported segments as the fixed assets and services are used interchangeably among segments.

As at 31.03.2013 (v)

As at 31.03.2012 (v)

B. SHARE CAPITAL

B(i) Share capital authorized, issued, subscribed and paid up:

Authorised :

3,27,50,000 Equity shares of v 5 each 163,750,000 163,750,000

(Previous year 3,27,50,000 of v 5 each)

Issued, paid up and subscribed:

3,22,50,000 Equity shares for v 5 each 161,250,000 161,250,000

(Previous year 3,22,50,000 of v 5 each)

EQUITY SHARE CAPITAL 161,250,000 161,250,000

B(ii) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of v 5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

During the year ended March 31, 2013, the amount of interim dividend distributed to equity shareholder was v 94 per share (Previous year v 79 per share)

S-638

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)B(iii) Shareholders holding more than 5% of equity shares as at the end of the year:

Name of shareholder As at 31.03.2013 As at 31.03.2012

Number of shares Shareholding% Number of shares Shareholding%

Larsen & Toubro Limited 32,250,000 100 32,250,000 100

B(iv) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital :

Particulars As at 31.03.2013 As at 31.03.2012

Number of equity shares to be issued

as fully paid

At face value(v)

Number of equity shares to be issued as

fully paid

At face value(v)

#Employee stock options granted and outstanding under Employee Stock Ownership Scheme “ESOS Plan”

393,003 25 393,003 25

2,155,197 10 2,179,953 10

Employees Stock Ownership Scheme – 2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’)

90,100 $12 90,100 $12

# Refer note no.B(vii)

B(v) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2013 are Nil (previous period of five years ended March 31, 2012 Nil)

B(vi) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended March 31, 2013 – Nil (previous period of five years ended March 31, 2012 -Nil)

B(vii) Stock option plans

1. Employee Stock Ownership Scheme (‘ESOS Plan’)

Under the Employee Stock Ownership Scheme (ESOS), 2,548,200 options are outstanding as at March 31, 2013. The grant of options to the employees under ESOS is on the basis of their performance and other eligibility criteria. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of v 5/- each.

All vested options can be exercised on the First Exercise Date as may be determined by the Compensation Committee prior to date of IPO. The details of the grants under the aforesaid scheme are summarised below:-

ESOP Series I,II & III IV-XXI

2012-13 2011-12 2012-13 2011-12

1 Grant Price (v) 25 25 10 10

2 Options granted and outstanding at the beginning of the year

393003 393003 2179953 2203092

3 Options granted during the year 0 0 0 0

4 Options cancelled/ lapsed during the year 0 0 24756 23139

5 Options exercised and shares allotted during the year

0 0 0 0

6 Options granted and outstanding at the end of the year

393003 393003 2155197 2179953

of which -

Options vested 393003 393003 970917 970917

Options yet to vest 0 0 1184280 1209036

2. Employees Stock Ownership Scheme – 2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’)

The Company had instituted the Employees Stock Ownership Scheme – 2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’) for the employees and Directors of its subsidiary, GDA Technologies, Inc, USA. The grant of options to the employees under this Sub-Plan is on the basis of their performance and other eligibility criteria. The term of option shall be 5 years from the date of grant. The options are vested over a period of five years, subject to fulfilment of certain conditions specified in the respective Option agreement. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of v 5/- each at an exercise price of USD 12 per share. Under the said plan, options granted and outstanding as at the end of the year are 90,100 options, all vested.

3. Employees Stock Options granted and outstanding as at the end of the year on unissued share capital represent options 2,638,300 (previous year 2,663,056).

S-639

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)

As at 31.03.2013 As at 31.03.2012

(v) (v) (v) (v)

C. RESERVES & SURPLUS

C(i) General reserve

As per last Balance Sheet 2,976,779,130 2,476,779,130

Add : Transferred from Profit and Loss Account 600,000,000 500,000,000

3,576,779,130 2,976,779,130

C(ii) Hedge reserve

Opening balance (2,663,105,390) (658,420,065)

Deduction/(addition) during the year (net) (31,276,492) (2,004,685,325)

(2,694,381,882) (2,663,105,390)

C(iii)Security premium reserve 1,181,240,000 1,181,240,000

C(iv)Profit and loss account

Opening balance 8,292,389,022 7,705,812,341

Add: Profit for the year 5,615,700,520 4,047,648,163

13,908,089,542 11,753,460,504

Less: Appropriation

(a) General reserve 600,000,000 500,000,000

(b) Interim dividend 3,031,500,000 2,547,750,000

(c) Tax on dividend 491,800,244 413,321,482

Balance to be carried forward 9,784,789,298 8,292,389,022

C(v) Employee stock options outstanding

As per last Balance Sheet 338,740,869 339,070,869

Less : deductions during the year 330,000 330,000

338,410,869 338,740,869

C(vi)Deferred employee compensation expense

As per last Balance Sheet (9,987,842) (29,523,392)

Less : deductions during the year 7,711,895 19,535,550

(2,275,947) (9,987,842)

TOTAL 12,184,561,468 10,116,055,789

D. BORROWINGS

As at 31.03.2013 As at 31.03.2012

Non–current Current Total Non–current Current Total

D(i) Secured loans*

Term loans from bank (Refer note D(iii)) 361,900,000 120,633,333 482,533,333 452,222,222 56,527,778 508,750,000

Other loans from banks – 828,657,286 828,657,286 – 1,232,712,500 1,232,712,500

361,900,000 949,290,619 1,311,190,619 452,222,222 1,289,240,278 1,741,462,500

D(ii) Unsecured loans

Loans from banks – 754,275,000 754,275,000 – 744,125,000 744,125,000

– 754,275,000 754,275,000 – 744,125,000 744,125,000

Total 361,900,000 1,703,565,619 2,065,465,619 452,222,222 2,033,365,278 2,485,587,500

*The secured loans from banks are secured against hypothecation of the Company’s movable assets and accounts receivables.

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LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)D(iii) Details of term loans

Nature of term loan v Rate of interest Terms of repayment of term loan

External commercial borrowings (ECB) 482,533,333

(508,750,000)USD LIBOR (3 months) + predetermined margin

Repayable in equal half-yearly instalments of USD 1.11 million each commencing from 19/10/2012 and ending on 14/10/2016.

(v)

As at 31.03.2013 As at 31.03.2012

Non-Current Current Total Non-Current Current Total

E. LIABILITIES

E(i) Trade payables

Due to holding company – 583,194,320 583,194,320 – 358,642,600 358,642,600

Due to others – 1,316,004,976 1,316,004,976 – 1,376,466,598 1,376,466,598

– 1,899,199,296 1,899,199,296 – 1,735,109,198 1,735,109,198

E(ii) Other payables

Loss on derivative contracts 1,170,198,813 1,642,215,508 2,812,414,321 1,955,482,338 985,594,352 2,941,076,690

Other payables 86,685,817 827,716,900 914,402,717 66,706,284 663,282,171 729,988,455

1,256,884,630 2,469,932,408 3,726,817,038 2,022,188,622 1,648,876,523 3,671,065,145

As at31.03.2013

(v)

As at31.03.2012

(v)

F. PROVISIONS

F(i) Provisions for employee benefits

Gratuity 88,007,811 140,684,258

Compensated absences 330,370,873 267,130,093

Post retirement medical benefits 90,811,071 42,186,909

Provision for Interest rate Guarantee (PF) 3,608,879 9,146,931

Others 1,353,617,566 1,186,090,552

1,866,416,200 1,645,238,743

F(ii) Other provisions 10,700,000 10,700,000

TOTAL 1,877,116,200 1,655,938,743

F(iii) “Provisions, contingent liabilities and contingent assets” as per Accounting Standard 29

Movement in provisions:

Sr.No Particulars Class of Provisions

Sales Tax Others Total

1 Balance as at 1-4-2012 4,000,000 6,700,000 10,700,000

2 Additional provision during the year – – –

3 Provision used during the year – – –

4 Provision reversed during the year – – –

5 Balance as at 31-03-2013 4,000,000 6,700,000 10,700,000

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LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.) Nature of provisions:

i) Provision for sales tax pertains to claim made by the authorities on certain transaction of capital nature for the year 2002-03.

ii) Provision for others represents liabilities relating to matters in dispute.

G. FIXED ASSETS

Gross Block Depreciation/Amortisation Net Block

Tangible and Intangible Assets

As at 01.04.2012

Additions

Deductions

As at 31.03.2013

As at 01.04.2012

For the year

OnDeductions

As at 31.03.2013

As at 31.03.2013

As at 31.03.2012

Tangible Assets - Own

Leasehold Land 12,268,579 – – 12,268,579 2,245,088 128,820 – 2,373,908 9,894,671 10,023,491

Buildings 362,071,625 20,272,015 8,347,504 373,996,136 68,259,762 12,443,642 681,761 80,021,643 293,974,493 293,811,863

Plant and machinery 644,608,985 49,871,922 28,481,852 665,999,055 177,479,354 39,428,388 15,692,101 201,215,641 464,783,414 467,129,631

Computers

a. Owned 1,735,869,509 225,580,574 43,023,908 1,918,426,175 1,301,963,548 196,309,934 41,114,167 1,457,159,315 461,266,860 433,905,961

b. Leased 23,630,040 – – 23,630,040 23,630,040 – – 23,630,040 – –

Office Equipments 651,232,422 76,184,460 12,330,493 715,086,389 439,497,509 70,660,055 10,288,836 499,868,728 215,217,661 211,734,913

Furniture and fixtures 962,271,607 72,277,968 79,750,423 954,799,152 433,342,908 89,053,343 65,091,065 457,305,186 497,493,966 528,928,699

Vehicles 270,251,307 117,443,970 19,961,076 367,734,201 45,638,217 44,742,019 5,550,311 84,829,925 282,904,276 224,613,090

Capital Work in Progress – – – – – – – – 462,057,584 74,327,116

Total of Tangible Assets 4,662,204,074 561,630,909 191,895,256 5,031,939,727 2,492,056,426 452,766,201 138,418,241 2,806,404,386 2,687,592,925 2,244,474,764

Total of Tangible Assets (Previous Year) 3,774,160,366 939,117,678 51,073,970 4,662,204,074 2,111,403,914 408,070,472 27,417,960 2,492,056,426 2,244,474,764 1,745,593,738

Intangible Assets

Software 1,321,721,976 184,369,922 69,896,702 1,436,195,196 1,020,253,299 169,700,527 69,896,702 1,120,057,124 316,138,072 301,468,677

Business Rights 98,050,000 – – 98,050,000 98,050,000 – – 98,050,000 – –

Intangible assets under development – – – – – – – – 321,152,250 210,069,550

Total of intangible Assets 1,419,771,976 184,369,922 69,896,702 1,534,245,196 1,118,303,299 169,700,527 69,896,702 1,218,107,124 637,290,322 521,561,718

Total of Intangible Assets (Previous Year) 1,290,100,171 205,392,080 75,720,275 1,419,771,976 1,036,255,262 157,768,312 75,720,275 1,118,303,299 511,538,227 367,747,409

1. Impairment up to 31.03.2013 Nil

2. Additions during the year & capital work-in-progress include v 1,044,588 (previous year v 258,102) being borrowing cost capitalised in accordance with Accounting Standard (AS) 16 on “Borrowing Costs” as specified in the Companies (Accounting Standards) Rules, 2006.

H. INVESTMENTS

As at31.03.2013

(v)

As at31.03.2012

(v)

H(i) Non-current investments

Trade investments (at cost)

Long term investment in wholly owned subsidiaries

1, fully paid equity share of Euro 25,000 in Larsen & Toubro Infotech GmbH 1,140,649 1,140,649

100, fully paid equity shares of CAD 1 each in Larsen & Toubro Infotech Canada Ltd. 6,606,466 6,606,466

10 Common Stock at no par value in GDA Technologies Inc., USA 1,202,967,204 1,202,967,204

963 equity shares of v 10 each in GDA Technologies Limited 240,750 240,750

1,000,000, equity shares at no par value in L&T Infotech Financial Services Technologies Inc. 2,806,321,790 2,806,321,790

332,350, equity shares at no par value in L&T Infotech South Africa (Pty) Ltd 2,009,966 –

Non trade investments

Investments in Mutual Funds :IDFC FMP 36 Months Series 2 Dividend Payout – 20,000,000

Total non-current investments 4,019,286,825 4,037,276,859

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LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)H(ii) Current Investments

(v)

Particulars/ Scheme Name Face Value per unit

Units as at31.03.2013

Amount As at 31.03.2013

Amount As at31.03.2012

(v) (v) (v)Monthly Income Plans HDFC MIP Long Term Plan Growth 10 9,000,297L&T Monthly Income Plan Cumulative 10 2,500,000Reliance MIP Growth 10 1,500,000Total (A) 13,000,297Liquid Investments SBI Premier Liquid Fund-Super IP-DDR 1000 22,200,000Birla Sun Life Savings Fund-IP-DDR 100 50,000,000ICICI Prudential Flexible Income Plan-Premium-DDR 100 50,000,000Religare Ultra Short Term Fund-IP-DDR 1000 30,000,000L&T Ultra Short Term Fund-IP-DDR 10 5,807,773 59,000,000 50,000,000L&T Liquid Super IP DDR 1000 37,889 38,300,000Total (B) 97,300,000 202,200,000Fixed Maturity Plans L&T FMP V (February 90 Days A) Dividend Payout 10 30,000,000L&T FMP I September 24 Months Series A Growth 10 20,390,121Franklin Templeton Fixed Tenure Fund - Series XII - Plan B (3 Year Plan) Growth

10 20,000,000

Birla Sunlife Fixed Term Plan Series EM Divided Payout 10 20,000,000L&T FMP V (February 368 Days A) Dividend Payout 10 30,000,000L&T FMP V (March 367 Days A) Dividend Payout 10 20,000,000HDFC FMP 372D February 2013 (1)-Growth 10 2,000,000 20,000,000ICICI Prudential FMP Series 66 - 366 Days Plan F-Growth 10 2,000,000 20,000,000Kotak FMP Series 94 - 370 D- Growth 10 2,000,000 20,000,000L&T FMP - VII (March367D A)- Growth 10 2,000,000 20,000,000Religare FMP series XVII Plan B Growth 10 2,000,000 20,000,000IDFC FMP 36 Months Series 2 Dividend Payout 10 2,000,000 20,000,000Total (C) 120,000,000 140,390,120Total (A+B+C) 217,300,000 355,590,418Less : Diminution in value of investments – –Grant Total 217,300,000 355,590,418Market Value of Investments 218,648,716 362,099,000

I. DEFERRED TAX ASSETS(v)

Particulars Deferred tax asset/(liability) as at

31.03.2012

Current year (charge) / credit

Deferred Tax asset/ (liability)

as at 31.03.2013

Deferred tax liabilities

Depreciation / amortisation (29,260,820) 28,973,553 (287,267)

Others (2,475,665) 627,425 (1,848,240)

TOTAL (31,736,485) 29,600,978 (2,135,507)

Deferred tax assets

Provision for doubtful debts & advances 9,029,298 6,716,360 15,745,658

Provision for employee benefits 42,992,739 1,327,850 44,320,589

TOTAL 52,022,037 8,044,210 60,066,247

Net deferred tax assets/(liability) 20,285,552 37,645,188 57,930,740

S-643

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)

As at 31.03.2013 As at 31.03.2012

(v) (v)

J. TRADE RECEIVABLES AND UNBILLED REVENUE

J(i) Trade receivables

Unsecured

Debts outstanding for a period exceeding six months

Considered good 63,515,136 51,491,091

Considered doubtful 89,981,601 47,355,517

153,496,737 98,846,608

Other debts

Considered good

- Due from subsidiaries 453,427,968 82,123,278

- Due from fellow subsidiaries 28,088,131 17,186,212

- Others 6,688,963,161 6,115,908,057

Less : Provision for doubtful debts (89,981,601) (47,355,517)

TOTAL 7,233,994,395 6,266,708,638

J(ii) Unbilled revenue

Unbilled revenues comprise revenue recognised in relation to services performed in accordance with contract terms but not billed.

K. CASH AND BANK

Cash on hand 760,200 723,198

Balances with bank

in current accounts

Overseas 591,418,784 607,627,925

Domestic 18,654,386 184,191,452

in deposit accounts

Deposits with less than 12 months maturity 100,680,000 312,549,762

Deposits with more than 12 months maturity 1,125,271 –

711,878,441 1,104,369,139

Remittances in transit 423,236,144 124,259,770

TOTAL 1,135,874,785 1,229,352,107

L. LOANS AND ADVANCES

As at 31.03.2013 As at 31.03.2012

Non-Current Current Total Non-Current Current Total

(Unsecured) (v) (v) (v) (v) (v) (v)

Loans against mortgage of house property – 535,274 535,274 – 230,398 230,398

Gain on derivative contracts 823,026,127 594,632,943 1,417,659,070 479,039,575 1,025,414,841 1,504,454,416

Interest receivable – 5,141,644 5,141,644 – 12,766,912 12,766,912

Cost of long term projects – 15,868,412 15,868,412 – – –

Loans to subsidiary – 271,425,000 271,425,000 – 262,006,250 262,006,250

Deposits 207,527,933 142,862,912 350,390,845 290,288,213 35,105,952 325,394,165

Capital advances 82,190,185 – 82,190,185 12,148,009 – 12,148,009

Advance tax current year (net of provision) – 15,656,680 15,656,680 – 14,417,131 –

Advances recoverable in cash or in kind 818,830,324 1,933,423,725 2,752,254,049 573,909,378 1,632,792,830 2,206,702,208

TOTAL 1,931,574,569 2,979,546,590 4,911,121,160 1,355,385,175 2,982,734,314 4,323,702,358

S-644

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)

2012-13(v)

2011-12(v)

M. REVENUEOverseas 34,015,806,222 27,838,752,995Domestic 2,118,400,074 1,756,792,454

TOTAL 36,134,206,296 29,595,545,449

N. OTHER INCOMEIncome from current investment in mutual funds 84,470,690 82,423,432Profit on sale of fixed assets 2,883,676 3,391,739Interest received 41,692,491 47,181,581Foreign exchange gain/(loss) (40,990,587) (119,337,585)Provision no longer required for doubtful debts – 3,442,748Miscellaneous income 79,295,702 72,885,742

TOTAL 167,351,972 89,987,657

O. EXPENSES

O(i) Employee benefit expenses Salaries including overseas staff expenses 19,926,151,883 16,537,255,202 Staff welfare 756,784,604 693,157,430 Contribution to provident and other funds 252,374,263 233,693,368 Contribution to superannuation fund 56,345,108 89,942,569 Contribution to gratuity fund 94,079,107 146,755,534

TOTAL 21,085,734,965 17,700,804,103

O(ii) Operating expensesCommunication expenses 104,612,307 104,585,175Consultancy charges 2,199,263,436 1,665,569,449Cost of Software packages for own use 302,794,950 235,413,017Cost of bought-out items for resale 271,089,274 228,222,162

TOTAL 2,877,759,967 2,233,789,803

O(iii) Sales, administration and other expensesTravelling and conveyance 976,150,756 847,125,319Rent and establishment expenses 1,330,433,786 1,087,129,541Telephone charges and postage 303,963,151 270,843,673Legal and professional charges 255,914,643 216,683,528Printing and stationery 24,932,020 28,105,365Advertisement 36,357,859 48,459,591Entertainment 31,924,968 24,823,397Recruitment expenses 71,420,756 81,437,021Repairs to building 105,136,101 93,853,606Repairs to computers 76,108,892 73,692,629General repairs and maintenance 152,584,713 111,713,145Power and fuel 282,843,193 237,196,304Equipment hire charges 7,798,591 11,004,863Insurance charges 111,551,532 73,992,934Rates and taxes 104,059,897 103,165,182Allowance for doubtful debts and advances 78,757,139 20,049,691Bad debts 29,553,336 178,496,310Less : Provision written back (29,553,336) (178,496,310)Commission paid 13,691,443 6,128,382Books and periodicals, Subscriptions 26,176,256 12,532,590Directors fees 520,000 620,000Commission to director 4,461,944 2,561,750Miscellaneous expenses 127,035,941 103,482,805Amortisation of cost of long term projects * 3,173,683 11,623,033

TOTAL 4,124,997,264 3,466,224,349

* Cost incurred for long term projects mainly comprise of legal and employee related costs to secure long term projects. These costs are amortised over a period of two years commencing from the date of securing the project.

S-645

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)

2012-13(v)

2011-12(v)

P. FINANCE COST

P(i) Interest paid on

Fixed loans 14,885,450 909,998

On others 42,034,658 75,544,203

Lease finance charges 615 397,440

56,920,723 76,851,641

P(ii) Exchange loss on borrowings (net) 140,749,802 281,175,063

TOTAL 197,670,525 358,026,704

Q. PROVISION FOR TAXATION

Q(i) Current tax# 1,788,748,713 1,544,538,174

MAT credit entitlement for current year – –

MAT credit entitlement for earlier years – (277,906,915)

Short/(excess) provision of earlier years (54,457,522) 9,377,925

Branch Profit Tax 80,582,296 –

TOTAL 1,814,873,487 1,276,009,184

#The current year tax charge includes v 326,980,212 (previous year v 295,616,875) payable outside India.

R. CONTINGENT LIABILITIES

1. Income tax liability that may arise in respect of which the Company is in appeal 48,223,124 44,309,259

2. Corporate guarantee given on behalf of subsidiary* 5,445,976,604 3,572,975,000

3. Bill discounted with banks 59,713,500 157,619,844

TOTAL 5,553,913,228 3,774,904,103

*The Company has given a corporate guarantee on behalf of its wholly owned subsidiary L&T Infotech Financial Services Technologies Inc. The guarantee is for performance of all obligations by L&T Infotech Financial Services Technologies Inc. Canada in connection with the long term annuity services contracts obtained by them. The obligation under this guarantee is limited in aggregate to the amount of CAD 70,000,000.

The Company has given a corporate guarantee on behalf of its subsidiary Larsen and Toubro Infotech South Africa (Proprietary) Ltd. The guarantee is for performance of all obligations by Larsen and Toubro Infotech South Africa (Proprietary) Ltd in connection with the Application Testing Service contract. The obligation under this guarantee is limited in aggregate to the amount of USD 31,414,785.

S. EMPLOYEE BENEFITSa) The amounts recognised in Balance Sheet are as follows

As at March 31, 2013 (March 31, 2012)

Gratuity planPost retirement

medical benefit planSelf–managed

provident fund plan

A.

a) Present value of defined benefit obligation as on March 31, 2013

- Wholly funded 384,118,858 – 2,707,007,772

(297,585,164) – (2,169,154,837)

- Wholly unfunded – 90,811,071 3,608,879

– (42,186,909) (9,146,931)

384,118,858 90,811,071 2,710,616,651

(297,585,164) (42,186,909) (2,178,301,768)

b) Fair value of plan assets as on March 31, 2013 296,111,047* – 2,685,758,970*

(156,900,906) – (2,142,593,204)

Amount to be recognized as liability or (asset) (a-b) 88,007,811 90,811,071 24,857,681

(140,684,258) (42,186,909) (35,708,564)

S-646

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)

As at March 31, 2013 (March 31, 2012)

Gratuity planPost retirement

medical benefit planSelf–managed

provident fund plan B. Amounts reflected in the Balance Sheet Liabilities 88,007,811 90,811,071 52,000,742

(140,684,258) (42,186,909) (50,214,474) Assets – – –

– – – Net liability/(asset) 88,007,811 90,811,071 52,000,742**

(140,684,258) (42,186,909) (50,214,474) * Asset is not recognised in the Balance Sheet.

** Employer’s and employee’s contribution for March 2013 paid in April 2013.

Figures in brackets relate to previous year.

b) The amounts recognised in statement of profit and loss are as follows:

Gratuity planPost retirement

medical benefit planSelf-managed

provident fund plan 1 Current service cost 63,453,913 11,825,580 226,650,971

(55,326,943) (12,083,457) (185,282,421)2 Interest cost 29,020,463 4,668,499 163,868,385

(16,493,047) (3,893,931) (132,394,081)3 Expected return on plan assets -10,601,888 – -163,868,385*

(-7,778,871) – (-132,394,081)4 Actuarial Losses / (Gains) 12,206,599 -3,640,545 -5,538,052

(82,714,415) (-10,064,667) (9,014,794)5 Past service cost 35,883,128

–Total expense for the year included in staff cost 94,079,087 48,736,662 221,112,919

(146,755,534) (5,912,721) (194,297,215)

* The actual return on plan assets is higher than interest cost but no credit is taken to profit and loss on account of the difference.

Figures in brackets relate to previous year.

c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows:

Gratuity plan

Post retirement medical benefit

plan

Self-managed provident fund

plan Opening balance of the present value of defined benefit obligation 297,585,164 42,186,909 2,178,301,768

(171,033,249) (36,349,473) (1,768,300,000)Add : Current service cost 63,453,913 11,825,580 226,650,971

(55,326,943) (12,083,457) (185,282,421)Add : Interest cost 29,020,463 4,668,499 163,868,385

(16,493,047) (3,893,931) (132,394,081)Add : Contribution by plan participants 383,048,550

(326,652,296)Add/(Less) : actuarial (gains)/losses 20,764,375 -3,640,545 -5,538,052

(85,052,189) (-10,064,667) (9,146,931)Past service cost 35,883,128

–Less : Benefits paid 26,705,057 112,500 235,714,971

(30,320,264) (75,285) (243,473,961)Closing balance of the present value of defined benefit obligation 384,118,858 90,811,071 2,710,616,651

(297,585,164) (42,186,909) (2,178,301,768)

Figures in brackets relate to previous year.

S-647

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)

d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:

FY 2012-13

Gratuity plan Self-managed provident fund plan

Opening balance of the fair value of the plan assets 156,900,906 2,142,593,204

(123,415,394) (1,753,100,000)

Add : expected return on plan assets 10,601,888 163,868,385

(7,778,871) (132,394,081)

Add/(Less) : actuarial gains/(losses) 8,557,776 12,666,427

(2,337,774) (132,137)

Add : Contribution by the employer 146,755,534 222,955,332

(53,689,131) (180,872,107)

Add : Contribution by plan participants 379,390,593

(319,568,840)

Less : Benefits paid 26,705,057 235,714,971

(30,320,264) (243,473,961)

Closing balance of the plan assets 296,111,047 2,685,758,970

(156,900,906) (2,142,593,204)

The Company expects to contribute v 88,007,811 (v 140,684,258) towards its gratuity plan and v 52,000,742 (v 50,214,474) towards its self managed provident fund plan during FY 2013-14.

Figures in brackets relate to previous year.

e) The major categories of plan assets as a percentage of total plan assets are as follows:

FY 2012-13

Gratuity plan Self-managed provident fund

plan

Government of India securities

Scheme with LIC

24.1%

(24.1%)

State government securities 12.7%

(11.6%)

Corporate bonds 7.1%

(6.6%)

Fixed deposits under Special Deposit Scheme framed by Central Government for provident funds 14.0%

(17.0%)

Public sector bonds 42.1%

(40.7%)

Figures in brackets relate to previous year.

f) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages):

2012-13 2011-12 2010-11 2009-10

1 Discount rate as at March 31

For gratuity 7.95% 8.65% 8.05% 8.0%

For post -retirement medical benefits 7.95% 8.65% 8.05% 7.75%

2 Annual increase in healthcare costs (see note below)

5.0% 5.0% 5.0% 5.0%

3 Attrition rate : Varies between 2% to 18% for various

age groups

Varies between 2% to 18% for various

age groups

Varies between 2% to 18% for various

age groups

Varies between 2% to 18% for various

age groups

4 Salary growth rate 5.0% 5.0% 5.0% 5.0%

S-648

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.) The estimates of future salary increases considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant

factors, such as supply and demand in the employment market.

Although the obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits, assumed healthcare cost trend rates may affect the amounts recognised in the statement of profit and loss. At present, healthcare costs, as indicated in the principal actuarial assumption given above, are expected to increase at 5% p.a. A one percentage point change in assumed healthcare cost trend rates would have the following effects on the aggregate of the service cost and interest cost and defined benefit obligation:

Particulars Effect of

1% increase 1% decrease

Effect on the aggregate of the service cost and interest cost 7,010,881 -5,330,498

(2,850,333) (-2,227,233)

Effect on defined benefit obligation 17,895,728 -13,876,489

(5,938,543) (-4,721,934)

Figures in brackets relate to previous year.

a) The amounts pertaining to defined benefit plans for the current year are as follows:

Post-retirement medical benefit plan (non-funded)

2012-13

v2011-12

v2010-11

v2009-10

v2008-09

v

Defined benefit obligation 90,811,071 42,186,909 36,349,473 30,482,505 27,503,003

Gratuity plan

2012-13

v2011-12

v2010-11

v2009-10

v2008-09

v

1 Defined benefit obligation 384,118,585 297,585,164 171,033,249 130,736,156 103,570,986

2 Plan assets 296,111,047 156,900,906 123,415,394 108,193,662 48,521,888

3 (Surplus)/deficit 88,007,811 140,684,258 47,617,855 22,542,494 55,049,098

Self-managed provident fund plan

2012-13

v2011-12

v2010-11

v2009-10

v2008-09

v

1 Defined benefit obligation 2,710,616,651 2,178,301,768 1,797,900,000 1,423,700,000 1,124,700,000

2 Plan assets 2,685,758,970 2,142,593,204 1,753,100,000 1,393,200,000 1,157,300,000

3 (Surplus)/deficit 24,857,681 35,708,564 44,800,000 30,500,000 32,600,000

Experience adjustments

Gratuity

2012-13

v2011-12

v2010-11

v2009-10

v2008-09

v

Defined benefit obligation 384,118,858 297,585,164 171,033,249 130,736,156 0

Plan assets 296,111,047 156,900,906 123,415,394 108,193,662 0

(Surplus) / deficit 88,007,811 140,684,258 47,617,855 22,542,494 0

Exp. Adj. on Plan Liabilities 5,049,882 95,811,406 23,895,493 0 0

Exp. Adj. on Plan Assets 8,557,776 2,337,774 0 0 0

GENERAL DESCRIPTIONS OF DEFINED BENEFIT PLANS:a) Gratuity plan

The Company makes contributions to the Employees’ Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to employees at retirement, death while

S-649

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)in employment or termination of employment of an amount equivalent to 15 days salary for every completed year of service or part thereof in excess of six months, provided the employee has completed five years in service.

b) Post-retirement medical benefit plan

The post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling limit sanctioned at the time of retirement. The ceiling limits are based on cadre of the employee at the time of retirement.

c) Self-managed provident fund plan

The Company’s provident fund plan is managed by its holding company through a Trust permitted under the Provident Fund Act, 1952. The plan envisages contribution by employer and employees and guarantees interest at the rate notified by the Provident Fund Authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

The interest payment obligation of trust managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense in the period in which such loss occurs. Further, on amount of v 3,608,879 has been provided based on actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan.

T. In line with the Company’s risk management policy, financial risks relating to changes in the exchange rates, are hedged by using a combination of forward and options contracts, besides the natural hedges. The loss on fair valuation of the derivative contracts which are designated and are effective as hedges, amounting to v 2,694,381,882 (net) (previous year v 2,663,105,390) has been accounted in retained earnings in Balance Sheet. The loss of v 747,271,800 (previous year v 1,074,467,125) on settlement of the options/forwards is recognized in statement of profit and loss.

The particulars of derivative contracts entered into for hedging foreign currency risks outstanding as at March 31, 2013 are as under:

Sr. Category of Derivative Instruments

Notional amountMarch 31, 2013

v

Notional amountMarch 31,2012

v

a) Forward contracts for receivables 34,906,683,100 24,887,267,000

b) Option contracts 1,954,260,000 3,663,000,000

Un-hedged foreign currency exposures as at March 31, 2013 are as under:

Sr. Un-hedged foreign currency exposures31.03.2013

(v)31.03.2012

(v)

1 Receivables including firm commitments and highly probable forecast transactions 36,877,479,601 41,528,917,251

2 Payables including firm commitments and highly probable forecast transactions 30,283,474,398 28,868,621,291

U. INCOME/EXPENDITURE IN FOREIGN CURRENCY U(i) Expenditure in foreign currency:

2012-13

v 2011-12

v

Overseas staff costs 11,471,243,665 9,473,581,626

Foreign travel 224,571,982 109,905,224

Agency commission 1,777,410 6,128,382

Subcontracting expenses 2,103,934,419 1,472,054,926

Others (including overseas office expenses) 1,147,663,436 890,330,506

TOTAL 14,949,190,912 11,952,000,664

U(ii) Earnings in foreign currency:

Software exports 34,015,806,222 27,838,752,995

Other income 21,688,368 53,705,401

TOTAL 34,037,494,590 27,892,458,396

S-650

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)V. AUDITORS’ REMUNERATION (EXCLUDING SERVICE TAX) CHARGED TO THE ACCOUNTS INCLUDE:

2012-13 v

2011-12 v

Audit fees 1,500,000 1,250,000

Tax audit fees 600,000 500,000

Other services 2,372,000 1,462,905

Expense reimbursement 5,825 9,845

TOTAL 4,477,825 3,222,750

W. VALUE OF IMPORTS ON C.I.F. BASIS

2012-13 v

2011-12 v

Capital goods 39,264,945 95,823,634

Others 16,809,029 48,830,880

TOTAL 56,073,974 144,654,514

X. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for: v 167,440,750 (previous year: v 234,587,718).

Y. LEASES Finance leases

In accordance with Accounting Standard 19 “Leases” issued by the Institute of Chartered Accountants of India, the assets acquired under finance leases on or after April 1, 2001 are capitalised and a loan liability is recognised for an equivalent amount. Consequently depreciation is provided on such leases. Lease rentals paid are allocated to the liability and the interest is charged to Statement of Profit and Loss.

Operating leases

The Company has taken employee used cars under non-cancellable operating leases. The rental expense in respect of operating leases was v 26,887,289 (previous year v 23,919,728) and the future rentals payable are as follows:

2012-13

v 2011-12

v

Minimum lease payments

- Payable not later than 1 year 10,620,957 21,412,774

- Payable after 1 year but not later than 5 years 1,558,045 11,977,391

TOTAL 12,179,002 33,390,165

Z. BASIC AND DILUTED EARNINGS PER SHARE (EPS)

2012-13 2011-12

Basic

Profit after tax as per accounts (v) 5,615,700,520 4,047,648,163

Weighted average number of shares outstanding (Nos.) 32,250,000 32,250,000

Basic EPS (v) 174.13 125.51

Diluted

Profit after tax as per accounts (v) 5,615,700,520 4,047,648,163

Weighted average number of shares outstanding (Nos.) 32,250,000 32,250,000

Add : weighted average number of potential equity shares on account of employee options (Nos.) 1,363,920 1,363,920

Weighted average number of shares outstanding (Nos.) 33,613,920 33,613,920

Diluted EPS (v) 167.06 120.42

S-651

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)AA. RELATED PARTY DISCLOSURE: AA(i) List of related parties over which control exists/exercised:

Name Relationship

Larsen & Toubro Infotech GmbH Wholly owned subsidiary

Larsen & Toubro Infotech Canada Limited Wholly owned subsidiary

GDA Technologies Inc. Wholly owned subsidiary

GDA Technologies Limited Wholly owned subsidiary of GDA Technologies Inc.

Larsen & Toubro Infotech LLC Wholly owned subsidiary

L&T Infotech Financial Services Technologies Inc Wholly owned subsidiary

Larsen and Toubro Infotech South Africa (Proprietary) Limited Subsidiary

AA(ii) Key Management Personnel :

Name Status

Mr. V. K. Magapu Managing Director

Mr. K. R. L. Narasimham Executive Director

Mr. Vivek Chopra Executive Director

Dr. Mukesh Aghi Executive Director

AA(iii) List of related parties with whom there were transactions during the year:

Name Relationship

Larsen & Toubro Limited Holding Company

Larsen & Toubro Infotech Canada Limited Wholly owned subsidiary

Larsen & Toubro Infotech GmbH Wholly owned subsidiary

Larsen & Toubro Infotech LLC Wholly owned subsidiary

GDA Technologies Inc Wholly owned subsidiary

GDA Technologies Limited Wholly owned subsidiary

L&T Infotech Financial Services Technologies Inc Wholly owned subsidiary

Larsen and Toubro Infotech South Africa (Proprietary) Limited Subsidiary

L&T - MHI Boilers Private Limited Fellow Subsidiary

L&T ATCO Saudi LLC Fellow Subsidiary

L&T East Asia Fellow Subsidiary

L&T Electricals Saudi Arabia Company Limited, LLC Fellow Subsidiary

L&T Finance Ltd. Fellow Subsidiary

L&T General Insurance Company Limited Fellow Subsidiary

L&T Infrastructure Development Projects Limited Fellow Subsidiary

L&T MHI Turbine Generators Private Limited Fellow Subsidiary

L&T Modular Fabrication Yard LLC Fellow Subsidiary

L&T Power Development Limited Fellow Subsidiary

L&T Power Limited Fellow Subsidiary

L&T Realty Limited Fellow Subsidiary

L&T-Sargent & Lundy Limited Fellow Subsidiary

L&T-Valdel Engineering Limited Fellow Subsidiary

Larsen & Toubro Electromech LLC Fellow Subsidiary

Larsen & Toubro Kuwait Construction General Contracting

Company, WLL Fellow Subsidiary

Narmada Infrastructure Construction Enterprise Limited Fellow Subsidiary

L&T-MHI Boilers Private Limited Fellow Subsidiary

L&T Infrastructure Finance Company Limited Fellow Subsidiary

L&T-Komatsu Limited Fellow Subsidiary

Tractors Engineers Limited Fellow Subsidiary

S-652

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)

Transaction Holding Co. Subsidiaries Fellow Subsidiaries

Sale of services / products 422,831,127 1,149,899,500 150,821,340

(345,811,523) (773,403,011) (168,413,715)

- Sales to L&T General Insurance Company Limited 51,417,017

- Sales to L&T Power Limited 33,926,951

- Sales to L&T Finance Limited 22,682,851

- Sales to L&T-Komatsu Limited 15,888,902

- Sales to Larsen & Toubro Infotech GmbH 387,616,752

- Sales to Larsen & Toubro Infotech Canada Limited 130,593,281

- Sales to L&T Infotech Financial Services Technologies Inc. 377,172,506

- Sales to Larsen and Toubro Infotech South Africa Pty. Ltd. 242,058,874

Sale of assets 30,517,526 – –

(23,657,811) – –

Purchase of services 1,428,880,828 488,017,830 –

(1,078,962,809) (350,392,121) –

- Purchase from Larsen & Toubro Infotech GmbH 186,159,998

- Purchase from Larsen & Toubro Infotech LLC 270,144,220

(345,036,011)

Overheads charged by 219,219,989 50,447,892 8,310,942

(245,796,522) (29,127,672) (8,594,550)

- GDA Technologies Inc. 44,961,694

(28,733,123)

Overheads charged to 321,578,399 138,230,503 133,707

(484,561,119) (154,460,911) (8,469,563)

- Larsen & Toubro Infotech Canada Limited 22,168,732

- Larsen & Toubro Infotech GmbH 25,011,197

- GDA Technologies Inc. 72,995,022

(94,419,127)

Commission charged to holding company 5,928,607 –

(979,176) –

Commission charged to subsidiary 4,706,539

(3,814,577)

Lease rent paid – – 2,697,188

– – (8,564,803)

Commission paid 11,700,000

Interest paid 12,329 – –

(32,715,616) (14,868,601) –

S-653

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)

Transaction Holding Co. Subsidiaries Fellow Subsidiaries

Interest received 12,172,208

– (12,837,719) –

Dividend received 154,080

Unsecured Loan given to – 271,425,000

(262,006,250)

Unsecured Loan taken from – – –

– –

Investments 4,019,286,825

(4,017,276,859)

Trade receivable 453,427,968 28,088,131

– (82,123,278) (17,186,212)

Trade payable 583,194,320

(358,642,600) – –

Interim dividend 3,031,500,000

(2,547,750,000)

Figures in brackets relate to previous year.

AA(iv) Managerial remuneration

2012-13 2011–12

Salaries & perquisites :-

Mr. Vivek Chopra 21,725,400 –

Dr. Mukesh Aghi 20,692,997 –

Sitting fees 520,000 620,000

Commission to non-executive directors 4,461,944 2,561,750

TOTAL 47,400,341 3,181,750

Note:-

Salaries and perquisites include the compensation paid to our Whole-time Directors who are based at USA and who have been appointed on the board with effect from September 2012.

AB SEGMENTAL REPORTING Effective September 2012, the Company has reorganized its business to be better aligned to market needs. Consequently, the financial

reporting of the business unit performance to the management has also been updated with the new organizational structure.

The Company has reorganised its business into 3 segments. Services Cluster includes Banking, Financial services, Insurance, Media & Entertainment, Travel & Logistics and Healthcare. Industrials Cluster includes Hi Tech and Consumer Electronics, Consumer, Retail & Pharma, Energy & Process, Automobile & Aerospace, Plant Equipment & Industrial Machinery, Utilities and E&C. Telecom segment refers to Product Engineering Services. The Company has presented its segment results accordingly.

The previous year figures have been presented after incorporating the necessary reclassification pursuant to this change in reportable segments. The accounting principles consistently used in the presentation of financial statements are also consistently applied to record income & expenditure in individual segments.

S-654

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

NOTES FORMING PART OF ACCOUNTS (Contd.)AB(i) Revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements.

The Revenue and operating profit by segment is as under:

Services Cluster Industrials Cluster Telecom Total

v v v v

Revenue 15,564,561,325 16,380,087,222 4,189,557,749 36,134,206,296

(12,635,403,192) (13,421,456,829) (3,538,685,429) (29,595,545,449)

Segmental operating profit 3,768,532,477 5,277,553,809 1,256,936,598 10,303,022,885

(3,559,466,188) (4,162,883,296) (1,053,589,445) (8,775,938,929)

Unallocable expenses (net) 2,257,308,785

(2,581,211,735)

Other income 167,351,972

(89,987,657)

Operating profit 8,213,066,072

(6,284,714,851)

Finance cost 197,670,525

(358,026,704)

Depreciation 452,766,201

(408,070,472)

Amortization of intangible assets 169,700,527

(157,768,312)

Profit before tax 7,392,928,819

(5,360,849,363)

Figures in brackets relate to previous year.

AB(ii) Segmental reporting of revenues on the basis of the geographical location of the customers is as under:

North America Europe Asia Pacific India Rest of the world Total

v v v v v v

23,610,746,160 6,225,371,693 2,223,711,243 2,095,489,361 1,978,887,838 36,134,206,296

(20,006,198,286) (4,648,991,008) (1,832,370,799) (1,756,792,454) (1,351,192,901) (29,595,545,449)

Figures in brackets relate to previous year.

Fixed assets used and liabilities contracted for performing the Company’s business have not been identified to any of the above reported segments as the fixed assets and services are used interchangeably among segments.

AC. Based on the information and records available with the Company, there are no amounts payable to micro and small enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

AD. Previous year’s figures have been regrouped / reclassified wherever necessary.

As per our report attached For and on behalf of the Board

SHARP & TANNANChartered Accountants Firm’s Registration No. 109982W by the hand of

R. D. KARE Partner ANGNA ARORA V. K. MAGAPU K. R. L. NARASIMHAMMembership No. 08820 Company Secretary Managing Director Whole-time Director

Place : Mumbai Place : MumbaiDate : May 3, 2013 Date : May 3, 2013

S-655

LARSEN & TOUBRO INFOTECH LIMITED

LARSEN & TOUBRO INFOTECH LIMITED

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANIES:

Name of the subsidiary company: Larsen & Toubro

Infotech GmbH

Larsen & Toubro

Infotech Canada Ltd

GDA Technologies

Inc

GDA Technologies

Ltd

Larsen & Toubro

Infotech LLC

L&T Infotech Financial Services

Technologies Inc.

Larsen and Toubro

Infotech South Africa

(Pty) Ltd

Financial year of the subsidiary company ended on: 31/03/2013 31/03/2013 31/03/2013 31/03/2013 31/03/2013 31/03/2013 31/03/2013

Number of Shares in the subsidiary company held by Larsen & Toubro Infotech Limited at the above date

1 100 10 963 Nil 1,000,000 332,350

The net aggregate of profits, less losses, of the subsidiary company so far as it concerns the members of Larsen & Toubro Infotech Limited:

v v v v v v v

(i) Dealt with in the accounts of Larsen & Toubro Infotech Limited amounted to:

(a) for the subsidiary’s financial year/ period ended March 31, 2013

Nil Nil Nil Nil Nil Nil Nil

(b) for previous financial years of the subsidiary since it became subsidiary of Larsen &Toubro Infotech Limited

24,979,000 Nil Nil Nil Nil Nil Nil

(ii) Not dealt with in the accounts of Larsen & Toubro Infotech Limited amounted to:

(a) for the subsidiary’s financial year/ period ended March 31, 2013

19,190,705 6,599,787 (35,413,813) 20,612,712 16,405,841 120,874,643 2,182,694

(b) for previous financial years of the subsidiary since it became subsidiary of Larsen & Toubro Infotech Limited

119,396,511 49,774,545 (222,181,753) 318,325,872 53,620,820 269,578,802 0

Changes in the interest of Larsen & Toubro Infotech Limited between the end of the subsidiary’s financial year and 31st March 31, 2013

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

ANGNA ARORA V. K. MAGAPU K. R. L. NARASIMHAM Company Secretary Managing Director Whole-time Director

Place : Mumbai Place : MumbaiDate : May 3, 2013 Date : May 3, 2013


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