The Directors present the Annual Report and the audited accounts of the Company for the year ended 31 December 2012.

Transcription

1 DIRECTORS REPORT The Directors present the Annual Report and the audited accounts of the Company for the year ended 31 December FINANCIAL RESULTS PARTICULARS R Cr. R Cr. Total Income / (Loss) Profit before tax Taxes (8.89) (12.22) Profit after tax DIVIDEND The Directors recommend a payment of dividend of RM 0.28 per equity share of RM 1.00 each. (28% of paid up equity share capital) CAPITAL EXPENDITURE As at 31 December, 2012 the gross fixed assets stood at R Cr. and the net fixed assets at R Cr. AUDITOR S REPORT The Auditor s Report to the shareholders does not contain any qualifications. MATERIAL CHANGES There have been no material changes between Balance Sheet date and the date of Directors Report. DIRECTORS RESPONSIBILITY STATEMENT The Board of Directors of the Company confirms: i. That in preparation of the annual accounts, the applicable Accounting Standards have been followed and there has been no material departure; ii. That the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 December, 2012 and of the profits of the Company for the year ended on that date; iii. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Company Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and iv. That the annual accounts have been prepared on a going concern basis; and v. That the Company has adequate internal systems and controls in place to ensure compliance of laws applicable to the Company. DIRECTORS During the financial year, the Directors of the Company are: Mr. S. C. Bhargava Mr. P. D.Khedekar (Resigned on 6 April, 2012) Mr. Graham Johnson (Appointed on 17 April, 2012) Mr. C. R. Lakshman (Resigned on 14 September, 2012) Mr. Razali Budin Mr. Yap Ket Loong Mr. Ramakrishnan Parameswaran (Appointed 5 October 2012) AUDIT COMMITTEE The Company has not been incorporated under the provision of Indian Companies Act 1956 and hence the requirement of having an Audit Committee is not applicable. AUDITORS Messrs. Ernst & Young were the auditors for the financial year ACKNOWLEDGEMENT The Directors acknowledge the invaluable support extended to the company by the bankers, employees of the company and staff of the ultimate holding company. For and on behalf of the Board S. C. BHARGAVA GRAHAM JOHNSON Date : April 24, 2013 Director Director S-1293

2 AUDITORS REPORT TO THE MEMBERS OF TAMCO SWITCHGEAR (MALAYSIA) SDN BHD The financial statements of Tamco Switchgear (Malaysia) SDN BHD (the Company) for the year ended 31 December 2012, being a company registered in Malaysia, prepared by the management and audited by the statutory auditor Ernst & Young, and we have been furnished with their audit report dated 29 March We are presented with the accounts in Indian Rupees prepared on the basis of the aforesaid accounts to comply with the requirements of Section 212 of the Companies Act, We give our report as under: We have audited the attached Balance Sheet of the Company as at 31 December 2012 and also the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In accordance with the provisions of Section 227 of the Companies Act, 1956, we report that: (1) As required by the Companies (Auditor s Report) Order, 2003, issued by the Central Government of India under sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. (2) Further to our comments in the Annexure referred to above, we report that: (a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (c) The said Balance Sheet, Statement of Profit and Loss and the 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 the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; and (e) as regards reporting on the disqualification of directors under Section 274(1)(g) of the Indian Companies Act, 1956, since the Company is registered in Malaysia, no reporting is required to be made under the said Section. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant accounting policies in note P and other notes forming part of accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: 1 in the case of the Balance Sheet, of the state of affairs of the Company as at 31 December 2012; 2 in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and 3 in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. SHARP & TANNAN Chartered Accountants ICAI Registration No W By the hand of EDWIN P. AUGUSTINE Partner Date : April 24, 2013 Membership no S-1294

3 ANNEXURE TO THE AUDITORS REPORT (Referred to 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 physically verified fixed assets and no material discrepancies were noticed on such verification. (c) The Company has not disposed of any substantial part of its fixed assets. 2 (a) As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. (b) As per the information given to us, the procedures of physical verification of inventory followed by management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. 3 There are no loans, secured or unsecured, either granted to or taken from companies, firms or other parties. However, no register is required to be maintained under Section 301 of the Companies Act, 1956 since the Company is incorporated and doing business only in the Malaysia. 4 In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for purchase of inventory, fixed assets and for sale of goods. 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 been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems. 5 The Company is incorporated in the Malaysia and accordingly, maintenance of records under Section 301 of the Companies Act, 1956 is not required. 6 The Company has not accepted deposits from the public. 7 The Company has an adequate internal audit system commensurate with its size and nature of its business. 8 Cost records are not required to be maintained under Section 209(1)(d) of the Companies Act, 1956 by the Company as it is incorporated in the Malaysia. 9 The Company being registered in the Malaysia, has no statutory liabilities in India and accordingly reporting for paragraphs 4 (ix) (a) and (b) is not required. 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 information and explanations given by management, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders 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 or 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 In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. 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 According to the information and explanations given to us the Company has applied all the term loans for the purpose for which they 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. 18 The Company has not made any preferential allotment of shares to any party during the year. 19 The Company has not issued debentures during the period and accordingly, no security is required to be provided. 20 The Company has not raised any money by public issues 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 material 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 ICAI Registration No W By the hand of EDWIN P. AUGUSTINE Partner Date : April 24, 2013 Membership no S-1295

4 BALANCE SHEET AS AT DECEMBER 31, 2012 As at As at Schedule R R R R EQUITY AND LIABILITIES Shareholders Funds Share capital A 1,191,750,000 1,191,750,000 Reserves and surplus B 2,797,223,057 2,351,827,991 3,988,973,057 3,543,577,991 Non Current Liabilities Long term borrowing C (i) 3,132,825 5,704,862 Long term provisions C (ii) 7,549,420 10,682,245 5,704,862 Deferred tax liabilities ( net ) C (iii) 49,638,600 25,128,750 Current liabilities Short term borrowings and current maturity of long term borrowing D (i) 3,032, ,655,197 Trade payables D (ii) 893,885,200 1,304,058,348 Other current liabilities D (iii) 140,851, ,496,218 Short term provisions D (iv) 1,383,444, ,428,746 2,421,213,670 1,883,638,509 TOTAL 6,470,507,572 5,458,050,113 ASSETS Non current assets Fixed assets Tangible assets E (i) 701,740, ,272,972 Intangible assets E (ii) 111,540,146 72,822,531 Net block 813,280, ,095,503 Investments F 187,162, ,787 Current assets Inventories G (i) 1,616,734,148 1,328,328,842 Trade receivable G (ii) 1,385,005,412 1,798,899,196 Cash and bank balances G (iii) 980,725, ,420,953 Loans and advances G (iv) 1,487,599, ,161,832 Net current assets 5,470,064,198 4,685,810,823 TOTAL 6,470,507,572 5,458,050,113 COMMITMENTS (CAPITAL AND OTHERS) CONTINGENT LIABILITIES SIGNIFICANT ACCOUNTING POLICIES OTHER NOTES TO ACCOUNTS Q R P S The schedules referred to above and the notes attached form an integral part of the financial statements. As per our report attached SHARP & TANNAN Chartered Accountants ICAI Registration No W By the hand of For and on behalf of the Board EDWIN AUGUSTINE Partner Membership No: Date : April 24, 2013 S. C. BHARGAVA GRAHAM JOHNSON Director Director Date : April 24, 2013 S-1296

5 STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED DECEMBER 31, Schedule R R R R REVENUE: Revenue from operations (gross) 5,703,932,165 5,156,812,172 Less: Excise duty Revenue from operations (net) H 5,703,932,165 5,156,812,172 Other income J 77,863,155 57,535,305 TOTAL 5,781,795,321 5,214,347,477 EXPENSES: Manufacturing and operating expenses Cost of raw materials, components consumed K 3,050,212,302 3,627,263,674 Sub-contracting charges 248,687,150 Stores, spares and tools 186,488,287 Other manufacturing and operating expenses 519,233,497 TOTAL 4,004,621,236 3,627,263,674 Employee benefits expense L 597,173, ,735,682 Sales, administration and other expenses M 317,834, ,590,388 Finance costs N 850,234 3,800,741 Depreciation and obsolescence of tangible assets 85,371,363 73,992,620 Amortisation and impairment of intangible assets 35,141,659 5,127,974 5,040,992,827 4,652,511,079 Profit before tax 740,802, ,836,398 Current tax 37,108,585 79,429,543 Deferred tax 21,805,308 42,770,560 58,913, ,200,103 Profit after tax carried to Balance Sheet 681,888, ,636,295 Basic earning per equity share (basic & diluted) S (6) Face value per equity share MYR 1.00 MYR 1.00 Significant accounting policies P Notes to accounts S The schedules referred to above and the notes attached form an integral part of the financial statements. As per our report attached SHARP & TANNAN Chartered Accountants ICAI Registration No W By the hand of For and on behalf of the Board EDWIN AUGUSTINE Partner Membership No: Date : April 24, 2013 S. C. BHARGAVA GRAHAM JOHNSON Director Director Date : April 24, 2013 S-1297

6 CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012 A. Cash flow from operating activities: Profit before tax 740,802, ,836,398 Adjustments for : Depreciation (including obsolescence), amortisation and impairment 120,513,022 79,120,594 Foreign currency translation reserve 7,431, ,098,581 Unrealised foreign exchange loss/(gain) (net) (26,177,982) 19,569,671 Provision for doubtful debts 1,492,591 1,725,165 Interest expenses 850,234 3,800,741 Interest received (28,184,641) (26,731,403) (Profit)/loss on sale of fixed assets (net) (118,649) Operating profit before working capital changes 816,608,698 1,101,419,746 Adjustments for : (Increase)/ decrease in trade and other receivables (352,807,765) (288,855,360) (Increase)/ decrease in inventories (288,405,306) (205,733,790) Increase/ (decrease) in trade payables and customer advances 819,257,051 (207,463,625) Cash generated from operations 994,652, ,366,971 Income taxes paid (58,913,893) (122,200,103) Net cash (used in)/ from operating activities 935,738, ,166,868 B. Cash flow from investing activities: Purchase of fixed assets (39,745,993) (48,237,684) Investment in Intangibles (69,880,843) (78,446,446) Sale of fixed assets 581,459 Interest received 28,184,641 26,731,403 Investments in subsidiary (187,018,860) (19,355) Exchange difference in opening balance (52,534,222) (90,904,928) Cash (used in)/ from investing activities (320,413,819) (190,877,010) C. Cash flow from financing activities: Repayment of borrowings (252,194,657) 89,884,859 Dividend paid (224,975,400) (198,577,500) Interest paid (850,234) (3,800,741) Net cash (used in)/ from financing activities (478,020,291) (112,493,382) Net (decrease) / increase in cash and cash equivalents (A + B + C) 137,304,676 (26,203,524) Cash and cash equivalents at beginning of the period 843,420, ,624,477 Cash and cash equivalents at end of the period 980,725, ,420,953 Notes: 1. Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3 Cash Flow Statements as specified in the Companies (Accounting Standards) Rules, Previous period s figures have been regrouped/reclassified wherever applicable R 2011 R As per our report attached SHARP & TANNAN Chartered Accountants ICAI Registration No W By the hand of For and on behalf of the Board EDWIN AUGUSTINE Partner Membership No: Date : April 24, 2013 S. C. BHARGAVA GRAHAM JOHNSON Director Director Date : April 24, 2013 S-1298

7 SCHEDULES FORMING PART OF ACCOUNTS NOTE A : SHARE CAPITAL Particulars As at As at Number of Shares R Number of Shares R A (i): Share capital authorised, issued, subscribed and paid up Share capital: Authorised: 100,000,000 equity shares of MYR 1.00 each 1,191,750,000 1,191,750,000 Issued: 100,000,000 equity shares of MYR 1.00 each 1,191,750,000 1,191,750,000 Subscribed and paid up: 100,000,000 equity shares of MYR 1.00 each 1,191,750,000 1,191,750,000 TOTAL 1,191,750,000 1,191,750,000 NOTE A (II) : TERM / RIGHT ATTACHED TO EQUITY SHARES The Company has one class of share capital, i.e. equity shares having face value of RM1 each. Share holder entitled to one vote per share. NOTE A (III) : SHARE HOLDER HOLDING MORE THAN 5% OF EQUITY SHARE The entity is a wholly owned subsidiary of Larsen & Toubro International FZE, an entity registered in Hamriyah Free Zone, Sharjah. The ultimate parent company is Larsen & Toubro Limited, a company incorporated in India. NOTE A(IV) : The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended 31 December,2012 are Nil (previous period of five years ended 31 December 2011 NIL). NOTE A(V) : The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended 31 December, 2012 are Nil (previous period of five years ended 31 December 2011 NIL). As at As at R R R R NOTE B : RESERVES AND SURPLUS B(i) Foreign currency translation reserve: As per last Balance Sheet 778,390, ,292,196 Addition/(deduction) during the year 7,431, ,098, ,822, ,390,777 B(ii) Hedging reserve: As per last Balance Sheet 19,449,585 3,260,285 Addition during the year (18,949,764) 16,189, ,821 19,449,585 B(iii) Surplus/ (Deficit) in Statement of Profit & Loss As per last Balance Sheet 1,553,987,629 1,312,928,834 Add: Profit for the year 681,888, ,636,295 Less : Dividend paid (224,975,400) (198,577,500) 2,010,900,830 1,553,987,629 TOTAL 2,797,223,057 2,351,827,991 S-1299

8 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) As at As at R R R R NOTE C (I) : LONG-TERM BORROWINGS Long term borrowing Finance lease obligation Lease finance- due beyond 1 year 3,132,825 5,704,862 TOTAL 3,132,825 5,704,862 The Company has finance leases for certain items of motor vehicles. NOTE C (II) : LONG TERM PROVISIONS Long term provisions 7,549,420 TOTAL 7,549,420 NOTE C (III) Major components of deferred tax liabilities and deferred tax assets pursuant to Accounting Standards (AS) 22 Accounting for Taxes on income Particulars Deferred tax liabilities/ (assets) as on Charge / ( credit ) to Statement of Profit and Loss Deferred tax liabilities/ (assets) as on Deferred tax liabilities Difference between depreciation rate and capital allowance rate 61,096,368 10,464,265 71,560,632 Other items (156,850) 14,779,066 14,622,216 Total 60,939,517 25,243,331 86,182,848 Deferred tax assets Other items (35,810,767) (734,081) (36,544,848) Total (35,810,767) (734,081) (36,544,848) Net deferred tax liability 25,128,750 24,509,250 49,638,000 As at As at R R R R NOTE D (I): SHORT TERM BORROWINGS AND CURRENT MATURITY OF LONG TERM BORROWING Secured loans: Lease finance- due within 1 year 3,032,577 3,232,763 Short term loan and advance from banks 249,422,434 TOTAL 3,032, ,655,197 NOTE D (ii) : TRADE PAYABLES Liabilities: Trade Payables: Due to : Subsidiaries 11,665, ,676,857 Other payable 882,219,518 1,117,381, ,885,200 1,304,058,348 TOTAL 893,885,200 1,304,058,348 S-1300

9 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) As at As at R R R R NOTE D (III) : OTHER CURRENT LIABILITY Advances from customers 77,137, ,389,009 Other Payables Forward contract payable 15,225,651 Liability for sales tax 48,488,999 35,107,209 63,714,650 35,107,209 TOTAL 140,851, ,496,218 NOTE D (IV) : SHORT TERM PROVISIONS Provisions for: Current taxes 87,111,402 Employee benefits 113,983,732 38,172,330 Other provisions 1,269,460,475 63,145,014 1,383,444, ,428,746 TOTAL 1,383,444, ,428,746 NOTE E (I) : TANGIBLE ASSETS COST / VALUATION DEPRECIATION BOOK VALUE TANGIBLE ASSETS As at Foreign Currency Fluctuation Additions Deductions As at Up to Foreign Currency Fluctuation For the year Deductions Up to As at As at R R R R R R R R R R R R OWNED ASSETS: Land - freehold 77,121,474 5,673,912 82,795,386 82,795,386 77,121,474 Buildings 447,646,400 32,933, ,580,242 98,909,340 7,730,596 11,560, ,200, ,379, ,737,060 Plant and machinery 649,556,443 53,085,178 30,623, ,265, ,359,035 41,276,709 41,084, ,719, ,545, ,197,408 Furniture and fixtures 63,975,452 4,706, ,125 69,551,322 33,338,664 2,663,343 5,365,777 41,367,784 28,183,538 30,636,788 Computers 213,330,624 15,694,977 6,063,136 (11,381,432) 223,707, ,703,839 13,991,714 15,589,672 (10,948,967) 206,336,258 17,371,046 25,626,785 Office Equipment 68,101,141 5,010, ,080 (134,312) 73,385,185 37,985,389 3,107,821 8,109,236 (129,240) 49,073,206 24,311,979 30,115,752 Vehicles 28,161,405 (3,224,717) 1,782,224 (669,204) 26,049,708 18,323,700 (3,445,760) 3,661,803 (643,932) 17,895,812 8,153,895 9,837,705 TOTAL 1,547,892, ,880,214 39,745,993 (12,184,948) 1,689,334, ,619,967 65,324,423 85,371,363 (11,722,138) 987,593, ,740, ,272,972 Previous year 1,297,791, ,863,760 48,237,684 1,547,892, ,164, ,462,891 73,992, ,619,967 Add: Capital work-in-progress 701,740, ,272,972 NOTE E (II) : INTANGIBLE ASSETS COST / VALUATION DEPRECIATION BOOK VALUE INTANGIBLE ASSETS As at Additions Deductions Foreign Currency Fluctuation As at Up to For the year Foreign Currency Fluctuation Up to As at As at R R R R R R R R R R Development expenditure incurred 78,446,446 69,880,843 5,771, ,098,699 5,623,915 35,141,659 1,792,979 42,558, ,540,146 72,822,531 TOTAL 78,446,446 69,880,843 5,771, ,098,699 5,623,915 35,141,659 1,792,979 42,558, ,540,146 72,822,531 Previous year 2,076,102 2,076,102 2,076,102 2,076, ,540,146 72,822,531 S-1301

10 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) As at As at R R R R NOTE F : NON-CURRENT INVESTMENTS (at cost unless otherwise specified) Long term investments Trade investments Fellow subsidiary companies PT Tamco Indonesia 154, ,787 (2,500 Shares of Indonesia Rupiah 2010 each) Henikwon Corporation Sdn Bhd 187,008, ,787 (6,450,000 Shares of Henikwon RM1.00 each) TOTAL 187,162, ,787 NOTE G (I) : INVENTORIES (at cost or net realisable value whichever is lower) Raw materials 1,232,293, ,032,972 (Including goods in transit of R Nil, (previous year R Nil)) Finished goods 328,745, ,458,524 (Including goods in transit of R Nil, (previous year R Nil)) Work-in-progress 55,694, ,837,346 TOTAL 1,616,734,148 1,328,328,842 NOTE G (II) : TRADE RECEIVABLES Unsecured: Debts outstanding for more than 6 months Considered good 180,592, ,355,683 Considered doubtful 49,452,419 47,373, ,044, ,729,357 Other debts: Considered good 1,204,413,016 1,256,543,513 1,434,457,832 1,846,272,870 Less : Provision for doubtful debts (49,452,419) (47,373,674) 1,385,005,412 1,798,899,196 TOTAL 1,385,005,412 1,798,899,196 NOTE G (III) : CASH AND BANK BALANCES Cash and cash equivalent Cash on hand 1,025, ,662 Balance with bank 76,852,711 8,700,791 Deposit with bank ( maturity less than 3 months ) 21,582,000 Other fixed deposits with bank including interest accrued thereon 881,265, ,274,500 TOTAL 980,725, ,420,953 S-1302

11 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) NOTE G (IV) : SHORT TERM PROVISIONS As at As at R R R R Unsecured : Considered good : Fellow subsidiary companies: Advances recoverable 982,598, ,437,950 Inter-corporate deposits: Others 334,319, ,547,373 Advances recoverable in cash or in kind 128,594, ,176,509 Income tax recoverable for previous years (net of provisions) 42,087,274 TOTAL 1,487,599, ,161, R R R R NOTE H : REVENUE FROM OPERATIONS Sales & Services Manufacturing activity- Gross sales 5,703,932,165 4,971,994,397 Service Income 184,817,775 TOTAL 5,703,932,165 5,156,812,172 NOTE J : OTHER INCOME: Interest income Interest received on inter-corporate deposits with associate companies,customers and others 28,184,641 26,731,403 Profit on sale of fixed assets (net) 118,649 Miscellaneous income 49,559,865 30,803,902 TOTAL 77,863,155 57,535,305 NOTE K : MANUFACTURING, CONSTRUCTION AND OPERATING EXPENSES Cost of raw materials, components consumed 3,050,212, ,670,726 Sub-contracting charges 248,687, ,510,111 Stores, spares and tools 186,488, ,247,083 Power and fuel 43,254,722 38,515,603 Packing and forwarding 55,153,810 Insurance 6,759,057 2,218,202 Rent 18,880,628 17,185,966 Travelling and conveyance 41,375,330 10,418,939 Repairs to plant and machinery, buildings 41,903,122 26,318,362 Other expenses 311,906,829 7,721, ,233, ,378,376 TOTAL 4,004,621,236 1,101,806,296 S-1303

12 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) R R R R NOTE L : EMPLOYEE BENEFIT SCHEME Contribution to and provision for: Provident fund and pension fund 50,678,807 43,508,757 Social security employer contribution 3,858,813 3,403,236 54,537,619 46,911,993 Leave encashment 17,009,144 19,952,442 Welfare and other expenses 29,636,909 34,886,859 TOTAL 597,173, ,735,682 NOTE M : SALES, ADMINISTRATION AND OTHER EXPENSES Packing and forwarding 178,314, ,856,620 Professional fees 8,187,685 2,531,130 Insurance 235,220 Rates and taxes 5,548,534 3,133,247 Travelling and conveyance 16,915,900 49,621,442 General repairs and maintenance 14,650,312 30,375,927 Telephone, postage and telegrams 11,839,884 16,056,534 Advertising and publicity 1,860,374 2,808,940 Stationery and printing 6,932,963 13,050,651 Commission: Distributors and agents 37,033,668 11,255,953 Bank charges 17,395,427 43,923,739 Provision for doubtful debts & advances 1,492,591 1,725,165 Exchange loss / (gain ) (12,216,182) 23,904,393 Miscellaneous expenses 29,643,503 10,346,647 TOTAL 317,834, ,590,388 NOTE N : FINANCE COSTS Interest expense 850,234 3,800,741 TOTAL 850,234 3,800,741 S-1304

13 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) TAMCO SWITCHGEAR (MALAYSIA) SDN BHD NOTE P - SIGNIFICANT ACCOUNTING POLICIES LEGAL STATUS Tamco Switchgear (Malaysia) Sdn. Bhd. is a private limited company registered under the Malaysian Companies Act In April 2008, Larsen & Toubro International FZE acquired the 100% equity interest in the Company from Tamco Corporate Holdings Berhad. SIGNIFICANT ACCOUNTING POLICIES. 1. BASIS OF ACCOUNTING The accounts have been prepared using historical cost convention and accrual basis and in accordance with the provision of Section 211 (3C) and the other provisions of the Companies Act, The preparation of statements in conformity with Generally Accepted Accounting principle requires that the management of the Company make estimate and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of the assets and liabilities and disclosures relating to contingent liabilities as of the date of the financial statements. Example of such estimates includes the useful life of fixed assets, provision for doubtful debts/advances, future obligation in respects of retirement benefits plans etc. actual results could differ from these 2. REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured. Sales of Goods Revenue from sale of goods is recognised up on transfer of significant risks and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated cost or possible return of goods. Sales of Services Revenue from services will be recognised upon services rendered. 3. INTANGIBLE ASSETS RESEARCH AND DEVELOPMENT All research costs are recognised in the profit or loss as incurred. Expenditure incurred on projects to develop new products is capitalised and deferred only when the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditures which do not meet these criteria are expensed when incurred. Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised using the straight-line basis over the commercial lives of the underlying products not exceeding three years. Impairment is assessed whenever there is an indication of impairment and the amortisation period and method are also reviewed at least at each Balance Sheet date. 4. FIXED ASSETS & DEPRECIATION Fixed Assets are depreciated on a straight-line basis over the assets useful lives. These are common life expectancies applied in the industry. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The depreciation rates are as follows : Assets Class Rate Building 2.5% Plant & Machinery 7.5% Office equipment 15.0% Motor Vehicle 20.0% The above rates are higher than the rates specified under Schedule XIV of the Companies Act 1956 for the respective categories 5. INVENTORIES Raw materials and consumable stores, work-in-progress, finished products and inventory-in transit are valued at the lower of cost and net realisable value. Cost comprises the actual cost of raw materials determined using weighted average cost and an applicable portion of labor and manufacturing overheads for finished goods. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. S-1305

14 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) 6. EMPLOYEE BENEFITS A) Short term benefits Salaries, wages, allowances, bonus and social security contributions are recognised as an expense in the financial year in which the services are rendered by the employees of the Company. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employee that increases their entitlements to future compensated absences and short term non-accumulating compensated absences such as sick leave are recognised when absence occurs. Non-monitory medical benefits such as medical care and other staff related expenses are charged to Profit and Loss Account as and when incurred. B) Defined contribution plan The Company participates in the national pension schemes as defined by the laws of the countries in which it operates. The Company makes contribution to Employees Provident Fund ( EPF ) Malaysia, a defined contribution pension scheme. For the eligible employees who have completed five years of service, the Company additionally contributes specific percentage of their salaries to EPF. Contribution to defined contribution pension schemes are recognised as an expenses in the period in which the related service is performed. 7. LEASE A lease is recognised as a finance lease if it transfers substantially to the Company all the risks and rewards incidental to ownership. All other leases are classified as operating leases. A) Finance Lease Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. The corresponding liability is considered as secured loan. In calculating present value of minimum lease payments, the discounting factor used is the interest rate implicit in the lease, where it is practicable to determine; otherwise Company s incremental borrowing rate is used. Lease payments are apportioned between the interest cost and the reduction in outstanding liability. Interest cost, which represents difference between the total lease commitments and fair value of the asset acquired, are recognised as an expense in Profit and Loss Account over the term of relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligation for each accounting period. B) Operating Leases Operating lease payments are recognised as expense in Profit and Loss Account on a straight line basis over the term of the relevant lease. 8. FOREIGN CURRENCY TRANSACTIONS Reporting currency used by the Company is Malaysian Ringgits. The financial statements are translated in Indian Rupees as follows: Share capital is retained as the initial contribution amount. Fixed Assets, current assets and current liabilities are translated at rates prevailing on the date of Balance Sheet. Revenue transactions are translated at the average rates. The resultant differences are accounted as translation reserve in the Balance Sheet. 9. TAXATION Taxes on income for the current period is determined on the basis of taxable income and tax credit in accordance to provisions of taxation law and based on the expected outcome of assessments / appeals. Deferred tax is recognized on timing differences between the accounting income and taxable income for the year, using the tax rates and laws enacted or substatively enacted as on Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. NOTE Q : COMMITMENTS Estimated amount of contract remaining to be executed on capital account (net of advances) and not provided for are as follows: Particulars As at 31 Dec, 2012 (R) As at 31 Dec, 2011 (R) Estimated amount of contracts remaining to be executed on capital account 87,076,967 19,121,923 NOTE R: Contingent liability as at 31 December, 2012 is R Nil. (Previous year R Nil) S-1306

15 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) NOTE S: OTHER NOTES FORMING PART OF THE ACCOUNTS 1. Related party disclosures; A. Related parties where control exists: Relationship Larsen & Toubro Limited Company Ultimate Holding Larsen & Toubro International FZE Holding Company B. Transaction with related parties during the year Larsen & Toubro Limited Company Ultimate Holding Larsen & Toubro International FZE Holding Company Tamco Electrical Industries Australia Pty Ltd Fellow Subsidiary Company PT Tamco Indonesia Fellow Subsidiary Company Larsen & Toubro Electrical & Automation FZE Fellow Subsidiary Company L&T Electrical And Automation Saudi Arabia Company Limited LLC Fellow Subsidiary Company Larsen & Toubro Infotech Limited Fellow Subsidiary Company Larsen & Toubro East Asia SDN BHD Fellow Subsidiary Company C. Disclosure of transactions & balances with related parties: Related party Transaction 2012 (R) 2011 (R) Larsen & Toubro Limited Sales 213,533,095 24,93,32,996 Purchases 6,976,687 91,05,272 Tamco Electrical Industries Australia Pty Ltd Sales 590,190,191 36,03,19,040 Purchases 14,528,914 PT Tamco Indonesia Sales 75,398,381 1,42,59,017 Purchases 3,168,470 2,92,426 L&T Electrical And Automation Saudi Arabia Company Limited LLC Sales 14,065,161 2,59,678 Larsen & Toubro Limited Sharjah Sales 172,723,229 L&T Electrical & Automation FZE Sales 15,365,661 Larsen & Toubro Oman LLC Sales 87,263,864 Larsen & Toubro International FZE Interest received 6,536,783 87,16,717 Larsen & Toubro Infotech Limited Services received 2,477,722 1,32,27,376 Larsen & Toubro Limited Account receivable 123,283,989 11,16,12,392 Account payable (5,904,543) (1,82,65,546) Henikwon Corporation Sdn Bhd Account receivable 7,016,631 Loan 79,403,775 Tamco Electrical Industries Australia Pty Ltd Account receivable 122,286,828 26,09,03,294 Account payable (466,870) (16,57,06,844) Loan 21,467,672 PT Tamco Indonesia Account receivable 279,012,526 19,79,33,261 Loan 190,232,498 Investment 154, L&T Electrical And Automation Saudi Arabia Company Limited LLC Account receivable 14,985,693 2,93,073 Larsen & Toubro (East Asia) SDN. BHD Account payable (644,967) Larsen & Toubro Limited, ECC Account payable (261,762) L&T Electrical & Automation FZE Account payable (585,679) (18,10,636) Account receivable 15,968,532 1,48,660 Larsen & Toubro International FZE Inter corporate deposit 334,319,046 32,95,47,372 Larsen & Toubro Infotech Limited Account payable (25,949) (8,93,831) Larsen & Toubro (East Asia) SDN. BHD Account payable (644,967) 4,11,074 Larsen & Toubro Limited, Sharjah Account receivable 142,396,091 Larsen & Toubro Oman LLC Account receivable 19,259, Borrowing cost capitalised during the period is R Nil (previous year Nil). S-1307

16 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) 3. There are no transactions with micro small and medium enterprises during the year. 4. Auditor s remuneration charged to the accounts are : Particulars 2012 (R) 2011 (R) For Statutory Audit 7,78,761 6,87,384 For Other Matters 2,59,587 NIL Total 10,38,348 6,87, Disclosures required by Accounting Standard (AS) 29 Provisions, Contingent Liabilities and Contingent Assets : Particulars Class of Provisions- Product Warranties (R) Balance as at 1 Jan, ,82,52,233 Provision reversed during the year 92,23,480 Balance as at 31 Dec, ,90,28, Earnings per share (basic & diluted) : Particulars For the year 2012 (R) 2011 (R) Profit after tax 68,18,88,601 43,96,36,295 Weighted no. of equity shares 10,00,00,000 10,00,00,000 Earnings per share (basic & diluted) Segmental reporting : The company operates wholly in Malaysia and its activities are the design, manufacture, supply, installation, commissioning and maintenance of equipment and systems for power distribution and motor control during the current year. The company operates predominantly in one industry - power distribution and motor control. Hence, no segment reporting is required. 8. Finance lease : Where company is a lessee: Company has acquired on finance lease certain items of motor vehicles. These leases do not have terms of renewal, but have purchase options at nominal values at the end of the lease term. Particulars Minimum lease payments Present value of minimum lease payments 2012 (R) 2011 (R) 2012 (R) 2011 (R) Payable not later than 1 year 34,65,740 36,89,102 30,32,577 32,32,763 Payable later than 1 year and not later than 5 years 36,18,213 65,68,041 31,32,825 57,04,863 Payable later than 5 years Total 70,83,953 1,02,57,142 61,65,402 89,37,626 Less: Future finance charge 9,18,551 13,19,516 30,32,577 32,32,763 Present value of minimum lease payments 61,65,402 89,37,626 31,32,825 57,04, Derivatives : a) In line with Company s risk management policy, risk related to changes in the exchange rate is hedged by using forward foreign exchange contracts. Category of derivative instrument Amount of exposure hedged For hedging foreign currency risks 2012 (R) 2011 (R) a) Forward contracts for receivables including firm commitments and highly probable forecasted transactions 76,12,86,292 87,74,17,297 S-1308

17 SCHEDULES FORMING PART OF ACCOUNTS (Contd.) TAMCO SWITCHGEAR (MALAYSIA) SDN BHD b) Unhedged foreign currency exposures Particulars As at 31 Dec, 2012 (R) As at 31 Dec, 2011 (R) Receivables including firm commitments and highly probable forecasted transactions 1,08,43,354 4,06,74,835 Payables including firm commitments and highly probable forecasted transactions 4,88,20,211 12,09,50, Previous years figures are regrouped/ reclassified wherever necessary. As per our report attached SHARP & TANNAN Chartered Accountants ICAI Registration No W By the hand of For and on behalf of the Board EDWIN AUGUSTINE Partner MEMBERSHIP NO: Date : April 24, 2013 S. C. BHARGAVA GRAHAM JOHNSON Director Director Date : April 24, 2013 S-1309