there's somethin new on the horizon

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A N N U A L R E P O R T

2 0 0 2 - 2003

there's somethinnew on the horizon

LML LIMITEDAN ISO 9001 COMPANY


DET NORSKE VERITASMANAGEMENT SYSTEM CERTIFICATE

Certificate No. 00384-2003-AQ-MDR-RvA

This is to certify thatthe Quality Management System

of

LML LIMITED

atH.O. & Works : C-10, Panki Industrial Estate, Kanpur - 208 022, INDIA

R.O. Sites : LML Limited. LML - Calcutta, LML - New Delhi, LML - Munibai, LML - BangaloreLML - Chandigarh, LML - Jaipur, LML-Ahmedabad, LML-Patna, LML-Bhopal, LML-Hyderabad, INDIA

has been found to conform to the Quality Management System Standard:ISO 9001:2000

This Certificate is valid for the following product or service ranges:

MANUFACTURING, MARKETING AND AFTER SALES SERVICING OF VARIOUSTWO WHEELER AUTOMOBILE MODELS FOR USE IN PERSONAL TRANSPORT

Original Certification dale: Place and date:

2000-12-15 Chennai, 2003-12-24

Compliance to the Standard in respecJ to the indicated scope MuMI. Jib.is verified by the DNV approved registered Team Leader: RwA HOPd

Sanjay Prakash Krishnakumar N.R.Lead Auditor Management Representative

Lack of fu l f i lmen t of conditions as set oul in the Appendix may render this Certificate invalid.

IThis Certificate i.v valiil until: /̂ *~"^V for the Accredited Unit:

2006-11-14 SlOvi DNV CERTIFICATION B.V.,THE NETHERLANDS


BOARD OF DIRECTORSM R B PUNJA, ChairmanK A NAJMI, IFCI NomineeKULWANT SINGH, IDBI NomineeD G PRASAD, EXIM BANK NomineeSHIROMANI SHARMA5 K AGGARWALLALIT KUMAR SINGHANIA, Whole-time DirectorSANJEEV SHRIYA, Whole-time DirectorDEEPAK SINGHANIA, Managing Director

EXECUTIVE DIRECTOR (COMMERCIAL)6 COMPANY SECRETARYK C AGARWAL

AUDITORSBANSI S. MEHTA & CO., Chartered Accountants, MumbaiPARIKH & JAIN, Chartered Accountants, Kanpur

COST AUDITORSJ K KABRA & CO., Cost Accountants, New Delhi

BANKERSSTATE BANK OF INDIABANK OF INDIABANK OF BARODA

REGISTERED OFFICEC-3, Panki Industrial Estate, Kanpur-208 022.

WORKS• Site Nos. II & III

Panki Industrial Estate, Kanpur - 208 022• Co-operative Industrial Estate, Kanpur - 208 022• 895, Udyog Vihar, Phase I, Gurgaon (Haryana)

ADMINISTRATIVE OFFICEMUMBAI : 714, Raheja Chambers, Nariman Point,

REGIONAL OFFICENEW DELHI : B-17, Greater Kailash Part-l,

SALES OFFICES• Ahmedabad61, Geekini House, Parkland Aptts.,Law Garden, Ellis Bridge• Bangalore56, Mission Road• BhopalPlot No. 165-166A,Opp Vijai Sthamb• BhubaneswarFlat No. A-1, Ratna Tower, Bomikhal• ChandigarhS.C.O. 84-85, Sector 17-C• Chennai110, Nelson Manikam Road,Aminjikarai• CochinOS-15, Illrd Floor, GCDA Complex,Marine Drive, Ernakulam

• GuwahatiNilomani Phukan Path,Christian Basti• Hyderabad24, Nagarjuna HillsCo-op. Hsg Soc., Punjagutta• JaipurB-192, University Marg, Bapu Nagar• Kolkata5A, 41, Hazra RoadStar Arcade Zone-l, M P Nagar• Mumbai103A, Kalpita Enclave,Swamy Nityanand Marg,Andheri (East),• Patna81, Surya Apartment,1st Floor, Fraser Road

CONTENTSPage

NoticeCorporate Governance &Shareholders' InformationDirectors' ReportAuditors' ReportBalance SheetProfit and Loss AccountSchedules forming Part ofthe Balance Sheet andProfit & Loss AccountBalance Sheet Abstract andCompany's General BusinessProfileCash Flow StatementProxy Form and Attendance Slip

No.(s)2-5

6-1617-2425-27

2829

30-53

5455


LML LIMITED

NOTICE

LIV/IL

NOTICE is hereby given that Twenty-ninth Annual General Meeting of the Members of LML Limited willbe held on Tuesday, the 9th March, 2004 at 11.00 A.M. at its Registered Office at C-3, Panki IndustrialEstate, Kanpur - 208 022 to transact the following business (es) :-

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet as at 30th September, 2003 and the Profitand Loss Account for the eighteen months period ended on that date, together with the Reports ofDirectors and Auditors thereon.

2. To appoint a Director in place of Mr M R B Punja, who retires by rotation and being eligible, offershimself for re-appointment.

3. To appoint a Director in place of Mr Lalit Kumar Singhania, who retires by rotation and being eligible,offers himself for re-appointment.

4. To appoint Auditors and to fix their remuneration and to consider, and, if thought fit, to pass with orwithout modification(s), the following resolution as an Ordinary Resolution :-

"RESOLVED THAT, pursuant to the provisions of Section 224 and other applicable provisions, if any,of the Companies Act, 1956, the retiring Auditors, M/s. Parikh & Jain, Chartered Accountants, Kanpurand M/s. Bansi S. Mehta & Co., Chartered Accountants, Mumbai, be and are hereby appointed asAuditors of the Company, to hold office from the conclusion of this Meeting until the conclusion ofthe next Annual General Meeting at a remuneration to be fixed by the Board of Directors and/or anyCommittee thereof."

SPECIAL BUSINESS

5. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as anOrdinary Resolution :-

"RESOLVED THAT, pursuant to the provisions of Sections 198, 269, 309 and 311 read with ScheduleXIII and all other applicable provisions of the Companies Act, 1956 (including any statutory modificationor re-enactment thereof) and subject to such other approvals as may be required (if any), the consentof the Company be and is hereby accorded to the re-appointment of Mr Sanjeev Shriya as Whole-timeDirector of the Company for a period of five years w.e.f. 18th July, 2004 on such remuneration andterms and conditions, as set out in the Explanatory Statement appended to the Notice conveningthis General Meeting."

"RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to take all suchsteps as may be necessary, proper or expedient to give effect to this resolution."

By Order of the Board of Directors

K C AGARWALPlace : New Delhi Executive Director (Comml.) &Date : 22nd January, 2004 Company Secretary

NOTES:

1. A member entitled to attend and vote at the meeting is entitled to appoint a PROXY to attend and,on a poll, to vote instead of himself/herself. A blank form of proxy is enclosed which, if intended tobe used, should be returned to the Registered Office of the Company not less than forty-eight hoursbefore the scheduled time of the Meeting. A proxy so appointed need not be a member.


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2. Information under Clause 49 of the Listing Agreement(s) regarding re-appointment of Directors (ItemNo. 2 & 3) and Explanatory Statement u/s 173(2) of the Companies Act, 1956 (Item No. 5) is appendedhereinbelow.

3. The Register of Members and the Share Transfer Books will remain closed from Monday, the 1stMarch, 2004 to Tuesday, the 9th March, 2004 (both days inclusive).

4. Company's Shares are being co'mpulsorily traded in Demat form w.e.f. 17th January, 2000. Membersmay send Dematerialisation Request Form(s) (DRF) alongwith Share Certificate(s)/Option Letter(s)through their Depository Participant(s) for demat of Shares to LML Shares Registry, C-10, PankiIndustrial Estate, Site-ll, Kanpur - 208 022.

5. Pursuant to SEBI circular No. D&CC/FITTC/CIR-15/2002 dated 27.12.2002, regarding whole ShareRegistry work at a single point, Company has established the Electronic Connectivities with CentralDepository Services (India) Ltd. (CDSL) and National Securities Depository Limited (NSDL), whichare working successfully. The physical share transfer work is already being done in-house.

6. Pursuant to the provisions of Section 205A of the Companies Act, 1956, as amended, the dividend(s)which remain un-paid or un-claimed for a period of seven years has to be transferred to "InvestorEducation and Protection Fund" of the Central Government. Members who have not encashed theDividend Warrant(s) so far, for the financial year(s) ended 30th September, 1997 and 31st March,1999 (for which dividend was declared), are requested to send the un-encashed dividend warrant(s)to LML Shares Registry for necessary action.

7. Members holding Shares in physical form are requested to notify changes in their address(es), if any,to LML Shares Registry, quoting their folio number(s), while those holding in the electronic modeare requested to send the intimation for change of address(es) to their respective Depositoryparticipant(s).

8. Members, who are holding Shares (in physical form) in identical order of names in more than oneFolio(s), are requested to write to LML Shares Registry, enclosing their share certificates forconsolidation in one folio.

9. Company has established a Trust for easy marketability of its Odd Lot Shares. Members may disposeoff their ODD LOT SHARES held in physical form through the Trust. Kindly send your ODD LOTSHARES alongwith duly signed Transfer Deed(s) as Transferor(s) at the following address for salein the market:

LML Limited - Odd Lot Shares TrustC-10, Panki Industrial Estate, Site - II, Kanpur - 208 022Tel : 0512-2691381-85Fax : 0512-2691393, 2691985 & 2691191

10. Members seeking any information with regard to Annual Accounts are requested to write to theCompany at least one week in advance so as to enable the Company to keep information ready atthe time of Annual General Meeting.

11. Members who wish to Nominate a person under Section 109A of the Companies Act, 1956, mayfurnish us required details in the prescribed Form 2B, which is available on demand.

12. Members / Proxies should bring the attendance slip duly filled in, for attending the meeting.


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INFORMATION UNDER CLAUSE 49 OF THE LISTING AGREEMENT(S) REGARDINGRE-APPOINTMENT OF DIRECTORS AND EXPLANATORY STATEMENT PURSUANT TO SECTION

173(2) OF THE COMPANIES ACT, 1956

Item No. 2

Mr MRB Punja, aged 78 years is Ex-Chairman of IDBI. He has been a Director of the Company since15th November, 1988 and Chairman since 16th May, 1989. He has vast professional experience infinance & general corporate management and also as a business entrepreneur.

Mr Punja is a Director of Adeep Auto Pvt. Ltd., Adeep Roloforms Ltd., Adeep Locks Ltd., Agrim AutomachPvt. Ltd., Aleef India Pvt. Ltd., Andhra Petrochemicals Ltd., Apollo Tyres Ltd., Chowgule Steamships Ltd.,Deepak Nitrite Ltd., Delite Engineering Pvt. Ltd., Hindoostan Spinning & Weaving Mills Ltd., SeshasayeePaper & Boards Ltd., Suprajit Engineering Ltd., Suprajit Chemicals Pvt. Ltd. and Sushruta Medical Aid &Research Hospital Ltd.

He is Chairman of (i) Audit Committee(s) of LML Ltd., Deepak Nitrite Ltd. and Suprajit Engineering Ltd.,(ii) Share Transfer & Shareholders/Investors' Grievance Committee of LML Ltd., (iii) RemunerationCommittee of Seshasayee Paper & Boards Ltd. He is also member of (i) Audit Committee(s) of HindoostanSpinning & Weaving Mills Ltd. and Seshasayee Paper & Boards Ltd. (ii) Share Transfer Committee ofSuprajit Engineering Ltd.Item No. 3

Mr Lalit Kumar Singhania, aged 59 years is a Post Graduate. He has substantial executive experience,including as a CEO. He has been actively involved in day to day affairs of the Company since 27thSeptember, 1988 in various capacities, including as its President, Deputy Managing Director & w.e.f.28.03.1995 as Whole-time Director.

He is member of Share Transfer & Shareholders'/Investors' Grievance Committee and Sub-committee ofDirectors of your Company.

Item No. 5

Mr Sanjeev Shriya, aged 45 years, is a Chartered Accountant and has wide experience in Two WheelerIndustry, Foreign Trade and IT Industry. He has widely travelled and is actively involved in day to dayaffairs of the Company since 09.10.1982 as a Director and w.e.f. 18.07.1987 as a Whole-time Director.

Mr Sanjeev Shriya was last appointed as Whole-time Director of the Company for a term of five years,which will expire on 17.07.2004. The Board has in its meeting held on 22.01.2004, re-appointed him fora further period of five years w.e.f. 18.07.2004. The remuneration payable to Mr Sanjeev Shriya, on therecommendation of Remuneration Committee, would be as follows :

(a) Salary : Rs. 6000/- per month

(b) Perquisites :

In addition to aforesaid salary, he shall also be entitled to perquisites, namely, House/House RentAllowance, Furniture & Furnishings, Gas, Fuel, Water & Electricity, Telephone(s), Servant(s), SecurityGuard(s) and maintenance of such facilities, Company's Car(s) with Driver(s) for official as well aspersonal use, Personal Accident Insurance, Reimbursement of Medical Expenses incurred in Indiaand/or abroad for self and family including travelling of attendant, if required on medical advice,Medical Insurance Premium, Club(s) Membership, Leave Travel Allowance for self and family,Educational support to dependent children including their travel, hostel fee and tuition fee etc. in Indiaand abroad, Entertainment, the payment of Income-tax on all perquisites (other than those by wayof monetary payment) by the Company and Company's contribution towards Provident Fund andSuperannuation fund, Gratuity/ Encashment of leave and any other perquisites as per policy/rules of


LIVXL

the Company in force or as may be approved by the Board from time to time. The monetary valueof such perquisites shall be determined as per Income-tax rules, wherever applicable, and, in theabsence of any such Rules, shall be valued at actual cost.

The aforesaid remuneration shall also be paid as minimum remuneration in the absence or inadequacyof profits in any financial year.

Mr Sanjeev Shriya is also Director in other Companies viz. Essar Steels Ltd., Gold Rock InvestmentsLtd., Gold Rock World Trade Ltd., Sugata Investments Ltd., Saryu Investments & Trading Ltd., Gold RockCard Co. Ltd., Smart Chip Ltd., Syscom Technologies Ltd., Tridhar Finance & Trading Ltd., Blue PointLeasings Ltd., Hutchison Essar Telecom Ltd. and Karthik Financial Services Ltd.

He is member of Sub-Committee of Directors of your Company.

None of the Directors, except Mr Sanjeev Shriya himself, is concerned or interested in the passing of theresolution at SI. No. 5.

Board commends passing of the resolution at SI. No. 5.

This may be treated as an abstract of terms of the Contract between the Company and Mr SanjeevShriya, pursuant to Section 302 of the Companies Act, 1956.

By Order of the Board of Directors

KCAGARWALPlace : New Delhi Executive Director (Comml.) &Date : 22nd January, 2004 Company Secretary


CORPORATE GOVERNANCE

I. COMPANY'S PHILOSOPHY

The philosophy of Corporate Governance is aimed at safeguarding and adding value to the interest ofthe various stakeholders of a Company including shareholders, lenders, employees and public at large.Emphasis is laid on striking a balance between individual interests & corporate goals- while operatingwithin accepted norms of propriety, equity, fair play & sense of justice. At LML, we are committed to GoodCorporate Governance to ensure that all functions of the Company are discharged in a professionallysound, accountable and competent manner. Given below is the requisite information relating to corporatefunctioning of your Company at apex level for the purposes of due transparency on this aspect.

II. BOARD OF DIRECTORS

Composition of BoardThe Board of Directors of the Company consists of Executive and Non-Executive Directors. As on 30thSeptember, 2003 more than 66% of the Board Members consisted of Non-Executive & IndependentDirectors. Three Directors were nominees of Financial Institutions namely, IDBI, IFCI & EXIM Bank.Chairman is a Non-Executive & Independent Director. The Chairman of the Company does not have aseparate office. However, all necessary support is provided to him by the Company in performance ofhis duties. Composition of the Board of Directors of the Company and their other Directorship(s) /CommitteeMembership(s)/Chairmanship(s) as on 30th September, 2003 was as under:-

Name

Mr M R B Punja

Mr Kulwant Singh

Mr K A Najmi *

Mr D G Prasad **

Mr S K Aggarwal

Mr Shiromani Sharma

Mr Lalit Kumar Singhania

Mr Sanjeev Shriya

Mr Deepak Singhania

Status

Independent,Non-ExecutiveChairmanIndependent,Non-Executive(Nominee DirectorIDBI)Independent,Non-Executive(NomineeDirector-IFCI)Independent,Non-Executive(NomineeDirector -EXIM Bank)IndependentNon-ExecutiveIndependent,Non-ExecutiveExecutive/Whole-time Director

Executive/Whole-time DirectorExecutive/Managing Director

No. of Directorship(s) and Committee Membership )̂/Chairmanship(s) of other public Companies

OtherDirectorship(s)

11

1

2

1

—

3

—

12

—

CommitteeMembership(s)

3

3

—

—

—

—

—

CommitteeChairmanship(s)

3

-

• 2

—

-

—


* Mr K A Najmi aged 55 years, was appointed as Nominee Director of IFCI Ltd. w.e.f. 30.04.2002. Heis a Non-Executive and Independent Director. He holds Directorships of two other Companies viz.SVC Superchem Ltd. and HARDICON. He is neither Chairman nor a member of any Committee ofother Companies.

** Mr D G Prasad, aged 55 years, was appointed as Nominee Director of Exim Bank of India on31.10.2002 w.e.f. 08.10.2002. He is a Non-Executive and Independent Director. He holds Directorshipin one more Company i.e. Trans Gel Industries Ltd. He is neither Chairman nor a member of anyCommittee of that other Company.

Directors' Attendance at Board/Shareholders' Meeting(s)

Eight Board Meetings were held during the period 2002-03. These meetings were held on 30th April,2002, 29th July, 2002, 31st October, 2002, 28th January, 2003, 17th April, 2003, 26th July, 2003, 9thAugust, 2003 & 24th September, 2003. The attendance record of all the Directors at the Board Meeting(s)and the last AGM between 01.04.2002 to 30.09.2003 was as under:

Name

Mr M R B Punja

Mr Kulwant Singh

Mr K A Najmi

Mr D G Prasad *

Mr S K Aggarwal

Mr Shiromani Sharma


Mr Sanjeev Shriya

Mr Deepak Singhania

No. of BoardMeeting(s) attended

7

8

8

6

8

7

7

7

8

Attended last AGM#

No

Yes

No

N.A.

Yes

No

Yes

Yes

Yes

* Appointed as Nominee Director on 31.10.2002 w.e.f. 8.10.2002.# The last AGM was held on 14th September, 2002

Board Procedure

As per Corporate Policy, statutory and material information is placed before the Board with a view toenable it to discharge efficiently its responsibilities in formulating the strategies and policies for the growthof the Company. The Agenda and other relevant papers are circulated ahead of the scheduled dates ofthe meetings. The day-to-day affairs of the Company are managed by the Managing Director and twoWhole-time Directors subject to the supervision and control of the Board of Directors. Opinions and adviceof the Independent & Non-Executive Directors are considered valuable guidance. For specific matters,the various Committees of the Directors deliberate in detail, analyse situations, firm up views & advisethe Board on decision making & follow up actions as may be considered appropriate.III. COMMITTEE(S) OF THE BOARD OF DIRECTORS

• Audit CommitteeComposition of the Audit Committee meets all the criteria under the law. The Committee comprises offour Directors, all being Non-Executive & Independent. It met six times during the period 2002-03, on


L3VIL

30th April, 2002, 29th July, 2002, 31st October, 2002, 28th January, 2003, 17th April, 2003 and 26th July,2003. The attendance of the Audit Committee Members was as under:-

Name

Mr M R B Punja

Mr S K Aggarwal

Mr K A Najmi

Mr Shiromani Sharma

Category

Chairman

Member

Member

Member

No. of Meeting(s) Attended

6

6

5

5

Mr K C Agarwal, Executive Director (Comml.) & Company Secretary acts as Secretary to the AuditCommittee. Heads of the Internal Audit and Accounts Departments, Statutory Auditors/CostAuditors/Internal Auditors attended the meetings of Audit Committee.

The Audit Committee deals with the various aspects of financial statements including quarterly, half yearlyand annual results, adequacy of internal controls & internal audit functions, various audit reports, significantdecisions affecting the financial statements, compliance with accounting standards and Company'sfinancial & risk management policies. It reports to the Board of Directors about its findings &recommendations pertaining to above matters. Board has accepted all the recommendations of the AuditCommittee.

• Remuneration CommitteeRemuneration Committee of the Board of Directors recommends/reviews the remuneration package ofManaging Director & Whole-time Directors. The Remuneration Committee comprises,of three Directors,all being Non-Executive & Independent, and met once on 30.04.2002 during the period.

Name

Mr M R B Punja

Mr S K Aggarwal

Mr Kulwant Singh

Mr Shiromani Sharma

Category

Chairman*

Chairman**

Member

Member


1

N.A.

1

1

* Ceased to be Member-Chairman w.e.f. 26.07.2003

** Appointed as Member-Chairman w.e.f. 26.07.2003

8


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Directors' Remuneration

The details of remuneration paid to the Directors during the period from 01.04.2002 to 30.09.2003 wereas under:

Name

Mr M R B Punja

Mr Kulwant Singh

Mr K A Najmi

Mr D G Prasad

Mr S K Aggarwal

Mr Shiromani Sharma


Mr Sanjeev Shriya

Mr Deepak Singhania

GrossRemuneration

(Rs.)

-

-

-

-

-

-

1867034

493667

1815645

Sitting Fee

(Rs.)

20000

9000

13000

6000

20000

13000

-

-

-

Total

(Rs.)

20000

9000

13000

6000

20000

13000

1867034

493667

1815645

• Gross remuneration includes salary, perquisites & income tax on perquisites paid by the Company.• The Company has a policy of not advancing any loans to Directors. The Company does not have

any stock option scheme.• Managing Director & Whole-time Directors have been appointed for a period of five years. As per

the service rules of the Company, either party is entitled to terminate the appointment by giving notless than three months' notice in writing to the other party. There is no severance fee.

• One of the Non-Executive Directors of the Company, Mr MRS Punja, along with his family members,is associated with two companies which supply auto-components to several two-wheelermanufacturing companies including LML. The value of supplies by the said two companies to LMLduring the period 2002-03 was Rs. 2.03 lakhs.

• Share Transfer & Shareholders'/Investors' Grievance CommitteeThe Share Transfer & Shareholders' / Investors' Grievance Committee of the Company looks into thematters like transfer / transmission, issuance of duplicate shares, non-receipt of declared dividend etc.and investigate the investors' complaints and take necessary steps for redressal thereof.Share Transfer & Shareholders'/Investors' Grievance Committee, consisting of following Directors, metsix times upto 30th September, 2003, i.e. on 30th April, 2002, 29th July, 2002, 31st October, 2002, 28thJanuary, 2003, 17th April, 2003 and 26th July, 2003. The attendance of the Members of Share Transfer& Shareholders'/Investors' Grievance Committee was as under:-

Name

Mr M R B Punja

Mr S K Aggarwal


Category

Chairman

_ Member

Member


6

6

5

Mr K C Agarwal, Executive Director (Commercial) & Company Secretary is the Compliance Officer of theCompany.


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Complaints by shareholders & their redressal during 01.04.2002 to 30.09.2003, is as under:-

Nature of Complaints

Non-receipt of Annual Report

Delay in Transfer of Shares/Non-receipt of shares after Transfer

Non-receipt of Dividend Warrants

Change of Address

Debenture Interest/Redemption

Others

Total

Received

1

7

8

Nil

29

4

49

Solved

1

7

8

N.A.

29

4

49

• Sub-Committee of DirectorsThe Company has a Sub-Committee of Directors of the Board for taking on records the un-audited financialresults of the Company and to do all other acts, deeds and things in terms of clause 41 of the ListingAgreement in a situation where Board Meeting is not held for the purpose. The Sub-Committee of Directorscomprises of following Directors :-

Name

Mr S K Aggarwal


Mr Sanjeev Shriya

Mr Deepak Singhania

Category

Member

Member

Member

Member

The Committee didn't meet during the period, as the Board of-Directors meetings were held for takingthe unaudited financial results on record.

IV. OTHER DISCLOSURES

• Details of last three Annual General Meeting(s)

Year

2002

2001

2000

Venue

Regd. Office at C-3, Panki Indl.Estate, Kanpur - 208 022



Date

14th September,2002

22nd September,2001

22nd August,2000

Time

11.00AM

10.00AM

10.00AM

Any Special Resolution

Yes, Special Resolution fordelisting of shares from DelhiStock Exchange. •

No

Yes, Special Resolutions underSections 81(1 A) & 31 of theCompanies Act, 1956 and ajsodelisting of shares fromAhmedabad Stock Exchange.

10


XJVEJL,

Whether special resolutions were put throughPostal Ballot last year, details of voting pattern

Person who conducted the Postal Ballot exercise

Are votes proposed to be conducted through PostalBallot this year

Procedure for Postal Ballot

No

N.A.

No

N.A.

Disclosures* None of the transactions with any of the related party are in conflict with the interest of the

Company. Transactions with the related parties have been disclosed in Note No. 17 of Schedule15 to the Accounts in the Annual Report.

» There is no non-compliance of any provision of law by the Company nor any penalty / strictureimposed on the Company by Stock Exchange(s), SEBI or any other authority, on any matterrelated to capital markets, during the last three years.

Means of Communication

Half yearly report sent to each household ofshareholders

Quarterly Results are normally published in

Any web-site, where displayed

Whether it also displays official news releases and thepresentations made to institutional investors or to theanalysts

Whether Management Discussion & Analysis Report isa part of Annual Report or not

Whether Shareholders' Information Section forms partof the Annual Report

No. However, Company is publishing the resultsin National & Regional Newspapers and onEDIFAR web-site.

Quarterly Results are published in National &Regional Newspapers and on EDIFAR web-site

Yes. The results are displayed on EDIFARweb-site i.e. sebiedifar.nic.in and are being sentto all the Stock Exchanges where the Shares ofthe Company are listed, for putting, in their ownweb-site

N.A.

Yes

Yes

11


V SHAREHOLDERS' INFORMATION

• Annual General Meeting

Date

Time

Venue

Tuesday, the 9th March, 2004

11.00AM

LML LimitedC-3, Panki Industrial Estate,Kanpur-208 022

Financial Calendar (tentative)

Financial Reporting for the quarter ended December 31 , 2003

Financial Reporting for the quarter/half year ending March 31 , 2004

Financial Reporting for the quarter ending June 30, 2004

Financial Reporting for the year ending September 30, 2004

Annual General Meeting for the year 2003-04.

22nd January, 2004

End of April, 2004

End of July, 2004

End of December, 2004

March, 2005

Dates of Book ClosureFrom Monday, the 1st March, 2004 to Tuesday, the 9th March, 2004 (both days inclusive).

Dividend Payment DateThe Directors have not recommended any dividend on Equity Shares for the period 2002-2003.

The name of the Stock Exchanges in which the Equity Shares of the Company are listedUttar Pradesh, Mumbai, National Stock Exchange and Delhi.

Pursuant to application made by the Company for voluntary delisting, The Ahmedabad Stock Exchangehas delisted the Equity Shares of the Company w.e.f. 16.01.2004. The Delhi Stock ExchangeAssociation Ltd. vide its letter dated 20.01.2004 has also confirmed voluntary delisting of EquityShares of the Company w.e.f. 23.01.2004.

Stock Code

Name of Stock Exchange

The Stock Exchange, Mumbai

National Stock Exchange of India Ltd., Mumbai

The Uttar Pradesh Stock Exchange Assn. Ltd., Kanpur

The Delhi Stock Exchange Association Ltd., New Delhi

Code

500255

LML Ltd.

L00004

000030

12


JLJVIJL

Market Price Data

Monthly High & Low price of the Equity shares of the Company for the period 2002-03

Month

April, 2002

May, 2002

June, 2002

July, 2002

August, 2002

September, 2002

October, 2002

November, 2002

December, 2002

January, 2003

February, 2003

March, 2003

April, 2003

May, 2003

June, 2003

July, 2003

August, 2003

September, 2003

High

UPSE

37.00

37.00

45.60

51.10

39.85

43.25

40.75

42.00

41.85

39.50

36.25

36.25

31.55

37.25

45.15

47.80

46.50

49.50

NSE

37.90

37.00

45.90

48.90

39.90

43.40

40.95

42.80

41.95

39.50

36.30

37.30

32.00

37.50

45.00

47.90

49.00

50.00

BSE

38.00

37.20

45.75

50.25

39.90

43.40

40.95

42.20

41.95

39.50

36.15

36.35

31.50

37.30

44.90

48.00

48.35

48.70

Low

UPSE

30.30

24.15

29.25

30.00

31.00

30.00

34.75

34.95

36.00

29.50

30.10

27.50

26.40

28.45

34.85

38.70

37.25

38.50

NSE

30.05

24.00

28.10

28.00

31.55

34.50

35.80

35.90

36.20

28.55

30.10

27.00

26.40

28.55

34.15

33.00

37.00

38.30

BSE

30.00

24.00

29.00

28.50

32.30

34.60

35.75

36.00

36.10

29.10

30.00

26.25

25.70

28.60

34.60

38.30

37.05

38.40

Stock Price Performance for the period 2002-03 — LML Vs BSE Sensex

*

• Share Transfer System

Share Transfers in physical form are registered if documents are clear in all respect and thereafter OptionLetter(s) for holding shares in Demat form is/are sent to those registered holders who have lodged upto500 Shares. For the cases where negative or no response is received within 30 days, shares are returnedto the registered holders in physical form. Shares transferred over 500 Share per Transfer Deed arereturned physically to the registered holders in compliance to Circular No. NSDL/JS/005/2003 dated12.02.2003 issued by National Securities Depository Ltd. and Communique No. CDSL/BDO/RTA/55 dated14.01.2003 of Central Depository Services (India) Ltd. The Share Transfer and Shareholders'/Investors'

13


Grievance Committee meets frequently to approve transfer of Shares above 10000 nos. under one transferdeed. Each of the Committee Member is severally authorised to approve transfers upto 10000 sharesunder one transfer deed. Company Secretary / Officers of the Company have been authorised to approvetransfers upto 5000/100 shares respectively under one transfer deed.

* Dematerialisation of Shares and LiquidityTrading in Equity Shares of the Company is permitted only in dematerialised form w.e.f. 17th January,2000. Company's Transfer-cum-Demat Scheme' is successfully operating since December, 1999. Allrequests for dematerialisation of Shares are processed and confirmation is given to the respectiveDepositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India )Ltd. (CDSL) within the stipulated time. Upto 30th September, 2003, 32.63% Equity Shares of the Companyhave been dematerialised.Other details are as under:* Approximate time taken for Share transfer if the

documents are clear in all respects* Demat ISIN Number for Equity Shares of the Company

in NSDL & CDSL* Total No. of shares dematerialised upto 30.09.2003» Total No. of shares rematerialised upto 30.09.2003.

* Total No. of shares transferred during 2002-03 (physical)* No. of Shares pending for transfer as on 30.09.2003

* No. of shares pending for dematerialisation/ confirmationas on 30.09.2003

Shareholding Pattern as on 30.09.2003

7 days

INE862A 01015

1,42,43,5281,6712,47,3403,102 (Transferred on 01.10.2003)

34,336 (Confirmed on 03.10.2003)

SI.No.

1.

2.

3.

4.

5.

6.

Category

Resident Individuals

Indian Companies

Fls/Mutual Funds/Banks

Indian Promoters/Directors & their rela

NRIs/OCBs/Flls/FCs

Clearing House(s) / Members

TOTAL

No. ofShareholders

207508

1598

49

lives 42

156

330

209683

%98.97

0.76

o!o20.02

0.07

0.16

100.00

No. of EquityShares

15980092

209121,5

44073

21796826

3458174

285256

43655636

%

36.61

4.79

0.10

49.93

7.92

0.65

100.00

Graphic Presentation of

NRIs/OCBs/7.92°/

vrfTrnnrmIndian Promoters / I • ,

Directors & their Relatives t49.93% ~~ -!!i'Ull|||

the Shareholding PatttClearing House/Members

-lls/FCs 0.65%«^ ^

HMsrn as on 30.09.2003

Resident Individuals/~ 36.61%

sjguip"' Indian Companies3L_— ' 4.79%

Fis / Mutual Funds/Banks0.10%

14


LIVIL

Distribution of Shareholding as on 30.09.2003

SI.No.

1.

2.

3.

4.

5.

No. of Shares Held

1 -499

500 - 999

1000-4999

5000 - 9999

10000 & ABOVE

TOTAL

No. ofShareholders

203092

3911

2367

200

113

209683

%

96.86

1.87

1.13

0.09

0.05

100.00

No. of EquityShares

8951386

2317958

3985191

1278579

27122522

43655636

%

20.50

5.31

9.13

2.93

62.13

100.00

Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likelyimpact on Equity SharesThe Company does not have any such instrument at present.

Plant Locations• Motorcycle & Scooter Unit

C-10, Panki Industrial Estate, Site-ll and Site-Ill, Kanpur-208 022.

• Industrial Electronics UnitUnit - 1Unit - 2Unit - 3

72-A, Co-operative Industrial Estate, Dada Nagar, Kanpur-208 02210-B, Co-operative Industrial Estate, Dada Nagar, Kanpur-208 02282-A, Co-operative Industrial Estate, Dada Nagar, Kanpur-208 022

• Labels & Graphics Unit895, Udyog Vihar,Phase I, Gurgaon,Haryana.

• Address of the Registrar & Share Transfer Agent & for correspondenceIn-house share transfer is done by the "LML Shares Registry" registered with SEBI as CategoryII Share Transfer Agent vide Registration No. INR000001666 valid upto 15.11.2006.

LML Shares Registry(A Division of LML Limited)C-10, Panki Industrial Estate, Site-ll,Kanpur - 208 022

Phone Nos. : (0512) 2691381-84Fax No. : (0512) 2691393, 2691985 & 2691391E-mail : [email protected]

15


JLJVEJL

CERTIFICATION BY THE AUDITORSAs required u/c 49 of the Listing Agreement(s), the Statutory Auditors of the Company have verifiedthe compliance of the Corporate Governance by the Company. Their Certificate is annexed hereinafter.

AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

To,The Members ofLML Limited

We have examined the compliance of conditions of Corporate Governance by LML Limited for the periodended on 30th September, 2003, as stipulated in Clause 49 of the Listing Agreement(s) of the saidCompany with the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Ourexamination was limited to procedures and implementation thereof, adopted by the Company for ensuringthe compliance of the conditions of the Corporate Governance. It is neither an audit nor an expressionof opinion on the financial statements of the Company.

Based on such examination, to the best of our information and according to the explanations given tous, we certify that the Company has complied with the conditions of Corporate Governance as stipulatedin the above mentioned Listing Agreement(s).

We state that no investor grievance is pending for a period exceeding one month against the Companyas per the records maintained by the Company and noted by the Board of Directors/Share Transfer andShareholders' / Investors' Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Companynor the effectiveness with which the management has conducted the affairs of the Company.

For BANSI S. MEHTA & CO. For PARIKH & JAINChartered Accountants Chartered Accountants

H G BUCH ANURAG JAINPartner Partner

Place : New DelhiDate : 22nd January, 2004

16


L3MEL

DIRECTORS' REPORT

ToThe Members

Your Directors have pleasure in presenting the Twenty-ninth Annual Report together with audited Statementof Accounts for the eighteen months period ended 30th September, 2003.This report also includes Management Discussion & Analysis (MD&A) as it has been considered appropriateto do so, in order to avoid duplication & overlap between Directors' Report and a separate MD&A.

1. WORKING RESULTS

ParticularsGross Sales and Other IncomeProfit/(Loss) before Interest, Depreciation & TaxationInterestCash Profit / (Loss)DepreciationProfit / (Loss) before TaxationProvision for Taxation

— Current Tax— Deferred Tax (Net)

Net Profit / (Loss)Production (Nos.)Sales (Nos.)

Period Ended30.09.2003

(18 Months)1127.63

23.5648.53

(24.97)36.21

(61.18)

22.50(38.68)317968315354

(Rs. in Crores)

Year Ended31.03.2002

(12 Months)552.96(4.58)40.71

(45.29)23.32

(68.61)

24.22(44.39)167625172729

In view of the loss, Directors regret their inability to recommend any dividend for the period.

2. OPERATIONSYour Company increased its business in motorcycles, which contributed to around 70 % of its turnover.Its motorcycle - Freedom, which is in the Deluxe Commuter Segment, has established a position ofexcellence in the market due to its contemporary technology which gives many benefits to the user.In December, 2003, Freedom was adjudged as the best motorcycle in the price band of Rs. 40,000to Rs 45,000 by BBC World Wheels programme. The Company also introduced variants of Freedomduring the year. The market for geared scooters continued to remain adverse. On the other hand4-stroke gearless scooters (CVT type) showed significant growth during the year. Barring unforeseencircumstances the Company expects to overcome the limitations it is facing including in the area ofproduct range, capacity, network and resource, in the coming period so as to make a completeturnaround in its business.Domestic sales performance of your Company was as follows :

Geared ScootersGearless Scooters - (single clutch)Motorcycles

Period ended30.9.2003

(18 months)(Nos.)

82,4051,548

219,008

Year ended31.3.2002

(12 months)(Nos.)

117,5813,184

44,723

17


Exports

Company exported 12,393 units as against 7,241 units last year. It added a number of new countriesto its export list, which now covers over 40 countries, and includes even developed countries.

In addition, it commenced exports of its scooters to the U.S.A. upon grant of the EPA and DOTcertification. It is estimated that the general recovery in the American market, which will have aninfluence on the world economy more particularly in the South American market, would help in furtherincreasing our export volume.During current financial year, Company expects to better its performance in exports.

3. RESTRUCTURING

Company has taken steps for a comprehensive restructuring of its business (financial, dealer net-work,industrial, product portfolio, cost, etc.). The Company's proposal for financial restructuring has alreadybeen approved by some of the lenders and balance approvals are expected shortly. AccordinglyCompany has taken credit of waiver of penal interest/compounding interest/ liquidated damagesprovided so far and has also provided interest on the outstanding loans as per the package.Accumulated interest has been converted into funded interest term loan.

4. PRODUCT PORTFOLIO / INDUSTRIAL

Inspite of the limitations the Company has been facing, it has taken steps in the area of expansionof the product portfolio for the new motorcycles. It expects that during the current and the followingfinancial year it would be able to place in the market new offerings which would give the Companythe required space in the motorcycle segment to operate and increase its overall size of businesswhich would lead to the turnaround.Concurrently, the Company has also taken steps for increase in capacity, which together with theexisting and new range of vehicles, would give it the required line up and depth of motorcycles inthe market, which has remained restricted to only one segment (Deluxe Commuter) through Freedom.

5. NETWORK

Substantial work has been done by the Company for the rationalization, upgradation and expansionof the network at the primary, secondary and tertiary level. This is being achieved through LML. Globaland Studio LML (primary), LML Centre (secondary) and LML Point (Tertiary) locations. The dealernetwork of the Company (originating from the scooter business) has been urban focused, being theareas where scooters were generally sold. The territorial penetration of the Company (through thisnetwork) has been only 39% of the motorcycle market, which during this year would increasesubstantially. A large number of primary, secondary and tertiary outlets for sales and service havealready been created and commissioned during the period. The entire network which is an exclusivebranded retail chain could possibly become one of the largest in consumer durables in the country.

6. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm :

a) that in the preparation of the annual accounts, the applicable accounting standards have beenfollowed and that no material departures have been made from the same;

b) that they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company at the end of the period and of the profits/losses of theCompany for that period;

c) that they have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;

d) that they have prepared the annual accounts on a going concern basis.

18


7. CORPORATE GOVERNANCE

Your Company has been practicing the principles of good corporate governance over the years.

The Board of Directors supports the principles of corporate governance. In addition to the basicgovernance issues, the board lays emphasis on transparency, accountability and integrity. Whole-time Directors set performance standards.

Formal detailed report on Corporate Governance and also Certificate of the Auditors of your Companyregarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of thelisting agreement(s) with stock exchanges, are enclosed.

8. MANAGEMENT DISCUSSION AND ANALYSIS

a) Mission, Vision & Core ValuesMission

LML aspires to :

- Become a significant player in the two-wheeler industry.- Create & sustain added stake-holder value.

Vision

- To achieve sufficient economic capacity and a reasonable share of the 2-wheeler market.

Core Values- Customer Satisfaction.- Concern for environment.- Commitment to Quality and Excellence.- Innovation.

b) Macro-economic Developments and overall review

Increase in Indian GDP for fiscal year 2002-03 at 4.4% was lower than the level (5%) achievedlast year. The lower GDP in 2002-03 stemmed mainly on account of poor monsoons during theperiod, which impacted the agricultural sector. However, monsoons during 2003 have beensubstantially better (and widespread) and this has given impetus to economic recovery. The.forecasts place the GDP growth to be around 8% for 2003-04 and the feel good factor isdistinctively palpable. The Indian economy is slowly moving away from the domination ofagriculture which was the most important determinant till the early 90's. Information Technologyled services sector has gained significant prominence. Contribution to GDP of agriculture andallied industries reduced from 31.5% in 1992-93 to 22% in 2002-03 while that of the Servicessector increased from 42.1% to 50.7% during the same period. The overall buoyancy in theeconomy has led to greater demand of goods including of automobiles so as to fulfil the requirementof mobility which is a basic necessity.

c) Two-wheeler Industry

The two-wheeler industry continued to show growth though the substantive part of it occurredduring the second half. After a buoyant market during the festival period, the Industry faced aslight lull post Diwali but it is expected that in the coming months the motorcycle industry wouldbe able to maintain a healthy growth rate. India is at the threshold of becoming a significantplayer in the auto sector both for manufactured vehicles and components. Indian two-wheelersover the next 2-3 years time are expected to make a mark for themselves in the globe, sincequality, reliability and ability to engineer vehicles has placed the country in a situation where itcould make a quantum jump in business in the overseas markets while at the same time servicingthe demand of the domestic market.

19


XJVTL

The share of the various categories of 2-wheelers in the overall 2-wheeler market is given in the tablebelow :

(Nos./Lacs)

Category

Geared Scooters(Metal Body)

Gearless Scooters(Plastic Body)

Motorcycles

Mopeds

Total

1990-91

No.

8.35

0.77

4.68

4.26

18.06

%

46.20

4.30

25.90

23.60

100.00

1995-96

No.

10.79

1.44

8.09

6.26

26.58

%

40.59

5.42

30.44

23.55

100.00

2000-01

No.

6.22

2.80

21.56

6.88

37.46

%

16.60

7.47

57.56

18.37

100.00

2001-02

No.

5.60

3.15

29.50

4.94

43.19

%

13.00

7.30

68.30

11.40

100.00

2002-03(18 Months)

No.

5.62

6.86

58.74

6.03

77.25

%

7.30

8.90

76.00

7.80

100.00

Source : SIAM & Other Secondary sources.

Chart 1 Market Scenario (1990-91) Chart 2 Market Scenario (2002-03) 18 Months

Geared Scooters{Metal Body)

46.2%


4.3%


7.3%


8.9%

Motorcycle continued to remain the preferred choice of the users in the country. 4-stroke gearless scooters(CVT type) also witnessed an increase in demand due to the convenience of drive and the flexibility thatit is a unisex vehicle. The geared scooters and mopeds, however, continued to face decline.

The probable inter-segment weightage distribution during next 4 years is likely to be :

Category

Geared Scooters (Metal Body)

4-stroke Gearless Scooters (CVT type)

Motorcycles

Mopeds

Total

2004-05%

6

10

80

4

100

2005-06%

4

10

81

5

100

2006-07%

4

10

79

7

100

2007-08' %

4

11

78

7

100

20


Chart 3 Market Scenario (2004-05)

JLJVIL

Chart 4 Market Scenario (2007-08)Geared Scooters


10%


4.0%


11.0%

d) SWOT Analysis of the CompanyStrengths :

- Strong and well differentiated marquee.- Consumer understanding and Systems for building insights into market behaviour.- R&D capability, well linked with business.- Strong dealer network in North, Central & Eastern markets.- Strong vendor supply chain.- Strategic location of the plant.- High level of indigenisation.

Weaknesses :

- Continued burden of "Asset-servicing" costs relating to geared scooter business.- Late entry into motor cycle market.- Low network penetration.- Low production capacity and product range (motorcycles)

Opportunities :

- Market growth through increased penetration especially in semi-urban and rural areas.

- Influencing consumers preference through innovation, and with high-level of quality andclass, defining product performance.

- Late entry gives flexibility in having a product line-up responding to present day consumer preferences.

- Substantial cost-reduction opportunities - with increase in volumes.

Threats :

- Low volumes as compared to peers.- Shrinking market for geared scooters.

e) Cautionary Statement

MD&A detailing the Company's objectives and expectations may have "forward lookingstatements" within the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed or implied depending upon global and Indian demand-supplyconditions, changes in Government regulations, tax regimes, economic developments within Indiaand overseas.

9. DIRECTORATE

Mr MRB Punja and Mr Lalit Kumar Singhania retire by rotation and, being eligible, offer themselvesfor re-appointment.

During the period under report, Mr K A Najmi & Mr D G Prasad were appointed as Nominee Directors

21


L3VIL

by IFCI Ltd. and EXIM Bank respectively, on the Board of the Company. Board welcomes the newDirectors.Subject to your approval, Mr Sanjeev Shriya has been re-appointed as Whole-time Director (w.e.f.18.07.2004 ) of your Company for a period of five years.

10. PERSONNEL

During the period, harmonious and peaceful relations continued with the employees. The Companyhad 6190 employees as on 30.9.2003 out of which 6 (six) were in receipt of remuneration of Rs.36.00 lacs or more for the period (Rs. 24.00 lacs per annum) and 4 (four) for the part of the period.In accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 and the rulesframed thereunder, the names and other particulars of employees are set out in the annexure to theDirectors' Report. In terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956,the Directors' Report is being sent to all the shareholders of the Company, excluding the annexure.Any shareholder interested in obtaining a copy of the said annexure may write to the CompanySecretary at the Registered Office of the Company. A copy of the said Annexure is also available forinspection at the Registered Office of the Company during the working hours.

11. AUDITS & AUDITORS

M/s. Parikh & Jain, and M/s. Bansi S. Mehta & Co., Auditors of the Company, are retiring at theensuing Annual General Meeting of the Company and, being eligible, offer themselves forre-appointment.In respect of observations made by the Auditors in their Report, your Directors wish to state that therespective notes to the accounts are self-explanatory, and do not call for any further comments.Pursuant to Section 233 B of the Companies Act, 1956 and as per requirements of the CentralGovernment, an audit of Cost Accounts, relating to motor vehicles was carried out for the period.Subject to approval of Central Government, M/s. J K Kabra & Co., Cost Accountants, have beenre-appointed to audit the Cost Accounts relating to the F.Y. 2003-04.

12. CONSERVATION OF ENERGY

Company continued to envisage and implement energy conservation measures in variousmanufacturing operations leading to savings of quantitative consumption of power, fuel and oil etc.Energy conservation during the period under various heads resulted into an estimated saving of Rs.203 lakhs (previous year Rs. 85 lakhs).

13. POLLUTION CONTROL

Relevant and necessary effluent treatment plants and other measures for control of water, air andenvironmental pollution are already in place and steps have been taken to further strengthen andconsolidate pollution control measures. 'No Objection Certificates' from the U.P. Pollution ControlBoard are obtained from time to time.

14. RAIN WATER HARVESTING SYSTEM (RWHS)

In order to make optimum utilization of rain water, the Company has installed a RWHS (in one blockof the factory). This has a designed rain water harvesting capacity of 23.15 lakh litres/annum.The Company plans to install such systems in other blocks over a period of next 2-3 years.

15. TECHNOLOGY ABSORPTION

Requisite information in prescribed form is given in Annexure to this report.

16. FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company earned Foreign Exchange of Rs 37.32 crores (previous year Rs. 24.64 crores). ForeignExchange outgo amounted to 58.96 crores (previous year Rs. 32.37 crores).

22


L3VTL

17. STOCK EXCHANGE LISTINGS AND DEPOSITORY SYSTEM

Listing :

The Equity shares of the Company are listed at the following Stock Exchanges :

— The U.P. Stock Exchange Assn. Ltd., Kanpur— The Stock Exchange, Mumbai— National Stock Exchange of India Ltd., Mumbai— The Delhi Stock Exchange Association Ltd., New Delhi

The Company confirms that it has paid the annual listing fee to the above Stock Exchanges. Pursuantto SEBI (Delisting) Guidelines as amended upto date, the Equity Shares of the Company have beengot voluntarily delisted from Ahmedabad Stock Exchange w.e.f. 16.01.2004.

The Delhi Stock Exchange Association Ltd. vide its letter dated 20.01.2004 has also confirmedvoluntary delisting of Equity Shares of the Company w.e.f. 23.01.2004.

Depository System

Trading in Equity Shares of the Company is permitted only in dematerialized form w.e.f. 17th January,2000. Company's Transfer cum Demat Scheme' is successfully operating since December, 1999.All requests for dematerialization of shares are processed and the confirmation is given to therespective depositories i.e. National Securities Depository Limited (NSDL) and Central DepositoryServices (India) Limited (CDSL) within the stipulated time. Upto 30th September, 2003, 32.63%Equity shares of the Company have been dematerialized.

18. SUBSIDIARY COMPANY

The Perfect Polycons Ltd. (PPL), erstwhile subsidiary of your Company ceased to be subsidiary w.e.f.31.12.2002. Accordingly, in terms of AS-21 issued by ICAI, New Delhi, Consolidated FinancialStatement as on 30.09.2003, are not required to be prepared. Section 212 of the Companies Act,1956 has also become inapplicable.

19. ACKNOWLEDGEMENT

Your Directors appreciate the valuable co-operation extended by the Central and State Governmentauthorities and are extremely grateful to the Financial Institutions and the Company's Bankers fortheir continued assistance, guidance and support. Your Directors are also grateful to the Customers,Shareholders, Employees, Vendors, Dealers/Sub-dealers, and the general public for their supportand confidence reposed in the Management.

For and on behalf of theBoard of Directors

Place : New Delhi M R B PUNJADate : 22nd January, 2004 Chairman

23


LHVIL

ANNEXUREFORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION

A. Research & Development (R & D)

1. Specific areas in which R & D carried out by the Company1.1 Re-design and development of new 4-stroke motorcycles.1.2 Development of scooters for US market.

1.3 Performance and capacity upgradation of 4-stroke engines used in motorcycles

2. Benefits derived as a result of the above R & DR & D work carried out has enabled the Company to offer to the market product with superiorperformance, features and benefits which have given positive value addition to the business ofthe Company.

3. Future plan of actionRe-engineering, design and development of various motorcycles and 4-stroke gearless (CVTtype) scooters of different displacements.

4. Expenditure on R & D

(Rs. in lakhs)(a) Capital 56.74(b) Recurring 1210.60(c) Total 1267.34(d) Total R&D expenditure as a

percentage of total turnover 1.15%

B. Technology Absorption, Adaptation and Innovation1. Efforts, in brief, made towards technology absorption, adaptation and innovation

1.1 Application of Computer Aided Industrial Design (CAID) for development of vehicle conceptsfor upgradation etc.

1.2 Computer Simulation of Vehicle Structural Components, Linkage Analysis and Stress Analysis.

1.3 Testing of vehicle components on test rigs and durability validation.

1.4 Development and manufacture of prototypes using Rapid Prototyping technology.

2. Benefit derived as a result of the above efforts e.g. product improvement, cost reduction,product development, import substitution, etc.

Substantive improvement in the product reliability.

3. Technology importedEngineering data, information and process for engines and vehicles.

4. If not fully absorbed, areas where this has not taken place, reasons thereof, and futureplans of action

The work is ongoing.For and on behalf of the

Board of Directors

Place : New Delhi M R B PUNJADate : 22nd January, 2004 Chairman

24


AUDITORS' REPORT

JLJVEJL,

To,The MembersLML LimitedWe have audited the attached Balance Sheet of LMLLimited as at 30th September, 2003, Profit & LossAccount of the Company for the eighteen months periodended on that date annexed thereto and the Cash FlowStatement for such period, all of which we have signedunder reference of this report. These financial statementsare the responsibility of the Company's management. Ourresponsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accounting principlesused and significant estimates made by management, aswell as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

1. The Central Government have issued, in terms ofSection 227 (4A) of the Companies Act, 1956 ("theAct"), the Companies (Auditors' Report) Order, 2003("CARO") vide Notification No. G.S.R. 480(E) dated12th June, 2003 which came into force from 1 st July,2003. While CARO replaced the Manufacturing andOther Companies (Auditors' Report) Order, 1988("MAOCARO"), the Central Government have,considering the difficulties of the companies as wellas the professionals in complying with CARO at shortnotice, conveyed its decision, vide General CircularNo.32/2003 dated 10th November, 2003, to takelenient view of the non-compliances in respect ofCARO, for accounts pertaining to financial yearending upto 31st December, 2003, provided theaccounts at least carry MAOCARO Report, ifrequired. The Company has represented to us thatefforts are being made to ensure the aforesaidcompliance and that records/ information relevantfor examining such compliances would be madeavailable in respect of the next financial year.

Having regard to the above, we annex hereto astatement on the matters specified in paragraphs 4& 5 of MAOCARO.

Further to our comments in the Annexure referred to inparagraph 1, we report that:

2. (i) Custom Duty amounting to Rs.539.98 lakhs onraw materials, components, stores andmachineries etc. in bond or transit as on30.09.2003 have not been provided andcorrespondingly the equivalent amount has notbeen considered in valuation of inventories andcapital work in progress. However, this has noimpact on the Loss for the period and the netassets as at 30th September, 2003. (Refer Note8 of Schedule 15).

(ii) As Ess/on Synthetics Limited (ESL) is beingwound up and an appeal is pending in Hon'bleDelhi High Court against confirmation of Orderof injunction in respect of 2728706 shares ofthe Company held by the guarantor, we areunable to express any opinion as regard to theloss, if any, that might arise in respect of thesum of Rs. 945 lakhs (Refer Note 9 of Schedule15).

(iii) The Company's suit in Hon'ble Delhi High Courtfor recovery of a sum of Rs.12 lakhs from Mr.Sitaram, Singhania is pending. Hence, we areunable to express any opinion as regard to theloss, if any, that might arise in respect of thesum of Rs.12 lakhs (Refer Note 10 of Schedule15).

(iv) Pending finalisation of any concrete action forrecovery of Company's dues from VCCL Ltd.,we are unable to express any opinion as regardto the recoverability of the amount and the extentof loss that might arise in respect of debts andadvances aggregating to Rs. 1520.13 lakhs(Refer Note 11 of Schedule 15 -).

We further report that, without considering itemsmentioned at (ii), (iii), and (iv) above, had the observationsmade by us in (i) above been considered, the Net CurrentAssets would have been Rs. 432.86 Lakhs (as againstRs. 244.03 Lakhs reported) and Fixed Assets would havebeen Rs. 25344.95 Lakhs (as against Rs. 25156.12Lakhs reported).

3. (i) We have obtained all the information and

25


L1VIL

explanations, which to the best of our knowledgeand belief, were necessary for the purposes ofour audit;

(ii) In our opinion, proper books of account asrequired by law have been kept by the Company,so far as appears from our examination of thebooks;

(Hi) The Balance Sheet and Profit & Loss Accountdealt with by this report are in agreement withthe books of account.

(iv) In our opinion, the said Profit and Loss Accountand the Balance Sheet comply with theAccounting Standards referred in Section 211(3C) of the Act, to the extent applicable.

(v) The provision of Section 274(1 )(g) of the Actare not applicable to the Director, Mr. KulwantSingh, a nominee of Industrial DevelopmentBank of India . As far as other Directors areconcerned, on the basis of writtenrepresentations/ information received from suchDirectors as on 30th September, 2003 and takenon record by the Board of Directors, none of theDirectors are prima facie disqualified from beingappointed as a Director in terms of theprovisions of the aforesaid provision of the Act.

Subject to our remarks in para 2 above, in our opinion

and to the best of our information and according to theexplanations given to us, the said Accounts read withthe Notes thereon [and particularly Note No. 12 inSchedule 15 dealing with the recognition of Deferred TaxAsset amounting to the sums of Rs. 4464.92 lakhs andRs. 2084.53 lakhs referred to therein (with consequentimpact in the corresponding items reflected in that respectin the Balance Sheet and the Profit and Loss Account)],give the information required by the Act in the manner sorequired and give a true and fair view :-

(a) in the case of Balance Sheet, of the stateof affairs of the Company as at 30thSeptember, 2003.

(b) in the case of Profit & Loss Account, of theLoss of the Company for the period endedon that date, and

(c) in the case of the Cash Flow Statement,of the cash flows of the Company duringsuch period.

FOR BANSI S. MEHTA & CO. FOR PARIKH & JAINChartered Accountants Chartered Accountants

H G BUCHPartner(Membership No. 33114)

A K JAINPartner

(Membership No. 71253)

Place :Dated :

New Delhi30.12.2003

ANNEXURE TO THE AUDITORS' REPORT(Referred to in Paragraph 1 of our Report of even date on the Accounts of LML Limited for the eighteen months periodended 30th September, 2003).

1. The Company has maintained proper recordsshowing full particulars including quantitative detailsand situation of fixed assets. The records which weredestroyed in the fire during 1995-96 have beensubstantially reconstructed. We are informed that theCompany has formulated a programme of physicalverification to cover all major categories of fixedassets over a period of three years, which in ouropinion is fairly reasonable. Accordingly the physicalverification of fixed assets has been carried out bythe management during the period. Thediscrepancies between the physical and theaforesaid records have been properly dealt with inthe books of account.

2. None of the fixed assets have been revalued duringthe period.

3. The physical verification of finished goods, stores,

spare parts, raw materials) and components inCompany's custody was conducted by themanagement, wherever practicable, during or at theend of the period. In case of materials lying withother parties, confirmation have been obtained inmost cases.

4. The procedure of physicail verification of stocksfollowed by the management is, in our opinion,reasonable and adequate in relation to the size ofthe Company and the natu re of its business.

5. The discrepancies noticed on physical verification ofstocks as compared to book records were notmaterial in relation to the size of operations of theCompany and the same have been properly dealtwith in the books of account.

6. On the basis of our examination of stock records,

26


UVXI,

we are of the opinion that the valuation of stocks isfair and proper, in accordance with the normallyaccepted accounting principles and is on the samebasis as in the immediately preceding year.

7. The Company has not taken any loans, secured orunsecured from Companies, firms or other partieslisted in the Register maintained under section 301of the Act.

8. The Company has not granted any loans toCompanies, firms or other parties listed in theRegister maintained Under Section 301 of the Act.

9. In respect of loans and advances in the nature ofloans where stipulations have been made, the partieshave generally repaid the principal amount asstipulated and are regular in payment of interest.However, no recovery has been made against partsale consideration of Rs. 945 lakhs due from EsslonSynthetics Limited which is now under liquidation(Refer Note 9 of Schedule 15 ). Further, loans,advances and deposits aggregating to Rs. 203.89lakhs are considered doubtful for which provisionshave been made. As informed to us, appropriatesteps for recovery have been/ are being taken bythe Company.

10. In our opinion and according to the information andexplanations given to us, the internal controlprocedures with regard to purchase of stores, rawmaterials including components, plant andmachinery, equipments and other assets and for thesale of goods are fairly commensurate with the sizeof the Company and the nature of its business.

11. According to the information and explanations givento us, there are no transactions of purchase of goodsand materials and sale of goods, materials andservices made in pursuance of contracts orarrangements entered in the register maintainedunder section 301 of the Act aggregating to Rs. 50000or more in respect of each party, except for purchaseof goods and materials from a party listed in theregister maintained under section 301 of the Act,where such purchases have been made at priceswhich are reasonable having regard to prevailingmarket prices for such goods and materials.

12. As explained to us, the Company has a regularprocedure for determination of unserviceable ordamaged stores, raw materials and finished goodsand provision has been made in the accounts inrespect of the items so determined.

13. During the period, the Company has not acceptedor renewed any deposit from the public. Accordingto the information and explanations given to us, theCompany has only unclaimed fixed deposits frompublic of Rs. 2.27 lakhs.

14. In our opinion, reasonable records have beenmaintained by the Company in respect of sale anddisposal of scrap. There is no by-product.

15. The Internal Audit is conducted by a firm of CharteredAccountants and the system is fairly commensuratewith the size and nature of Company's business.

16. We have broadly reviewed the cost recordsmaintained by the Company under section 209 (1 )(d)of the Act for the period under review and are of theopinion that prima facie the prescribed accounts andrecords have been made and maintained for theScooter Unit. We have, however, not made a detailedexamination of the same.

17. The Company has regularly deposited ProvidentFund and Employees State Insurance (ESI) dueswith appropriate authorities.

18. According to the information and explanations givento us, no undisputed amount payable in respect ofIncome-Tax, Wealth Tax, Sales Tax, Custom Dutyand Excise Duty was outstanding as at 30thSeptember, 2003 for a period of more than 6 monthsfrom the date it became payable.

19. During the course of our examination of the booksof account carried out in accordance with thegenerally accepted auditing practices, we have notcome across any personal expenses which havebeen charged to the Profit & Loss Account, nor wehave been informed of any such case by themanagement, other than those payable undercontractual obligations or in accordance withgenerally accepted business practices.

20. The Company is not a Sick Industrial Company withinthe meaning of Clause (o) of Sub-Section (1) ofSection 3 of the Sick Industrial Companies (SpecialProvisions) Act, 1985.

FOR BANSI S. MEHTA & CO. FOR PARIKH & JAINChartered Accountants Chartered Accountants

H G BUCHPartner(Membership No. 33114)

Place : New DelhiDated : 30th December, 2003

A K JAINPartner

(Membership No. 71253)

27


BALANCE SHEET AS AT 30th SEPTEMBER, 2003

Schedule

As per our Report of even date attached

As at30.09.2003

Rs. in lakhs

SOURCES OF FUNDSShare Capital 1 4,365.56Reserves and Surplus 2 4,487.60Loans 3 28,508.11

37,361.27APPLICATION OF FUNDS

Fixed Assets 4Gross Block 48,721.98Less: Depreciation 25,773.79Net Block 22,948.19Capital Work-in-Progress 2,207.93

25,156.12

Investments 5 20.31Deferred Tax Asset (Net)(Refer Note No. 12 of Schedule 15) 2,990.39

Current Assets, Loans and Advances 6 29,983.54Less: Current Liabilities and Provisions 7 30,227.57Net Current Assets (244.03)

Miscellaneous Expenditure(to the extent not written off or adjusted) 8 3,732.90

Profit and Loss Account 6,674.34Less: Reserves and Surplus per Contra 968.76

5,705.58

37,361.27Notes to the Accounts 15

Schedules 1 to 8 and 15 form an integral part of the Balance Sheet

For BANSI S. MEHTA & CO.Chartered Accountants

H G BUCKPartner

Place : New DelhiDate : 30.12.2003

For PARIKH & JAINChartered Accountants

A K JAINPartner

DEEPAK SINGHANIAManaging Director

K C AGARWALExecutive Director (Commercial)& Company Secretary

MAHESH KANODIAVice President (Accounts)

L K SINGHANIAWhole-time Director

As at31.03.2002Rs. in lakhs

4,365.564,487.60

24,711.0333,564.19

46,376.4622,432.2723,944.19

1,408.3725,352.56

184.19

740.27

26,589.5023,455.81

3,133.69

2,316.03

2,806.21968.76

1,837.45

33,564.19

M R B PUNJAChairman

SANJEEV SHRIYAWhole-time-Director

28


PROFIT AND LOSS ACCOUNT FOR 18 MONTHS PERIOD ENDED 30th SEPTEMBER, 2003

Schedule

INCOMEGross SalesLess : Excise Duty

Other Income 9

EXPENDITUREManufacturing and Other Expenses 10Payments to and Provisions for Employees 11Administrative, Selling and Other Expenses 12Finance and other Charges 13DepreciationPrior Period Adjustments (Net) 14

Loss before TaxationProvision for Taxation-Current Tax- Deferred Tax (Net) (Refer Note No. 12 of Schedule 15)Net LossLoss as per last Balance Sheet

Balance carried to Balance Sheet

Weighted average Number of Equity SharesBasic & Diluted Earning Per Share (Rs.)

Notes to the Accounts 15


Rs. in lakhs

110,420.3715,794.9994,625.382,343.05

96,968.43

68,756.7711,564.7713,845.285,271.023,621.28

27.56103,086.68

(6,118.25)

2,250.12(3,868.13)(2,806.21)

(6,674.34),

43,655,636(8.86)

Year ended31.03.2002Rs. in lakhs

53,910.26

7,311.89

46,598.371,385.31

47,983.68

33,713.03

6,572.83

7,834.55

4,385.45

2,331.84

7.44

54,845.14

(6,861.46)

2,422.21

(4,439.25)

1,633.04

(2,806.21)

43,655,636(10.17)

Schedules 9 to 15 form an integral part of the Profit and Loss Account

As per our Report of even date attached

For BANSI S. MEHTA & CO. For PARIKH & JAINChartered Accountants Chartered Accountants

H G BUCHPartner

Place : New Delhi

Date : 30.12.2003

A K JAINPartner




LK SINGHANIAWhole-time Director

M R BPUNJAChairman


29


LIVCL

Schedules Annexed to the Accounts

(1) SHARE CAPITAL No. ofShares of

Rs. 10 each

AuthorisedEquity Shares 60,000,000

Issued, Subscribed and Paid-upEquity Shares 43,655,636

As at30.09.2003

Rs. in lakhs

4,365.56

No. ofShares of

Rs. 10 each

6,000.00 60,000,000

4,365.56 43,655,636


6,000.00

4,365.56

4,365.56

Notes : (i) 460000 Equity Shares were allotted as fully paid-up Bonus Shares by capitalisation of General Reserve,(ii) 5314116 Equity Shares were allotted as fully paid-up on conversion of Debentures (Series I, II & III)(iii) 3162000 Equity Shares were allotted as fully paid-up to Financial Institutions pursuant to the convertibility

clause in the relevant Rupee Loan Agreement.

(2) RESERVES AND SURPLUS

Capital Reserve

Capital Redemption Reserve..

Share Premium Account

Investment Allowance UtilisedReserve Account

As per last AccountLess : Transferred to General Reserve.

General ReserveAs per last AccountAdd: Transferred from Investment

Allowance Utilised Reserve Account

Less: Deferred Tax Liability (Net) as at 01.04.2001

685.48

283.28

283.28

Less : Debit balance in Profit and Loss Account per Contra

As at30.09.2003

Rs. in lakhs

3,273.79

2.50

1,211.31

685.48

283.285,456.36

968.764,487.60


3,273.79

2.50

1,211.31

1,224.33538.85685.48

1,426.37

538.851,965.221,681.94

283.285,456.36

968.76

4,487.60

30


L3VIL


(3) LOANS

Secured Loans

As at30.09.2003

Rs. in lakhs

(i) 720000 13.5% Partly Convertible Debentures(Series-ll) of Rs.125 each fullypaid-up 900.00

Less : Converted into Equity Shares 72.00: Bought back/Redeemed 596.73

231.27Add : Interest accrued and due 386.94

618.21

(ii) 113636213.5% Partly Convertible Debentures(Series-Ill) of Rs.110 each fullypaid-up 1,250.00

Less : Converted into Equity Shares 113.64: Bought back/Redeemed 838.46

297.90Add : Interest accrued and due 498.42

796.32

(iii) Rupee Loans from BanksBank of India 750.00State Bank of India 1,249.96Corporation Bank... 2,000.00ICICI Bank Limited * 638.68HDFCBank 7.70Interest accrued & due on above -

4,646.34

(iv) Rupee Loans from Financial InstitutionsIFCI Limited 2,701.82IFCI Limited under Project Finance Scheme.... 1,600.00Industrial Development Bank of India 1,000.00Industrial Development Bank of Indiaunder Equipment Finance Scheme (EFS) 93.75Industrial Development Bank of Indiaunder Corporate Loan Scheme 2,700.00Industrial Development Bank of Indiaunder Asset Credit Scheme (ACS) 443.95Export-Import Bank of India 789.90Export-Import Bank of India under ProductionEquipment Finance Program (PEFP) 1,312.50Industrial Investment Bank of India Limitedunder Asset Credit Scheme (ACS) 100.00Interest accrued and due on above -

10,741.92


900.0072.00

593.35234.65344.61579.26

1,250.00113.64833.20303.16445.23748.39

750.001,249.962,000.00

638.68

435.085,073.72

2,701.821,600.001,000.00

93.75

2,700.00

443.95789.90

1,312.50

100.001,554.32

12,296.24

31



(3) LOANS (Contd..) As at30.09.2003

Rs. in lakhs


(v) Funded Interest Term Loans(a) From Banks 1,390.75(b) From Financial Institutions 3,512.71

4,903.46(vi) Cash Credits and Working Capital Term Loan

(a) From Banks 5,235.76(b) (i) From Export-Import Bank of India 500.00

(ii) Interest accrued & due on above 52.225,787.98

(vii) Hire Purchase credits 34.8827,529.11

Unsecured LoansUnclaimed Fixed Deposits from Public 1.81Interest accrued and due 0.46

2.27

Short Term Loans (Payable on demand) 84.43Other Loans & AdvancesSecurity Deposits 892.15Deferred Payment to U.P. State Industrial DevelopmentCorporation Limited, towards premium of land '.. 0.15

Interest accrued and due on above -979.00

28,508.11

* Upon merger of ICICI Limited with ICICI Bank Limited during the period.

4,733.40500.00

19.735,253.13

125.5124,076.25

1.890.472.36

84.45

537.95

8.94

1.08634.78

24,711.03

Notes :A. Rs.10 out of Debentures (Series - II & III) of Rs.125 and Rs.110 each were converted into one Equity

Share of Rs.10 each at par on 14.2.1985 and 30.4.1986 respectively. The non-convertible part of theDebentures, which had become due for redemption in 3 instalments each between 14.8.1991 to14.8.1993 and 31.10.1992 to 31.10.1994 respectively, is being redeemed with uptodate interest onsurrender of Debentures by Debentureholders.

B. (i) Debentures (Series-ll & III), Rupee Loans, Funded Interest Term Loans (FITL) and WorkingCapital Term Loan from Banks/Financial Institutions as mentioned at Serial Nos. (i), (ii), (iii), (iv)(v) and (vi) (b) above except Rupee Loan of Rs. 93.75 lakhs from IDBI under EPS, Rupee Loanof Rs.1312.50 lakhs from Exim Bank under PEFP, Rupee Loan of Rs.100 lacs from IIBI underACS and Rupee Loan of Rs. 7.70 lacs from HDFC Bank Limited are secured by a first mortgageand charge on the immovable properties consisting of Land (viz. Plot No. A (A1+A2+A3) andC-6 to C-10, Panki Industrial Estate, Site II, Kanpur; Plot No. A-1and Plot No. Parcel A, B & C,Panki Industrial Estate, Site III, Kanpur), Buildings, Fixed Plant and Machinery, Furniture and

32


LIV/IL


(3) LOANS (Contd..)

Fixtures, both present and future, of the Company and first charge by way of hypothecation ofall movable assets of the Company (save and except book debts), including movable machinery,tools, accessories, etc., both present and future, subject however, to the prior charges created/tobe created in favour of (a) banks/others over certain specified equipment purchased/ to bepurchased by the Company on Hire Purchase basis, (b) IDBI over the specified equipmentacquired out of its EFS Loan, (c) Exim Bank over the specified equipment acquired by theCompany out of its Rupee Loan under PEFP, (d) IIBI over the specified equipment acquired outof its Rupee Loan under ACS, (e) HDFC Bank Limited over the specified equipment acquiredout of its Rupee Loan and (f) Company's Bankers over specified movables for securing WorkingCapital and quasi credit facilities. The aforesaid first mortgage and charges rank pari-passu,inter-se, in all respects amongst the aforesaid Financial Institutions/Banks for their Rupee Loans,FITL & Working Capital Term Loan and State Bank of India in their capacity as Agents andTrustees for the holders of Debentures (Series-ll and III). Rupee Loans of Rs. 13636.61 lacs,FITL and Working Capital Term Loan are further secured by personal guarantees of three Directorsof the Company.

(ii) Rupee Loan from IDBI under EFS, Rupee Loan from Exim Bank under PEFP, Rupee Loan fromIIBI under ACS and Rupee Loan from HDFC Bank Limited are secured by an exclusive firstcharge by way of hypothecation of specified equipment acquired out of these loans.

C. Cash Credits from Banks are secured by a first charge by way of hypothecation of current assetssuch as stocks of Raw Materials, Components, Stores & Spares, Work-in-process, Finished goods,Book Debts, etc. of the Company. These are further secured by (a) a first charge by way of equitablemortgage on the immovable properties (viz. Plot No. C-3 & 4, Panki Industrial Estate, Site I, Kanpur)of the Company, (b) a second charge on the immovable properties, consisting of Land (viz. Plot No.A(A1+A2+A3) and C-6 to C-10, Panki Industrial Estate, Site II, Kanpur; Plot No. A-1 and Plot No.Parcel A, B & C, Panki Industrial Estate, Site III, Kanpur), Buildings, Fixed Plant and Machinery,Furniture and Fixtures, both present and future, of the Company and (c) Personal Guarantees ofthree Directors of the Company. The Mortgage charge (second charge) on Plot No. Parcel A, B & Cis yet to be created.

D. Fixed Assets purchased under Hire Purchase arrangement are secured by hypothecation of respectiveassets.

E. Instalments of Rupee loans, debentures and deferred payments repayable within one year areRs. 899.32 lacs (As at 31.03.2002 Rs. 9332.89 lacs).

33

Sch

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An

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87.9

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2,62

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875.

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396.

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3.98

202.

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6.03

133.

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342.

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62.8

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119.

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186.

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503.

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— — 9.21

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(414

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666.

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87.9

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204.

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193.

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28.8

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276.

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279.

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293.

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235.

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6

(26,

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77)


L1VIL


(4) FIXED ASSETS (Contd..)

Notes :

1. (i) Land is leasehold except Rs. 2.72 lakhs (As at 31.03.2002 Rs. 2.72 lakhs) which is acquired onfree hold basis.

(ii) Buildings include cost of Shares of Rs. 0.04 lakh (As at 31.03.2002 Rs.0.04 lakh) in Co-operativeHousing Society.

(iii) Conveyance/Title Deeds in respect of Fixed Assets amounting to Rs. 8.17 lakhs (As at 31.03.2002Rs.178.28 lakhs) are pending for execution/registration.

(iv) Additions to Plant & Machinery include Rs. Nil (As at 31.03.2002 Rs. 32.38 lakhs) on accountof exchange rate fluctuations.

(v) Additions to fixed assets (including capital work in progress) includes Rs. 26.44 lakhs (Previousyear Rs.14.30 Lakhs) on account of borrowing costs capitalised during the period.

(vi) Figures in brackets pertain to as at 31.03.2002

2. PRE-OPERATIVE EXPENDITURE PENDING ALLOCATION

Development Expenses

Insurance Expenses

Travelling Expenses

Finance & Other Charges :Interest on Fixed Loans


Rs. in lakhs

5.67

44.97


1.40

0.16

12.75

31.6250.64 45.93

Less : Interest and other Income

Add : Pre-operative Expenditure incurred uptoPrevious year

Less : Allocated to Fixed Assets

Balance included in Capital Work In Progress.

18.53

71.42

17.3232.11

211.72243.83

172.41

28.61

264.07292.68

80.96

211.72

35



(5) INVESTMENTS As at As at30.09.2003 31.03.2002

Rs. in lakhs Rs. in lakhs

LONG TERM (except otherwise stated)Equity Shares (Fully Paid-up)

QUOTEDTrade1536000 Shares of Rs. 10 each in VCCL Limited 153.60 153.60

Others- Shares of Rs.100 each in Mafatlal Engineering

Company Limited (Previous year 25 shares) - 0.041200 Shares of Rs. 10 each in Bajaj Auto Limited 0.08 0.082188 Shares of Rs. 10 each in Reliance Industries Limited 0.67 0.67

- Shares of Rs.10 each in Hindustan MotorsLimited (Previous year 370 shares) - 0.09

100 Shares of Rs.10 each in Scooters India Limited 0.02 0.02100 Shares of Rs.10 each in TVS Suzuki Limited 0.04 0.04

1620 Shares of Rs.2 each in Hero Honda Motors Limited 0.05 0.05- Shares of Rs.10 each in Ashok Leyland Limited

(Previous year 242 shares) - 0.11- Shares of Rs.10 each in Mahindra & Mahindra Limited

(Previous year 6 shares) - 0.02- Shares of Rs.10 each in Shree Chamundi Mopeds Limited

(Previous year 100 shares) - 0.03- Shares of Rs.10 each in Daewoo Motors (India) Limited

(Previous year 200 shares) - 0.05- Shares of Rs.10 each in Hotel Ganges Limited

(Previous year 2500 shares) - 0.25- Shares of Rs.10 each in ICICI Limited

(Previous year 100000 shares) - 138.08- Shares of Rs.10 each in Aptech Limited

(Previous year 400 shares) - 0.54400 Shares of Rs.5 each in Infosys Technologies Limited 1.36 1.36

- Shares of Rs. 10 each in Swaraj Engines Limited(Previous year 100 shares) - 0.55

50 Shares of Rs.10 each in Bajaj Tempo Limited 0.12 0.12- Shares of Rs.10 each in Apollo Tyres Limited

(Previous year 50 shares) - 0.06120 Shares of Rs.10 each in Asian Paints (India) Limited

(Previous year 80 shares) 0.17 0.17- Shares of Rs.10 each in Autolite (India) Limited

(Previous year 100 shares) - 0.07- Shares of Rs.10 each in Ceat Limited

(Previous year 50 shares) - 0.02100 Shares of Rs.10 each in Eicher Motors Limited 0.02 0.0250 Shares of Rs.10 each in Escorts Limited 0.05 0.05

100 Shares of Rs.10 each in Ginni Filaments Limited 0.01 0.01

36


LIVIL


(5) INVESTMENTS (Contd..) As at As at30.09.2003 31.03.2002


- Shares of Rs. 10 each in Goodlass Nerolac Paints Limited(Previous year 50 shares) - 0.11

- Shares of Rs.10 each in Greaves Limited(Previous year 50 shares) - 0.02

- Shares of Rs.1 each in Hindustan Lever Limited(Previous year 500 shares) - 0.71

- Shares of Rs.10 each in ICI India Limited(Previous year 50 shares) - 0.13

100 Shares of Rs.10 each in J.K. Synthetics Limited 0.01 0.01100 Shares of Rs.10 each in Kalyani Forge Limited 0.02 0.02100 Shares of Rs.10 each in Kalyani Seamless Tubes Limited 0.01 0.01

- Shares of Rs.10 each in Lumax Industries Limited(Previous year 100 shares) - 0.10

- Shares of Rs.10 each in MRF Limited(Previous year 50 shares) - 1.52

50 Shares of Rs.10 each in Maharashtra Scooters Limited 0.11 0.11- Shares of Rs.10 each in Mahanagar Telephones

Nigam Limited (Previous year 100 shares) - 0.27- Shares of Rs.10 each in Nilkamal Plastics Limited

(Previous year 100 shares) - 0.03100 Shares of Rs.10 each in Pal Peugeot Limited 0.01 0.01100 Shares of Rs.10 each in Patheja Forgings

& Auto Parts Mfrs. Limited 0.02 0.02- Shares of Rs.10 each in Premier Auto Limited

(Previous year 50 shares) - 0.01- Shares of Rs.10 each in Premier Instruments

& Controls Limited (Previous year 50 shares) - 0.09- Shares of Rs.10 each in Punjab Tractors Limited

(Previous year 150 shares) - 0.36- Shares of Rs.10 each in SKF Bearings (India) Limited

(Previous year 150 Shares) - 0.13100 Shares of Rs.10 each in Sona Steering Limited 0.06 0.0650 Shares of Rs.10 each in Supreme Industries Limited 0.09 0.09- Share of Rs.10 each in Swaraj Mazda Limited

(Previous year 50 shares) - 0.03- Shares of Rs.10 each in Tata Engg. & Locomotive

Company Limited (Previous year 50 shares) - 0.18- Shares of Rs.10 each in Titan Industries Limited

(Previous year 100 shares) - 0.08- Shares of Rs.10 each in Videocon Appliances Limited

(Previous year 100 shares) - 0.02- Shares of Rs.10 each in Videocon International Limited

(Previous year 100 shares) - 0.0450 Shares of Rs.10 each in Whirlpool India Limited 0.02 0.02- Shares of Rs.10 each in Escorts Financial Services Limited

(Previous year 100 shares) - 0.02

37


LIV/IL




100 Shares of Rs. 10 each in Ester Industries Limited 0.01 0.01- Shares of Rs. 10 each in Fag Precision Bearings Limited

(Previous year 50 shares) - 0.04100 Shares of Rs.10 each in IFCI Limited 0.04 0.04

- Shares of Rs.10 each in Deal Fuel Systems Limited(Previous year 100 shares) - 0.08

- Shares of Rs.10 each in Autoriders Finance Limited(Previous year 100 shares) , - 0.02

- Shares of Rs.10 each in BPL Limited(Previous year 100 shares) - 0.07

100 Shares of Rs.10 each in BPL Sanyo Technologies Limited 0.01 0.0150 Shares of Rs.10 each in Kinetic Engineering Limited 0.10 0.10

100 Shares of Rs.10 each in Kinetic Honda Motor Limited 0.13 0.13- Shares of Rs.10 each in Atlas Cycle Industries Limited

(Previous year 50 shares) - 0.03100 Shares of Rs.10 each in BPL Sanyo Utilities &

Appliances Limited 0.02 0.02- Shares of Rs.10 each in Clutch Auto Limited

(Previous year 50 shares) - 0.01- Shares of Rs.10 each in HMT Limited

(Previous year 100 shares) - 0.02- Shares of Rs.10 each in Motherson Sumi Systems Limited

(Previous year 225 shares) - 0.10100 Shares of Rs.10 each in Polyplex Corporation Limited 0.02 0.02

- Shares of Rs.10 each in Ranbaxy Laboratories Limited(Previous year 50 shares) - 0.33

- Shares of Rs.10 each in Bharat Gears Limited(Previous year 50 shares) - 0.02

- Shares of Rs.10 each in Birla Yamaha Limited(Previous year 100 shares) - 0.07

50 Shares of Rs.10 each in Modi Rubber Limited 0.03 0.03- Shares of Rs.10 each in NRB Bearings Limited

(Previous year 100 shares) - 0.20- Shares of Rs.10 each in ZF Steering Gear (India) Limited

(Previous year 50 shares) - 0.03- Shares of Rs.10 each in Brite Automotive & Plastics Limited

(Previous year 100 shares) - 0.04- Share of Rs.10 each in Rico Auto Industries Limited

(Previous year 100 shares) - 0.08- Shares of Rs.10 each in Samkrg Pistons Limited

(Previous year 100 shares) - 0.02- Shares of Rs.10 each in Talbros Automotive Components

Limited (Previous year 50 shares) = 0.023.30 t48.24

38


XJVLL,




UNQUOTEDOthers

- Shares of Rs.10 each in LML Holdings Limited(Previous year 70 shares) - 0.01

- Shares of Rs.100 each in Vertex Enterprises Private Limited(Previous year 9555 shares) - 9,55

800000 Shares of Rs.10 each in Trident Auto ComponentsPrivate Limited 80.00 80.00

Subsidiary Company- Shares of Rs.10 each in Perfect Polycons Limited

(Previous year 1000 shares of Rs.10 each) - 0.10(Ceased to be subsidiary w.e.f. 31st December, 2002)

236.90 391.50Units (Fully Paid-up)Quoted - Others

- Units of Rs.10 each of Morgan Stanley Growth Fund(Previous year 276333 Units) - 26.24

** Post Office National Savings Certificates 0.84 0.84237.74 418.58

Less : Provision for diminution in value of Investments 217.43 234.39~20i3J 184.19

** Includes Rs.0.64 lakh pledged with Government AuthortiesNotes :

(i) Aggregate amount of Quoted Investments- Cost Rs. 156.90 lakhs (As at 31.03.2002 Rs.328.08 lakhs)- Market value Rs.44.49 lakhs (As at 31.03.2002 Rs.122.99 lakhs)

(ii) Aggregate amount of Unquoted Investments- Cost Rs. 80.84 lakhs (As at 31.03.2002 Rs.90.50 lakhs)

39


L1VIL


(6) CURRENT ASSETS, LOANS AND ADVANCES As at30.09.2003

Rs. in lakhs

Current AssetsInventories

Raw materials and Components 7,077.28Stores and Spare Parts 2,247.65Loose Tools 1,129.93Work in Process 1,722.10Finished Goods 3,918.51

16,095.47Sundry Debtors - Unsecured

Over Six Months - Considered Good 470.36-Considered Doubtful I 193.28- Less: Provision 193.28

Other debts-considered good 1,603.412,073.77

Cash and Bank BalancesCash in hand 39.63Cheques/Drafts in hand 2,160.54With Scheduled Banks

Current Account 986.37Margin Account 211.60Fixed Deposits 955.94Interest accrued on above 32.34

4,386.42

22,555.66Loans and Advances - UnsecuredLoans - Considered Good 1,346.80

(Refer Note No. 9 of Schedule 15)- Considered Doubtful 2.72- Less : Provision 2.72 ,

1,346.80Deposit with Companies etc.

- Considered Good-Considered Doubtful [ 116.33- Less / Provision 116.33

Advances recoverable in cash orin kind or for value to be received

- Considered Good 5,339.83- Considered Doubtful I 84.84- Less : Provision 84.84

5,339.83


6,103.862,231.75

981.68945.38

2,835.6613,098.33

492.30

3,456.233,948.53

51.91272.35

764.95278.87

2,488.96106.16

3,963.20

21,010.06.

1,374.35

4,171.13

40


LIVCL


(6) CURRENT ASSETS, LOANS AND ADVANCES (Contd..)

With Customs and Excise Authorities.

Note : Loans and Advances include :

Due from Officer

As at30.09.2003

Rs. in lakhs

741.25

7,427.8829,983.54

Rs. in lakhsDue Maximum

24.39 28.51


33.965.579.44

26,589.50Rs. in lakhs

Due Maximum

27.99 59.25

Note : Loans and Advances includes Rs. Nil (As at 31.03.2002 Rs.1.30 lakhs) due from an erstwhilesubsidiary company.

(7) CURRENT LIABILITIES AND PROVISIONS

Current LiabilitiesAcceptancesSundry Creditors

Due to Small Scale Industrial Undertakings.Others

Unclaimed DividendAdvance against OrdersInterest accrued but not due on above.Interest accrued but not due on loans..

Provisionsfor Taxation (Net)for Gratuity and leave encashment.

1,640.8316,900.52

333.86582.08

4,024.03

18,541.3545.00

2,659.163,806.37

235.7229,311.63

915.9430,227.57

2,682.26

972.9012,508.43

13,481.3348.01

2,668.413,539.41

387.8322,807.25

333.86314.70648.56

23,455.81

Note : Sundry Creditors includes Rs. Nil (As at 31.03.2002 Rs. 382.30 lakhs) as temporary bank overdraftand Rs. 319.34 lakhs (As at 31.03.2002 Rs.Nil) resulting from book overdraft.

41


L1VIL


(8) MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

Deferred Revenue Expenditure

Advertisement and Publicity(Relating to introduction of new products/modelsof vehicles, etc.)Technical Know-How/Engineering Fees(for Licence, Patents, Design, Drawings andmodifications of Vehicles/ Components)Technical cum Consultancy Services forsubstantial revamping of operations

As at30.09.2003

Rs. in lakhs

2,679.37

909.81

143.723,732.90


1,279.73

694.37

341.932,316.03

(9) OTHER INCOME Period ended Year ended30.09.2003 31.03.2002


83.08 0.9153.28 25.04

283.62 164.53607.42 350.73

1,081.34 466.041.27 19.73

233.04 350.53. - 7.80

2,343.05 1,385.31Note : Tax deducted at Source from

- Interest/Dividend Rs.47.44 lakhs (Previous year Rs.73.80 lakhs)

Job and Repairing ChargesRetention ChargesMiscellaneous receiptsExport benefitCredit Balances/Provision no longerrequired written backDividend on Shares/UnitsInterest from OthersProfit on Sale of Fixed Assets (Net)...

(10) MANUFACTURING AND OTHER EXPENSES

Manufacturing ExpensesRaw materials and Components Consumed 61,240.92Stores, Spare Parts and Dies Consumed 4,045.47Power and Fuel 2,742.03Development Expenses 308.84Excise Duty on uncleared Finished Goods (Net).... 208.04Lease Rent - Plant and Machinery 251.88Technical Know-how/Engineering Fees Written off 574.26

69,371.44

26,784.672,445.011,469.43

109.37(92.33)175.28387.87

31,279.30

42


LJVIL


(10) MANUFACTURING AND OTHER EXPENSES (Contd..) Period ended30.09.2003

Rs. in lakhs

(Increase)/Decrease in StocksClosing Stocks

-Work in Process 1,722.10- Finished Goods 3,918.51

5,640.61Less: Opening Stock

- Work in Process 945.38- Finished Goods 2,835.66

3,781.04(1,859.57)67,511.87

Repairs and Maintenance- Machinery 420.22- Buildings 443.24-Others 381.44

1,244.9068,756.77

(11) PAYMENTS TO AND PROVISIONS FOR EMPLOYEES

Salaries, Wages and Bonus 9,927.56Contribution to Provident Fund and Other Funds... 1,033.47Welfare Expenses 603.74

11,564.77

(12)ADMINISTRATIVE, SELLING AND OTHER EXPENSES

Rent 576.65Rates and Taxes 63.18Insurance (Net) 331.75Travelling, Conveyance, Car &Recruitment Expenses 2,233.29Postage, Telex and Telephones 495.44Printing and Stationery 295.31Directors' Sitting Fee 0.81Charity and Donation 1.61Statutory Audit Fee 12.96Professional and Legal Charges 546.87Miscellaneous Expenses 947.37Advertisement, Publicity & Sales Promotion 5,047.05Sales Tax/Turn-over Tax 103.54Freight, Cartage and Clearing charges (Net) 749.66Rebate and Discount 142.47Warranty and Service Charges 1,419.97


945.382,835.663,781.04

1,385.794,176.225,562.011,780.97

33,060.27

218.43243.74190.59

652.7633,713.03

5,574.80601.99396.04

6,572.83

426.3139.34

211.36

1,428.90418.82200.74

0.332.828.40

249.57600.95

2,015.9278.78

398.06137.86761.37

43


XJVHL,


(12) ADMINISTRATIVE, SELLING AND OTHER EXPENSES (Contd..)

RoyaltyCommission - Other AgentsSales Incentives - Other AgentsSundry Balances/Bad Debts/Advances w/offProvision for Doubtful DebtsProvision for Doubtful Loans and AdvancesLoss on sale of investments (net)Loss on sale of fixed assets (net)Loss on fixed assets discardedProvision for Diminution in value of Investments....


Rs. in lakhs63.3696.87

485.4724.5027.5952.909.69

22.3631.3563.26

13,845.28


9.3772.94

602.8535.3430.78

5.43

20.5977.72

7,834.55

(13) FINANCE AND OTHER CHARGES

Interest on Fixed Loanson Debentureson Others

Bank and Other ChargesDifference in Exchange (Net)

2,670.19108.84

2,073.90430.81(12.72)

5,271.02

2,674.2373.11

1,324.25274.1239.74

4,385.45

(14) PRIOR PERIOD ADJUSTMENTS (NET)

DEBITS

Raw material & Components Consumed.Sales Tax/Turnover TaxInterestIncome tax

LESS: CREDITS

InterestDepreciation

NET DEBIT.,

2.27

20.5721.1844.02

16.46

16.46

27.56

15.893:22

19.11

11.6711.67

7.44

44



(15) NOTES ON ACCOUNTS

1. Significant Accounting Policies(i) System of Accounting

(a) The Company follows the mercantile system of accounting and recognises income andexpenditure on accrual basis. However:(i) Leave travel concession and medical reimbursement to employees are accounted as

and when incurred and claimed.

(ii) Product warranty costs are recognised upon receipt and acceptance of claim.

(b) Financial statements are based on historical cost.(ii) Fixed Assets

Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation.Cost is inclusive of duties, taxes, erection/commissioning expenses, incidental expenses andborrowing cost etc. and where applicable is net of Modvat / Cenvat benefit. Custom Duty onmachinery lying in Bond or in transit is accounted for at the time of clearance thereof.

(iii) Borrowing costsBorrowing costs, attributable to the acquisition / construction of qualifying fixed assets arecapitalised, net of income earned on temporary investments of borrowings, by applying weightedaverage rate for the eligible period. Other borrowing costs are charged to Profit and Loss Account.Borrowing costs comprise of interest and other cost incurred in connection with borrowing offunds.

(iv) Foreign Currency TransactionsTransactions in foreign currency are accounted at exchange rates prevalent on the date(s) oftransactions. Exchange differences arising on adjustment for year end/ settlement rates arerecognised as under:(i) In respect of the transactions related to Fixed Assets, adjustments are made in the carrying

amount of such assets.(ii) In other cases, the same are recognised in the Profit and Loss Account. In case of forward

contract, the difference between the forward rate and exchange rate on the date of transactionis recognised as income or expense over the period of the contract.

(v) Research and DevelopmentResearch and Development expenditure of revenue nature are charged to the Profit and LossAccount, while capital expenditure are added to the cost of fixed assets in the year in whichthese are incurred and depreciated in accordance with para 1 (xi) below.

(vi) Retirement Benefits(a) Gratuity & Leave Encashment

The Company has provided for the liability for future payment of Gratuity and for leaveencashment on the basis of actuarial valuation.

(b) SuperannuationThe Company has created a Superannuation Fund Trust and the Trust has taken GroupSuperannuation Scheme Policy with Life Insurance Corporation of India.

(vii) InvestmentsLong Term Investments are stated at cost and provision for dimunition is made if the decline invalue is other than temporary in nature. Current Investments are stated at lower of cost and fairvalue.

45


L1VIL

(viii) Sales(a) Revenue from domestic sales is recognised upon despatch to customers.(b) Export sales are recognised upon despatch from the customs port.

(ix) Export BenefitsThe Company accounts for Export Benefit Entitlements under the Duty Entitlement Pass BookScheme of the Government of India, in the year of Export Sales.

(x) Deferred Revenue ExpenditureIn the following cases, Revenue Expenditure have been deferred as explained below :

(a) Technical Know-how/Engineering Fees for licence, patents, design, drawings andmodifications of vehicles/ components are charged to Profit and Loss Account over a periodof five years.

(b) Advertisement and Publicity Expenses relating to introduction of new products/ models ofvehicles etc. are charged to Profit and Loss Account over a period of four years.

(c) Technical cum consultancy services for substantial revamping of operations are charged toProfit and Loss Account over a period of four years.

(xi) Depreciation(a) No amount is being written off on Leasehold land.(b) Depreciation on vehicles is being provided as calculated under Written Down Value Method

at the rates specified in Schedule XIV to the Companies Act, 1956.(c) On other assets, depreciation is being provided proportionately on Straight Line Method at

the rates indicated below :(i) On capital expenditure incurred on leasehold improvements considering the period of

lease; and

(ii) On the remaining assets at the old rates specified in Schedule XIV to the CompaniesAct, 1956 upto 30.9.93 and w.e.f. 1.10.93 on the basis of revised rates as prescribedby Notification dated 16.12.93 of the Department of Company Affairs.

(d) Depreciation on additions to fixed assets till 31.03.1991 on account of foreign exchangefluctuations is being provided at the rates as per Schedule XIV / Section 205 (2) (b) of theCompanies Act, 1956, from the year of such adjustments. Depreciation on the additions toFixed Assets from 01.04.1991 on account of foreign exchange fluctuations is being providedover the residual life of the assets.

(xii) InventoriesInventories are valued at lower of cost and net realisable value. Cost of finished goods, workin process and factory made components include costs of conversion and other costs incurredin bringing the inventories to their present location and condition. Finished goods lying in thefactory premises are valued inclusive of Excise Duty.Cost for raw materials and components, stores and spare parts, loose tools is determined onFIFO basis. Cost of materials is arrived at after adjustment of, where applicable, Cenvat benefitavailed or to be availed. Custom duty on materials lying in bond or in transit is accounted forat the time of clearance thereof.

(xiii) LeasesAssets acquired under finance leases are recognised as fixed assets at the lower of the fairvalue at inception and the present value of minimum lease payments. Lease payments areapportioned between the finance charge and the reduction of the outstanding liabilities. Thefinance charge is allocated to periods comprised in the lease term at a constant periodic rateof interest on the remaining balance of the liabilities.

46


LIVIL

(xiv) TaxationIncome tax expense/ savings comprises Current Tax and Deferred Tax Charge or Credit. Provisionfor current tax is made on the estimated taxable income at the tax rate applicable to the relevantassessment year. The Deferred Tax Assets are recognised based on the principles of prudence.Deferred Tax Asset and Deferred Tax Liabilities are calculated by applying the rate and tax lawsthat have been enacted or substantively enacted by the Balance Sheet date. Deferred TaxAssets are reviewed at each Balance Sheet date.

2. Contingent Liabilities(a) Income-tax, Sales-tax, Customs and Excise Duty matters pending in appeals etc. Rs. 3890.69

lakhs (As at 31.03.2002 Rs. 869.19 lakhs) (net of Bank Guarantee of Rs. 241.00 lakhs includedin (b) below as at 31.03.2002 Rs. 316.55 lakhs).

(b) Outstanding guarantees furnished by Bankers Rs.1107.14 lakhs (As at 31.03.2002 Rs.1151.12lakhs).

(c) Claims against the Company not acknowledged as debts Rs. 2518.49 lakhs (As at 31.03.2002Rs.1553.13 lakhs).

(d) Custom duty including interest in respect of export obligation Rs. 530.02 lakhs (As at 31.03.2002Rs.765.39 lakhs) (net of Bank Guarantee of Rs. 789.43 lakhs included in (b) above as at31.03.2002 Rs. 789.43 lakhs).

3. Unexecuted Capital commitments (net of advances) Rs.1739.15 lakhs (As at 31.03.2002 Rs.1828.33lakhs).

4. Debtors, Creditors, Advances recoverable in cash or kind are subject to confirmation and subsequentreconciliation, if any.

5. Interest in respect of Long Term Loans/Debentures/Deferred Credits (for acquisition of Fixed Assets)availed/issued during the financial years 1982-83 to 1984-85 had been capitalised for the full periodof Long Term Loans/Debentures/Deferred Credits in the year of availment/issue as per practiceprevailing then. No such capitalisation has since been made. In view of such capitalisation, the chargeto Profit and Loss Account on account of depreciation is higher by Rs. 9.74 lakhs (Previous Year Rs.6.49 lakhs).

6. Remuneration to Managing Director and Whole-time Directors :2002-03 , ' 2001-02

(18 Months) (12 Months)(Rs./iakhs) (Rs./lakhs)

Salary 3.96 2.64Contribution to :

Provident Fund 0.48 0.32Superannuation Fund 0.40 0.26

Perquisites 36.92 7.3341.76 10.55

7. Expenditure on Research & Development activities during the period amounted to Rs. 1267.34 lakhs(Previous year Rs.1096.91 lakhs).

8. Custom Duty on imported raw materials, components, stores and machineries etc., lying in Bond orin transit as on 30.09.2003 amounting to Rs. 539.98 lakhs (As at 31.03.2002 Rs. 736.27 lakhs) hasnot been provided and correspondingly, the equivalent amount has not been considered in valuationof inventories and capital work-in-progress. However, this has no impact on the loss for the period.

9. In respect of Rs. 945 lakhs (after assignment of Rs.1759 lakhs to a subsidiary company in earlieryear) out of a total sum of Rs.7103 lakhs recoverable from Esslon Synthetics Limited (ESL) againstthe sale consideration for transfer of undertakings, other debts and amounts, no payment has beenreceived. The said sum of Rs. 945 lakhs was to be received by the Company on or before 31.03.1992which was guaranteed by Saraswati Trading Company Limited (STCO).

47


JLJVEL

The Company has made an application in the Hon'ble Delhi High Court u/s 20 of the Arbitration Act,1940 for appointment of Arbitrators, recovery of dues from ESL and also to adjudicate upon otherrelated matters. The matter is sub-judice before Hon'ble Delhi High Court.The winding up process of ESL pursuant to the order of the Hon'ble Allahabad High Court on therecommendation of BIFR is in progress.In respect of the overdue unpaid sale consideration of Rs. 945 lakhs, the Company alongwith itsManaging Director and one Whole-time Director has filed a suit in Hon'ble Delhi High Court invokingthe guarantee given by STCO whereupon the Hon'ble High Court has confirmed the order of injunctionwhich was passed earlier restraining STCO and its Director Shri I. P. Shroff from transferring, creatingany charge, encumbering or exercising any voting rights in respect of 2728706 Equity Shares of theCompany held by STCO other than in favour of Promoters. STCO has filed an appeal against theorder before Hon'ble Delhi High Court which is pending adjudication.Considering the aforementioned guarantee of STCO and the confirmation of order of injunction byHon'ble Delhi High Court, the management considers it appropriate to treat the sum of Rs. 945 lakhs(included in Loans and Advances in Schedule 6) as good and realisable.

10. Loans and Advances include a sum of Rs.12.00 lakhs (As at 31.03.2002 Rs.12.00 lakhs) due fromMr. Sitaram Singhania, Promoter and erstwhile Managing Director of Esslon Synthetics Ltd. (ESL)on account of shares of ESL sold by the Company to him in the financial year ended 31st March,1991. The Company has filed a suit in the Hon'ble Delhi High Court for recovery of the said sumfrom Mr. Sitaram Singhania together with interest thereon. The matter is sub-judice.

11. The Company is a promoter of VCCL Limited. The outstanding debts/advances (Net) due from VCCLLimited as on 30.09.2003 is Rs. 1520.13 lakhs (As at 31.03.2002 Rs. 1524.29 Lakhs). As per thelatest available audited accounts, the net worth of VCCL Limited is negative and the said Company'smanufacturing operations continued to be suspended as in the past. The management is pursuingthe matter of recovery of above dues from VCCL Limited, inter alia, by way of start up/use/acquisition/disposal of its assets. Adjustment for loss, if any, which may arise in respect of the saidoutstanding will be made on its determination.

12. Deferred Taxationi) Deferred taxes have been recognised in respect of timing differences between accounting income

and the taxable income as under:(RsAakhs)

Item of timing difference

Depreciation

Deferred Revenue Expenditure

Expenses allowable for tax purpose whenpaid.Unabsorbed loss and depreciation

Others

TOTAL

Asset/(Liability)as on 1 .4.2002

(4233.21)

(505.55)

984.67

4464.92

29.44

740.27

(Charge)/Creditduring the

period

(164.46)

(535.55)

799.61

2084.53

65.99

2250.12

Asset/(Liability)as on

30.09.2003

(4397.67)

(1041.10)

1784.28

6549.45

95.43

2990.39

ii) The deferred tax credit (net) of Rs. 2250.12 lakhs for the period (Previous Year Rs. 2422.21lakhs) has been recognised in the Profit and Loss Account.

'in) In terms of para 26 of AS-22 ("Accounting for Taxes on Income"), the Company has reviewedthe Deferred Tax Asset (DTA) recognised till March 31, 2002 and has also, in terms of para 15to 18 of AS-22, examined the issue of recognising as an item of DTA the tax effect of the loss

48


L3MCL

and unabsorbed depreciation in respect of the financial period of eighteen months ended onSeptember 30, 2003. Having regard to the financial projections, actual performance, events thathave taken place and legal advice of eminent counsel, the Company has :-

Retained the DTA recognised in respect of the losses and unabsorbed depreciation till March 31, 2002amounting to Rs. 4464.92 lakhs; and

Recognised on like basis, a sum of Rs. 2084.53 lakhs as DTA in respect of the loss and unabsorbeddepreciation for the eighteen months period ended on September 30, 2003.

13. Earning Per Share (EPS) computed in accordance with Accounting Standard 20 issued by TheInstitute of Chartered Accountants of India.Particulars 2002-03 2001-02

(18 Months) (12 Months)Net Loss as per Profit andLoss Account (Rs./lakhs) (3868.13) (4439.25)Weighted average Number of EquityShares outstanding during the period 43655636 43655636Basic and diluted Earning Per Share (Rs.) (-) 8.86 (-) 10.17

14. Business Segment :The operations of the Company relate to only one segment viz. Motorised Two-Wheelers.

15. Leases :(a) Operating Leases :

The Company has taken various residential/ commercial premises and Plant and Machinery underoperating leases. These lease arrangements are normally renewed on expiry. The future minimumlease payments in respect of the aforesaid leases are as follows :

RsAakhsi) Payable not later than one year 322.37ii) Payable later than one year and not later than five years 408.37ill) Payable later than five years . 59.49

790.23The rental expenses in respect of operating leases was Rs 498.24 lakhs

(b) Finance Leases :i) Assets acquired during the period on finance lease comprises cars.ii) The minimum lease payment in respect of assets taken on lease on or after 01.04.2001 and

the present value thereof in respect of assets acquired under finance leases are as follows :RsAakhs

Minimum Lease paymentsi) Payable not later than one year 25.54

Payable later than one year and not later than five years 41.47Payable later than 5 years -Total minimum Lease payments " 67.01Less: Future Finance charges 11.25Present value of Minimum Lease Payments 55.76

Present value of Minimum Lease Paymentsi) Payable not later than one year 20.23ii) Payable later than one year and not later than 5 years 35.53iii) Payable later than 5 years ^

55.76

49


L]VIJL

16. List of Small Scale Industrial Undertakings to whom amount is outstanding for more than 30 days :Ambe Polymers Pvt. Ltd., J.S. Auto Parts Pvt. Ltd., Spring India, Alpha Toyo Ltd., Jain Auto PartsMfg. Co., Sharda Computer Forms Pvt. Ltd., Assab Sripad Steels Pvt. Ltd., Jaguar Packaging Pvt.Ltd., Super Precision Products, Atop Fasteners Pvt. Ltd., Jas Diamonds Tools, SIFA Sanpra SystemsPvt. Ltd., A. K. Enterprises, Kartar Wire Industries, Super Screws Pvt. Ltd., Abhishek Polyplast,Krishna Plastics, Tool Groove, Accurate Springs, Laxmi Industries, Thread Aids, AFG EngineeringCo., MCS Fasteners India Ltd., Temco Rubber industries, Ailga Rubber Works, Malhotra Cables Pvt.Ltd., Terminal Tech (I) Pvt. Ltd., Ajit Chemicals P. Ltd., Master Tools (India), Time Rubber Factory,Akash Hi-Tech. Inds. Pvt. Ltd., Moni Abrasive Wheel, Tool Aids Pvt. Ltd., Akshay Insulated, MicroTurners, Unitech Industries, Ambe Polymers Pvt. Ltd., Micro Screw Mfg. Co., Unicorn Electricals &Fuses Co., Anant Automats Pvt. Ltd., Micro Precision, Universal Engg. & Mfg. Ind., Ancee Industries,Mars Auto Pvt. Ltd., Vinayak Industries, Anu Industries Ltd., Marshall Auto Cast Pvt. Ltd., VansalElectricals Pvt. Ltd., Arson Industries, Mehta Techno Tools Pvt. Ltd., Variety Fibers Auto metalIndustries, Metal Craft Engg. & Spring, Vibrant Industries, Belz Instruments Pvt. Ltd., Micro Craft,Vimal tools & Gauges, Belmak Components Pvt. Ltd, Micron Precision Screws Ltd., Vindhya CircuitSystem, Bansal Brothers, Monarch Self Adhesive, Virak Switchgears P. Ltd., Bee Kay Enterprises,Net Plast Ltd., Weld Metals India Pvt. Ltd., Bemco India Pvt. Ltd., Net Plast Ltd. (Unit-2), Ya FidelityEngg. Pvt. Ltd., Bhabha Automic, Neelkanth Poly Packings, Bhagya Laxmi Industries, NavlakhaIndustries, Bhansali Engg., National Products, Bansuri Poly Pack (P) Ltd., Nicks (India) Tools,Chaitanya Dip Moulding, Nicks Auto Industries, Chandra Engineers, Priyanka Engineering, CharanIndustrial & Packagers, Poly Plastics, Classic Industries, Precision Springs Works, CrimpsonElectronics, Premier Seals (India) Ltd., Carbo Tools and Gauges India, Pooja Forge Limited, CraftsMen Tools, Prolific Tool, Deki Electronics Ltd., Positive Plastics, Deusch Mediqip (P) Ltd., ParadiseInstruments, Denovo Resins, Paramjyoti Movers Pvt. Ltd., Drill Jig Bushing Co. (Madras), ParwatiAutomotive Pvt. Ltd., Deep Shikha Stampings, Petrotec Engineers, DGP Henoday Industries, PerfectFasteners, Elegance Engg. Works, Pivot Fabrique, Eqic Dies & Moulds, R. G. Mehanical Pvt. Ltd.,ES Engineering Pvt. Ltd., R. S. Enterprises, Empire Fasteners, Raj Engg. Works, Flexo Film Wraps(I) Ltd., Rajat Moulders Pvt, Ltd., Forgo Fine Fastners, Royal Box Industries, Flexo Plast Abrasives(I) Ltd., Radix Sensors (P) Ltd., Goodrich Industries, Raja Tools, Guru Nanak Engg. Works Co., RammPrecision Products, Gyan Cirkitronics (P) Ltd., Saraswati Engg. Ltd., Himgiri Auto Electrotech, SatluzEngg. P. Ltd., Hipro tools (P) Ltd., Seqronics (India) P. Ltd., Indo Global Bio Tech: Ltd., Spinn India,Indian Pneumatic & Hydraulic Co., Steel Smith, Indmech Industrial Corporation, Shirshu Industries,Imanes Pvt. Ltd., Surfine Tools, Indication Instruments Ltd., Shreetronics Enterprises, Innovative Arts,Siddhartha Packagers, IMI Machine & Tools Pvt. Ltd., Sigma Enterprises, J. O. Cables (P) Ltd.,Southern Diamond Products Pvt. Ltd.

17. Related Party Disclosures :1. Names of related parties and description of relationship :(A) Subsidiary Perfect Polycons Limited (ceased to be

subsidiary w.e.f. 31st December, 2002).(B) Associates/Joint Venture 1. VCCL Limited

2. Trident Auto Components (P) Ltd.(C) Key Management Personnel 1. Shri D.K. Singhania, Managing Director

2. Shri L.K. Singhania, Whole-time Director3. Shri Sanjeev Shriya, Whole-time Director

(D) Companies controlled by Directors/ 1. Smart Chips LimitedRelatives 2. Suryodaya Investment & Trading Co. Limited

3. Mahalaxmi Holdings Ltd.4. Payal Investments & Trading Limited5. Mimosa Finance & Trading Limited6. Bina Fininvest P. Limited

50


7. Ginideep Finance & Investments P. Ltd.8. Gold Rock Investments Ltd.9. Gold Rock Metals Limited10. Gold Rock World Trade Limited11. Blue Point Leasing Limited12. Gold Rock Agro-Trading Limited13. Tridhar Finance & Trading Limited14. Picanova Investments P. Limited

2. There is no provision for doubtful debts or amounts written off or written back during the periodin respect of dues from or to related parties.

3. Summary of Transactions : /ps

Particulars

Purchase of goods

Sale of goods

Leasing arrangement for machinery

Paid for deputation of employees

Job charges paid

Job charges received

Reimbursement of Expenses

Rent recovered

Miscellaneous Income

Remuneration

Outstanding (Payable) as on30.09.2003Outstanding (Receivable) as on30.09.2003

Subsidiaries

—

—

T-

—

—

—

—

—

—

—

—

—

Associates/Joint Venture

83.56

5.95

56.70

22.41

116.67

0.50

0.63

—

0.27

—

14.62

1520.13

KeyManagement

Personnel

—

—

—

—

—

—

—

—

—

41.76 -

—

5.00

CompaniesControlled by

Directors/Relatives

0.31

—

—

—

—

—

—

0.07

—

—

—

—

18. Details of investments purchased and sold during the period

50 Equity Shares of Apollo Tyres Ltd.50 Equity Shares of Atlas Cycle Ind. Ltd.100 Equity Shares of Autolite (India) Ltd.200 Equity Shares of Daewoo Motors Ltd.100 Equity Shares of MTNL Ltd.50 Equity Shares of Premier Auto Ltd. (Less than Rs.1000)

0.060.030.010.010.120.000.23

Rs./lakhs0.060.030.010.010.090.000.20

19. Remuneration to Auditors :(a) Statutory Audit Fee Rs. 12.96 lakhs (Previous Year Rs. 8.40 lakhs)(b) Tax Audit Fee Rs. 0.86 lakh (Previous Year Rs. 0.84 lakh).(c) Other Services - Certification and other Jobs Rs. 10.77 lakhs (Previous Year Rs. 5.51 lakhs).

51


XJVEI,

20. Remuneration to Cost Auditors :Audit Fee Rs. 0.32 lakh (Previous Year Rs. 0.32 lakh).

21. The Company has already received approval from some of the lenders to its Restructuring Packageand balance are under process and expected shortly. Accordingly, the Company has :(i) taken credit of waiver of penal interest / compounding interest / liquidated damages provided

so far, totaling Rs.1151.98 lakhs.Provided interest on the outstanding loans as per the package.Reflected conversion of accumulated interest into funded interest term loans (the reconciliationof the amounts is being done with the respective lenders and effect thereof, if any, will be givenupon such reconciliation).

22. Information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to theCompanies Act, 1956.

A. CAPACITY, PRODUCTION, TURNOVER AND STOCKS (Rs./Lakhs)

SI.No.

1.

2.

Class of GoodsManufactured

Motorised Two-Wheeler

Spares, Accessoriesand Miscellaneous

Unit

No.

LicencedCapacity

Per annum

NotApplicable

InstalledCapacity

Perannum @

630,000(570,000)

Opening Stock

Qty.

11,450(16,554)

Value*

2,742.43(4,070.55)

93.23(105.67)

Production

Qty.

317,968

(167,625)

Turnover

Qty.

315,354

(172,729)

Value'

103,352.85

(48,915.33)

7,067.52(4,994.93)

Closing Stock

Qty.

14,064

(11,450)

Value*

3,800.17

(2,742.43)

118.34(93.23)

@ As certified by the Management and not verified by the Auditors being a technical matter.* Value given in lakhs of Rupees

B. Raw Materials and Components Consumed

1. Iron, Steel, non-ferrous metalsand other materials

2. Paints and Thinners

3. Components

C. C.I.F. Value of ImportsRaw Materials and ComponentsStores, Spares Parts and DiesCapital Goods

D. Expenditure in ForeignCurrency (As remitted)RoyaltyTechnical Know-how/Engineering FeeProfessional and Consultation FeesOthers

Qty.

14523 WITs. 1100720 Mtrs. ]

1347288 Ltrs. i1739428 Kgs. j

rees


Rs. in lakhs Qty.

8,755.40 9958 MTs. 175991 Mtrs. )

2,313.13 475188 Ltrs. -i510850 Kgs. ]

50,172.3961,240.92

4,218.57207.44606.82

5,032.83

15.31541.63151.87154.69


4,761.82

773.26

21,249.59

26,784.67

2,158.96108.78294.58

2,562.32

6.99249.24277.02141.63

863.50 674.88

52


E.

F.

Remittance in Foreign Currencyon account of DividendAmount remitted

Raw Materials/Stores, Spare Parts& Dies Consumed

Raw Materials & ComponentsImportedIndigenous

Stores, Spare Parts & DiesImportedIndigenous

G. Earning in Foreign ExchangeF.O.B. Value of Exports


Rs. in lakhs

ValueRs. in lakhs

6,273.6654,967.2661,240.92

296.823,748.654,045.47

10.2489.76100.00

7.3492.66100.00

3,732.01

ValueRs. in lakhs

2,463.61

Year ended31.03.2002Rs. jn lakhs

3,912.9322,871.7426,784.67

196.362,248.652,445.01

14.6185.39100.00

8.0391.97100.00

23. Figures of this Period and Previous Year are eighteen months and twelve months respectively andhence they are strictly not comparable. Figures for the previous year have been regrouped andrecasted wherever necessary to make them comparable.

24. Figures in brackets pertain to the previous year.

Schedules 1 to 15 form an integral part of the Balance Sheet and Profit and Loss Acgount.

As per our report of even date attached

For BANSI S. MEHTA & CO.Chartered Accountants

H G BUCHPartner


A K JAINPartner

PlaceDate

New Delhi

30.12.2003





M R B PUNJAChairman


53


UVTL

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

I) Registration Details

Registration No.

Balance Sheet Date | 3 | 0 [ | 0 | 9 | | 2 | 0 | 0 | 3II) Capital Raised during the period

Public Issue \N\ I | L

Bonus Issue N I L

3 | 6 | 1 |2| State Code

(Amount Rs. in lakhs)

Right Issue

Private Placement

IN HL,

N| i | L |

III) Position of Mobilisation and Deployment of Funds

Total Liabilities | 3 | 7 | 3 I 6 I 1~] | 2 J 7 | Total AssetsSources of Funds

Paid-up Capital

Secured LoansApplication of Funds

Net Fixed Assets I 2 | 5 I 1

Deferred Tax Credit (Net)

Net Current Assets

3 7 3 6 1

IV) Performance of the Company

Reserves and Surplus

Unsecured Loans

Investments

Miscellaneous Expenditure

Profit and Loss Account

4|4|8|7|

|3J7|3|2| \9\0\

5 7 0 5

Other Income

Loss before Taxation |(-)| 6 I 1 I 1 I 8

Basic & Dilute Earning Per Share (Rs.) |(-)| 8 |

Total Expenditure

Loss after Taxation

Dividend Rate %

1 1 8 8 8 1

EH

0 2

V) Generic Names of two principal Products of Company

1. Item Code No.(ITC Code) IsMl l lMol

Product Description | T | w | o | IWI h I

2. Item Code No.(ITC Code) | 8 | 7 | l | 4 | l | o |

Product Description

e e

P l a | r l e l s f o T w o W h e e

PlaceDate

New Delhi30.12.2003


K C AGARWALExecutive Director (Commercial) .& Company Secretary



MRBPUNJAChairman


54


CASH FLOW STATEMENT FOR 18 MONTHS PERIOD


Rs. in lakhs

A. Cash Flow from Operating Activities

Loss before Tax (6,118.25)

Adjustments for :

Depreciation 3,621 .26

Loss on Sale ofInvestments (Net) 9.69

Diminution in value of Investments 63.26

Interest/Dividend Income (234.31)

Interest Charged (Net) 4,672.94

Amortisation of MiscellaneousExpenditure 2,433.79

(Profit) / Loss on sale of FixedAssets (Net) 22.36

Loss on Rxed Assets discarded 31 .35

Operating Profit before WorkingCapital Changes 4,502.11

Adjustments for :

Trade & Other Receivables 91 1 .86

Inventories (2,997.14)

Trade Payables & OtherLiabilities 6,659.94

Cash Generated from Operations 9,076.77

Interest Paid (includingcapitalised) (2,429.11)

Taxes Paid —

Net Cash from Operating Activities 6,647.66

Year Ended31.03.2002Rs. in lakhs

(6,861.46)

2,331.84

-

77.72

(370.26)

4,071.59

1,095.67

(7.80)

20.59

357.89

(1,354.55)

3,266.72

(2,363.37)

(93.31)

(1,780.01)

(1.03)

(1,874.35)

ENDED 30th SEPTEMBER, 2003


Rs. in lakhs

B. Cash Flow from Investing Activities

Purchase of Fixed Assets - netof Interest capitalised (3,630.90)

. Sale of Fixed Assets . • 178.79

Miscellaneous Expenditure paid (3,850.66)

Purchase of Investments (0.23)

Sale of Investments 91.16

Interest Received 233.04

Dividend Received 1 .27

Net Cash used in Investing Activities (6,977.53)

C. Cash Flow from Financing Activities

Proceeds from Share Capital

Proceeds from Borrowings 941.62

Repayment of Borrowings (185.52)

Dividend Paid (3.01)

Net Cash from Financing Activities 753.09

Net (Decrease)/lncrease in Cash &cash equivalents 423.22

Cash & Cash equivalents atstart of the period . 3,963.20 ,

Cash & Cash equivalents atclose of the period 4,386.42

Year Ended31,03.2002Rs. in lakhs

(1,535.53)

80.41

(1,206.67)

(0.02)

0.20

350.53

19.73

(2,291.35)

-

722.72

(190.46)

(0.54)

531.72

(3,633.98)

7,597.18

3,963.20

ForBANSIS.MEHTA&CO.Chartered Accountants

HGBUCHPartner


A K JAINPartner

Place

Date

New Delhi

30.12.2003




LK SINGHANIA M RBPUNJAWhole-time Director Chairman


55


LML LIMITEDRegd. Office : C-3, Panki Industrial Estate, Kanpur - 208 022

PROXY FORM

DP Id.*

[Client Id.*

No. of Shares

Master Folio No.

I/We :

of

being member(s) of LML LIMITED, hereby appoint

of

or failing him/her

of :

as my/our proxy to attend and vote for me/us and on my/our behalf at the Twenty-ninth Annual GeneralMeeting of the Members of LML Limited to be held on Tuesday, the 9th March, 2004 at its RegisteredOffice at C-3, Panki Industrial Estate, Kanpur - 208 022 at 11.00 A.M. and any adjournment thereof.AS WITNESS my/our hand(s) this day of 2004.

Signature(s) of Apix 30 Signature ofMember(s) Paise Proxy(ies)

RevenueStamp '

* Applicable for Investors holding shares in electronic form.

Note : The proxy must be deposited at the Registered Office of the Company not less than 48 hoursbefore the time fixed for holding the meeting.

LML LIMITEDRegd. Office : C-3, Panki Industrial Estate, Kanpur - 208 022

ATTENDANCE SLIP

DP Id.*

Client Id.*

No. of Shares

Master Folio No.

I hereby record my presence at the TWENTY-NINTH ANNUAL GENERAL MEETING of the Members ofLML Limited held on Tuesday, the 9th March, 2004 at C-3, Panki Industrial Estate, Kanpur-208 022 at11.00A.M.Full Name(s) of Member(s)

Full name of attending member/proxy

* Applicable for Investors holding shares in electronic form. Signature of Member/Proxy(To be done at the Entry -Point)

Note : Please fill in block letters, except signature. Please bring your copy of the Annual Report in the Meeting.

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