· a.k. das t. ananthanarayanan k.v. seshasayee ˆˆ˘ ˙ ˝ ˘ ˆˆ˘ anil harish - chairman r.p....

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1. General Information 06

2. Directors’ Report 09

3. Performance Highlights 20

4. Corporate Governance Report 21

5. Auditors’ Report 27

6. Financial Statements

l Balance Sheet 30

l Profit and Loss Account 31

l Schedules to the Accounts 32

l Cash Flow Statement 55

l Section 212 Statement 57

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7. Annual Report of Subsidiary Companies 58

l ALIT Inc. and Subsidiary 59

l Aasia Industrial Technologies Limited 73

l IndusInd Media & Communications Limited 90

l IndusInd Cable Television (Bombay) Limited 116

l Grant Investrade Limited 124

l In2Cable.com (India) Limited 133

l IndusInd Entertainment Limited 154

l Cable Video (India) Limited 171

l CVO Holdings Private Limited 189

l IndusInd Telecom Network Limited 199

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A.P. Hinduja - Chairman

R.P. Hinduja - Co-Chairman

S. Solomon Raj - Vice Chairman

D. G. Hinduja

H.C. Asher

A. Harish

A.K. Das

T. Ananthanarayanan

K.V. Seshasayee

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Anil Harish - Chairman

R.P. Hinduja

A.K. Das

T. Ananthanarayanan

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S. Solomon Raj - Chairman

R.P. Hinduja

A.K. Das

K.V. Seshasayee

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S. Solomon Raj

H.C. Asher

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S. Solomon Raj

A. K. Das

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S. Solomon RajExecutive Vice Chairman

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M.S.Varadan Executive Director (on deputation to IndusInd Media & Communications)

Rajiv Vyas President (on deputation to IndusInd Media & Communications)

Srinivas Palakodeti Senior Vice President

Pushkar Misra Senior Vice President

Chetan Shah Senior Vice President

Arun Kumar Vice President

Yagnesh Sanghrajka Chief Financial Officer

Kuntal Goel Manager

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R.C. Khanduri President

S. Nagarajan Senior Vice President

S.K.Bandhyopadhyay Principal Advisor – Quality & Process Management

A.Srinivasan Vice President, Finance & Accounts

R. Ravichander Vice President, IT Operations

Savita Govilkar Vice President, Broadband Services

Anand Rao Asst. Vice President, Marketing

Dr. Solomon Suresh Asst. Vice President, HRD

Lalit Malani Asst. Vice President, Projects

Narsimha Murty Asst. Vice President, Marketing

S. D. Konda Asst. Vice President, Projects

K.M.Raju General Manager, EAG

Vishwanath Rao General Manager, IT Enabled Services

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Price Waterhouse, Chartered Accountants

1104, Raheja Chambers, Nariman Point

Mumbai - 400 021.

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Crawford Bayley & Co

Pandya & Co

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UTI Bank Limited

Standard Chartered Bank

IndusInd Bank Limited

HDFC Bank Limited

State Bank of India

ABN Amro Bank

Canara Bank

Bank of Madura

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Hinduja House, 1st Floor,

171, Dr. A. B. Road,

Worli, Mumbai - 400 018.

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Sharepro Services

Satam Industrial Estate,

Cardinal Gracious Road,

Chakala, Andheri (E),

Mumbai - 400 099.

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To the Members,

Your Directors have pleasure in presenting the Annual Report together with Audited Statement of Accounts of theCompany for the Financial Year ended 31st March 2001.

We are pleased to announce that subsequent to your approval in the Extra-ordinary General Meeting of 20th February,2001 and after obtaining regulatory approvals, your Company has changed its name from Hinduja Finance CorporationLimited to “Hinduja TMT Limited” (HTMT). The new name would correctly reflect the company’s current positioningin the market place as an operating IT company and its parenting role of companies brought under its control in theTMT (Technology, Media, Telecom) sector for achieving synergies of operations through technology convergence.

1. Performance Data(Rs. in million)

Particulars Year ended Previous Period ended31st March 2001 31st March 2000

(12 months) (9 months)

Total Income 617.24 113.78Total Expenditure 244.75 40.78Gross Profit 372.49 73.00Add: Exceptional Items 88.21 136.73Profit before tax 460.70 209.73Less: Provision for Taxation 40.04 48.00Profit after Tax 420.66 161.73Basic Earnings per Share ( Rs. ) 13.67 7.04

Appropriations:

Provision for Proposed Dividend 153.62 51.69Tax on Distributed Profits 15.67 5.69Transferred to General Reserve 42.07 16.17Transferred to Statutory Reserve Fund 116.48 -Balance Transferred to Balance Sheet 213.77 138.63

The performances, as stated above, are not comparable due to different accounting periods and also the fact thatprevious period figures do not include the performance of I.T. division.

2. Financial Review

Your Company’s total income from operations increased to Rs. 617.24 million in 2000-01 from Rs. 113.78 million forthe period ended 31st March 2000 thereby registering a growth of 307% on an annualized basis. Gross Profit grew toRs. 372.49 million from Rs. 73.00 million, a growth rate of 283% on an annualized basis. Profit after tax grew by 95%(annualized basis) to Rs. 420.66 million from Rs. 161.73 million in the previous year. Information Technology activities

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contributed 61.45% of the total income for the year under review. The rise in total income is primarily due to inclusionof IT turnover that showed a strong growth during the FY 2000-01.

3. Dividends

Considering the healthy cash flow, your directors recommend a dividend for the year ended 31st March 2001 @Rs. 5/- per share on equity shares on a pro-rata basis for the current year.

4. Increase In Share Capital / Status Of Mergers

Your Company (hereinafter also referred to as ‘HTMT’) has allotted 12,610,090 equity shares pursuant to the schemesof amalgamation with Ashok Leyland Information Technology Limited, Hinduja Telecom India Limited, RichmanInvestrade Private Limited and Melody Trading Private Limited with itself.

The swap ratios for the above mergers and the resultant rise in share capital of HTMT are as under :-

Share Rise in equity capitalSwap Ratio (Rs. million)

Ashok Leyland Information Technology Ltd. (ALIT) 1:20 10.18

Hinduja Telecom India Limited 1:29 49.91

Richman Investrade Private Limited 1:5 50.52

Melody Trading Private Limited 4:11 15.48

The merger of ALIT was with effect from 1st July 1999. However as the approval for the same was obtained after31st March 2000, cognizance of the same is taken in the accounts for the year ended March 31, 2001. The balancethree mergers are with effect from 31st August, 2000 and the necessary approvals have been obtained. Pendingallotment of shares pursuant to these 3 mergers the same are shown under the head “Share Capital Suspense” ason 31st March, 2001. These shares have since been allotted and would be eligible for pro-rata dividend for theyear under review. Due to the above, the paid-up capital of HTMT would increase from Rs. 22.97 Crores to Rs.35.58 Crores.

Consequent on the said mergers, ALIT Inc, IndusInd Telecom Network Limited, Aasia Industrial Technologies Ltd.,CVO Holdings Pvt. Ltd. have become direct subsidiaries of HTMT and HTMT Europe Ltd., IndusInd Media &Communications Ltd., IndusInd Entertainment Ltd., Cable Video (India) Ltd., IndusInd Cable TV (Bombay) Ltd.,have become indirect subsidiaries of HTMT.

The networth of your Company has risen by Rs. 1977 million, from Rs.1488 million in the previous year to Rs. 3465million, while the Book Value per share stands at Rs. 97.38 against a Book Value of Rs. 64.76 in the previous year.

The businesses brought within the fold of your Company would leverage established strengths to avail of the growthopportunities emerging in TMT sector and are expected to enhance shareholder value.

Due to the uncertain market conditions, your Company has decided to defer the merger of Sarthak Mercantile PrivateLimited (SMPL) with your Company. The merger of SMPL, a special purpose vehicle of the Hinduja Group holdingequity stake in some of your Company’s existing subsidiaries, would have increased paid-up capital of your Companyto Rs. 45.72 Crores from the existing level of Rs. 35.58 Crores.

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5. Business

a. Information Technology

ALIT has merged with HTMT with retrospective effect from 1st July, 1999. Subsequent to the merger, InformationTechnology became HTMT’s predominant activity.

Indian IT industry has grown at an average rate of over 50%, from almost nothing in 1991 to Sales of US $ 8.26 billionin 2000. Although the growth momentum may slow down on account of downturn in the United States, your Companyis confident of improving its performance by focusing on its areas of strengths in Information Technology.

Looking at the changing business scenario, your Company had appointed Accenture (formerly Andersen Consulting)for drafting a comprehensive strategy for its IT initiatives. After a thorough examination of the IT expertise of HTMTand the needs of the environment, Accenture has recommended that as a part of its Information Technology strategy,HTMT should focus on the following segments: -

1. Professional Services (T&M)2. Business Process Outsourcing

- Customer Interaction Services (Call Centers)- Back Office Processing

3. IT Services- E-commerce Solutions- Software Development and Maintenance- Systems Integration and Package Implementation

In Professional Services, given the current global IT scenario, HTMT has decided to work on the basis of a risk freeenvironment. It has decided to send its staff abroad only after a client approves of them, instead of deputing themabroad in anticipation of securing onsite placements. This would help your Company achieve low bench rates.

The geographical areas of focus of HTMT are Europe, US, India and Middle East. It has offices in New York andLondon apart from Bangalore and Mumbai in India. Further the Hinduja Group has its presence in major cities of theworld and these offices are being utilised to promote the business of HTMT.

Off-shore Development Centre (ODC)

Your Company has recently commissioned a new 52,000 sq. ft off-shore development centre at Bangalore and hasspent nearly Rs. 45 mn. on the facility till date. The centre is connected with a 1 Mbps dedicated fibre optic link to USAand has excellent computing and telecommunication facilities. It has the capacity to offer over 600 seats for businessprocess outsourcing operations.

Operations

ALIT (the company as it existed prior to its merger) was a pre dominant mainframe oriented company. HTMT,subsequent to the merger, has been directing its efforts to acquire new skill sets and has extensively retrained itspersonnel in areas of Oracle 8i, Developer 2000 (D2K), Java, XML, VB 6.0 etc. The current segments of operationsinclude:

l Systems Integration Servicesl Business Process Outsourcing

l Onsite & Offshore Software Services

l Enterprise Integration Services

l Web & Convergence Solutions

l Customised Product Development

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Your Company has effectively leveraged its presence (through its subsidiaries) in the Telecom & Media sectors. YourCompany’s System Integration Group (SI Group) has been closely associated with IndusInd Media & CommunicationsLtd (IMC) in testing and selection of technologies for delivering Internet and other related services on television toIMC’s cable subscribers. The SI Group is also helping HTMT’s another subsidiary In2Cable.com India Ltd. a broadbandISP in evaluating a usage and duration based billing system.

Business Process Outsourcing (BPO): This is a new area of focus for HTMT and it has set itself quite ambitious targetsfor the same. The activity began with a large BPO project from a Fortune 50 US Healthcare organisation based in USA.HTMT has been able to adhere to stringent quality standards as specified by the client.

HTMT has set a target to become a dominant player in the business process outsourcing industry by the end of FY2001-02 and would be dedicating the required financial, managerial and other resources required to achieve thisobjective.

Your Company is a leading partner for BaaN, with the maximum implementation sites in India. Presently HTMT’sengineers are being trained on BaaN V, iBaaN and their extended ERP products.

HTMT also executed off-shore projects in the e-commerce / web technologies area for a host of clients during the yearunder review.

HTMT was responsible for conceptualizing, designing, developing and implementing an integrated and customisedERP package for a large automobile company in India. This package would facilitate integration of the client’s operationsgeographically to create a unified virtual organisation. It has also developed a Supply Chain Management productthat is shortly to be integrated with the customised ERP solution developed for this client.

The Company has successfully completed a pilot for a large Brazilian client for developing a real time debit cardprocessing system and is now in the process of executing a commercial contract.

Human Touch (HT) : It is a Human Resources Management Solution (HRMS), for the manufacturing industry, developedin-house integrated with the BaaN ERP suite. This product is jointly marketed with BaaN and has to its credit about400 licenses in India and abroad.

E-port (formerly Web-HR): It is a web-based generalized HRMS for multi-location organizations, which covers both theservice and manufacturing industry. The product was launched commercially in March 2001 and has achievedsignificant commercial success with 35 licenses being sold till date.

EMMA (End-to-End Integrated Textile Product): This product, used for end to end integration in the textile industry,consists of two components:

a. Business-to-Business connectivity: It enables the business promoter of this product to link up, in a seamless way,the various manufacturers of components in the textile industry.

b. The second part of this product deals with a Business to Consumer link that enables any member to launch ashopping portal.

HTMT owns HT, E-port and EMMA and has the IPR on these products.

Human Resources in the IT segment

HTMT recognizes that its primary asset is intellectual capital. The employees of the company are its strength and themanagement is aware of its responsibility to provide a harmonious and congenial atmosphere to ensure that theyidentify with the Company and are committed to their work. It believes in empowering its employees and givingthem freedom to operate so that they can deliver their best. It has a strong management and technical team with over3000 man-years of experience. The total number of employees is 360, and the average age of its young and dynamicteam is just 28 years with women constituting 22% of the workforce.

Employee Stock Option Plan

As a reinforcement of HTMT’s commitment to its employees an approval was obtained from the shareholders toissue upto 2% of its equity to eligible employees. Pursuant to the same a Compensation Committee has been formedto execute the scheme and to grant stock options to employees.

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b. Finance

HTMT has surrendered its certificate of registration as a Non Banking Finance Company (NBFC) to Reserve Bank ofIndia in June 2001 so that the Company could focus on Information Technology activities.

c. Corporate Group

In order to monitor the performance of subsidiaries, to provide strategic direction to them and to explore opportunitiesfor creating value to shareholders a corporate group consisting of officials experienced in technology, investmentbanking, corporate governance and research in corporate affairs has been set up during the year under review. Thegroup will also look at new projects and acquisitions of companies, which have a strategic fit with your Company inTMT sector. An important responsibility of the group is to raise resources for your Company and its subsidiaries andensure proper end-use thereof. The group will also maximize shareholder value by orchestrating the components ofbusiness models of the companies under the HTMT fold. It has taken the help of the consultants Accenture andPricewaterhouseCoopers to redefine the strategies and restructure businesses of HTMT.

The group has implemented a robust planning process to deal with environmental complexities and address risksand concerns.

6. Future Outlook

The slowdown in the US economy offers a challenge as well as an opportunity. It is expected that, at the end of theprevailing turbulence, more and more companies would outsource their work from India. As per a survey conductedby Nasscom, revenues from IT Enabled Services sector in India in 2000-01 are estimated to be Rs. 41 billion from abase of Rs. 24 billion in 1999-2000. IT Enabled Services can generate revenues of US$ 17 billion and provide employmentfor 1.1 million people in the next eight years.

As mentioned earlier, HTMT’s thrust area in its new business model is Business Process Outsourcing (also known asIT Enabled Services). Your Company’s new initiatives of starting European operations, commissioning of new state-of-the art offshore development center and strengthening of its management team would definitely help your Companyemerge as a stronger and a bigger player in the industry.

Your Company believes that convergence is an ongoing process, occurring at various intersections and transactioncycles across all sectors of industries. Business opportunities are most interesting in the Technology, Media andTelecom sectors given their nature of being consumer driven businesses. With proliferation of different service offeringsand ubiquitous nature of technologies, your Company is entering into an era where multiple technologies will be usedto deliver applications such as entertainment, commerce and communications combined with the challenge of acommon billing and client management system. Your Company would strive to achieve the highest level of performancein a world of convergence by combining the formerly separate disciplines of Technology, Media and Telecommunication.

7. Subsidiaries / Associates

The direct / indirect subsidiaries of HTMT are tabulated below: -

Direct Indirect

ALIT Inc., USA HTMT Europe Ltd.Aasia Industrial Technologies Ltd. IndusInd Media and Communications Ltd.In2Cable.com (India) Ltd. IndusInd Entertainment Ltd.IndusInd Telecom Network Ltd. (*) Cable Video (India) Ltd.CVO Holdings Pvt. Ltd. (*) Planet E Shop Holdings India Pvt. Ltd. (*)Grant Investrade Ltd. (*) Planet E Shop India Pvt. Ltd

IndusInd Cable Television (Bombay) Ltd.(* : Holding company/Special Purpose Vehicle)

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The associates of HTMT are :

l Fascel Ltd.

l IndusInd Information Technology Ltd.

The details as required under section 212 of Companies Act, 1956 pertaining to subsidiaries has been appended to theBalance Sheet.

Direct / Indirect Subsidiaries

a) ALIT Inc., USA

Pursuant to the merger of ALIT with HTMT, ALIT Inc. became the wholly owned subsidiary of your Company. Itacts as the marketing arm of HTMT for North and South America and is headquartered in New York with office inAtlanta.

It was instrumental in sourcing the business process outsourcing order from a US based Fortune 50 corporate. It isresponsible for ensuring a steady workflow for delivery desk in India and has also placed people on onsite work atclient premises in US.

b) HTMT Europe Ltd

HTMT Europe Ltd. (previously known as ALIT U.K Ltd.) is a 51% subsidiary of ALIT Inc with its registered office inLondon. It has re-commenced commercial activities during FY 2000-01. The primary objective of HTMT Europe is toact as the European marketing arm of HTMT. It is currently focused on placing software engineers in the Europeancontinent and in securing business for the ODC in India. The results of its efforts are expected to be reflected from FY2001-02 onwards.

Total revenues ofALIT Inc. (inclusive of HTMT Europe) for the year ended 31st March 2001 were US $ 2,035,283 ascompared to US $ 3,023,109 in the previous year and incurred a loss of US $ 393,125 as against a net income of US $13,813. The fall in revenue was due to decline in Time & Material businesses in USA. The marketing team in NewYork is being strengthened for securing more off-shore work for being executed in India.

c) Aasia Industrial Technologies Ltd (AITL)

AITL became a subsidiary subsequent to the merger of Richman Investrade with your Company. AITL owns a 40,000sq. feet modern building in Mumbai with state of the art infrastructure housing our Media and Internet companies.Additional 40,000 sq. feet FSI is available for usage in IT related activities.

Its total income for the year ended 31st March 2001 was Rs.59.98 million as against Rs. 89.92 million in 1999-2000 andthe company incurred a loss of Rs. 9.73 million as compared to a profit of Rs. 23.07 million in the previous year. Stepsare on to improve AITL’s performance.

d) IndusInd Media & Communications Ltd. (IMC)

IMC was a subsidiary of AITL and pursuant to AITL becoming HTMT’s direct subsidiary, IMC has become an indirectsubsidiary of your Company.

IMC’s total income increased by 92% from Rs.262.42 million in 1999-00 to Rs.503.20 million in 2000-01. IMC madecash profit (after interest but prior to extra ordinary items) of Rs.3.03 million during 2000-2001, as against the cash lossof Rs.227.84 million in the previous year.

IMC is the leading Multiple System Operator (MSO) in India with a reach exceeding 4.5 million households. During2000-01, IMC started operations in three more centres namely Nasik, Baroda and Mysore thereby increasing thenumber of centres from 9 to 12. IMC also commenced provision of value added services like Broadband Internetservices through cable modem in alliance with In2cable.com India Ltd.

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Intel Pacific Inc’s investment of US $ 49.23 million in IMC has been through Grant Investrade Ltd. (GI), a specialpurpose vehicle. Intel Pacific Inc. holds 49% stake in GI and the balance (51%) is held by HTMT. GI holds 6.6% of thefully diluted equity capital of IMC. This investment gives a benchmark valuation of US $ 1.5 billion to IMC, makingit one of the most valuable unlisted companies in India.

IndusInd Cable Television (Bombay) Ltd., a wholly owned subsidiary of IMC, holds a Category B licence to offerInternet Services in the city of Mumbai.

e) In2Cable.com (India) Ltd. (In2Cable)

In2Cable, the broadband cable Internet Service Provider (ISP) and a direct subsidiary of your Company, completedits first year of business with a total income of Rs.25.82 million and a loss of Rs.11.85 million. During the year, In2Cableimplemented its internet-on-cable project at 10 locations in 8 cities throughout the country and is a leading player inthe Cable Internet market.

f) IndusInd Entertainment Ltd. (IEL)

IEL was incorporated to have a company focusing on local television content and to take over the operations of IMC’sIN-TV division.

IEL commenced operations with effect from 1st April, 2000 as a wholly owned subsidiary of AITL. It has entered intoan agreement with IndusInd Media & Communications Ltd. (IMCL) for right to use the ‘INTV’, ‘IN TIME’ and ‘INMUMBAI’ brands and television software. It offers an infotainment channel having a mix of multilingual news/events and light entertainment on cable TV systems.

The total income of IEL for the year ended 31st March 2001 (first year of operations) was Rs. 43.90 million on which itincurred a loss of Rs. 4.66 million. Within a short period of time, its cable channel has become popular and expectedto post better results during FY 2001-02. During the year, it also started an Internet division for web content managementand web based solutions.

g) Cable Video (India) Ltd. (CVIL)

The merger of Melody Trading Pvt. Ltd. led to CVO Holdings Pvt. Ltd. becoming a subsidiary of HTMT. CVIL, a 85%subsidiary of CVO Holdings Pvt. Ltd., is in the process of merging with CVO Holdings Pvt. Ltd.

CVIL earned a total income of Rs. 148.75 million in 2000-01 and cash profit of Rs 39.50 million. It operates the leadingHindi movie Channel on cable under the brand ”CVO” with over 1600 movie rights. It continued to acquire filmrights of various new Hindi films and develop film – based programmes for exploitation on its CVO channel, benefitsof which have accrued in the year under review and shall also continue to accrue in the future.

h) Planet E-Shop India Private Ltd.

Planet E-Shop India Private Ltd. has commenced implementation of India’s first integrated media and e-commerceventure by setting up a 24-hour home shopping project for retail consumers. The company has a foreign collaborationwith the Planet E-Shop group of USA, which specializes in various sectors of media commerce in USA and China.

The project envisages marketing of exclusive consumer products through a teleshopping channel, Internet portal andpoints of presence through a franchised retail outlets, with fulfillment through a carefully planned mechanism of callcentres. The venture would produce its own programming content for the products and has already set in motion thesteps required for setting up a world-class facility for the same and is expected to launch its commercial operations bythe end of 2001.

Your Company holds 51% equity of Planet E Shop Holdings India Pvt. Ltd., through its subsidiary AITL (balanceequity is held by a US based company). Planet E Shop Holdings India Pvt. Limited holds 97% equity of Planet E ShopIndia Pvt. Limited.

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Associates

a) Fascel Ltd.

Fascel Ltd. is the cellular service provider in Gujarat and is one of the largest cellular circle operators. It had a base ofover 165,000 subscribers as on March 31, 2001 exhibiting a growth rate of more than 50% over the previous year. It isa part of Hutchison’s cellular operations in the country and Fascel has an extensive statewide network in Gujaratcovering 24 out of the 25 District Headquarters. In the current year it registered a turnover of Rs. 2001 million. It haslaid over 225 kilometres of optic fiber in Gujarat as a part of a statewide backbone and has plans to lay over 1200kilometres of optic fiber in the current year.

HTMT holds 30% equity of Fascel through its subsidiary IndusInd Telecom Network Ltd. (ITNL) in which SumitomoCorporation, Japan is a partner with 31.50% stake. ITNL became a subsidiary pursuant to the merger of HindujaTelecom India Ltd.

b) IndusInd Information Technologies Ltd. (IITL)

IITL has commenced operations in FY 2000-01 and it was incorporated to focus on the rapidly emerging sharedservices opportunities in the Banking and Financial services industry. IITL aims at emerging as a leading player inthe nascent ASP services segment, addressing core banking applications with the Equation DBA Banking Solutionsfrom Midas Kapiti International (MKI), WorkFlow & Messaging Applications based on Lotus Domino-Notes fromIBM, Internet based solutions from CR2 and the shared payment services using the Base24 switch from AppliedCommunications Inc.

IITL is responsible for conceptualizing, driving and supporting the entire technology driven initiatives of the IndusIndBank. Technology-driven initiatives are a critical component of IndusInd Bank’s business plans, especially its thrustinto the retail segment.

IITL is also in discussion with MKI and CR2 to set up product competence centres in the Middle East that can beleveraged upon by the latter to expand and complement their global product development and implementationinitiatives.

In FY 2000-01 the provisional (unaudited) figures of IITL show total income of Rs. 12.37 million on which it earned anet profit of Rs.1.46 million.

8. Corporate Governance

In line with the recommendations of the Securities and Exchange Board of India (SEBI) on Corporate Governance,two separate committees for Audit and protection of Shareholder’s interest were formed and named as AuditCommittee, and Investor Grievances Committee respectively. The Committee of Directors was reconstituted withadditional responsibility to monitor the operations of subsidiaries and provide strategic direction to them. The Companyhas taken steps to comply with the provisions of the Corporate Governance guidelines as per the Listing Agreementswith the Stock Exchanges. A separate report on Corporate Governance is annexed as a part of the Annual Report.

9. Risk Management

HTMT is aware that in a dynamic industry like IT services it is very important to utilise risk management tools tomitigate the existing and potential risks likely to be faced by it. The major risks that are examined are (a) clientconcentration (b) exposure to e business /Internet companies (c) geographical concentration (d) exposure to service

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segments (e) client creditworthiness (f) foreign exchange rate fluctuations (g) contractual obligations (h) projectmanagement (timely & satisfactory completion of assignments).

With the emphasis on Business process outsourcing where a single order from a client has potential of generatingannual revenues in excess of US$10 million risk management has become even more critical and risks are beingactively assessed to address them adequately. HTMT is using appropriate risk management tools and effective controlprocedures.

10. Internal Control Systems

The Committee of Directors meets every fortnight to discuss various issues that directly influence the business ofyour Company and its subsidiaries and monitor their performance.

The internal control systems and processes address the following: -

l Operational efficiency

l Accuracy and promptness in financial reporting

l Compliance with laws and regulations

HTMT has a well-defined organizational structure, clearly demarcated authority levels and well documented policyand guidelines to ensure process efficiencies.

The internal auditors carry out pre-audit and post-audit checks, reviews and ensure that the audit observations areimplemented. The internal auditors are also responsible for management audit. They submit their report on a quarterlybasis to the Audit Committee, which reviews the same and takes necessary action.

11. Fixed Deposit

HTMT has not accepted any fixed deposits from the public and, as such, no amount of principal or interest wasoutstanding as on the balance sheet date.

12. Directors

Mr. R P Hinduja and Mr. Anil Harish, Directors of the Company are liable to retire by rotation at the ensuing AnnualGeneral Meeting and being eligible, offer themselves for re-appointment.

Mr. Dheeraj G Hinduja was appointed an Additional Director in the Board meeting held on 19th June, 2001. He holdsoffice upto the date of this Annual General Meeting and in respect of him, the Company has received notice in writingunder Section 257 of the Companies Act, 1956 from shareholder proposing his candidature for the office of Director ofthe company at the forthcoming Annual General Meeting.

13. Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors’Responsibility Statement it is hereby confirmed:

1. That, in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

2. That, the Directors had selected such accounting policies and applied them consistently and made judgementsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of HTMT atthe end of the financial year and of the profit or loss of HTMT for that period;

3. That, the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in

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accordance with the provision of the Act for safeguarding the assets of HTMT and for preventing and detectingfraud and other irregularities;

4. That, the Directors had prepared the annual accounts on a going concern basis.

14. Auditors

M/s Price Waterhouse, Chartered Accountants, the Auditors of HTMT, retire at the conclusion of the forthcomingAnnual General Meeting of the Company and being eligible offer themselves for re-appointment.

15. Conservation of Energy, Technology Absorption & Foreign exchange earnings and outgo:

The prescribed particulars Under Section 217 (1) (e) of the Companies Act, 1956 relating to Conservation of Energy,Technology Absorption and Foreign Exchange earnings and outgo are annexed herewith.

16. Employees:

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees)Rules, 1975 forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 theReport and Accounts are being sent to the shareholders of the Company, excluding the statement of particulars ofemployees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statementmay write to the Company Secretary at the Registered Office of the Company.

17. Acknowledgements:

The Directors take this opportunity to thank your Company’s clients, vendors, business partners, shareholders andbankers for their support. They also wish to thank the Government of India, various Government departments andagencies, VSNL and Software Technology Park – Bangalore for their support and look forward to their continuedsupport.

Your directors place on record their sincere appreciation of the contribution made by employees who through theircompetence, hard work, co-operation and support have enabled the Company to achieve consistent growth.

For and on behalf of Board

Mumbai ASHOK P. HINDUJAJune 23, 2001 Chairman

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Particulars pursuant to Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988.

A. Conservation of Energy : The Company makes evaluation on a continuous basis to explore new technologies andtechniques to make the infrastructure more energy efficient. The operations of the Company are not energy-intensive.

B. Research and Development : In today’s world, technologies are changing very fast and hence it is very importantto invest in research and development. Being a global player in the IT arena, your Company is constantly engaged inthe field of research and development of newer technologies. It is because of its continuous R & D efforts, yourCompany has successfully developed its products like E-port (Web-HR), Human Touch and Emma.

C. Technology Absorption & Adaptation : Your Company has successfully commissioned a 52,000 square feet stateof the art offshore development center at Bangalore with all the latest computing and telecommunication facilities.The other specific technological initiatives undertaken by the Company during the year are as under:

l State of the art IBM Server in its software development facilities was added.l Diversified into Baan E- Enterprise and Supply chain Management and added High End Intel Based Servers for

In- House Laboratory for learning and testing.l Carried out projects on IBM Mainframe and on the latest versions of the Oracle Developer suite.l Connection by International Private Lease Circuit (IPLC) to its Fortune 50 client in US was established.l A Network/Computing Setup with high redundancy was established at the offshore development facility.l Standardization of Desktops with PIII 550 Mhz processors with 128MB RAM and a Minimum of 10GB Hard disk

space for all Developers and PC Note Books for Senior management. l Upgradation of the Network Facility with Cat6 Cabling and Data/Voice redundancy on all the Floors with an

Intelligent Layer 3 Giga Bit Core Switch.l Continued using STPI (SOFTNET) for Internet Access for Business Generation and Management requirements.

Your Company will continue to invest in rapidly changing new technologies and use them for improving theproductivity and quality of its products and service offerings.

D. Foreign Exchange Earnings & Outgo

l Export initiatives and development of new export markets

Your Company has had a strong export focus in the past, and expects its export thrust to continue in future. Duringthe year, your Company started its marketing office in London to market its IT services in Europe and the benefits ofthe same are expected to reflect in the current year. The Hinduja Group offices across the world can also be utilisedfor marketing for your Company’s IT business in future. Further, your Company plans to take part in internationalexhibitions to promote its products and services. The long-term goal of your Company is to develop a highly respectablename in the global market for its services and products, and to continue to realize a significant portion of its revenuefrom exports.

l Foreign Exchange earned and used for the year ended 31st March, 2001(Rs.in ‘000s)

2000-2001 1999-2000(*)- Total Foreign Exchange-Earned 330,308 454- Total Foreign Exchange Outgo 18,065 115 (including capital goods)(*) : Previous year figures does not include the performance of our I.T division.

For and on behalf of Board

Mumbai ASHOK P. HINDUJAJune 23, 2001 Chairman

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HTMT’s PHILOSOPHY

The Code on Corporate Governance as prescribed by SEBI, will be applicable to the Company not later than March2002. However, the Company has been conforming to most of the guidelines even before they were prescribed bySEBI. The Board of Directors and the Management of HTMT commit themselves to:

l Striving towards enhancement of shareholder value in the medium and long term through sound businessdecisions, prudent financial management, and high standard of ethics throughout the organization.

l Ensuring transparency and professionalism in all decisions and transactions of the Company.

l Conforming to, and exceeding wherever possible, prevalent guidelines on Corporate Governance.

l Regularly reviewing the Board processes and the Management systems to improve governance relating to all theabove.

1. Board of DirectorsComposition:

The Board of Directors of the Company as on 31st March, 2001 consisted of:

(i) Non-Executive Directors: Promoter GroupMr. A. P. HindujaMr. R.P.Hinduja

Connected with Associate CompaniesMr. A.K.DasMr. K.V.Seshasayee

IndependentMr. H. C. AsherMr. Anil HarishMr. T. Ananthanarayanan

(ii) Executive Vice Chairman: Mr. S. Solomon Raj

Attendance:

Details of Board Meetings, Last AGM and Attendance of Director are given herein below:

Date of Board Name of the Directors No. of Meetings Last AGMMeetings held Attended by eachduring the year director

20.4.2000 Mr. A P Hinduja 7 Attended

27.4.2000 Mr. R.P.Hinduja 3 Attended

16.5.2000 Mr. S Solomon Raj 7 Attended

31.7.2000 Mr. A K Das 6 Attended

11.8.2000 Mr. H C Asher 7 Attended

20.10.2000 Mr. Anil Harish 5 Attended

11.1.2001 Mr. T Ananthanaraynan 2 —-Mr. K V Seshasayee 5 Attended

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Details of Membership of the Directors in other Boards and Board Committees:

Name Other Boards(excludes HTMT) All Board Committees (includes HTMT)Mr. A P Hinduja 5 -Mr. R P Hinduja 5 2Mr. S Solomon Raj 7 3Mr. A K Das 14 3Mr. H C Asher 14 1Mr. Anil Harish 15 3Mr. T Ananthanarayanan 6 1Mr. K V Seshasayee 3 1

(Excludes Foreign companies, Private Limited companies and Alternate Directorships).

2. Audit Committee

A. Terms of reference

To oversee Company’s financial reporting process and disclosure of its financial information, to recommendappointment of Statutory Auditors and fixation of audit fee, to review and discuss with Auditors about internalcontrol systems, scope of audit including observations of Auditors, adequacy of internal audit function, majoraccounting policies and practices, compliance with accounting standards and with Stock Exchange and legalrequirements concerning financial statements and related party transactions, if any, to review Company’s fiscal andrisk management policies and discuss with Internal Auditors any significant findings for follow-up thereon, to reviewhalf-yearly and annual financial statements before submission to the Board of Directors, to advise and guide operatingmanagement on specific issues/ transactions in co-ordination with Statutory Auditors.

B. Composition

The Audit Committee of the Company was constituted in February, 2000. The composition of the Audit Committee isas follows:

Chairman : Mr. Anil Harish

Members : Mr. R. P. Hinduja

Mr. A. K. Das

Mr. T. Ananthanarayanan

Permanent Invitees : Mr. S. Solomon Raj, Executive Vice Chairman

Representatives of Statutory Auditors and Internal Auditors.

Secretary : Mr. Pradeep Pasari

C. Meetings and Attendance

The details of meetings held during the year, and the attendance thereat are as follows:

Date of Meetings: 20th April, 2000 and 11th January, 2001.

Attendance

Name of the Director No. of Meetings attended

Mr. Anil Harish 2

Mr. T Ananthanarayanan 1

Mr. A. K. Das 2

Mr. R. P. Hinduja 1

3. Committee of Directors

Terms of reference

The Committee of Directors is mandated to oversee the functioning of and to provide strategic direction to thesubsidiaries/ associates of the Company. It is also responsible to ensure that the subsidiaries comply with the corporategovernance guidelines. The Committee is empowered to approve the investments, borrowings and lending within thelimits prescribed by the Board of Directors. In addition to these, the Committee also acts as the Share Transfer Committee.

A. Composition

Chairman : Mr. S. Solomon Raj

Members : Mr. R. P. HindujaMr. A. K. Das

Mr. K V Seshasayee

Secretary : Mr. Pradeep Pasari

Permanent Invitees : Mr. Srinivas Palakodeti(Members, Corporate Group) Mr. Pushkar Misra

Mr. Arun Kumar Mr. Kuntal Goel

Meetings

The details of meetings held during the year, and the attendance there at, are as follows:

Date of Meeting : 8.4.2000, 20.4.2000, 12.5.2000, 15.5.2000, 24.5.2000, 29.5.2000 & 31.5.2000, 12.6.2000, 20.6.2000, 26.6.2000,10.7.2000, 24.7.2000, 7.8.2000, 21.8.2000, 4.9.2000, 12.9.2000, 18.9.2000, 3.10.2000, 16.10.2000, 31.10.2000, 13.11.2000,20.11.2000, 27.11.2000, 28.11.2000, 11.12.2000, 26.12.2000, 8.01.2001, 24.01.2001, 5.02.2001, 19.02.2001, 24.02.2001,5.03.2001, 19.03.2001, 21.03.2001, 27.03.2001.

Attendance

Name of the Director No. of Meetings attended

Mr. S. Solomon Raj 35

Mr. R. P. Hinduja 13

Mr. A. K. Das 23

Mr. K. V. Seshasayee 18

4. Investor Grievance Committee

The Company has formed an Investor Grievance Committee at its Board Meeting held on19th June, 2001. The Committeecomprises Mr. Anil Harish, Mr S.Solomon Raj and Mr. A. K. Das. The Committee will specifically look into theredressal of shareholders and investors’ complaints like transfer of shares, non-receipt of balance sheet, non-receiptof declared dividends, non-receipt of shares, issue of duplicate shares and any other matter of shareholder’s interest.

5. Compensation Committee

A Compensation Committee, for grant of Employees Stock Options has been formed at the Board Meeting held on

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19th June, 2001. The members of the Committee are Mr. Anil Harish, Mr. S. Solomon Raj, and Mr. H. C. Asher. TheCommittee is empowered to formulate the detailed terms and conditions of the Employees Stock Option Plan.

6. General Body Meetings

a. Details of location and time of holding the last three Annual General Meetings:

Financial Year Location Date and Time

1997-98 Amar Gian Grove Auditorium, 7.10.98 at 11.00 a.m.Lala Lajpatrai Marg, Mahalaxmi,Haji Ali, Mumbai- 400 034

1998-99 Hall of Harmony, Nehru Centre, 14.10.99 at 11.00 a.m.Worli, Mumbai- 400 018

1999-2000 Nehru Centre Auditorium,Dr. Annie Besant Road, Worli,Mumbai- 400 018 24.05.2000 at 10.30 a.m.

b. No special resolution has been put through postal ballot so far. The same will be done from the next year, ifrequired, as prescribed under the Companies (Passing of Resolutions by Postal Ballot) Rules, 2001.

7. Disclosures

a. During the year, there were no transactions of material nature with the directors or the management or theirsubsidiaries or relatives that had potential conflict with the interest of the Company at large except a housetaken on lease for the Vice- Chairman.

b. There have been no instances of non-compliance by the Company on any matters related to the capitalmarkets, nor have any penalty/strictures been imposed on the Company by the Stock Exchanges or SEBI orany other statutory authority or any matter relating to capital markets during the last three years, except onedefault, the details of which are given below:

For the book closures for the Annual General Meeting dated 14th October, 1999, the Company through anoversight gave a shorter notice than required (33 days instead of 42 days) to Stock Exchange, Mumbai. Asa result, the Exchange suspended trading of shares of the Company for a period of 5 days from 27-9-1999till 1-10-1999.

8. Means of Communications

a. A Quarterly report was sent to the shareholders, for the quarter ended 30th June, 2000, alongwith the rationalefor convergence strategy.

b. The quarterly results are being published in the leading national newspapers (Business Standard/ Sakal,Economic Times and Maharashtra Times. The quarterly results are simultaneously displayed onwww.hindujatmt.com, the Company’s website. The website is updated regularly with the official news releasesand disclosures as required from time to time.

c. The Directors’ Report contains the required information as specified in Management Discussion and AnalysisReport.

9. General Shareholder Information

1. Next Annual General MeetingDate 27th September, 2001Time 11 A.M.

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Venue Hall of Harmony,Nehru Centre,Dr. A. B. Road, WorliMumbai- 400 018.

2. Financial Calendar 2001-2002Unaudited results for the quarter ending on 30th June, 2001 4th week of July 2001Unaudited results for the quarter/half year ending on September 2001 4th Week of October, 2001Unaudited results for the quarter ending on 31st December 2001 4th week of January 2002Audited results for the year ending on 31st March 2002 4th week of June 2002

3. Book Closure Dates From 20.09.2001to 27.09.2001

4. Dividend Payment Date 1st October, 2001 onwards5. Listing of Equity Shares Stock Exchange, Mumbai

and National StockExchange.

6. Stock Code BSE: 500189

10. Stock Market Data

Month The Stock Exchange, Mumbai National Stock Exchange

Month’s High Month’s Low Month’s High Month’s LowApril 2000 473.10 216.35 501.10 214.35May 2000 510.90 210.85 479.00 207.00June 2000 387.90 280.00 385.25 283.05July 2000 329.00 160.05 327.25 161.00August 2000 280.00 126.50 293.75 126.00September 2000 361.00 230.00 361.75 225.25October 2000 300.00 155.00 302.65 155.10November 2000 207.40 159.15 209.50 160.00December 2000 190.50 139.95 191.70 138.55January 2001 156.90 115.80 160.00 115.00February 2001 138.45 95.00 138.00 99.20March 2001 131.00 56.05 130.95 56.00

SHARE PRICE MOVEMENT (BSE)

HTMT share price performance relative to BSE Sensex (Base share price on 1st April, 2000 to 31st March, 2001) :

H T M T S H A R E P R I C E P E R F O R M A N C E v s B S E S E N S E X 1 A P R I L 2 0 0 0 T O 3 1 M A R C H 2 0 0 1

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4 0

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B S E S E N S E X H T M T

SHARE PRICE/BSE SENSEX AS ON 1.04.2000 IS TAKEN AS BASE FIGURE OF

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11. Share transfer System

HTMT’s equity shares are compulsorily traded in dematerialised form as per the SEBI Guidelines. As on 31st March,2001, about 87.88% of HTMT’s equity comprising 21083407 shares had been dematerialized. Shares of HTMT areregularly traded on Stock Exchange, Mumbai and National Stock Exchange.

Share transfer requests received are processed / returned within an average of 20 days from the date of receipt, if thedocuments are correct and valid in all respects. A letter is sent to the shareholder giving him an option to receiveshares in the physical mode or in dematerialised mode. A period of 30 days is given to the shareholder for sending hisintimation. The shareholder then receives the shares in the form, he exercises his option for. On 31st March, 2001, therewere no unprocessed transfers pending. The number of shares transferred during the last three years is given below:

Particulars 1998-99 1999-2000 2000-01

No. of transfer deeds 5261 13512 36050

No. of shares transferred 7111162 3827191 3819147

The following facilities are available for the convenience of investors:

Telephone : Investors may contact 91-22- 8215168 / 8300270 / 8300272 for shareholder queries and complaints.Fax : # 91-22- 837 5848Dedicated e-mail facility ([email protected])

12. Registrar and Transfer Agents

Sharepro Services.Satam Industrial Estate, Cardinal Gracious Road,Chakala, Andheri (E),Mumbai- 99

Queries related to Investor services may be addressed at the above address to Ms. Mazrine Wadia / Rashmi Darji /Vinod Bhadkar.

Queries relating to the operational and financial performance of HTMT may be addressed to :

Mr. Yagnesh Sanghrajka / Mr. Arun KumarHinduja TMT Ltd.Hinduja House, 171,Dr. Annie Besant Road,Mumbai 400 018Telephone # 91-22-496 6350Fax # 91-22-493 7374

Plant Locations – Not Applicable.

Address for correspondenceHinduja TMT Ltd.Hinduja House, 171,Dr. Annie Besant Road,Mumbai 400 018Telephone # 91-22-496 6350Fax # 91-22-493 7374E-mail: [email protected]

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TO THE MEMBERS OF HINDUJA TMT LIMITED(formerly known as Hinduja Finance Corporation Limited)

1. We report that we have audited the Balance Sheet of Hinduja TMT Limited (formerly known as Hinduja FinanceCorporation Limited) as at March 31, 2001 and the relative Profit and Loss Account for the year ended on thatdate both of which we have signed under reference to this report.

2. The financial statements of the Company for the period ended March 31, 2000 were audited by other independentfirm of Chartered Accountants, whose report dated April 20, 2000 expressed unqualified opinion on thosestatements. Balances as on April 1, 2000 have been considered as opening balance for the purposes of theseAccounts.

3. In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheetand Profit and Loss Account together with the notes thereon and attached thereto, comply with the accountingstandards referred to in Section 211 (3C) of The Companies Act, 1956, of India (The Act) and give in the prescribedmanner, the information required by The Act and also give a true and fair view of the state of the Company’saffairs as at March 31, 2001 and its profit for the year ended on that date.

4. We have obtained all the information and explanations, which to the best of our knowledge and belief, werenecessary for our audit. In our opinion, proper books of account have been kept as required by law so far asappears from our examination of the books and the above mentioned accounts are in agreement therewith.

5. Based on the representations made by all the Directors of the company as on March 31, 2001, and taken on recordby the Board of Directors of the company and in accordance with the informations and explanations as madeavailable, the Directors of the company do not, prima facie, have any disqualifications as referred to in clause (g)of sub-section (1) of Section 274 of The Act.

6. As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 dated 7th September,1988 and issued by the Central Government of India and on the basis of such checks as we considered appropriateand according to information and explanations given to us, we further report that:

(i) (a) The Company has maintained proper records to show full particulars, including quantitative detailsand situation, of its fixed assets.

(b) The fixed assets of the Company are physically verified according to a phased programme designed tocover all items over a period of two years. Pursuant to the programme, physical verification of DevelopedSoftware, Computers and Vehicles was carried out and no material discrepancies were noticed on suchverification.

(ii) The fixed assets of the Company have not been revalued during the year.

(iii) The stocks of securities have been physically verified/ confirmed with the statement of holdings providedby National Securities Depository Limited (NSDL).

(iv) In our opinion, the procedures of physical verification of stocks of securities followed by the Managementare reasonable and adequate in relation to the size of the Company and the nature of its business.

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(v) There were no discrepancies between the physical stock/ stock of securities as per the statement of holdingsand the book stock.

(vi) In our opinion, the valuation of stock-in-trade has been fair and proper in accordance with the normallyaccepted accounting principles followed in India and is on the same basis as in the earlier years.

(vii) In our opinion, the rates of interest and the terms and conditions of unsecured loan, taken by the Companyfrom companies, firms and other parties listed in the register maintained under Section 301 of The Act, arenot prima facie prejudicial to the interests of the Company. In terms of sub-section (6) of Section 370 of TheAct, the provisions of Section 370 are not applicable to a company after the commencement of The Companies(Amendment) Act, 1999, of India.

(viii) In our opinion, the rates of interest and the terms and conditions of unsecured loans, granted by the Companyto companies, firms and other parties listed in the register maintained under Section 301 of The Act, are notprima facie prejudicial to the interests of the Company. In terms of sub-section (6) of Section 370 of TheAct, the provisions of Section 370 are not applicable to a company after the commencement of The Companies(Amendment) Act, 1999, of India.

(ix) The parties (including employees) to whom loans or advances in the nature of loans have been given bythe Company are repaying the principal amounts wherever stipulated and are also regular in payment ofinterest where applicable.

(x) In our opinion, there is an adequate internal control procedure commensurate with the size of the Companyand the nature of its business, for purchase of machinery, equipment and similar assets.

(xi) The Company has not purchased goods and materials and sold goods, materials and services aggregatingRs. 50,000 or more in value during the year in respect of each party, pursuant to contracts or arrangementsentered in the register maintained under Section 301 of The Act.

(xii) The Company has not accepted any deposits from the public.

(xiii) In our opinion, the Company’s present internal audit system is commensurate with its size and nature ofbusiness.

(xiv) The Company has been regular during the year in depositing Provident Fund and Employees’ StateInsurance dues with the appropriate authorities in India.

(xv) At the last day of the financial year, there was no amount outstanding in respect of undisputed income tax,sales tax, customs duty and excise duty which was due for more than six months from the date it becamepayable.

(xvi) During the course of our examination of the books of account carried out in accordance with generallyaccepted auditing practices in India, we have not come across any personal expenses which have beencharged to Profit and Loss Account, other than those payable under contractual obligations and acceptedbusiness practices nor have we been informed of any such case by the Management.

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(xvii) In respect of services rendered:

(a) The nature of the services rendered is such that it does not involve consumption of materials.

(b) The Company has a reasonable system of allocating man-hours utilised to the relative jobs,commensurate with its size and the nature of its business.

(c) There is a reasonable system of authorisation at proper levels, with necessary controls on the allocationof labour to various jobs and the related system of internal control of the Company is commensuratewith the size of the Company and the nature of its business.

(xviii)The Company is not a chit fund, nidhi or mutual benefit society.

(xix) The Company has maintained proper records of transactions and contracts in respect of trading in shares,debentures and other securities and, that timely entries have been made therein. All shares, debenturesand other securities have been held by the Company in its own name except to the extent of exemptiongranted under Section 49 of The Act and save for certain other securities as detailed in Annexure A and Bto the Accounts.

(xx) The other clauses of Manufacturing and Other Companies (Auditor’s Report) Order, 1988, dated September7, 1988, and issued by the Central Government of India, were not applicable to the Company during theyear.

P. N. GhataliaPartner

For and on behalf ofMumbai Price WaterhouseJune 23, 2001. Chartered Accountants.

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HINDUJA TMT LIMITED(formerly known as Hinduja Finance Corporation Limited)

BALANCE SHEET AS AT 31ST MARCH, 2001Schedule As at As at

31.03.2001 31.03.2000SOURCES OF FUNDSShareholders’ Funds

Share Capital A 239,919 229,736Share Capital Suspense A1 115,918 -Reserves and Surplus B 3,120,705 1,261,233

3,476,542 1,490,969Loan Funds

Secured Loans C 1,302 1,741Unsecured Loans D 164,529 -

165,831 1,741TOTAL 3,642,373 1,492,710

APPLICATION OF FUNDSFixed Assets

Gross Block E 371,213 225,179Less: Depreciation 318,441 202,382Less: Lease Adjustment 10,287 10,287Net Block 42,485 12,510Capital Work-in-Progress 25,313 -

67,798 12,510Investments F 2,240,982 667,906Current Assets, Loans and Advances

Stock in Trade G 98,263 543,675Debtors H 342,051 533,271Cash and Bank Balances I 108,514 5,694Other Current Assets J 44,202 -Loans and Advances K 1,049,401 8,256

1,642,431 1,090,896Less: Current Liabilities and Provisions

Current Liabilities L 146,003 250,035Provisions M 174,354 31,876

320,357 281,911Net Current Assets 1,322,074 808,985Miscellaneous Expenditure N 11,519 3,309(to the extent not written off or adjusted)

TOTAL 3,642,373 1,492,710Significant Accounting Policies TNotes to Accounts U

The Schedules referred to above form an integral part of the Balance Sheet.For and on behalf of the Board

This is the Balance Sheet referred to in our report of even date.A. K. Das S. Solomon RajDirector Director

P. N. GhataliaPartnerFor and on behalf of Pradeep PasariPrice Waterhouse Company SecretaryChartered Accountants.Place : Mumbai Place : MumbaiDate : June 23, 2001 Date : June 19, 2001

(Rs. in ‘000s)

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HINDUJA TMT LIMITED(formerly known as Hinduja Finance Corporation Limited)PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2001

(Rs. in ‘000s)Schedule Year Ended Period ended

31.03.2001 31.03.2000INCOME (12 Months ) ( 9 Months )Software Development, Service and Products

- Overseas 233,127 -- Domestic 146,223 -

379,350 -Income from dealing in Shares and Other Securities 26,705 71,353Profit/ (Loss) on Sale of Long Term Investments (net) 134,310 9,236Other Income O 76,881 33,191

TOTAL 617,246 113,780EXPENDITURESoftware Development and Product Charges 21,612 -Employee Costs P 67,788 6,157Administrative and Other Expenses Q 130,123 25,136Financial Expenses R 7,790 8,099Depreciation / Amortization 11,541 1,391Provision for Doubtful Debts 5,899 -

TOTAL 244,753 40,783Profit before Exceptional Items and Taxation 372,493 72,997Add: Prior Period and Exceptional Items (net) S 88,212 136,730Profit before Taxation 460,705 209,727Taxation for the year (Refer Note 12 of Schedule ‘U’) 40,046 48,000Profit after Taxation 420,659 161,727Adjustment on account of Profit/ (Loss) of erstwhile Ashok (17,683) -Leyland Information Technology Limited (ALIT) for the periodJuly 1, 1999 to March 31, 2000.Add: Balance brought forward from Previous Period 138,630 50,453PROFIT AVAILABLE FOR APPROPRIATIONS 541,606 212,180APPROPRIATIONSTransfer to Statutory Reserve Fund (Under Section 45 IC 116,477 -of the Reserve Bank of India Act, 1934)Dividend: Interim - 22,974

Final (Proposed) 153,623 28,717Dividend Tax 15,670 5,686

Transfer to General Reserve 42,066 16,173Balance carried to Balance Sheet 213,770 138,630Significant Accounting Policies TNotes to Accounts U

The Schedules referred to above form an integral part of the Balance Sheet.For and on behalf of the Board

This is the Balance Sheet referred to in our report of even date.A. K. Das S. Solomon RajDirector Director

P. N. GhataliaPartnerFor and on behalf of Pradeep PasariPrice Waterhouse Company SecretaryChartered Accountants.Place : Mumbai Place : MumbaiDate : June 23, 2001 Date : June 19, 2001

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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2001(Rs. in ‘000s)

As at As at31.03.2001 31.03.2000

SCHEDULE ‘A’

SHARE CAPITALAuthorised

50,000,000 (Previous Period - 29,500,000) Equity Shares of Rs.10 each 500,000 295,000Nil (Previous Period - 1,050,000) 9% Cumulative Convertible Preference - 105,000Shares of Rs. 100 eachNil (Previous Period - 3,000,000 ) Cumulative Redeemable Preference - 300,000Shares of Rs. 100 each20,000,000 Unclassified Shares of Rs.10 each 200,000 -

Note: 700,000 700,0001. During the year, at an Annual General Meeting held on 24th May, 2000

pursuant to a special resolution passed by the shareholders, the AuthorisedShare Capital has been reclassified into 50,000,000 Equity Shares and20,000,000 Unclassified Shares of Rs. 10 each, with the power to theBoard of Directors to classify the Unclassified Shares in future.

Issued, Subscribed and Paid-up

23,991,900 (Previous Period - 22,973,572) Equity Shares of Rs.10 each 239,919 229,736fully paid-up

(Of the above, 1,018,328 Equity Shares issued for consideration otherthan cash pursuant to the Scheme of Amalgamation with erstwhileAshok Leyland Information Technology Limited (ALIT)).(Refer Note 6 a) of Schedule ‘U’) 239,919 229,736

SCHEDULE ‘A1’

SHARE CAPITAL SUSPENSE 115,918 -

11,591,762 Equity Shares of Rs. 10 each, fully paid-up, to be issuedpursuant to Scheme of Amalgamation of erstwhile Hinduja TelecomIndia Limited (HTIL), Richman Investrade Private Limited (RIPL) andMelody Trading Private Limited (MTPL) with the Company.(Refer Notes 6 b), c) and d) of Schedule ‘U’) 115,918 -

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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2001

(Rs. in ‘000s)As at As at

31.03.2001 31.03.2000SCHEDULE ‘B’

RESERVES AND SURPLUS

General Reserve

As per last Balance Sheet 71,174 55,001Add :- Transferred From Profit and Loss Account 42,066 16,173Add :- Addition on account of Amalgamation of ALIT 32,777 -Add :- Addition on account of Amalgamation of HTIL 1,375,391 -Add :- Addition on account of Amalgamation of RIPL 198,796 -Add :- Addition on account of Amalgamation of MTPL 18,825 1,739,029 - 71,174(Refer Note 6 of Schedule ‘U’)

Share PremiumAs per last Balance Sheet 1,016,143 1,016,143

Statutory Reserve Fund (Under Section 45 IC ofthe Reserve Bank of India Act, 1934)As per last Balance Sheet 35,286 35,286Add :- Transferred from Profit and Loss Account 116,477 151,763 - 35,286

Profit and Loss Account 213,770 138,630

3,120,705 1,261,233

SCHEDULE ‘C’SECURED LOANSFrom Banks

(Due within one year Rs. 1,190 (‘000s)

Previous Period Rs. 907 (‘000s))

- Cash Credit and Demand Loan (Secured by - -

pledge of Shares)

- Car Finance (Secured by first and exclusive

charge on the cars financed) 1,302 1,741

1,302 1,741

SCHEDULE ‘D’

UNSECURED LOANS

Inter-Corporate Deposits 1,029 -

From Subsidiaries 163,500 -(Repayable within one year Rs. 163,500 (‘000s))

164,529 -

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(Rs. in ‘000s)

DESCRIPTION GROSS BLOCK DEPRECIATION / AMORTIZATION NET BLOCKAs at Cost taken over Additions Deductions As at Up to Depreciation For the On Up to As at As at

01.04.00 consequent to during during 31.03.01 31.03.00 taken over year deductions 31.03.01 31.03.01 31.03.00amalgamation the year the year consequent to during the

amalgamation year

Developed Software - - 2,300 - 2,300 - - 1,150 - 1,150 1,150 -

Plant and Machinery 205,758 - - - 205,758 195,471 - - - 195,471 10,287 10,287Given on Lease

Office Equipment 2,281 4,852 1,271 91 8,313 443 1,273 372 15 2,073 6,240 1,838

Computers 5,521 132,668 4,432 15,800 126,821 3,657 112,478 8,172 13,372 110,935 15,886 1,864

Furniture and Fixtures 7,489 10,138 3,034 119 20,542 1,805 4,171 1,187 39 7,124 13,418 5,684

Vehicles * 4,130 2,724 3,335 2,710 7,479 1,006 964 660 942 1,688 5,791 3,124

SUB-TOTAL 225,179 150,382 14,372 18,720 371,213 202,382 118,886 11,541 14,368 318,441 52,772 22,797Lease AdjustmentAccount (10,287) (10,287)

TOTAL 225,179 150,382 14,372 18,720 371,213 202,382 118,886 11,541 14,368 318,441 42,485 12,510

Previous Period 224,823 - 965 609 225,179 201,268 - 1,391 277 202,382

Capital Work-in-Progress 25,313 -(Includes Capital Advances Rs. 17,688 (‘000s) ; Previous Period Rs. Nil)

67,798 12,510

* Vehicles include Assets on Hire Purchase Rs. 4,839 (‘000s) (Previous Period Rs. 5,839 (‘000s)).



SCHEDULE ‘E’FIXED ASSETS (Refer Notes 2 and 3 of Schedule ‘T’)

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31.03.2001 31.03.2000SCHEDULE ‘F’INVESTMENTS - (At cost) 2,274,595 758,233(As per Annexure - A)Less: Provision for diminution in value of Investments 33,613 90,327

2,240,982 667,906SCHEDULE ‘G’

STOCK IN TRADEJobs In Progress - Software Development 17,367 -Shares and Debentures 47,096 509,875(As per Annexure - B)Real Estate 33,800 33,800

98,263 543,675SCHEDULE ‘H’

SUNDRY DEBTORS (Unsecured)Considered Good * Over six months 10,078 12,744 Other debts 331,973 520,527

342,051 533,271Considered Doubtful - Over six months 5,899 -

347,950 533,271Less: Provision for doubtful debts 5,899 -

342,051 533,271*- Debtors include due from subsidiaries Rs. 51,888 (‘000s)(Previous Period Rs. Nil )

SCHEDULE ‘I’

CASH AND BANK BALANCESCash on Hand 70 80Bank balances with Scheduled Banks- Cash Credit Accounts 12,994 -- Current Accounts 86,277 5,614 - Margin Money Account# 2,567 -- Deposit Account 2,621 -- Unclaimed Dividend Account 3,164 -- EEFC (Exchange Earners’ Foreign Currency Account) (US $ 17,650; Previous Period - Nil) 821 -

108,514 5,694# Under Lien with Banks towards Letters of Credit issued by them on behalf of the Company.

SCHEDULE ‘J’

OTHER CURRENT ASSETSLease Rights - Films 28,000 -Interest Accrued on Inter-Corporate Deposits and others 16,202 -

44,202 -

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31.03.2001 31.03.2000SCHEDULE ‘K’

LOANS AND ADVANCES(Unsecured and Considered Good)

Advances Recoverable in Cash or in Kind or for 336,218 4,471value to be ReceivedAdvance Tax and Tax Deducted at Source (Net 49,775 2,715of Provisions)Inter-Corporate Deposits 439,573 -Loans to Subsidiaries 187,600 -Employee Loans and Advances 16,850 -Security Deposits 19,385 1,070

1,049,401 8,256

SCHEDULE ‘L’

CURRENT LIABILITIESSundry Creditors 138,627 240,171(Refer Note 11 of Schedule ‘U’)Unclaimed Dividend 3,164 1,771Other Liabilities 4,212 8,093

146,003 250,035

SCHEDULE ‘M’

PROVISIONSRetirement Benefits 5,015 -Wealth Tax 46 -Dividend 153,623 28,717Dividend Tax 15,670 3,159

174,354 31,876

SCHEDULE ‘N’

MISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)Preliminary and Share Issue Expenses 7,788 2,209Pre-operative Expenses 20 -Deferred Revenue Expenditure 3,711 1,100

11,519 3,309

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SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED31ST MARCH, 2001

(Rs. in ‘000s)Year Ended Period ended

31.03.2001 31.03.2000SCHEDULE ‘O’ (12 Months ) ( 9 Months )

OTHER INCOME

Dividend 24,992 26,313

Interest on Long Term Investments 700 525

(Tax Deducted at Source Rs. 154 (‘000s),

Previous Period - Rs. 77 (‘000s))

Interest

(Tax Deducted at Source Rs. 14,185 (‘000s),

Previous Period - Rs. 345 (‘000s))

- On Inter-Corporate Deposits given 60,137 6,166

Less: Interest on Inter-Corporate Deposits taken 31,828 28,309 1,752 4,414

- On Short Term Investments 2,166 -

- On Deposits with Bank 271 -

- On Others 456 -

Fees

(Tax Deducted at Source Rs. 848 (‘000s), Previous Period - Nil)

- Consultancy Charges 5,000 -

- Syndication Fees 3,125 913

- Others 1,939 838

Recovery of Bad Debts 7,350 -

Miscellaneous Income 2,573 18876,881 33,191

SCHEDULE ‘P’

EMPLOYEE COSTS

Salary and Other Benefits 59,021 5,171

Contribution to Employees’ Provident and Other Funds 4,847 425

Staff Welfare Expenses 3,920 561

67,788 6,157

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SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED31ST MARCH, 2001

(Rs. in ‘000s)Year Ended Period ended

31.03.2001 31.03.2000(12 Months ) ( 9 Months )

SCHEDULE ‘Q’ADMINISTRATIVE AND OTHER EXPENSESLegal and Professional Fees 35,306 4,860Training and Recruitment Charges 2,035 -Computer and Other Equipment Hire Charges 6,946 737Rent and Compensation 24,337 11,860Travelling, Conveyance and Car Hire Charges 13,601 612Communication 4,850 688Printing and Stationery 2,857 640Utilities 2,047 -Insurance 1,194 225Advertisement and Business Promotion 3,342 129Membership and Subscription 1,764 894Motor Car Expenses 2,097 494Commission 754 -Software / Jobs in Progress written off 2,350 -Repairs and Maintenance - Others 3,231 209Auditors’ Remuneration

- As Auditors 630 188- For Other Matters 477 82- Out-of-Pocket Expenditure 12 -

Interest Tax 253 150Directors’ Sitting Fees 188 40Brokerage and Commission 74 -Foreign Exchange Loss (Net) 376 -Bad Debts / Advances / Shares under Objection written off 6,377 1,858Share Issue and Deferred Revenue Expenses written off 1,066 494Lease Rights - Films amortized 8,167 -Miscellaneous Expenses 2,800 737Loss on Sale / Scrapping of Assets 2,992 239

130,123 25,136SCHEDULE ‘R’

FINANCIAL EXPENSESInterest on:- Cash Credit and Other Facilities 2,264 5,861Bank Charges and Commission 5,526 2,238

7,790 8,099SCHEDULE ‘S’PRIOR PERIOD AND EXCEPTIONAL ITEMSPrior Period Items (net) (1,237) (979)Provision for Diminution in Investments written back 63,805 137,709Provision for Taxation of earlier years written back 25,644 -

88,212 136,730

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SCHEDULES FORMING PART OF THE BALANCE SHEET AND THE PROFIT AND LOSSACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2001

Schedule - T SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Convention

These Accounts have been prepared under historical cost convention on accrual basis and comply with the Accounting

Standards issued by the Institute of Chartered Accountants of India and referred to in Section 211 (3C) of the Companies Act,

1956, of India (the ‘Act’).

2. Fixed Assets

Fixed assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working condition forits intended use, less accumulated depreciation.

3. Depreciation/Amortization

a. Depreciation on assets for own use is provided on Straight Line Method on pro-rata basis at the rates prescribed in Schedule

XIV to the Act.

b. Depreciation on assets given on lease is provided in such a manner that 95% of the cost of these assets is written off over the

primary lease period in proportion to lease rentals accrued and accounted during the year as per one of the methods recommended

by the Institute of Chartered Accountants of India.

c. Lease adjustment account represents depreciation on assets written off in the books of accounts, which is short/excess of the

amount calculated in accordance with the methods prescribed under the guidelines issued by the Institute of Chartered

Accountants of India.

d. In respect of Software Products developed by the Company, the direct and other related costs are accumulated and are written

off over the estimated life of the Products.

4. Valuation of Stock-in-trade

Jobs in Progress - Software Development has been valued at cost/ contract value on the basis of work completion at the year-

end.

Shares and Debentures have been valued at cost (aggregate) or market value (aggregate) whichever is lower. The cost is

arrived at by the “First In First Out” Method.

Real Estate is valued at cost or net realisable value whichever is lower.

5. Valuation of Investments

Investments are carried at cost including related expenses. All the securities held by the Company other than stated in paragraph

4 above are long-term in nature. In the Management’s opinion, where the decline in the value of these investments is

permanent in nature, a provision to recognise such decline is made in the books of accounts.

6. Lease of Film Rights

Lease of film rights is amortised over a period of three years based on the average life of lease, as per opinion of theManagement.

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7. Revenue Recognition

a. In respect of I.T. Division, revenue from software development is recognised based on software developed and billed toclients as per terms of specific contracts. On fixed-price contracts, revenue is recognised based on milestones achieved asspecified in the contracts on the basis of work completed. Revenue from sale of licences for the use of software applicationsis recognised on transfer of title in the user licence. Revenue from rendering Technical Project and other services is recognisedduring the period in which services are rendered.

b. Profits/ Losses from Trading/ Investment activites are recognised on the basis of trade dates/ contracts entered with parties.

c. Lease rentals are recognised as revenue over the lease period as per the terms of the lease agreements except for incomeportion in case of overdue installments.

d. Interest and Dividend income is accounted on accrual basis.

e. In respect of other heads of income, the Company follows the practice of accounting of such income on accrual basis.

8. Foreign Currency Transactions

a. All foreign currency transactions are recorded at the rates prevailing on the date of transaction.

b. All foreign currency assets and liabilities are restated at the exchange rate prevailing at the year-end and the exchangedifference has been ascertained and recognised as income/ expense in Profit and Loss Account.

c. Exchange difference between the rates applicable at the date of transaction and the rate actually realised/ paid has beenascertained and recognised as income/ expense in the Profit and Loss Account.

9. Retirement Benefits

a. On a conservative basis, provision for Gratuity has been made in accordance with the rules framed under the Payment ofGratuity Act, 1972, of India. Liability for leave encashment is made on unavailed accumulated leave balances of employeeson the basis of their current salaries.

b. Liability for Superannuation payable to the eligible employees is determined in accordance with the scheme formulated bythe Company and contribution as per rules of the said scheme is made to the fund administered by Life Insurance Corporationof India.

10. Taxation

Provision for Income Tax is made after considering exemptions and deductions available under the Income Tax Act, 1961,and legal advice from time to time.

11. Miscellaneous Expenditure

Preliminary Expenses and Share Issue Expenses are amortised over a period of ten years.

Deferred Revenue ExpenditureExpenses on employees during the training period are deferred and charged to the Profit and Loss Account on completion oftraining.

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SCHEDULES FORMING PART OF THE BALANCE SHEET AND THE PROFIT AND LOSSACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2001

Schedule – U NOTES TO ACCOUNTS

1. Change of name of the Company to ”Hinduja TMT Limited“

The shareholders of the Company, at an Extraordinary General Meeting held on February 20, 2001, have approvedthe change of name to ”Hinduja TMT Limited“. On receipt of necessary regulatory approvals, the Company haschanged its name to ”Hinduja TMT Limited“ with effect from 8th June, 2001.

2. Capital Commitments and Contingent Liabilities

a) Estimated amount of contracts (net of capital advances) remaining to be executed on Capital Account annot provided for Rs. 19,687 (‘000s).

b) Contingent liabilities in respect of:

i. Counter Guarantee given by the Company for guarantee given by Standard Chartered Bank Limited forIn2cable.com (India) Ltd., a subsidiary Company, Rs. 20,000 (‘000s).

ii. The matter of payment of stamp duty on merger of erstwhile Hinduja Finance Limited Rs. 1,591 (‘000s)(Previous Period Rs. 1,591 (‘000s)) is pending adjudication.

iii.Taxation matters - Rs. 4,544 (‘000s).

3. Investments

The Company has been following prudential norms for income recognition and for non-performing assets asprescribed by Reserve Bank of India.

4. An Irrevocable Letter of Credit for Rs. 23,750 (‘000s) issued towards performance of an overseas contract issecured by charge on investments in shares of the Company.

5. Managerial Remuneration

Employee Costs include remuneration of Manager and Whole-Time Director:

(Rs. in ‘000s)

Particulars Year ended Period ended31st March, 2001 31st March, 2000

Salary 2,361 722

Contribution to Provident Fund 163 85

Perquisites 1,185 281

Total 3,709 1,088

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6. Amalgamations taken place during the current year:

a) Amalgamation of Ashok Leyland Information Technology Limited (ALIT) with the Company.

i. Pursuant to the Scheme of Amalgamation of the erstwhile ALIT with the Company, as approved by theshareholders at an extraordinary general meeting held on 30th March, 2000 and subsequently sanctionedby the Honorable High Courts of Bombay and Madras on June 28, 2000 and July 28, 2000, respectively,the assets and liabilities of the erstwhile ALIT were transferred to and vested in the Company withretrospective effect from July 1, 1999. The Scheme has, accordingly, been given effect to in these Accounts.

ii. The operations of ALIT include Software Development and Services.

iii. The Amalgamation has been accounted for under the “pooling of interest” method, as prescribed byAccounting Standard (AS-14) issued by the Institute of Chartered Accountants of India. Loss incurredduring the period July 01, 1999 to March 31, 2000 has been adjusted in the Profit and Loss Account. Theassets, liabilities and other reserves of the erstwhile ALIT as at the close of March 31, 2000 have beentaken over at their book values subject to adjustments made for the differences in the Accounting Policiesof the two companies. Accordingly, Rs.1,534 (‘000s) have been charged to revenue during the year.

iv. Pursuant to the Scheme of Amalgamation, 482,498 equity shares of Rs. 10 each, fully paid-up, have beenallotted to the shareholders of ALIT in the ratio of 1 share of the Company for every 20 shares held inALIT. 535,830 equity shares of Rs. 10 each, fully paid-up, have been allotted to the creditors of theCompany against balance of Rs. 107,179 (‘000s) standing to their credit as on December 31, 1999.Accordingly the difference between the face value of shares allotted and balance due is transferred toGeneral Reserve account.

b) Amalgamation of Hinduja Telecom India Limited (HTIL) with the Company.

i. Pursuant to the Scheme of Amalgamation of the erstwhile HTIL with the Company, as approved by theshareholders at an extraordinary general meeting held on 28th September, 2000 and subsequentlysanctioned by the Honorable High Court of Bombay on February 14, 2001, the assets and liabilities of theerstwhile HTIL were transferred to and vested in the Company with retrospective effect from August31, 2000. The Scheme has, accordingly, been given effect to in these Accounts.

ii. The operations of HTIL include earnings from Telecom Project carried out by HTIL for IndusInd BankLimited and interest earning on Loans/ Inter - Corporate Deposits.

iii. The Amalgamation has been accounted for under the “pooling of interest” method, as prescribed byAccounting Standard (AS-14) issued by the Institute of Chartered Accountants of India. Accordingly,the assets, liabilities and other reserves of the erstwhile HTIL as at the close of August 30, 2000 have beentaken over at their book values.

iv. Pursuant to the Scheme of Amalgamation, 4,991,035 equity shares of Rs. 10 each are to be issued to theshareholders of HTIL in the ratio of 1 share of the Company for every 29 shares held in HTIL. Pendingthe allotment, an amount of Rs. 49,911 (‘000s) has been included in Share Capital Suspense account as atMarch 31, 2001.

c) Amalgamation of Richman Investrade Private Limited (RIPL) with the Company.

i. Pursuant to the Scheme of Amalgamation of the erstwhile RIPL with the Company, as approved by theshareholders at an extraordinary general meeting held on 28th September, 2000 and subsequentlysanctioned by the Honorable High Court of Bombay on February 14, 2001, the assets and liabilities of theerstwhile RIPL were transferred to and vested in the Company with retrospective effect from August 31,2000. The Scheme has, accordingly, been given effect to in these Accounts.

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ii. The operations of RIPL include earnings from Lease of Film Rights and interest earning on Loans/ Inter- Corporate Deposits.

iii. The Amalgamation has been accounted for under the “pooling of interest” method, as prescribed byAccounting Standard (AS-14) issued by the Institute of Chartered Accountants of India. Accordingly,the assets, liabilities and other reserves of the erstwhile RIPL as at the close of August 30, 2000 have beentaken over at their book values.

iv. Pursuant to the Scheme of Amalgamation, 5,052,000 equity shares of Rs. 10 each are to be issued to theshareholders of RIPL in the ratio of 1 share of the Company for every 5 shares held in RIPL. Pending theallotment, an amount of Rs. 50,520 (‘000s) has been included in Share Capital Suspense account as atMarch 31, 2001.

d) Amalgamation of Melody Trading Private Limited (MTPL) with the Company.

i. Pursuant to the Scheme of Amalgamation of the erstwhile MTPL with the Company, as approved by theshareholders at an extraordinary general meeting held on 28th September, 2000 and subsequentlysanctioned by the Honorable High Court of Bombay on February 14, 2001, the assets and liabilities of theerstwhile MTPL were transferred to and vested in the Company with retrospective effect from August31, 2000. The Scheme has, accordingly, been given effect to in these Accounts.

ii. The operations of MTPL include interest earnings on Loans/ Inter – Corporate Deposits given.

iii. The Amalgamation has been accounted for under the “pooling of interest” method, as prescribed byAccounting Standard (AS-14) issued by the Institute of Chartered Accountants of India. Accordingly,the assets, liabilities and other reserves of the erstwhile MTPL as at the close of August 30, 2000 havebeen taken over at their book values.

iv. Pursuant to the Scheme of Amalgamation, 1,548,727 equity shares of Rs. 10 each are to be issued to theshareholders of MTPL in the ratio of 4 shares of the Company for every 11 shares held in MTPL. Pendingthe allotment, an amount of Rs. 15,487 (‘000s) has been included in Share Capital Suspense account as atMarch 31, 2001.

7. Quantitative Details

The Company traded in/ produced the following products. The relevant information in quantities and values isas follows:a) Traded goods:

(Rs. in ‘000s)

Traded Goods Unit Opening Stock Purchases Sales Closing Stock

Shares# Qty 3,751,263 35,383,353 38,495,214 642,356(Nos.) (4,901,621) (35,938,479) (37,089,887) (3,751,263)

Value 509,875 18,682,790 19,175,921 47,096(318,707) (20,201,947) (20,145,396) (509,875)

Real Estate Value 33,800 Nil Nil 33,800(105,394) (Nil) (Nil) (33,800)

Bought-out Software** Value Nil 21,613 22,150 Nil(Nil) (Nil) (Nil) (Nil)

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Figures in brackets represent previous period figures.

# Closing stock includes:

l 8,250 shares received on account of conversion/ amalgamation of companies.

l Adjustment on account of write-off of 5,296 shares worth Rs. 1,493 (‘000s).

** The Company is engaged in the development and maintenance of computer software. The purchase and sale

of such software cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details

of sales and certain information as required under paragraphs 3, 4C and 4D of Part II of Schedule VI to the

Companies Act, 1956.

b) Details of Software Product Developed:(Rs. in ‘000s)

Software Unit TurnoverProduct Developed

E- Port (Web- HR) No. of Copies 36

(Nil)

Value 25,100

(Nil)

Notes :

i Details with regard to opening and closing stock of software product developed not provided as licensed

copy of this product is being capitalised (Refer Note 3 d) of Schedule ’T‘).

ii. Figures in brackets represent previous period figures.

8. Value of Imports on C.I.F. basis(Rs. in ‘000s)


Capital Goods 8,636 Nil

9. a) Earnings in Foreign Exchange:

(Rs. in ‘000s)


Sale of Shares 96,145 NilProfessional and Consultation Charges 46,644 NilClaim Processing Fees 177,312 NilMobilisation Fees 9,170 Nil

Other Fees 1,037 454

Total Earnings in Foreign Exchange 330,308 454

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b) Expenditure in Foreign Currency:

(Rs. in ‘000s)


Foreign Travel 294 112

Allowances 9,116 Nil

Subscription 19 3

Total Expenditure in Foreign Currency 9,429 115

10. Employees Stock Option Plan 2001

During the year, at an Extraordinary General Meeting held on February 20, 2001, the shareholders approved theHinduja Finance Corporation Limited Employees Stock Option Plan 2001 prepared by the Company in accordancewith the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock PurchaseScheme) Guidelines 1999. According to the scheme, the Plan shall be implemented with the consent of the Boardof Directors (Board) of the Company (which shall be deemed to include the Compensation Committee to beconstituted by the Board to exercise its powers including the powers conferred by the resolution).

The shareholders at the above mentioned meeting also approved the Employees Stock Option Plan for theemployees of the Company’s Subsidiaries on such terms and conditions as may be decided by the Board ofDirectors or the Compensation Committee mentioned above.

11. As of March 31, 2001, the Company had no outstanding dues to small-scale industrial undertakings. (PreviousPeriod Rs. Nil).

12. Provision for Income – Tax for the current year has been made after taking into account benefit available underSection 10A of the Income Tax Act, 1961 in respect of Unit II carrying out claim processing activities in ALIT – I.T.Division of the Company. Unit II started its operations during the year and the Company has maintained separatebooks of account for the same.

13. Please refer Annexure C for additional information pursuant to Part IV of Schedule VI to the Act.

14. Previous period’s figures have been regrouped/ rearranged, wherever considered necessary. Previous period’sfigures are not comparable as the current year’s figures include financials of ALIT for the period 1st April 2000 till31st March 2001 and that of HTIL, RIPL and MTPL for the period 31st August 2000 till 31st March 2001.

The Schedules A to U and Annexures A to C referred to above form an integral part of the Accounts.

For and on behalf of the Board

P. N. Ghatalia A. K. Das S. Solomon RajPartner Director DirectorFor and on behalf ofPrice WaterhouseChartered Accountants. Pradeep Pasari

Company Secretary

Place: Mumbai Place: MumbaiDate: June 23, 2001 Date: June 19, 2001

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ANNEXURE ‘A’INVESTMENTS (Long Term) (Rs. in ‘000s)

Sr. Scrip Face Value As at 31.03.2001 As at 31.03.2000 No. Per Share Quantity Amount Quantity Amount

Rs. Nos. Nos.I INVESTMENTS IN SUBSIDIARY

COMPANIES ( AT COST )(a) UNQUOTED EQUITY SHARES1 Aasia Industrial Technologies Limited. 100 1,729,410 173,772 - -2 ALIT Inc., USA USD 1 200,000 7,092 - -3 CVO Holding Limited. 10 2,856,000 28,795 - -4 Grant Investrade Limited. 10 2,119,002 21,190 2 05 In2Cable .Com. (India) Limited. 10 4,510,000 45,100 510,000 5,1006 IndusInd Telecom Network Limited. 10 98,550,000 1,233,275 - -

Total (A) 1,509,224 5,100

(b) UNQUOTED PREFERENCE EQUITY SHARESALIT Inc., USA USD 1 1,500,000 69,975 - -Total (B) 69,975 - -

TOTAL INVESTMENTS IN SUBSIDIARIES ( A+ B ) 1,579,199 5,100

II OTHER UNQUOTED INVESTMENTS (AT COST)

(a) EQUITY SHARES :1 I D L Finance Limited. 10 39,100 529 39,100 5292 IndusInd Enterprise and Finance Limited. 10 - - 1,255,000 12,5503 Modi International Paper Limited. 10 1,045,000 39,885 1,045,000 39,8854 Prasanth Textiles Limited. 10 - - 458,333 16,5005 Patheja Brothers Forgings and Stampings Limited. 10 - - 200,000 36,0006 IndusInd Information Technologies Limited. 10 300,000 3,000 - -7 Eurobike Limited. 10 - - 1,000,000 53,272

(b) MUTUAL FUNDS1 Kothari Pioneer Infotech Fund 10 - - 521,648 20,0002 UTI Money Market Fund 10 15,409 104 - -

Total (C) 43,518 178,736

TOTAL VALUE OF UNQUOTED INVESTMENTS (A+B+C) 1,622,717 183,836

III QUOTED INVESTMENTS

(a) EQUITY SHARES :1 Autopins (India) Limited. 10 260 14 240 132 Associated Cement Companies Limited. 10 150,000 29,020 - -3 Ashok Leyland Limited. ( # 150,000 ) 10 150,000 11,164 62,535 8,7634 Arvind Mills Limited. ( # 98,550 ) 10 100,000 1,245 - -5 Apollo Hospitals Limited. 10 10,000 1,621 - -6 ABB Limited. 10 - - 15,000 5,474

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Rs. Nos. Nos.7 ABB Alstom Power Limited. 10 9,150 9 10,000 108 Astra IDL Limited. ( # 95,000 , * 50 ) 10 100,000 27,983 143,500 39,0809 Autolec Industries Limited. 10 22,300 1,715 22,300 1,71510 Birla Corporation Limited. ( # 28,000 ) 10 37,000 1,691 47,000 2,14811 BPL Limited. ( * 100 ) 10 100 43 10,000 4,32912 B O C Limited. ( # 7,500 ) 10 30,900 760 - -13 BASF Limited. 10 11,975 1,428 - -14 Cipla Limited. 10 - - 2,500 3,00615 Consortium Finance Limited. 10 - - 33 116 Citicorp Securities Limited. 10 - - 1,100 13917 CESC Limited ( * 200, @ 200 ) 10 154,000 4,489 - -18 Dynamatic Technologies Limited. 10 100,006 3,480 59,206 2,36819 Deccan Cements Limited. ( @ 2,500 ) 10 278,400 7,274 118,300 3,13520 D S J Finance Corporation Limited. 10 29,870 134 29,870 13421 Digital Equipment (India) Limited. 10 - - 20,000 17,51522 DSQ Software Limited. 10 15,000 3,703 - -23 E I H Associated Hotels Limited. 10 - - 6,100 42424 Excel Industries Limited. ( # 6,700 ) 10 6,700 2,496 6,700 2,49625 Finolex Cables Limited. 10 - - 20 026 F A G Precision Bearings Limited. ( * 50 ) 10 71,900 4,771 71,900 4,77127 Flat Products Limited. 10 - 70,800 2,67528 Fujitsu ICIM Limited. 10 2,500 383 - -29 Framotone Connectors Limited. ( * 24,700 ) 10 33,210 4,116 - -30 Glaxo India Limited. 10 - - 10,000 6,70231 Gujarat Industrial Power Limited. ( # 30,300 ) 10 60,900 2,565 50,000 2,25532 Gujarat Ambuja Cements Limited. ( # 65,000 ) 10 100,000 20,605 - -33 Grasim Industries Limited. 10 50,000 17,212 - -34 Glenmark Pharma Limited. 10 7,550 2,075 7,550 2,07535 Gulf Oil India Limited. ( # 400,000 ) 10 497,600 68,080 493,500 67,89036 Gujarat Siddhee Cement Limited. 10 - - 50 -37 Hughes Tele.com Limited. 10 400,000 4,800 - -38 Hindustan Oil Exploration Limited. 10 50,200 2,496 50,200 2,49639 Hindustan Zinc Limited. 10 400,000 8,620 936,949 20,18840 Hindustan Machines Limited. 10 156,001 1,395 160,800 1,43741 Hitech Drilling Limited. ( # 86,000 ) 10 86,000 7,215 86,000 7,21542 Himachal Futuristic Communications Limited. 10 5,000 1,374 - -43 HCL Technologies Limited. 2 10,000 6,861 - -44 IDL Industies Limited 10 390,600 22,643 100,000 6,00045 Indian Cement Limited. 10 - - 205,000 17,09846 India Gelatine & Chemicals Limited. 10 9,350 631 9,350 63147 I T I Limited. ( @ 100 ) 10 475,700 13,146 700 12

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Rs. Nos. Nos.48 Infosys Technologies Limited. 10 - - 500 5,48549 IndusInd Bank Limited. ( # 2,500,000 ) 10 2,789,600 87,991 2,789,600 87,99150 I P Rings Limited. 10 14,000 1,754 14,000 1,75451 Ipca Laboratories Limited. 10 3,300 631 3,300 63152 ITW Signode (I) Limited. ( # 26,500 ) 10 26,650 2,613 26,650 2,61353 International Travelhouse Limited. 10 64,200 5,877 64,300 5,88554 Jayaswals Neco Limited. 10 - - 1,130 355 J B Chemicals Limited. 10 20,700 2,365 - -56 Kulkarni Power Tools Limited. ( * 81,200 ) 10 146,850 5,478 146,850 5,47857 K G Denim Limited. 10 - - 49,700 47258 Kopran Limited. 10 - - 2,300 40658 KDL Biotech Limited. 10 81,050 19,465 81,550 19,58559 Mphasis B F L Software Limited. ( # 2,500 ) 10 2,500 980 - -60 Mahavir Spinning Mills Limited. 10 37,500 2,775 37,500 2,77561 Madura Coats Limited. ( # 174,950 ) 10 309,981 16,902 309,981 16,90262 MC Dowell Limited. 10 10,000 678 - -63 Monotana Exports Limited. 10 55,200 276 55,200 27664 Magnus Industries Limited. 10 100 1 200 265 Majestic Auto Liners Limited. 10 257,100 7,966 257,100 7,96666 Mukand Engineering Limited. 10 52,620 10,215 53,100 10,30867 MICO Limited. ( # 1,400 ) 100 1,478 7,550 2,440 12,46868 Nestle India Limited. 10 - - 42,000 17,03169 Nahar Spinning Limited. ( # 25,510 ) 10 26,800 2,060 26,800 2,06070 Nahar Exports Limited. 10 32,900 943 32,900 94371 Omax Autos Limited. 10 78,100 6,475 78,100 6,47572 Odyssey Technologies Limited. 10 58,600 3,919 - -73 Orient Paper Limited. 10 - - 5,300 19474 O.N. G. C. ( # 25,000 ) 10 27,200 6,767 27,200 6,76775 Pacific Industries Limited. 10 - - 61 276 Paper Products Limited. 10 35,000 4,969 35,000 4,96977 Procter & Gamble Limited. 10 - - 15,480 10,46678 Pidilite Industries Limited. ( # 20,000 ) 10 23,920 6,712 160 3379 Ramakrishna Mills Limited. 10 5,200 374 5,200 37480 Reed Relays and Electronics India Limited 10 15,000 623 15,000 62381 Raasi Cement Limited. 10 300 56 180 2182 Rashtriya Chemicals & Fertiliser Limited. 10 202,524 3,407 150,000 3,05883 Reliance Petroleum Limited. 10 2,600 39 2,600 3984 Reliance Petroleum Limited Warrants-2001. 10 2,600 39 2,600 3985 Rayban Sun Optics Limited. 10 - - 25,000 3,00486 Satyam Computers Limited. ( * 1,000 ) 2 4,000 4,411 2,700 14,88687 Sanrhea Technical Textiles Limited. 10 24,500 21 24,500 21

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Sr. Scrip Face Value As at 31.03.2001 As at 31.03.2000

No. Per Share Quantity Amount Quantity AmountRs. Nos. Nos.

88 Sanderson Industries Limited. 10 95,500 134 95,500 13489 Super Auto Forge Limited. ( * 345,600 ) 10 635,300 46,209 635,300 46,20990 S I Property Development Limited. 10 91,400 731 91,400 73191 Samkrg Pistons Limited. 10 178,800 5,320 161,300 4,96592 Software Solutions Limited. 10 10,000 12,221 - -93 Sterlite Optical Limited. ( @ 200 ) 5 25,530 14,751 - -94 Siemens Limited. ( # 12,000 ) 10 12,000 4,112 - -95 Smithkline Beecham Consumers Ltd. ( # 3,000 ) 10 3,000 1,259 - -96 State Bank of India. 10 100,000 24,508 - -97 Tata Special Steel Limited. 10 - - 105,050 2,77098 Tirupati Fibres & Industries Limited. ( * 950 ) 10 132,000 792 132,000 79299 Tata Yodogawa Limited. 10 116,400 3,433 116,400 3,433100 Tata Power Limited. 10 - - 89,690 7,275101 Tata Infotech Limited. ( # 11,350 ) 10 11,500 3,438 - -102 Tata Tea Limited. 10 18,205 4,919 - -103 Tube Investments of India Limited. ( # 31,900 ) 10 31,900 2,042 300 39104 Transtream India.Com Limited. 10 5,000 2,004 5,000 2,004105 United Breweries Limited. 10 - - 15,000 3,328106 Vardhaman Spinning & Gen. Mills Ltd. ( @ 25 ) 10 114,850 8,843 120,650 9,290107 Vesuvius India Limited. 10 - - 15,300 1,698108 Visual Soft Limited. 10 10,521 8,046 - -109 Videsh Sanchar Nigam Limited. ( # 3,000 ) 10 3,000 2,381 1,000 2,381

Total (D) 646,732 569,250

(b) NON CONVERTIBLE DEBENTURES1 Tata Special Steel Limited. 50 100,000 5,000 100,000 5,0002 Garware Polyester Limited. 40 - - 40 1

Total (E) 5,000 5,001

(c) FULLY CONVERTIBLE DEBENTURES1 VCK Capital Market Services Limited. 5,300 146 5,300 146

Total (F) 146 146TOTAL VALUE OF QUOTED INVESTMENTS ( D+E+F ) 651,878 574,397AGGREGATE COST OF INVESTMENTS(A+B+C+D+E+F) 2,274,595 758,233Less: Diminution in Value of Long Term Investments (33,613) (90,327)

TOTAL INVESTMENTS 2,240,982 667,906

Aggregate cost of Quoted Investments is Rs. 651,878 (‘000s) (Previous Period Rs. 574,397 (‘000s)).Market Value Rs. 391,314 (‘000s) (Previous Period Rs. 441,311 (‘000s)).* Shares in process of registration.

@ Shares sent for dematerialisation.

# Shares pledged with banks.

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ANNEXURE ‘B’STOCK IN TRADE (Valued at cost (aggregate) or market value (aggregate) whichever is lower) (Rs. in ‘000s)



QUOTED SHARES :

1 Associated Cement Companies Limited. 10 - - 150,120 21,1272 Arvind Mills Limited. 10 - - 100,000 4,5443 Autopins (India) Limited. 10 - - 20 14 Ashok Leyland Limited. 10 - - 38,900 4,2105 Asian Paints Limited. 10 - - 24,822 10,0836 Atlas Copco Limited. 10 6,000 686 - -7 Bharat Earth Movers Limited 10 20400 572 72500 2,0198 Bharat Bijlee Limited. ( * 5 ) 100 10251 1,854 13700 2,4789 B S E S Limited. 10 - - 21,150 5,83310 Bharat Heavy Electricals Limited. 10 - - 25,000 3,18611 Ballarpur Industries Limited. 10 - - 16,884 1,12712 Bhagyanagar Metals Limited. 10 - - 500 1213 B F L Software Limited. 10 - - 2,500 2,03914 B O C Limited. 10 - - 30,900 2,52215 B P L Limited. 10 - - 100 2816 Century Spinning & Textile Limited. 10 - - 114,000 8,30117 C E S C Limited. 10 - - 154,000 5,47918 Cochin Refineries Limited. 10 - - 500 6719 Cadbury India Limited. 10 1 - 12,167 10,20420 Chicago Pneumatic Tools Limited. 10 - - 10,000 68721 Colgate Palmolive Limited. 10 - - 60,000 9,07522 Cipla Limited. 10 - - 10,000 11,28923 Cinevesta Communications Limited. 10 800 240 800 24024 Chettinad Cement Limited. 10 22,890 732 - -25 Container Corporation Limited. ( # 40,000 ) 10 41,460 5,400 - -26 D C L Polyesters Limited. 10 - - 95 -27 Dabur India Limited. 10 - - 1,000 1,35228 Deccan Cements Limited. 10 - - 181,250 4,70029 Dynamatic Technologies Limited. 10 - - 40,800 1,18230 Dr. Reddy’s Laboratories Limited. ( # 2,250 ) 10 2,250 2,735 43,981 68,61831 Digital Equipments (India) Limited. 10 - - 5,000 3,90432 DSQ Software Limited. 10 - - 2,500 4,26333 Essar Shipping Limited. 10 - - 100 334 Escorts Limited. 10 - - 50 435 Esab India Limited. 10 - - 51600 5,09236 EIH Associated Hotels Limited. 10 - - 9,300 61137 Excel Industries Limited. 10 - - 200 6538 Fujitsu ICIM Limited. 10 - - 2,500 1,78639 Framatone Connectors OEN Limited. 10 - - 7,050 370

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40 Gujarat Siddhee Cements Limited. 10 50 - - -41 Godrej Industries Limited. 6 - - 17,385 85142 German Remedies Limited. 10 - - 50 5243 Gulf Oil India Limited. 10 - - 4,100 52744 Gillette India Limited. 10 - - 100 2345 Gujarat Industrial Power Limited. 10 - - 10,900 43846 Glaxo India Limited. 10 - - 15,639 8,04747 Gujarat Flourochemicals Limited. 10 - - 200 1348 Hindustan Motors Limited. 10 22,300 242 22,300 24249 Hindustan Petroleum Corporation Limited. 10 - - 50,000 6,28250 Hindustan Lever Limited. 1 - - 140 43851 Hindustan Zinc Limited. 10 - - 139,500 3,09952 Industrial Credit and Investment

Corporation of India Limited. 10 - - 50,003 7,161

53 I D L Industries Limited. 10 - - 15,600 52854 Indo Gulf Fertilisers & Chemical Corp. Ltd. 10 - - 100 -55 I T C Limited. 10 14,210 11,215 890 88256 Infosys Technologies Limited. 5 - - 1,588 17,46357 India Cement Limited. 10 - - 14,973 1,19658 ITC Bhadrachalam Paperboards Limited. 10 100 4 48,372 2,85659 Indian Aluminium Limited. 10 - - 30,000 2,73460 I T I Limited. 10 - - 478,700 15,54361 I T C Hotels Limited. 10 - - 25 362 Indian Petrochemical Corporation Limited. 10 - - 101,750 5,90063 India Card Clothing Limited. 10 - - 58 264 Ingersoll - Rand (India) Limited. 10 - - 50 2665 J B Chemicals Limited. 10 - - 30,700 5,98166 Kulkarni Power Tools Limited. 10 - - 1,400 8267 Kanoria Dyechem Limited. 10 96,300 616 96,300 61668 Kotak Mahindra Limited. 10 - - 100 269 Kodak India Limited. 10 - - 3,229 1,17470 Larsen and Toubro Limited. 10 - - 195,159 53,59471 Lloyd Finance Limited. 10 - - 100 -72 Madura Coats Limited. 10 - - 750 673 Mahindra and Mahindra Limited. 10 - - 140 5774 Master Shares. 10 - - 4,798 475 Majestic Auto Limited. 10 - - 2,000 6976 Medicaps Limited. 10 - - 100 277 Nahar Spinning Limited. 10 - - 4,150 47078 Novartis Limited. 10 - - 5,000 4,591

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79 Novartis Limited. ( # 5,868 ) 5 5,868 3,437 - -80 Nicholas Piramal Limited. 10 - - 50 2881 Nestle India Limited. 10 - - - -82 Orkay Industries Limited. 10 195 2 195 283 Pfizer Limited. 10 - - 5,000 4,78484 Pidilite Industries Limited. 10 - - 10,500 6,90185 Plastiblends Limited. 10 37,100 1,152 37,300 1,15886 Premier Instruments & Controls Limited 10 - - 41 187 Parry’s Confectionery Limited. 10 - - 5,127 96988 Punjab Tractors Limited. 10 - - 10,000 6,27289 Ramco Industries Limited. 10 - - 100 25090 Raasi Cements Limited. 10 - - 170 4191 Reckitt Benckiser (I) Limited. 10 200 94 585 27492 Reliance Industries Limited. 10 25,050 9,938 151,230 39,52193 Rhone Poulenc Limited. 10 - - 345 49994 Reliance Petroleum Limited. 10 - - 153,900 8,66795 Siemens Limited. 10 - - 6,734 2,05196 SKF Bearing Limited. 100 - - 75 9597 Sterlite Industries (India) Limited. 10 - - 781 70498 Surlux Diagnostics Limited. 10 40,000 316 40,000 31699 SAE India Limited. 10 - - 18 2100 Sandvik Asia Limited. 100 1,581 874 - -101 Silverline Industries Limited. 10 - - 5,000 4,439102 Sun Pharmaceutical Industries Limited. 10 - - 300 46103 Surana Strips Limited. 10 2,400 49 2,400 49104 State Bank Of India. 10 - - 126,649 25,124105 Satyam Computers Limited. 2 - - 1,830 8,251106 South India Viscose Limited. 10 100,000 1,000 100,000 1,000107 Sierra Optima Limited. 10 - - 3,100 1,204108 Swaraj Mazda Limited. 10 - - 200 14109 Samkreg Pistons Limited. 10 - - 17,500 578110 Tata Special Limited. 10 - - 60,450 1,745111 Tata Chemicals Limited. 10 - - 100,000 4,592112 Tata Power Company Limited. 10 - - 200 17113 Tata Engineering & Locomotive Co. Limited. 10 - - 110,000 15,062114 Tata Iron and Steel Co. Limited. 10 - - 41 -115 Tata Vashisti Limited. 10 200 4 - -116 Tata Telecom Limited. ( # 148,900 ) 10 148,900 5,810 148,900 5,810117 Tata Infotech Limited. 10 - - 11,500 10,797118 Television Eighteen Limited. 10 2,200 396 2,200 396

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119 Tata Infomedia Limited. 10 - - 14 3120 Tube Investments of India Limited. 10 - - 32,500 5,863121 Utility Engineers (India) Limited. 10 1,530 79 15,300 79122 Vesuvius India Limited. 10 200 10 5,100 287123 VDO India Limited. 10 - 50 5124 VCK Capital Market Services Limited. 10 21,200 212 21,200 212125 Zee Telefilms Limited. 1 5,000 579 14,340 14,312

AGGREGATE COST OF QUOTED SHARES (A) 48,248 509,875

AGGREGATE MARKET VALUE OF QUOTED SHARES (B) 47,096 511,429

(A) OR (B) WHICHEVER IS LOWER 47,096 509,875

* Shares sent for registration.# Shares pledged with banks.

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ANNEXURE ‘ C ‘Additional information pursuant to Part IV of Schedule VI of the Companies Act, 1956, of India.

Balance Sheet Abstract and Company’s General Business Profile.

I Registration Details

Registration No. 011-36896State Code 11Balance Sheet Date 31-03-2001

II Capital Raised during the year(Amount in Rs. Thousands)Public Issue NilRights Issue NilBonus Issue NilPrivate Placement NilShare Capital pursuant to Amalgamation 10,183Share Capital pending allotment pursuant to Amalgamation 115,918

III Position of Mobilisation and Deployment of Funds(Amount in Rs. Thousands)Total Liabilities 3,642,373Total Assets 3,642,373

Sources of FundsPaid-up Capital 229,736Share Capital pursuant to Amalgamation 10,183Share Capital pending allotment pursuant to Amalgamation 115,918Reserves and Surplus 3,120,705Secured Loans 1,302Unsecured Loans 164,529

Application of FundsNet Fixed Assets 67,798Investments 2,240,982Net Current Assets 1,322,074Miscellaneous Expenditure 11,519Accumulated Losses Nil

IV Performance of the Company(Amount in Rs. Thousands)Total Income 617,246Total Expenditure 244,754Profit Before Tax 460,704Profit After Tax 420,658Earning Per Share (Rs.) 13.67Dividend Rate ( % ) 50 %

V Generic Names of Principal Products/ Services ofthe Company (as Per monetary terms)

Item Code No. N.A.Product Description Software Development,

IT Enabled Services andInvestment Banking.

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HINDUJA TMT LIMITED(formerly known as Hinduja Finance Corporation Limited) (Rs. in ‘000s)

Cash Flow Statement for the year ended 31st March, 2001

(Pursuant to the Listing Agreement with Stock Exchange) 2000 -2001 1999 - 2000

A Cash Flow from operating activities :Net profit before tax and extraordinary items 372,492 72,997

Adjustments for :Share Issue and Deferred Revenue Expenses written off 1,065 494Depreciation / Amortisation 19,708 1,391Bad Debts / Advances / Shares Under Objection written off 6,377 1,858Provision for Doubtful Debts 5,899 -Loss / Profit on Sale of Assets 2,992 239Interest/ Dividend Received (net) (56,894) (31,252)(Profit) / Loss on Sale of Long Term Investments (134,310) (9,236)Foreign Exchange Loss (Net) 376 -Software / Jobs in Progress written off 2,350 -Interest Paid (net) 7,790 8,099Recovery of Bad Debts (3,650) (148,297) - (28,407)

Operating profit before working capital changes 224,195 44,590Adjustments for :Trade Receivables 243,388 81,635Inventories 446,265 (119,574)Trade Payables (263,927) 33,969Other Receivables (9,626) 416,100 (531) (4,501)

Operating profit after working capital changes 640,295 40,089Direct Taxes paid (42,153) (40,315)Tax Deducted at Source (17,841) -Deferred revenue expenses incurred (2,811) -Prior period items (1,237) -

(64,042) (40,315)

Net Cash from/ (used in) operating activities (A) 576,253 (226)

B Cash Flow from investing activities :Purchase of Fixed Assets (38,738) (965)Sale of Fixed Assets 1,360 93Investments made (617,914) (335,653)Investments in Subsidiaries (148,039) (5,100)Investments sold 1,031,210 423,876Interest/ Dividend Received 47,596 28,753

Net Cash from investing activities (B) 275,475 111,004

C Cash Flow from financing activities :Proceeds from long term borrowings (net) (24,736) (54,197)Proceeds from short term borrowings (net) (691,771) -Interest Paid (7,505) (9,351)Dividend paid (including tax thereon) (30,483) (50,368)

Net Cash used in financing activities (C) (754,495) (113,916)

Net increase/ (decrease) in Cash & Cash equivalents (A + B + C) 97,233 (3,138)

Cash and Cash Equivalents as at the beginning of the year 11,281 8,832(Refer note 2 below)Cash and Cash Equivalents as at the end of the year 108,514 5,694

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Cash Flow Statement for the year ended 31st March, 2001 (contd.)(Pursuant to the Listing Agreement with Stock Exchange)

Notes :

1. The above cash flow statement has been prepared under the “Indirect Method” as set out in the AccountingStandard - 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India.

2. Opening Cash and Cash Equivalents includes cash and bank balances of Rs. 3,68,601, Rs. 27,99,606 and Rs. 3,33,486of the erstwhile Richman Investrade Pvt.Ltd.(RIPL), Hinduja Telecom India Ltd.(HTIL) and Melody TradingPvt. Ltd.(MTPL), respectively as at August 30, 2000 and Rs. 20,85,628 of the erstwhile Ashok Leyland InformationTechnology Ltd. (ALIT) as at April 1, 2000.

3. The Amalgamation of ALIT, HTIL, RIPL and MTPL with the Company is a non-cash transaction.(Refer Note 6 of Schedule ‘U’ ).

4. In view of Notes 2 and 3 above, the current year’s figures are not comparable with the previous period’s figures.

5. Previous period’s figures have been regrouped/ rearranged to confirm with current year’s classifications.

For and on behalf of the Board

A. K. Das S. Solomon RajDirector Director

Pradeep PasariCompany Secretary

Place : MumbaiDate : June 19, 2001

Auditors’ Certificate

The above Cash Flow statement has been compiled from and is based on the audited accounts of Hinduja TMTLimited (formerly known as Hinduja Finance Corporation Limited) for the year ended March 31, 2001 and reportedupon by us on June 23, 2001.

According to the information and explanations given, the aforesaid Cash Flow statement has been prepared pursuantto Clause 32 of the Listing Agreement with Stock Exchanges and the reallocations required for the purpose as madeby the Company.

P. N. GhataliaPartnerFor and on behalf ofPrice WaterhouseChartered Accountants.

Place : MumbaiDate : June 23, 2001

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HINDUJA TMT LIMITED - STATEMENT AS PER SECTION 212 OF THE COMPANIES ACT, 1956(Rs. In Lakhs)

Name of the The Financial Holding Extent of Face Value of Number of Equity Net Aggregate Net AggregateSubsidiary Company Year of the Company Holding Equity Shares Shares held by the amount of Subsidiary amount of Subsidiary

Subsidiary Company’s held by the Holding Company Company’s Profit/ Company’s Profit/Company Interest Holding Company (Loss) so far as not (Loss) so far as dealtended on (amt. in Rupees) dealt with in with in the

HTMT’s Accounts HTMT’s Accounts

(1) (2) (3) (4) (5) (6) (7) (8)

Aasia IndustrialTechnologies Ltd. (AITL) 31.03.2001 HTMT 51% 100/- 1729410 (49.61) -

ALIT Inc., USA 31.03.2001 HTMT 100% USD 1 2,00,000 (USD 377,450) -

CVO Holdings Pvt. Ltd. 31.03.2001 HTMT 51% 10/- 28,56,000 (0.06) -

Grant Investrade Ltd. 31.03.2001 HTMT 51% 10/- 21,19,002 (1.15) -

In2Cable.Com (India) Ltd. 31.03.2001 HTMT 90.20% 10/- 45,10,000 (106.86) -

IndusInd TelecomNetwork Ltd. 31.03.2001 HTMT 65.70% 10/- 9,85,50,000 (70.08) -

IndusIndEntertainment Ltd. 31.03.2001 AITL 100% 10/- 20,00,000 (23.77) -

IndusInd Media &Communication Ltd. 31.03.2001 AITL 57.50% 10/- 3,25,06,000 (945.63) -(IMCL)

Cable Video (India) 31.03.2001 CVO 84.62% 100/- 55,00,000 10.65 -Limited (CVIL) * Holdings

HTMT Europe Limited(formerly known as 31.03.2001 ALIT Inc. 51% GBP 1 102,000 (GBP 11,064) -ALIT Europe Limited)

IndusInd Cable Television(Bombay) Ltd. 31.03.2001 IMCL 99.98% 10/- 9,998 (1.12) -

Planet E-Shop HoldingsIndia Pvt. Ltd.(PESHIL) ** 31.03.2002 AITL 51% 10/- 10,20,000 N.A -

Planet E-Shop India Ltd. ** 31.03.2002 PESHIL 97% 10/- 19,40,000 N.A -

* CVIL has merged with CVO Holdings Pvt. Ltd. However, the High Court approval for the same is awaited.

** The first Financial year for these companies is proposed to be from 2nd November, 2000 to 31st March, 2002.

· a.k. das t. ananthanarayanan k.v. seshasayee ˆˆ˘ ˙ ˝ ˘ ˆˆ˘ anil harish - chairman r.p....

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